[100-Year Life Finance] Will Tesla Lead Again in the Next Bull Market?

On the first day of this year, our investors held $17.3 billion (22.7 trillion won) worth of Tesla shares. This amount is equivalent to the market capitalization of LG Electronics. By the end of December, this figure had decreased to $9.1 billion. While some shares were sold in between, the larger factor was the decline in stock price. Tesla's stock price, which was $399 at the beginning of the year, recently fell below $110. As the stock price dropped, criticism of the founder Elon Musk poured in. It was said that the stock price fell due to problems caused by stock sales, neglect of Tesla management after acquiring Twitter, and political tweets.

So, if Elon Musk refrains from social activities and focuses on management, will Tesla's stock price rise again? That depends on how one views Tesla as a company. If Tesla is seen as a "fox ruling a den without a tiger," a quick stock price recovery is unlikely. It was only a matter of time before a decline came, and now is that time. On the other hand, if one believes Tesla will become the king of the electric vehicle market, stock price recovery is not difficult. After all, electric vehicles will become the mainstream of the automobile market.

Even though electric vehicles seem widely adopted, 95% of the cars running worldwide are still internal combustion engine vehicles. They do not want the electric vehicle era to come too quickly. In that case, the production facilities they have already built become stranded assets, and automobile sales decrease. Therefore, existing automobile companies inevitably remain passive in entering the electric vehicle market. Tesla's position is different. It is a company created to produce electric vehicles, so it must focus on electric vehicles, and thanks to that, it has enjoyed high growth and market share so far.

The future is the issue. Automobile companies are not hesitating to enter the electric vehicle market because they lack technology. They have over 100 years of experience making cars. They own large-scale production facilities, have know-how to understand customer preferences and make good cars, which Tesla cannot match in many ways. They have sales organizations already established worldwide and money earned from car sales.

If they fully enter electric vehicle production, Tesla will inevitably be at a disadvantage in many aspects. The stock market is worried about this. Shareholders are naturally dissatisfied because, while Tesla should be increasing capital and production facilities and securing technology, it is instead engaging in unrelated activities such as venturing into space and acquiring Twitter.

The companies leading the U.S. stock market have changed continuously over a long time. In 1980, IBM and Boeing were at the forefront. By 2000, IT companies like Cisco Systems and Oracle took their place, and by 2020, the leaders shifted to Tesla, Apple, and Amazon. This means that the leaders in the U.S. market have not been fixed.

Domestic Tesla shareholders should consider whether Tesla will still be the market leader at the next rise. Based on past cases, Tesla may be excluded from the leading group. Then Tesla will become a forgotten stock, just as few people now know about Cisco Systems.

Jongwoo Lee, Economic Columnist

This content was produced with the assistance of AI translation services.