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.
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
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.
Share prices catching up to reality, good one 🤣🤣🤣
Yeah those two words rarely belong in the same paragraph.
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
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.
It’s pretty simple. The market is not rational, and anyone trying to convince you otherwise is an idiot