While investors may have been momentarily distracted by the fact that Tesla solar roofs are apparently spontaneously combusting across the country, the company's legacy vehicle business also remains in turmoil, with Bernstein opining on the Model S and the Model X's sales collapse this morning.
In a new note, Bernstein seeks to explain the weakness behind both of the models, which lag the newer Model 3 in sales. Bernstein says that "competition" is likely to blame for Model S and Model X gross profit dollars declining 57% in the first half of 2019.
Did Elon forget about this part in his "master plan"?
Bernstein says that the introduction of new offerings from companies like Audi and Jaguar have not expanded the EV market as a whole - rather, they have cannibalized sales from Tesla. Perhaps it is just pesky consumers that want a vehicle they can actually get serviced and a warranty that they are actually going to be made whole on.
The free market works in mysterious ways...
Bernstein notes that the cannibalization is still a new trend that has come to light over the first half of this year, but that it is worth watching as competition is going to grow significantly in the space over the next 12 to 24 months. It also anticipates traditional auto makers to enter the sub $50,000 electric vehicle segment, which could target Tesla's one remaining area of strength – if you want to call it that - the Model 3.
The competition narrative has been peddled by short-sellers and skeptics for years, even though it has taken the auto industry some time to finally get up to speed. After all, storied names like Audi and Jaguar don't exactly have the option to throw together their EVs in a hastily built tent outside of their production facility.
Now, it looks as though they are done biding their time - if Bernstein's conclusions hold true, it looks as though the carefully calculated competition could be ready to wreak havoc on Tesla.