Some believe oil prices are irrelevant to Tesla’s clientele and therefore the recent woes. At over $70,000 a car, the typical Tesla customer could opt for a brand new BMW if running costs were the issue. If that’s the case, what is causing Tesla’s price to drop?
Taking a longer-term view however, Tesla could certainly spell trouble for the major manufacturers.
China is a logical place to look for answers, following Musk’s announcement on 14 January that sales in the country were ‘unexpectedly weak’ in the fourth quarter. The theory emerging is that early Tesla adopters are a small crowd, and they’ve already spent their cash. With an affordable model looking further off than hoped, Tesla is effectively a collector’s car and in China the novelty is starting to wear thin.
Taking a longer-term view however, Tesla could certainly spell trouble for the major manufacturers. Global warming won’t ease without serious intervention, and as emissions regulations get stricter, electric cars could triumph. As more car companies inevitably turn to alternative energy in the future, they’ll find Tesla well ahead of the game.
Teaming up with Panasonic, Tesla is building the Gigafactory – a $5 billion facility designed to supply enough lithium-ion batteries for 500,000 vehicles a year. That’s a lot of cars, and some believe a gross overestimation (based on recent years that’s a similar number of units per annum as the best-selling car in the US). But the exciting point for investors is that via the Gigafactory, Tesla could sell its batteries to rival car makers.
