Tesla Inc (NASDAQ:TSLA) shares are up nearly another 10% on Monday following a five-for-one stock split and are now up 969% overall in the past year as traders continue to buy shares of the EV maker at any price.
Loup Ventures Managing Partner and former sell-side analyst Gene Munster said in a blog post this weekend that Tesla appears to be pulling off a miracle by jumping seven or eight years ahead of its EV competitors.
What He Said: In the first half of 2020, Tesla accounted for about 80% of the total EV market share in the U.S., 15% share in Europe and about 20% share in China.
“Over the next few years, it’s unlikely that traditional auto will close the EV market share gap, as producing EVs is more complicated than producing traditional cars, and producing autonomous vehicles is significantly more complicated than producing EVs,” Munster wrote.
Gap Widening? Each new technology Tesla brings to the market will widen the gap between Tesla and its competitors even further, according to Munster.
“Tesla’s 7-8 year head start is looking more and more like a business miracle that very few companies ever achieve,” Munster said.
In addition to its existing first-mover advantage, Munster said the COVID-19 pandemic has also helped Tesla in two key ways.
First, some of Tesla’s competitors have delayed the launch of new EV models until 2021. Given those developments, Munster is estimating Tesla will enter 2022 with between 70% and 80% market share in the U.S. EV market.
Second, the pandemic has sped up the long-term shift in retail from offline to online sales.
A recent survey from CarGurus found that the percentage of Americans willing to buy a car online jumped from 32% before the outbreak to 61% in April. Munster said Tesla is the “king” of online auto sales and has recently added shopping features such as Tesla Direct Drop and an Apple Pay option.
Benzinga’s Take: Tesla is clearly dominating an EV market that is virtually free from competitors at this point. For Tesla to maintain anything close to its current valuation in the long term, it will need to maintain the same level of domination once roughly 20 new EV models produced by other auto companies hit the market for the first time before the end of 2021.