Tesla’s earnings come out later today. I’m publishing this now so I’m not biased. I’ll probably add an update to the end after the earnings call.
Tesla sales have not been going well in 2024. Tesla is pulling all sorts of demand levers, but electric vehicles (EVs) just aren’t selling.
Here’s what I got wrong about Tesla in the near term: Before 2024, if you bought an EV, you received a $7,500 tax credit. In 2024, the incentive changed to a rebate at time of purchase. Instant gratification! I thought that as soon as the federal electric vehicle (EV) tax credit changed, Tesla would experience a big bump in demand; the instantaneous $7,500 would prove to be a big boon for Tesla. I even moved my Model Y purchase to 2023 because I was sure prices would go up in 2024. This didn’t happen. Tesla has been having a hard time selling cars this year.
Tesla Sour Gripes
And I have some specific gripes!
Robotaxi First: I’m not thrilled with Tesla’s strategy. Tesla announced a new factory in Mexico way back in February of 2023 to build a more affordable car. Great! Well, not so great because 14 months later, Tesla hasn’t even broken ground on the facility. It appears that Tesla is putting the cheaper model on the backburner in favor of a Texas built, dedicated robotaxi that will be announced on August 8th.
A robotaxi network would be highly profitable. But at least where I’m at, Tesla’s autonomous driving software (FSD) isn’t yet good enough for driverless operation. Just yesterday on a ride, it ignored a detour sign and tried to go the wrong way down a one-way road into a construction zone. Ooopsie. To be clear, most of the time it does very well, but edge cases are difficult and infinite.
Battery: Another big concern is the 4680 battery project. The 4680’s dry electrode process was supposed to allow Tesla to make batteries (by far, the most important and expensive component of an EV) cheaply and quickly (no drying time which is the bottleneck). The 4680 initiative is way behind the timelines set at the Battery Day event back in September of 2020).
Outdated: I’m also not a fan of the way Tesla goes about updating its lineup. The 2024 Model S is a much better car than than the 2013 version, but it looks very similar. Humans like shiny, novel things. I wish Tesla put a little more effort into changing the appearance of its lineup over time.
But I digress…
Why Aren’t People Buying Teslas?
After tax rebates, a Tesla Model Y is comparable in price to the Honda CRV and Toyota RAV4. And the maintenance costs are much less. There just aren’t that many moving parts.
In most parts of the world, it’s much cheaper to charge an EV than it is to fuel a car. Here in Colorado, $8 of electrons gets me about 300 miles of daily and 200 miles of high speed driving.
I’m 6 months into owning a Model Y and it’s been perfect. I even drove it 800 miles in a day to Las Vegas. It was great. If my Y was totaled today, I’d buy another one to replace it without a second thought.
It seems that all of the early adopters (EV nerds) have already bought Teslas. Now, it will take non-nerds buying EVs to move the needle. When I ask people about their aversion to EVs, they usually say:
- I hate Elon Musk.
- EVs don’t work in the cold.
- I can’t go on a road trip.
- Insert conspiracy theory here ______.
There is a little bit of truth to some of these things.
If you leave your Tesla overnight in -10 degree weather, the range will take a hit. However, if I open the Tesla app on my phone and tell the car what time I’m leaving, it will warm up the cabin and batteries, mitigating the range issue:
As far as road trips go, Tesla has a thorough and reliable charging network. You just tell the car where you’re going and it tells you where to stop. You’ll have to stop for 20-30 minutes every 2-3 hours, but it’s not a big deal. Your car gets some electrons and you get to pee:
Conspiracy theories!
EVs are worse for the environment!
Batteries die after 5 years!!
They explode!!!
Read this.
Elon Musk: No one wants their CEO spouting on about hot-button political issues. You’ll alienate half of your customers. He’s got issues, but he’s also important and I’ll leave it at that.
Where Do We Go From Here?
My worst case scenario is that Tesla stock goes down to about $50 which would put it at a valuation similar to other auto manufacturers. I don’t think it will actually go this low, but I’m OK with it doing so.
I’m still a believer. I think that most people will come around to EVs this decade. At this point in 2024, they are already similar in purchase price as the competition, much cheaper to maintain, much cheaper to fuel, and super safe. So now, it’s just an education issue. Also:
Do you really like going to gas stations?
And in a strange twist, the more Tesla stock falls, the less it bothers me. It’s taking up a lesser percentage of my portfolio and at the same time, other holdings have been booming. At one time, my Tesla stock was worth over $1.5m and consumed about a third of my portfolio. Now, it’s worth $600,000 and 12.5% of my portfolio. I know some people who have most of their net worth tied up in Tesla and that would be stressful.
See MMM’s take on Tesla here:
Bright Spots Too
It’s not all doom and gloom. Tesla has a lot going for it:
Tesla owns the fueling stations: Tesla’s charging network is the best in the world. Second place isn’t even close. By the end of this year, most other car brands will be allowed to charge on it. This will become a major profit center for Tesla.
Tesla stationary energy storage business is growing aggressively. Will it surpass cars some day?
Maybe they’ll actually figure out FSD: I think we’ll know by the end of this year whether Tesla is going to solve autonomous driving. If it does, watch out. A widespread robotaxi network would be worth a lot of money.
Elon is a lot of things, but he usually does what he sets out to do, just not on time.
My Hypothesis Took A Break
I bought Tesla stock in 2012 on a whim. I thought Elon Musk was a great leader and the Model S looked cool. I had some extra cash laying around, so I picked up shares. Sometimes luck can play an extreme role in your life.
I held on to the stock because I thought the world would pivot to EVs and Tesla was the leader.
For now, my hypothesis has taken a break. EVs aren’t selling like they used to. I continue to believe that the pivot to mainstream EV adoption is inevitable, but the next couple of years are going to be interesting…
I’ll add more to this post tonight after I digest the earnings.
Finally, posts like this are a great reason to be an index investor. No need to waste precious brain bandwidth chewing on stuff like this.
Update 4/23/2024, 4:29pm MST: Tesla’s Earnings Call!
As expected, Tesla’s earnings were bad, but the stock is up over 10% after hours. Tesla stated that deliveries of the cheaper car are being accelerated and will happen in about 1 year from now. That is big news and I was totally wrong about this in the post.
Also interesting were the screen captures from the earnings deck of a preview of a ride-hailing app. Could the Cybercab happen also in 2025? I’m skeptical, but hopeful.
If you hold stock in Tesla, the next couple of years will be exciting if nothing else.
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Hey Carl, I think your analysis is spot on. The “non-nerds” will inevitably fall in line. The positives are all there and cost parity is always going to start the twist to the alternative. Elon does have his challenges, but ultimately he does generally get his shit done. FSD will be the most interesting question mark to date in my eyes as it opens so many doors. Regardless, great read as always!
Honestly the truth about Evs is somewhere between the sensationalists and your own all is great take. For example my own usage profile would never work with an ev. We drive long distances towing a trailer. There is no ev on the market then can do that and owning a seperate vehicle is not cost efficient. Also while chargers are getting more common place there are still areas of the country where they can be 50-100 miles out of your way. Not to mention the hurdles for many to charging at home. The technology has come along way, but still has a long way to go.
On the other hand very few owners are going to have a car freeze up on them or battery die on a trip on a regular basis. It’s probably 10 percent of my and most people’s usage that is an issue. So the sensationalism is overwrought. But real solutions for that ten percent matter.
I personally prefer hybrids although there are few of them that can tow as well which I find disappointing.
Trailers: True, but one cool thing that’s coming online now is trailers with their own batteries. I like this a lot; the trailer provides it’s own propulsion and also gives you quiet power/HVAC when stopped (no generator).
Apartment living: One of the best parts of having an EV is being able to plug it in when you get home, so I see your point there too. However, there are a lot of people who EVs would be a great solution for and swear off of them because of crap they hear in the media. I can think of one person who drives minimally, but explodes at the price of gas. I’m like, “Dude, just get a Leaf.” The response is even more anger. Sigh…
I have a major issue with the common “owning a separate vehicle is not cost efficient” logic for towing/hauling. I don’t know your situation, but most seem to default to “well, I suppose we have to get a $70,000 Tahoe because we occasionally tow.” Burning up that expensive tow vehicle’s life by daily driving it is the real expense. If towing is 10% of your driving, why not get a efficient, flexible, comfortable car that suits 90% of the miles (say $20,000 for a used Bolt, Volt PHEV, or Prius), then get a used pickup or large SUV that will then last forever because you aren’t using it every day. Maintenance is largely per mile so much less and insurance would be similar if your insurer accounts for mileage/use.
Beyond that and perhaps beyond your situation, I think people would be shocked at the per-hour cost of their RV or boat if you included all depreciation, maintenance, and marginal vehicle costs to dailying their off road F250.
Reason 1 is valid. Elon is a huge tool and could do something really dumb on a whim. See Twitter/X. If I’m paying $50-75k for a car that makes me really nervous.
2-3 are about risk. EVs are still comparatively new. I was hoping to get one about now when our son gets our older car but I don’t know. My wife would really take some convincing. I am more on the early adopter side and wouldn’t mind having an EV though the battery issue does make me nervous since we tend to hold our cars a long time.
“2-3 are about risk. EVs are still comparatively new.”
Hmmm, where do you see the risk? I did some thinking on this and here is what I came up with:
1) The lithium-ion battery chemistry was invented in 1976, so it’s almost 50 years old. There is a load of research and information about them now.
2) You already use them daily in devices like phones, tablets, and laptops.
3) The first Tesla came out in 2008 and Leaf in 2009. In the case of Tesla, the car phones home to the mothership. Battery health is constantly monitored.
I expect to get get at least 200,000 miles from my Y. At that time, I’d bet I’ll be able to swap out the battery for something superior and much cheaper than what a current replacement would cost.
The other thing that’s great about Teslas is how safe they are. This story is horrible and amazing: https://www.ktvu.com/news/tesla-driver-who-drove-family-over-devils-slide-cliff-charged-with-attempted-murder
I’ll thow my two cents in here since we were talking about some of it recently at work, ironically enough
I don’t think full self driving is viable unless every vehicle on the road is self driving, it’s basically been available just not viable (albiet for different reasons) for decades at this point (Google gets me the late 1950s for extremely primative self driving that I think could have been viable, if difficult to implement). I think we can get extremely close but I don’t think we’ll be able to have a computer saftely handle the guy who is still driving his 1957 Ford F-100 with no modern bells and whistles. Could we mandate self driving? Sure, but I don’t think the political will is there in the near future. I think someone will always have to be behind the wheel. Liability will be a huge issue.
I don’t drive much, so maybe this is just a me problem. I usually gas my car up twice a year, excluding my one trip home every year. So I don’t see the price of gas as much of a problem. My 2009 beater cost me about $20-$30 (maybe less?) to fill it up back in December.
Probably my next car will be a hybrid, electric for day to day driving and the ICE for trips. At the end of the day I plan to retire to a decently rural area where an EV just wouldn’t be the right choice unless paired with an ICE/hybrid vehicle I can use in an emergency, say during a deep freeze when I need to drive somewhere in a hurry. I mean I plan to own a truck in retirement specifically for this reason.
I know at least a few years ago you could not drive east to west across New Mexico soley on an electric vehicle unless you took a fairly roundabout route. I like the ability to be able to make long trips. Based on the map posted here it looks like I-40 is still the only area going east to west across the state. This could add a solid 5+ hours to a trip depending on where I started (and some healthy eyeballing on the route). I think this will continue to hold back adoption. Personally I think long-term the middle path of hybrids will become the norm, with EVs being more popular among urban and more settled areas and hybrids becoming the norm among rural populations.
“I don’t think full self driving is viable unless every vehicle on the road is self driving…”
Are you strictly referring to Tesla’s approach? The reason I ask is because Waymo already has fleets of driverless vehicles in San Francisco and Tempe. Here’s a photo of one I took in February: https://www.1500days.com/wp-content/uploads/2024/04/PXL_20240224_013328216-scaled.jpg Waymo is expanding to Austin and Los Angeles soon: https://waymo.com/blog/2024/03/scaling-waymo-one-safely-across-four-cities-this-year/
“At the end of the day I plan to retire to a decently rural area where an EV just wouldn’t be the right choice unless paired with an ICE/hybrid vehicle I can use in an emergency, say during a deep freeze when I need to drive somewhere in a hurry.”
I’d be curious to know what your reasoning is here. EVs work in the cold, especially if you warm the batteries first (see my screen capture in the post). I was curious, so I tested out a long drive myself. In February, I drove west to Las Vegas. Starting with an 88% charge, my Y made it to Parachute Colorado, a distance of 231 miles before I had to charge. This was with 6,000 of elevation gain (over the Continental Divide) in subfreezing temperatures.
I’ve had ICE vehicles that wouldn’t start in severe cold, but this is a non-issue for an EV.
Regarding the charging situation, Tesla has been growing the network aggressively. It’s more than doubled in size in the past 2 years. Check out the map: https://www.tesla.com/findus
I see that there are still some parts of the country that are lacking. I doubt there are many Teslas in Plentywood Montana. But even then, unless you’re driving long distances every day, just plug it in at home.
I’m going to number these to make it easy.
1. Self driving. I was unfamiliar with Waymo before this. I wss envisioning the full self driving with no one behind the wheel/minimal input from the driver. Perhaps I’m underestimating where full self driving is going. I thought Tesla was further ahead than competitors to be honest. I have concerns about having no one behind the wheel. I’d be curious how all the liability will work.
I was seeing further tools to assist a driver during operation being the path forwards because people are irrational. I’m open to being proven wrong, I hate to drive after all.
2. My logic is twofold on the rural area idea: weather and reaction time. Temperatures will get to the mid-teens in the winter with a foot or so of snow. I need a vehicle that can get through that, so a fairly heavy duty vehicle (I know there are some heavy duty EVs). I will agree with the time to heat the battery this is less of a problem.
My understanding is that without this heating time (pick your emergency situation where you need to drive in a hurry), ICE/hybrid vehicles have a higher chance of starting in cold temperatures. My concern is mostly with the starting of the vehicle not during operation. In such weather it becomes s long drive to the hospital.
I could be wrong though. Alternatively I have the EV as the commuter/good weather service and then a heavier duty hybrid/ICE for these situations in inclement weather.
3. Distance and charging. I do agree and I think these are short term problems that can be solved. I think we’ll make more efficient/higher capacity batteries and instal more chargers. I assume charging stations will eventually be in every tiny town just like gas stations are now.
I just was looking at my usual trips, to the grocery store and back (charge in my house) and back home (aproximately 1200 miles ~22hrs of driving) and for the latter I see some very large gaps along my usual route (especially in OK’s panhandle. You could do it if you routed it properly though but it would add distance). But I’m not doing a deep dive on the scale, maybe an EV can handle these distances these days.
You could probably make a good argument that hybrids will be a fad while these remaining issues are ironed out before full electric vehicle adoption. I think some form of EV (be it a hybrid or full) is coming, it’s just a question of when. These are just the issues I see at the moment and what I’m thinking about for my next vehicle based on the current situation, there is time for things to change.
I appriciate the feedback on my points though. It’s given me some more to chew on going forwards. Overall I’d describe myself as optimistic on innovation so as long as physics will allow it, any problem can be overcome. It just takes time to solve them.
Hey Carl,
I have loved our first month with our Model Y. It is a tremendous value, especially in CO where we get 12,500 in tax credits.
I’m going to push back on the notion that ONLY EV sales are slowing. Not mentioned in your article is the interest rate’s effect on demand across all vehicle types. The media narrative is all about slowing EV demand. However, GM, Ford, etc. count a car sold when they deliver it to the dealer. The legacy OEMs have been filling up dealer lots. Where Tesla is up to 30 days of inventory, most OEM dealerships are sitting on record inventory, with over 100 days worth. A practice know as channel stuffing. They get to count a sale even though the vehicle has no buyer yet.
I’d also argue Tesla sales are not down as much as Q1 numbers would indicate. Issues with the Suez Canal and the German arson attack meant that a lot of vehicles that would have made it to their owners by quarter’s end, instead were stuck on boats, trains, or docks. Most of the added inventory will get counted as a sale in Q2. Tesla is still in a unique position of being able to sell every vehicle (Ev) they make profitably; however, they may need to offer additional price cuts or incentives to do it.
I shared your concern about the reported canceling or deemphasizing on the cheaper Gen 3 vehicle in favor of prioritizing robotaxi. If I understand yesterday’s call correctly, Tesla will pursue a “hybrid” approach whereby they produce new cheaper vehicles using existing factories and lines to maximize existing capacity and get to market sooner. The “new “ vehicles would be variants or spinoffs of the Model 3 and Model Y. Manufacturing would be a hybrid of existing practices and incorporation of some of the “unboxed” practices. I am good with this approach and it restored some of my faith in the near term prospects of Tesla.
FSD could be fully “solved” in two months or two years. Your guess is as good as mine. I do believe Tesla has the best approach and they are rapidly iterating, growing miles driven (data), and increasing compute power. Prospects of the first FSD licensing deal this year are huge.
Last point on batteries. Yes, the 4680 ramp has been slow, though it is progressing. Tesla can make up for this by getting cheaper batteries, including 4680 form factor, on the open market. Prices for these batteries will be coming down as a bunch of new supply/factories come on line this year, while legacy OEMs simultaneously scale back their EV programs. IMO, legacy OEMs are sealing their fate, by scaling back EV plans when they need to be powering through to get to scale/profitability.
Thanks Justin!
I appreciate the comment about the legacy OEMs.
The new vehicle(s) being built on existing lines seems positive. Perhaps it won’t have the same cost savings as the unboxed process, but I think time to market matters more right now. I can’t wait for 8/8!! I do wonder what Tesla will do with Giga Mexico?
I’ve been testing FSD like crazy. It does almost all driving pretty well, but still messes up on edge cases. For example, yesterday there was a Detour sign with an arrow pointing which way to go and the Y couldn’t figure it out.
Now through the end of 2025 will be interesting times for Tesla. Hopefully interesting in a good way.
1) I hate Elon Musk
2) I live in SE WA on the border with ID. That nice little corner that has no charging stations. I do drive a hybrid but there aren’t any places around us that provide charging stations in abundance. Even my yearly travel for work in Southern ID does not offer a lot of charging stations.
3) I am a car person, and I don’t like the look of them. But that’s just me personal opinion.
2) I’d be curious to see you map your house to your work in Southern Idaho in the Tesla trip planner: https://www.tesla.com/trips
This summer, we’re taking our Y on a big trip: Longmont, Bozeman, Missoula, Seattle, Portland, Newport (Oregon), Bend, Irwin (Idaho), Jackson (Wyoming), and back to Longmont. Except for one part of the trip on day 1 through Wyoming where we have to go slightly out of our way, the trip will be easy.
3) I’m a car person too and I have to agree with you. The Y is a great car, but it’s nothing great to look at. Tesla focuses on aerodynamics first, hence the weird lines.
There is no charging station on my route until you get within 45ish minutes from Boise. So that’s about 4-4.5 hours with no option to charge anywhere.
Missoula is a great place! If you are taking I-90 from Missoula to Seattle I am assuming you will go through Spokane which is about 2 hours north from where I live.
Thanks for helping me understand the supercharging situation a little better. It’s easy to get stuck in your own tunnel vision.
Yep, that’s exactly the route we’re taking. Let me know if you have any suggestions for food or hikes or anything else in Missoula.
I’m sure that many who read your post disagree with some or all of your points. I disagree on some. However, no one can deny your track record here. You’ve held on through thick and thin and that’s not something I could have done. it’s extremely difficult to hold a volatile stock, particularly after significant gains. I tip my hat to you. You have done awesome with your portfolio. I would love to know what your average annualize gains are. Nice work.
TL:DR – I am a six-month Model 3 owner with ideas why the market for EVs is where it is. The issue is not with Teslas in particular but the entire EV market. Yes, Teslas have the supercharger network, and that is a game-changer. Elon understood that was a key to adoption. However, most rely on EA or other networks and are simply unreliable. I would never buy a non-Tesla, but Tesla is getting hammered as the market is getting hammered. Specifically regarding Tesla, the issues in Chicago this winter hurt them. The EV owners that had to use EA and were stranded were another black eye. Also, charging at home saves a lot of money once you amortize the cost of your home charger. But Supercharging is not much cheaper than gas in much of the country.
You touched on an excellent point: the early adopters are tapped mainly. Now, you need cars that match their ICE counterparts for price and performance. Tesla is getting there. Others, not so much. Five years ago, I never would have had an EV when I did much more family traveling for kids’ sports. A vehicle that matched my Honda Pilot in ease of keeping fueled, accessibility of fueling stations, the speed of that re-fueling, plus 7-8 passengers would have been nearly impossible to find outside of a 100K Model X. The Pilot was less than half that. My friends who know I bought a Tesla are shocked at the price – they still have the old, very expensive EV pricing in mind.
Note also that an EV is not for everyone, despite what we see in the comments. Nor is the condescension towards ICE owners, which pisses them off, going to convince them to buy an EV. As does the idea that the government is trying to force people into buying one, whether through mandates or artificially driving up the cost of gas to make EVs more appealing. I have friends who were furious I bought an EV. The government’s involvement and overt coercion made EV vs. ICE a political football match. BTW, I do not know if you have driven a nicely equipped F-150, but damn. It’s the best vehicle I have driven, not named Model 3. A luxury vehicle that can also carry a half-ton of whatever you need for your projects is brilliant, and with an eco-boost engine, it’s not that bad on gas.
Elon’s political positions (commitment to free speech – I said it) may have annoyed some, but I am betting it was among the core markets for EVs, which leans left in my opinion. That said, will they buy a Mach-E and use Electrify America?
Lastly, you have tapped into why I like Tesla as a long-term play—they are becoming the gas station for EVs, which may well be where the money is.
“I have friends who were furious I bought an EV.” We’ve experienced the same. My response: “There shouldn’t be anyone happier than you because I bought an EV. You love internal combustion and every EV means one less person buying gas! More gas for you!”
I don’t like the government stuff much either. How many know how much fuel is subsidized by the government? It’s massive. I vote for taking away the subsidies for everyone and see who wins.
Yeah, the Supercharger network will eventually be huge. If Tesla solves FSD, that will be far bigger. I think we’ll know this year.
I disagree that FSD will be “solved” this year. Its a party trick suitable for longer straight shot highway, but to me, I’m not trusting code to navigate me start to finish. While that is based solely on my FSD free trial, it is a solution that is fixing a mostly non existent problem, We are a long way from implementing a large fleet of autonomous vehicles (can you imagine autonomous tanker trucks barreling down I-70 in between Denver and Silverthorn)?
I know you like bold statements, but I would put that time frame at more than 10 years before we see common autonomous FSD vehicles.
And lets not even come close to discussing the sci-fi disaster scenarios of bad actors hacking our FSD vehicles for malicious purposes….
I’d call it more than a party trick. I recently did a 400 mile round trip and only had to intervene twice for a lane issue. Just this morning, on a drive, I noticed that the new version (12.3.6) had solved two troublesome situations in my own town. One is a very difficult unprotected left turn. It’s not nearly ready for driverless operation, but the progress lately has been quite good.
Actually, I could and look forward to it. Look around at other drivers next time you’re out. While driving, the number of them looking at phones is alarming (10%?). At stop lights, maybe it’s 50%. On Saturday, I was almost rear ended by someone not paying attention. I think that road deaths will greatly decrease once autonomous fleets become widespread.
I also think that autonomous vehicle fleets will be widespread this decade, but it may not be Tesla. Waymo is already in San Francisco and Phoenix. It’s expanding to Los Angeles and Austin soon. It may be a while before it’s tackling Minneapolis in winter, but I’d bet it happens this decade.
I tend to be optimistic though. Check back in with me in 5 years and feel free to tell me I was full of poop if my techno-nerd-self-driving-utopia is still lagging! 🙂
I have a Model Y performance that I bought at peak price in mid 2022. I am a lifelong democrat (I voted for Mondale AND Dukakis…lol). I also really don’t like Musk. like alot.
So how did I reconcile the 2 opposing positions and end up with a MYP? Well, a number of things. 1) I took a job with a 60 mile one way commute, 2) I live in NJ, where you are not permitted to pump your own gas, making the process of getting gas a maddening experience 3) I wanted to replace my 10 year old Audi with 140K on the clock, and 4) my workplace offers free charging, and I owned a home with easy ability to add a 50a charger in the garage
All of those factors made an EV a good option for me.
But, even in 2022, there were a lot of EV options available, including Tesla 3, Y, S, and X, Ford e-mustang, Rivian, Lucid, Polestar, Audi, Porsche, Jaguar Hyundai and Kia. However, despite my distaste for Musk, at the time there was a heavy practical incentive to lean to Tesla. Regardless of my ability to charge at work and at home, their national network of Superchargers gave me the ability to consider longer trips. That plus knowing that the Tesla probably charged more efficiently at non-SC high voltage chargers was another factor in my evaluation. In addition, despite higher demand back then, access to a car was easier and likely cheaper than any other available EV at the time. All the other brands were slower on the roll out, or much more expensive due to supply and demand issues..
I was worried about the financial security of the company and the ability to support the car long term however. I have friends in finance who are very bearish on TSLA. They have serious concerns about accounting within the company, and they see a real possibility that it is a house of cards. These analysts have a strong track record of identifying companies with these types of accounting issues, and are trust worthy.
So I think it is possible to separate out Tesla the product, Tesla the company as a viable long term investment, and Elon Musk. It is possible to be a visionary and also a liar, and schmuck. Many things can be possible at once.
My bigger question is why you continue to hold such an outsized position in your portfolio. Based on what financial data do you continue to believe that TSLA is worthy of such a role in your NW. What is your basis in the investment?
Here’s one more reason: I know some people who work for Tesla and many despise Musk too. I’ve asked them why they stay and they all said some varation of this: “The mission is too important.”
I’d be curious to know what they can point to specifically.
I’ve heard others make these statements as well. The most famous one was Bill Mann on a Motley Fool podcast stating that it looked like Tesla was playing monkey business with numbers after one of the quarterly reports came out. I researched it and it was due to one of Musk’s earnings tranches being met and throwing the numbers off. I hope Tesla isn’t doing anything nutty, but it wouldn’t surprise me either if they were.
It’s not really any financial data. It’s more subjective. I bought it on a whim with extra cash laying around, but continued to hold it thinking that the world would pivot to EVs aggressively. It has in some countries like China and Norway, but it’s stalling out here.
I also thought that the Supercharger business would eventually become a major profit center. In light of recent news, I have to question my hypothesis here.
Finally, I thought (and still think) that the stationary energy business could be bigger than cars.
A bigger bet is robotaxis, but I’ll respond to your other comment to address that.
Bottom line: Tesla is having a rough time now, but I still believe that the future will be good.
I’ll admit that I don’t really see the benefit of a fully electric vehicle over a plug-in hybrid, like a plug-in RAV4 or plug-in Prius. Around town, it has all the benefits of a fully electric vehicle, never uses gas, and when you roundtrip, it has none of the downsides of a fully electric vehicle. In Missouri, where I live, I can’t drive from St. Louis to Jefferson City, where I have friends, (normally a 2 hour drive) and back without stopping twice to charge in a Y as the closest super charger is 30 minutes out of my way either in Columbia, Missouri or Osage Beach, Missouri. I can drive my car roundtrip without stopping for gas except to fill up at the beginning and the end. So a drive to Jeff City in a Tesla is gonna cost me an extra 2 hours. No thanks! There are large parts of the country, particularly in the Midwest and South without adequate superchargers.
I currently drive a regular hybrid, but that’s mostly because its impossible to get a plug-in Prius or RAV4 in Missouri. Maybe if I cared about cars or was a car person, I’d get it, but having ridden in a couple Teslas I just don’t get the allure compared to plug-in hybrids.
I looked at a road trip I did recently and the longest I went without a charge was from Longmont to Parachute, a distance of 233 miles in my Model Y Long Range. This was in the winter over the continental divide, so less than ideal conditions.
I mapped out your route using the Tesla trip planner and it’s a 133 mile trip each way. There is a chance you could make the round trip without charging, but it would be close. You may have to charge once on the way back. Add the 30 minute detour to Columbia and about 10-20 minutes of charging and you’ve added an hour to your trip. If you do this frequently, I can see where it would be annoying. But also, if you’re at your friend’s house for any length of time, plugging in there (you can charge an EV with a standard outlet) would probably avoid the Columbus detour altogether. I also see that Jefferson City has a charger at Culver’s, although it’s slower.
In my part of the world, Teslas work great. It costs $8 to fully charge. Where I take roadtrips, there are adequate Superchargers. There is little maintenance to do. In the winter, I can tell the car via the app what time I’m leaving and it will defrost itself.
But, we’re still early in the game and it’s obvious that EVs aren’t for everyone. Lack of charging, especially if you’re in an apartment, isn’t great. Also, the best car to drive is probably the one you already have.
Carl – Thanks for the response. The last time I drove to Jeff City was in the winter when the weather had highs in the 20s, and we would have been driving my friend’s regular range Model 3, and instead ended up taking my Prius, which easily did the whole trip in one tank of gas. Two stops was going to be necessary to be safe in the Model 3.
I’m not saying that EVs aren’t the future, but at this time, I currently don’t see how Tesla is inherently better than a plug-in hybrid for most drivers who aren’t super motivated by the environmental issue (which is most people) I’m not yet sure that Tesla is going to be the winner in the electric vehicle war, but it does seem to be relatively far ahead of any fully electric competitors.