Take Your Best Shot at Tesla

May 4, 2023 - 12:34pm -- Selcuk Gulboy

I followed a Tesla Model S driving home last night. Attractive blue sedan, even in the Chicago gloom.

I have not personally seen any other makes of electric vehicles other than a rivian pickup, which looked like it had never been driven on the streets of Chi-town. I know Ford has sold some Mustangs, and GM sold some Bolts, which they discontinued. I see no electric BMWs or Mercedes or Audis or Chinese built electric varieties in my town.

Tesla owns the American market for electrics, but their behavior says they are running scared. Two price cuts in the last month. All of Tesla’s competitors are investing heavily in advertising, battery plants, and lobbying, yet so far they are still not legitimate rivals on the street. The Japanese car companies have finally decided to maybe, perhaps, possibly put electrics into the marketplace.

I have questions.

Americans like trucks and husky SUVs. Does an American market clamor for a lithium-ion electric that takes half an hour to charge? Do they want a vehicle that gets 100 to 200 miles with any kind of load before requiring charging in cold weather like Chicago, much less Duluth? Frankly, I doubt it.

If my assumptions are correct, does that mean today’s electric cars are primarily sedans built for Phoenix and Miami markets?

I know this is short-term thinking because eventually there will be more charging stations with faster charging, but even Elon Musk has yet to solve the weight and distance issues 

President Biden and Governor Newsom of California can proclaim and legislate as much as they want, but if electrics do not do what American vehicle buyers wish to buy, the electric market will be limited to city driving with light loads,  i.e., your mama’s car in Los Angeles.

I think Elon Musk, the ultimate entrepreneur and risk taker, sees this. He has more experience building batteries and searching for a replacement for lithium than anyone. It appears he has no imminent replacement for the element. America actually has huge amounts of lithium, but we don’t mine it because environmentalists make it too difficult and expensive. So we haul it in from Bolivia and Africa. Forget about getting it from China or Russia. Meanwhile, Biden likes the idea of expensive gasoline and diesel, and Exxon and Chevron are not objecting.

If we really wanted $2 gas to lighten the load on American drivers we could eliminate taxes and ethanol subsidies, but would you bet $5 on that idea?

Musk is sending us a message with Tesla price cuts. I think he is saying, “Okay GM, Ford, Toyota, and BMW, try your best punch. By the time you finally put a viable vehicle on the road in 2025, 26 or 27, I will have huge brand loyalty and identity.  You will all stumble with recalls and missteps like Tesla once did. While you spend billions on TV advertising, Tesla will work on improving its car and squeezing out better mileage, even in Anchorage.

By increasing Tesla’s sales volume, he will expand his margins. And, he might even put the first driverless car on the street for people to buy. 

Elon Musk is tweeting it out to all of his competitors. Tesla is a moving target. Throw your best punch.

Question: What will it take for you to buy an electric vehicle?

Does liking a CEO of a company affect your buying decisions?

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