Tesla faces a ‘demand’ problem

I was just reading this article from CNBC dated April 16, 2024 – “Tesla job cuts heighten Wall Street concerns that EV maker faces a demand problem“. Tesla announced job cuts on Monday. Tesla shares plunged almost 6%, continuing a year-to-date sell-off. Then EV demand questions that have been popping up… Sounds dire!

As an ‘investor’, I’d be concerned. As a Tesla owner, or prospective owner, I’m delighted. First, as an owner, I invested in Tesla in 2023 by buying a Model 3, and their cars are amazing. In my opinion, Tesla makes 2 ‘perfect’ cars for the segment of the car-buying public that is willing to take the EV plunge. The 2024 Model 3 (refresh) and the Model Y (best selling car of any type in the world in 2023). Safety, reliability, efficiency, cost of ownership, and just plain fun to drive are all criteria my Model 3 meets and exceeds. And the Model Y is more of the same, just roomier for young families or older individuals that find the sportier stance of the Model 3 to be less comfortable.

Then for the prospective EV buyer, Tesla offers amazing deals on cars ‘in inventory’ that make it hard to pass up. I bought my Model 3 from inventory which provided a substantial discount before the federal tax credit. If one were in the market for a Model Y, this is the kind of deal you could find today (link): $39,300 to $41,500 after tax credit – add $1000 for red paint…

I know, for many this sounds like a lot of money, and it is. But, after doing the math that factors in electric versus gas cost savings, and maintence and inspection cost savings, owning this Model 3 or Y for 5 years will break even with, or be less than, the cost of owning a Toyota Camry. A few people have put some effort into doing this comparison, in case you’re interested (some of these links are dated, but you could substitute Model Y for Model 3 today and come up with a similar comparison):

Well, that’s all for now. I got a bit off track, but my point is Tesla makes a great product and they’re postured well for the future. Sure, China is a becoming a major player on the EV scene, but as an American company with good leadership, I’m still betting on Tesla to lead the industry when it comes to producing EVs that people want to buy, perform well, and last as long or longer than the venerable Camry.