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Mark has been driving a Tesla since 2014. But Elon’s faith is beginning to fade after he pledged allegiance to Musk’s electric car company for nearly a decade.
“It feels silly to drive in a brand new Tesla Model Y,” Mark told me.
For 2022, Musk will increase the prices of four Tesla models, citing higher supply costs and updated driver-assist systems. So when Mark managed to secure a year-end rebate to bring the cost of the new Model Y down from his $65,990 to his $58,490, he figured he was getting a rare deal. However, just two weeks after his new car was delivered, on January 13th, Tesla announced that it would cut the price of the Model Y by $13,000 to $52,990.
The big price cut shocked the Tesla owner community. The value of a brand new Tesla from Tesla fell by as much as 20% overnight. Fans Stick To Masks After ‘Production Hell’, Some Feds investigationand instances of the handle literally falls off I had reached my limit.
Mark’s message to Tesla’s CEO was straightforward. “Elon, help us, do something!”
Tesla has been disappointing and disrupting the auto industry for the past two decades, but in 2023, the once revolutionary car company has done the seemingly unthinkable. The uproar among supporters like Mark, who is also usually a Tesla shareholder, is more than complaints from overly attached enthusiasts. This shows that a company that has long relied on a near-mythical reputation as a futuristic automaker is losing its edge.
Tesla is transforming from a young, silly industry disruptor into a company that looks like a formerly rattled automaker. And the once epic leader of the company that promised to take us to Mars in the movie Iron Man is looking more human with each passing day.
Tesla has so far existed only in a favorable economic environment with no real competition. The market for electric cars is now everyone’s game, and Musk is trying to find out just how difficult it is to go to war with some of the world’s most famous brands.
lose the edge
Since its launch in 2003, Tesla’s calling card has been technology. The company has been at the forefront of his EV revolution, providing the first battery with a range comparable to that of a petrol vehicle and the first extensive charging infrastructure with a supercharger network. Tesla also led the way with innovations such as OTA software updates, giant in-vehicle touchscreens and keyless vehicle entry. But after years of leapfrogging traditional car companies’ technology, the futuristic guts of Tesla’s cars are starting to look obsolete.
The average electric car from automakers like GM, Ford, and Hyundai now has a range that rivals Tesla’s. iPad-like touch screens are now standard equipment in new vehicles. Other car companies have also caught up with the software, directing billions of dollars towards new features that will compete with Tesla, such as hands-free driving and batteries built for performance. An example is perhaps Tesla’s place in the world of self-driving technology.
For years, Musk has promised to deliver a fully self-driving Tesla vehicle, and last year his electric car companyessentially zero valuePrioritize self-driving technology.Tesla will soon level 2 A hands-free driving system where the driver does not have to touch the steering wheel and needs to pay attention to the road. But competitors such as GM and Ford have already introduced similar hands-free driving systems and have done so without getting caught up in federal investigations. Perhaps the final nail in the coffin of Musk’s automation ambitions is Mercedes-Benz’s Level 3, designed to require human intervention only under extreme conditions on public roads in the United States. It must have been early February when he got his first driver automation certification.
Another setback soon followed after Mercedes caught up with Tesla in Level 3 autonomous driving. Tesla has recalled more than 362,000 vehicles over concerns its latest fully self-driving (FSD) software could increase the risk of crashes.
Tesla’s car lineup is becoming obsolete, eroding the company’s huge lead in new technology.
Mike Blake/Reuters
Automakers have competed with each other on the latest technology since the days of cassette tape radio systems and anti-lock brakes. Tesla set the bar so high that competitors took a while to catch up, but now the dinosaurs of the auto industry are starting to catch up to their emerging rivals.
“Competition is starting to eat away at Tesla’s market share,” said Martin French, managing director of consulting firm Beryls. ”
Still, French said all is not lost for the industry disruptor. Tesla has maintained its edge with timely over-the-air updates. So even if people don’t come to upgrade their cars to new hardware, Tesla is still able to extract revenue from customers. No one else can claim that,” French said.
Tesla’s technical problems are not limited to the interior, and there are many requests for the exterior of Tesla cars. Since the Model S was released in 2012, Tesla hasn’t completely redesigned its vehicle. Its most popular cars, the S and the Model 3, are both sedans, body styles that the rest of the industry left in the dust five years ago. And by the time the Cyber truck hits the market (it was announced in 2019, but will eventually go into production at the end of this year), the electric pickup market will be full of models such as his GM. well established. Ford, whose F-Series pickup truck has been the best-selling car in the United States since the Reagan administration.
Tesla recently hinted at a facelift for the Model 3 and Model Y. He argued that as Tesla tries to move more and more cars, redesigning them will become an important part of the business.
“We need to keep up with Jones when we move to a higher volume vehicle,” Fiorani said. “When you sell about 300,000 of the same cars each year and park them all together in the grocery store parking lot, suddenly those customers want something that sets them apart from their neighbors.”
As if that wasn’t enough, Tesla is losing its novelty in how it sells cars. From the beginning, the company decided to avoid the dealer model and sell cars directly to customers. This gave Tesla more control over pricing and gave it an edge over its traditional competitors in terms of profit per vehicle. But competitors are finding ways to beat Tesla at their own game, keeping dealers long protected by complicated US franchise laws.
Companies such as Ford and Audi have changed their sales strategies to model Tesla’s innovative direct selling style. These companies have something that Musk doesn’t have. It’s a nationwide network of brick-and-mortar stores where customers can get vehicle service and repairs. Tesla’s service network is still fairly thin, with only 670 of his stores nationwide and only 1,300 of his mobile service options servicing about 2 million Teslas on the move. This gives established companies the opportunity to get profitable business from Tesla and go deep inside their cars through repairs. GM president Mark Reuss recently told investors that dealers have started repairing his Tesla in 2021.
“This is a great new business,” Lois said with a laugh.
Tesla is being beaten while Elon continues Elon
One of the clearest signs that automakers are in serious trouble is oversupply. For many reasons that might sound familiar, like customers being overwhelmed with designs, other automakers releasing some hot new tech, and brand reputation being tarnished. Cars may sell poorly. Tesla once had to build vehicles in tents outside its Fremont, Calif. assembly plant in a chaotic attempt to meet overwhelming customer demand. , which did not appear to be affected by this issue.
But cracks began to appear in late 2021, when Tesla struck a deal to supply car rental giant Hertz with 100,000 vehicles. EV boosters and Tesla bulls applauded the move, which took Tesla’s market capitalization to $1 trillion a few days later, but others in the industry said the deal was a big deal because Tesla had overbuilding issues. I was wondering if it was showing that there was
“We see Tesla fall into these traps and eventually all the car makers go out of business. said in an interview with Insider in December. “It’s a fairly traditional means of moving metal.”
Musk lost focus as Tesla began to pile up and the company’s dominance began to wane. Last spring, the billionaire became increasingly obsessed with the Twitter takeover. To raise his $44 billion fund to acquire the social media site, Musk spent most of last year selling Tesla shares (worth $22.9 billion) and taking on a large amount of new debt. Tesla shares plummeted amid reports of economic hoaxes, Mr. Musk’s bombastic behavior and post-acquisition Twitter confusion.
Elon Musk went from one of Tesla’s biggest assets to one of its biggest problems.
Getty
By the end of 2022, whispering about EV makers’ overproduction problem had grown into a roar. With the rest of the auto industry facing inventory crunch and withholding year-end deals, Tesla offered his unprecedented $7,500 discount on Model 3 and Model Y vehicles. Investors Angry, Customers Angry, Tesla Stock Falls 65% in 2022, Even Tesla’s Biggest Bulls Think Musk Is Ready For His 2023 Recession I was wondering if there is.
Tesla’s return to the herd doesn’t mean it’s doomed. Mr. French said Tesla may need some competition to get out of this stagnation. “It’s always good to keep your guard up in this business,” he told me. “They have the cash to do what they want. We will see if we can use it to gain an edge.”
But the company’s new position worries other industry analysts.
“Tesla’s Cinderella ride is over,” wrote Wedbush analyst Dan Ives ahead of Tesla’s earnings report in January. “Musk now has to navigate the company through this dark Category 5 macro storm instead of focusing on his new Golden Child Twitter.
Musk was able to allay some of those investor concerns with the company’s earnings call, confidently painting a rosy picture for Tesla a year ahead.
A calm and composed Musk helped stave off a year-long crash in Tesla’s stock, but the company’s survival remains an issue. Startups have been beaten in nearly every area where Tesla has dominated over the past two decades: vehicle design, technology, and sales strategy. Musk’s old competitors are closing in on his heels.
Nora Naughton is Insider’s senior reporter covering the automotive industry.