Tesla Sales May Improve In Norway As Majority Of Cars Sold Were EVs

Tesla Sales May Improve In Norway As Majority Of Cars Sold Were EVs

Whitney Tilson’s email to investors discussing his skepticism on Tesla‘s stock and electric cars sold in Norway.

1) In my email today to my entire investing email list, I included this:

ValueWalk’s July 2022 Hedge Fund Update: Tiger Cub Hedge Fund Shuts Down

investWelcome to our latest issue of issue of ValueWalk’s hedge fund update. Below subscribers can find an excerpt in text and the full issue in PDF format. Please send us your feedback! Featuring Andurand's oil trading profits surge, Bridgewater profits from credit, and Tiger Cub Hedge Fund shuts down. Q1 2022 hedge fund letters, conferences Read More

Get The Full Series in PDF

Get the entire 10-part series on Charlie Munger in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues.

Q4 hedge fund letters, conference, scoops etc

3) Whatever you may think of TSLA the stock (and my skepticism is well known), CEO Elon Musk and his company deserve enormous credit for dramatically accelerating the development and adoption of electric cars worldwide. What is happening in Norway, where more than half of all cars sold this year will be EVs, is a harbinger of what’s to come in every developed country in the world in coming years.


Here's the story from Norway: Tesla boom lifts Norway's electric car sales to record market share. Excerpt:



In response, a friend wrote:

The outcome in Norway isn't difficult to understand.  It's 100% driven by a government incentive (de-facto mandate).  It's like saying that UBER would have 100% of the market if the government imposed a special 125% tax on all LYFT rides.  Or that McDonald's would gain almost 100% market share if a 125% tax was imposed on Burger King, Wendy's et al.

Let's say that a government were to impose a 100% blanket ban on non-electric cars.  Then the EV market share would then be 100%.  This is not a mystery.  The Norwegian government is basically taxing the Norwegian population into a bloody pulp if they want to buy any car that's not electric.  The only thing that's surprising is that the EV share in Norway isn't a nice round 100% already.

All of that said, just look at how dramatically Tesla's sales will fall in April, compared to March.  We only have data for 2 days yet, but it's already down a lot. Model 3 remains #1 compared to other EVs, but by a far smaller margin, and it's likely to narrow even more as the first few days of the month probably contains some logistical spillover from March.  Furthermore, look at how handily the Audi eTron and Jaguar i-Pace are widening their lead over the Tesla Model X and S in Norway now.  It's not even remotely close.

Look here and sort on month: https://elbilstatistikk.no

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Tesla's very existence has always been 100% dependent on subsidies and mandates, and Norway is of course the most extreme example under the sun.  But even there, once we go beyond seeing the 3 years of backlog being crammed into barely a month worth of sales, we'll see a different story already in Q2 -- and that includes Tesla's higher-priced cars being completely chainsawed by Audi and Jaguar.

2) Another friend sent me this:

Here are some articles that discuss the challenges and approaches to building the software platform for the next generation of cars. These issues are vastly more critical to the eventual winners in the global auto market than the hardware platform. One article discusses the two different approaches to collecting data for training the machine learning platforms and the other discusses the difference in approach to machine learning algorithms.

These articles are just about the self driving software, there are many other  types of software based features that are being incorporated in the car/software platform.



3) Re. Tesla’s reviews on Glassdoor, a third friend wrote: “Those reviews are easily gamed, and Musk employs a social media team.”

Updated on

Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)www.valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver
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  1. People on waiting lists haven’t bought cars. They are like people lined up outside a store, waiting for it to open. A sale happens when one of those people goes inside the store and buys something, not before.

    A sale isn’t counted unless someone actually buys something.

    Imagine the waiting list never existed – those are still interested buyers, who would still be buying cars. You don’t get to pretend those people don’t count, or that their sales don’t matter.

  2. The only reason TEssla Model 3 sals have been “great” for the quarter is because they were not quarterly sales – those Model 3 sales came from the waiting list and represent almost three years of sales.

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