Things are not looking good for Tesla next year. Experian, a consumer credit reporting and data analytics business, just published its Automotive Market Trends for Q3 2022.

The study includes statistics on vehicles in operation (VIO) by model year, segment, age, and market share, as well as other light-duty vehicle data in the United States through September 30, 2022.

The report has a wealth of useful information, but I was particularly intrigued by its examination of electric vehicles (EVs).

At the conclusion of the third quarter, pure EVs accounted for 0.69% of all light-duty vehicle registrations, with hybrid cars accounting for the remaining 2.4%.

Although overall vehicle registrations were down from the previous year, EV registrations have climbed dramatically from the third quarter of 2021.

EV registrations accounted for 5.6% of all vehicle registrations in Q3 2022, up from 3.1% the previous year.

Tesla continues to dominate EV sales, accounting for 65.4% of the market. This is a decrease from 68.2% in 2021 and 79.4% in 2020.

Despite its loss of market share, Tesla is nevertheless fast increasing its vehicle sales.

However, there are some grounds to be concerned.

Tesla fell short of expectations in the third quarter, delivering 343,000 units vs the average forecast of 358,000.

The corporation cited the extremely difficult climate for transportation and logistics, which is absolutely true.

However, the “Twitter effect” may begin to take effect next year.

Elon Musk, CEO of Tesla, completed his purchase of Twitter on October 27, 2022.

Since then, he has made a number of contentious judgments that many see as mistakes.

I won’t go through his decisions, but they’ve been panned by liberals and applauded by conservatives.

This could have market ramifications for Tesla.

According to a recent Pew Research poll, Democrats are twice as likely as Republicans to consider acquiring an EV.

Consider that from January to September of this year, solidly Democratic California alone accounted for more than a third (35.9%) of all new EV registrations, compared to 7.4% in Florida and 6.4% in Texas.

It’s anecdotal, but I’ve heard several folks remark that they would no longer contemplate buying a Tesla due to Musk’s Twitter decisions.

People I know have actually canceled their Tesla orders.

In fact, several people have tweeted about their cancellations.

I don’t believe there will be any doubt about the consequences.

However, Tesla does have a handful of advantages. The first is that Tesla’s competitors are still attempting to catch up.

If a significant portion of potential Tesla consumers decides to look elsewhere, there simply aren’t enough alternatives to meet demand.

Furthermore, supply chain restrictions impede automakers’ ability to ramp up output.

Another factor to Tesla’s advantage is that some people support Musk’s actions on Twitter, which may lead them to support him by purchasing a Tesla.

However, because Republicans are significantly less likely to buy an EV, Tesla is poised to lose even more market share as Musk’s followers and detractors vote with their wallets.

Musk’s Twitter issues have likely contributed to Tesla’s share price drop this year.

Shares have plunged 62.5% year to date, compared to a 33.4% drop in the Nasdaq.

Tesla shares (TSLA) have fallen 33.4% since Musk completed his acquisition of Twitter in October, compared to a 3.9% drop in the Nasdaq.

That kind of movement in such a short period is definitely not the product of the Federal Reserve’s interest rate hikes.

Depending on how much of the hole competitors can fill, this might lead to a substantially faster loss in Tesla’s market share in 2023.

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