Tesla Is A Car Company (And That Ain’t Good)

2/ What does this mean for Tesla? Well, for starters, it means they’re getting more in line with the rest of the car industry - which is a thin margin business.

That might work for a company like Toyota with very strict production controls. However, Tesla is a hot mess.

— Brianna Wu (@BriannaWu) January 13, 2023

4/ Don’t discount what’s going to happen to used car dealers. They are stuck with excess inventory. They are going to get absolutely devastated on selling.

So you’re going to see a glut of dirt cheap Teslas on the road picked up by a clientele not inclined to service them.

— Brianna Wu (@BriannaWu) January 13, 2023

6/ Porsche doesn’t lower their prices to pump the stock price. They are playing a long game in the luxury market.

Tesla isn’t a luxury car, but it pretends to be. And right now we’re seeing the consequences of a complete lack of leadership.

— Brianna Wu (@BriannaWu) January 13, 2023

But wait, there's more!

For Tesla owners looking to sell their vehicles, the steep price cuts this week have been frustrating. One who spoke to Fortune said he listed his 2018 Model 3 with the Full Self-Driving Beta software package for around $51,000 in December, but would likely cut the price to $30,000. 

Wu also predicted a “glut of dirt-cheap Teslas on the road” purchased used by people who might be unable to afford repairs, which can be notoriously expensive in the case of Tesla. In late 2021, one customer blew up his Model S in a YouTube video rather than pay $22,000 to repair it.

I read an article (sadly, didn’t save it) about another problem with electric cars: weight. Batteries are very heavy, and add about 20,000 lbs to the weight of a car. Which is clearly a danger to smaller, lighter cars. But it made me think of the Tesla semi; now I know why the Mercedes-Benz engineer wanted to see one. Musk claimed it could deliver a long-rage on one charge, but the batteries needed would have to be larger than than those in a sedan (or more of them). Weight only increases the amount of energy required to move the vehicle. Unless, as the M-B engineer said, the laws of physics are different in America.

And $22,000 to repair a car? Or $10,000 to $15,000 for repairs? I don’t think even IceT can get Carshield to cover that cost. I’m pretty sure that’s in the range where insurance calls it “totaled,” but car insurance doesn’t cover mechanical failure.

Yeah, I’m sure Tesla stock will bounce back any day now. If Musk can just find enough new suckers.