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Tesla bulls are still very bullish on the company, but if you told them two years ago that Tesla sales would drop significantly in 2024 and the beginning of 2025, they’d call you crazy, stupid, evil, and not worth listening to. They’d tell you about how many reservations there were for the Tesla Cybertruck and how much sales would continue growing for the Tesla Model Y and for Tesla robotaxis that would be in operation by the end of the year, or 2024 at the latest. If you told them Cybertruck reservations would evaporate, Model Y sales would stall and even decline, and robotaxis were still years away, you’d be called a heretic.
Why does that matter? We already know all of that.
That matters because we don’t yet know what the future holds, but it could certainly hold much more trouble for Tesla than we’ve seen already. Tesla bulls (and, let’s be clear, they almost ALWAYS have a lot of money invested in the company) would tell you right now this is an idiotic take and Tesla’s future is super successful and bright. Tesla always proves the haters and critics wrong. That’s the argument. I pushed that argument for years, because it was right, but when I started seeing consumer demand issues at Tesla, lack of model innovation and missed targets on robotaxis, I had an open enough mind to see that Tesla was no longer proving haters and critics wrong. In fact, the haters and critics were becoming right more and more of the time. If you don’t want to believe it and don’t want to see it, you won’t. But if you look at the company dispassionately and objectively, I think you have to notice numerous warning flags.
Tesla is supposed to have surging demand right now for the new Model Y, which finally got into production globally and should have a long list of waiting buyers. Nonetheless, I keep getting peppered by Tesla to buy a new Tesla, and today I even got a text message from the company encouraging me to come in and test drive any model I’d like — something I don’t think I’ve ever received from the company. That implies to me that the company is still really struggling to hit its sales targets. This kind of thing never happened 5 years ago, or even a few years ago.
Yes, Tesla still makes money — a lot of it. However, if the fall continues, that could change. It only made a profit last quarter thanks to ZEV credits, and now Republicans are trying to remove California’s ZEV mandate, which would take a lot of regulatory revenue away from Tesla.
Anyway, we don’t know if the future is bright for Tesla or not so bright. I don’t pretend to know what is going to happen with the company’s sales. However, the signs are not good, and it got me thinking, what would happen to the EV revolution if Tesla really fell financially and had to seriously downsize and go backwards (if not worse)?
In China, Europe, and even other markets like Africa, Australia, and South America, I don’t think it would make any real difference. The Chinese market is above 50% plugin vehicle sales, Tesla is losing more and more share, and, frankly, several Chinese EV producers are out-innovating the company. Similarly, in Europe, Tesla sales have tanked even as the overall EV market has risen. Traditional automakers have gotten quite serious about being EV leaders, and I think it’s unlikely that will change whether Tesla is present as it is today or fades away. Tesla isn’t serving the fast-developing markets in Africa and South America, so I definitely don’t see how its fall would matter there. But, the US….
The US market is tricky and questionable. Tesla still has nearly 50% of EV sales in the country, far more than anywhere else. It is, of course, an American company. I think you’d have to assume a hit to EV sales growth if Tesla stumbled or even collapsed. However, at the same time, the market has gotten vastly more competitive, there are dozens more EV models on the market than a couple of years ago, legacy automakers seem to be earnestly trying to produce and sell as many EVs as they can (just like other models), and I think they have enough competition amongst themselves now that they would continue trying to innovate, beat each other, and be EV leaders whether Tesla was there or not. I wouldn’t say that was the case even three years ago, but I think it’s the case today and I don’t see us going backwards. That said, the less competition, the worse the market is, and Tesla is clearly the market leader bringing a lot of the competition and awareness to the table. So, no, I don’t want Tesla to collapse and I don’t think it would be a positive thing for the transition to clean, electric vehicles.
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