The decision represents an abandonment of a longstanding goal that Tesla chief Elon Musk has often characterized as its primary mission: affordable electric cars for the masses. His first “master plan”, opens new tab for the company in 2006 called for manufacturing luxury models first, then using the profits to finance a “low cost family car.”
Tesla shares were down about 3% in early afternoon trading after the Reuters report.
Musk has since repeatedly promised such a vehicle to investors and consumers. As recently as January, Musk told investors that Tesla planned to start production of the affordable model at its Texas factory in the second half of 2025, following an exclusive Reuters report detailing those plans.
I don’t understand how the stock price doesn’t crash. I thought the whole basis for the ridiculous value was the idea that eventually nearly everyone would be driving a Tesla but here they are just backing out of a massive market to focus on shitty ‘luxury’ EVs. I just don’t get how the price hasn’t caught up to reality yet.
Share prices catching up to reality, good one 🤣🤣🤣
Yeah those two words rarely belong in the same paragraph.
Last year their revenue from selling cars, powerwalls, and solar tiles was around $90 million. Makes the stock price seem crazy, yes. But then they sold $1.8 billion of carbon credits to other auto manufacturers, and that costs them basically nothing. Still doesn’t justify the stock price, but makes it less ridiculous. Selling carbon credits is Tesla’s main business at this point, the things they make just provide the justification for it.
Personally I don’t understand it either, but I think the thesis is/was that Tesla isn’t just a car company.
So beyond just the car business you’d also have the vertical manufacturing including batteries, eventually autonomous self driving, the charging network, and even at people’s homes stuff like the solar roofs.
How that ever made them more expensive than basically the rest of the car industry combined I don’t know.
I could see the high evaluation if they have a lead in self driving, but they don’t have any edge compared to their competitors including Google/wamyo, Mercedes and so on
It’s pretty simple. The market is not rational, and anyone trying to convince you otherwise is an idiot
In fairness, tesla is not just a car company. Batteries and solar are a significant and growing part of their business.
Their plan was always to popularize evs and then sell batteries to Ford, Chevy, and all the others.
But Tesla doesn’t make their own battery cells. They put cells (made by suppliers) together as a pack, but that is something that their competitors can easily do themselves (and they do already). Their solar business doesn’t seem to be significant at this point, and I can’t imagine it would be considering the steep cost required to get an installation done.
I think you’re incorrect. They, in partnership with Panasonic, make a ton of cells at their Nevada gigafactory. They have five more gigafactories where they make other components like motors, batteries, photovoltaic cells, etc…
I also think “easily” is pulling a lot of weight in your sentence there. Scaling up battery pack production to hit manufacturing goals in the next 10 or so years is going to be difficult for anyone attempting it.
All that said, fuck Musk I wish he’d take a ride to Mars already.
Tesla has had a head start, but BYD is hot on their heels and is looking to surpass them soon: https://www.visualcapitalist.com/visualizing-global-electric-vehicle-sales-in-2023-by-market-share/
I think one problem for other companies is that they already have ICE vehicles that they’re content with making up the vast majority of their sales. Those other companies are still only pricing EVs for the higher-end market, which don’t necessitate higher unit production to make significant profits. Tesla only makes EVs and thus dedicate 100% of their manufacturing capacity to EVs. BYD is also a pure EV manufacturer and seems more capable of expanding than even Tesla. Tesla doesn’t have the moat that its stock price pretends it does.
Same here. I’ve been a huge fan of Tesla disrupting the car industry and have been one of those seeing the potential for ridiculous growth, but wtf? Where’s the growth potential for cars now?
Sure, Tesla does other things but I find it hard to believe they have the growth rate and profit margin of cars. There’s no way the company has ridiculous growth off the other stuff: it may still be big and more stable of a market but it’s much slower growth.
I glossed over the previous stock dips with reckless optimism, but I don’t see why it didn’t immediately tank this time
I, for one, cannot believe Tesla went back on a promise.
So Biden is trying to block the import of BYD cars, and now Tesla isn’t making an affordable car, where are we supposed to get affordable electric cars from now?
There’s all of the other automakers that are dipping their toes into the electric market.
Oh wait, they are all leaning hard into SUVs. Nevermind.
How else would they be able to keep shaming poor people and telling them climate change is their fault?
It’s dooming the majority of US car buyers to a used market where they will struggle to find an affordable EV whose battery isn’t toast when there is a comparable ICE vehicle for just a little less than the EV.
Cue shifting the blame to poor people and increasing gas taxes on consumer vehicles.
Didn’t something similar go down in France?
That’s what happens when the major incentive from subsidies and tax breaks is focused on SUV production. We need more regulation on safety and functionality as well as deeper incentives to cover the range of market needs instead of a single weight class.
Kia has a reletively affordable one, its a game of wrapping your head and accepting its a Kia.
Elon lied about something? I’m shocked!
Ok, I’m not that shocked.
Eh, he’s an awful person and frequent liar, but not this time. Modifying plans as market conditions are changing isn’t the same thing as lying. Few people were taking Chinese automakers seriously in 2006.
I don’t understand the article title. With the looming threat of super cheap Chinese EVs, Tesla decides to cancel their low-cost car. How does that help Tesla compete? Doesn’t seem like he has a plan to counter competition. Maybe he’s relying on the steep 25% tariffs that the US places on Chinese EVs (that they’re also thinking of increasing even higher). Add this to the massive pile of broken Musk promises. The article goes on to mention “self-driving robotaxis” which I assume will be yet another broken Musk promise.
I had the exact same question after reading the article.
Chinese evs are cheap and their build quality is rapidly improving.
Tesla roofs and doors fall off so he’s going to keep prices the same?
Without a cheap Tesla equivalent, I don’t see how Tesla maintains its market share unless the Chinese manufacturers make a suicidal move and start pricing their cars higher than Tesla.
Maybe he’s going all in on self-driving but that really doesn’t seem anywhere close
What blows my mind is that he’s sabotaging his own engineers by forcing them to only rely on cameras for self-driving. Let’s excuse the consumer vehicle market for a moment since maybe the added cost of LIDAR and RADAR is too much. That doesn’t explain why he also wants the robotaxis to only rely on cameras. Robotaxis would provide service to far more people per vehicle, so the per-vehicle cost shouldn’t matter as much. Replacing a human driver alone recoups the cost of LIDAR and RADAR in a short amount of time.
