„They can't stop us,“ Musk, the company's CEO, told workers in a giant tent next to the factory.
But there are increasing signs that Tesla may not be as unstoppable as once seemed. The company's car sales are no longer growing at a breakneck pace. Chinese automakers and established brands such as BMW and Volkswagen are bringing electric vehicles to market. And Tesla has been slow to respond with new models.
Mr. Musk's many outside businesses and tendency to make polarizing political statements and attack people with whom he disagrees have raised questions about how focused he remains on running Tesla. Wall Street is growing concerned about Tesla, whose stock has lost a third of its value this year, even as major stock indexes hit record highs.
„A bet on Tesla is always a bet on Mr. Musk,“ said Eric Talley, a professor at Columbia Law School who specializes in corporate law, governance and finance.
In an interview with former TV anchor Don Lemon streamed online Monday, he said: musk Musk dismissed the drop in the company's stock price as part of the economic cycle. „Stock prices may go up and down, but what really matters is that we make and deliver great products,“ Musk said. The week-long production stoppage at Tesla's Grünheide factory was the second this year, but it was only a temporary setback. But the stock's decline shows investors are reassessing Tesla's long-term prospects and are becoming less certain that the company, which is still worth more than other automakers, will one day dominate the industry. There is.
Musk can take much credit for encouraging other automakers to focus on electric vehicles and proving that they can be practical, profitable, and fun. Tesla's Model Y SUV was the world's best-selling car of all types last year.
However, Tesla has not added a mass-market car to its lineup since launching the Model Y in 2020. Chinese automakers such as BYD, SAIC and Geely are introducing dozens of new models. Analysts say Tesla's futuristic Cybertruck, which went on sale in limited numbers last year, will likely appeal to a relatively narrow group of buyers, given its high price and unconventional design. Expect. Tesla is also working on an electric car that costs about $25,000, but it is not expected to be available in large quantities until 2026.
„I'm a little surprised at this point that the next thing hasn't happened yet,“ said Michael Lennox, a business professor at the University of Virginia who studies industries undergoing technological upheaval. .
Tesla has repeatedly adjusted prices in response to demand, lowering prices and sometimes raising them again to boost sales. Analysts note that while the cuts helped make electric vehicles more affordable, the strategy eroded the company's profits without contributing much to revenue growth. The price cuts have also significantly reduced the resale value of Tesla cars, since no one will pay more for a used car than a new one.
The strategy „trains potential buyers to wait for a deal,“ Future Fund managing partner Gary Black said on X (formerly Twitter). Mr. Black, who has more than 400,000 followers on Mr. Musk's company X, has long been optimistic about Tesla, but the fund recently sold some of its stake in the company.
Tesla faces particularly stiff competition in China, the world's largest auto market, where more than a third of new car sales are electric vehicles. With a wide range of sedans, SUVs and inexpensive subcompacts, BYD surpassed Tesla in global electric vehicle sales in the last three months of 2023. The company's Seagull model sells for less than $12,000 in China.
Even after Tesla's price cuts, the Model 3 sedan and Model YS SUV built at its Shanghai factory are still much more expensive than many Chinese models. European and Chinese automakers are also introducing new models. Electric car At blinding speed. HSBC says more than 150 will be on sale by the end of the year.
At the same time, Tesla cars don't have as many amenities as cars from BMW or Mercedes-Benz, so they're not in a good position to compete in the luxury car market, said John Helveston, assistant professor of engineering management. . George Washington University studied China's car buying habits.
„There are a lot of great options in China, so Tesla is right in the middle,“ Helveston said. „It's a car that costs too much for the luxury you get.“
Tesla has not told investors how it will regain its position in China, where it generates the majority of its sales. The company did not respond to requests for comment.
“What will they take out of their toolbox other than price cuts to remain in the market in 2024?” asked Tu Le, managing director of research firm Sino Auto Insights. “The price-cutting tool has lost its effectiveness.”
Mr. Musk's disdain for established ways and preference for big engineering challenges makes it difficult for Tesla to introduce new products quickly, Mr. Helveston said. The Cybertruck is one example. Made of stainless steel, it is more resistant to rust than traditional steel, but is notoriously difficult to machine. The truck arrived two years later than planned and consumed resources that could have been used for a product with broader appeal.
„If Tesla hadn't been so aggressive about trying everything new and used half the available knowledge, Tesla could have done a lot better than it does now,“ Helveston said.
But Mr. Musk, who is excited about doing new things, laughed with glee when he told Mr. Lemon about a revised version of Tesla's Roadster sports car, which Tesla plans to release at the end of the year. He said the vehicle will combine technology from Tesla and its rocket company SpaceX to „create something that's not really a car.“
In Europe, the Model Y was the best-selling electric car last year. But Volkswagen and its Audi, Skoda and Seat brands combined sold more electric cars on the continent than Tesla, according to Schmidt Automotive Research. Model Y sales declined at the end of the year as Germany and other countries cut subsidies.
Tesla could also be affected by restrictions the European Union is considering imposing on imports from China. All Model 3 sedans sold in Europe and the right-hand drive Model Y for the UK are imported from Shanghai. According to Schmidt, one in four Chinese-made cars imported into Europe is a Tesla.
„This will reduce previously impressive profit margins and create a more level playing field for European automakers who have traditionally produced locally,“ said Matthias Schmidt, the research firm's founder. said. He pointed out that France has taken protectionist policies a step further by limiting government subsidies for the purchase of electric vehicles to vehicles produced within the European Union. Italy has also indicated it may take similar measures.
Mr. Musk is also a source of uncertainty. In January, a Delaware judge revoked Tesla's compensation package worth more than $50 billion, saying Tesla's board used a flawed process to negotiate his compensation. In response, Musk threatened to move Tesla's corporate registration from Delaware to Texas.
Tesla's board has not disclosed his new salary structure. Musk, who oversees SpaceX and several other businesses in addition to Tesla and X, has threatened to pursue unspecified new businesses outside of Tesla unless he is given 25% control of the company. ing. He currently owns about 13%.
„We've got a difficult CEO,“ said Mr. Tully, of Columbia Law School. „What does that suggest about Tesla's ability to get Mr. Musk's attention? Is there a chance he will leave the company?“
Musk's whistleblower visit to Grünheide was timed to demonstrate his continued commitment to the company and factory to German employees who had voiced safety concerns after the arson. It seems so. The factory produces about 300,000 cars a year, but the company aims to increase that to up to 1 million cars.
Asked by reporters if he intended to stick with that plan, Musk said: „Absolutely.“