QOTD: What's Happening With Tesla?

Tim Healey
by Tim Healey

qotd what s happening with tesla
Mr. Guy wrote this morning about Tesla and how it appears that the company's cars are being sold to rental fleets. As most of you know, large fleet sales are often seen as a negative mark on the health of a company and can also tank resale values.

Tesla prices* are also down, by large amounts, across the board, as the company fell short of estimated deliveries

*Interestingly, CNN used the same story from Reuters, but Reuters frames this as a Tesla being more aggressive towards rivals in its headline, while CNN's headline is more neutral. I'd guess that the different framings come from each outlet having its own editor(s) slapping on a headline on the story, and each outlet's editor(s) having a different interpretation of the story.

Anyway -- what is happening at Tesla? Is it Elon's Twitter involvement? Is it just that Tesla is being battered by the same headwinds as the rest of the industry? Is the company's reputation for poor quality catching up to it? Is it because competition from other OEMs is increasing? Something else? Some combination of the above?

Sound off below.

[Image: Tesla]

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6 of 75 comments
  • TheEndlessEnigma TheEndlessEnigma on Jan 17, 2023

    Rent and EV from Hertz (or any other rental car company)? With the way rental cars are ridden hard and hung up wet no way is a rental EV a good idea.

    • VoGhost VoGhost on Jan 17, 2023

      Hertz is reporting higher profits because EVs are so inexpensive to maintain.

  • Motorqjoe Motorqjoe on Jan 17, 2023

    Rental car companies are very "flip-centric" and I don't think they are happy about recent price reductions. They still seem happy to buy Teslas without a discount. Long-term residual performance of Model 3's to every other segment competitor is still likely to be impressive.

  • I_Deal_With_Facts I_Deal_With_Facts on Jan 17, 2023

    No one is accounting for Tesla's battery storage / energy business. No one understands the importance of the 4680 battery that is developed in-house by Tesla.

    And very few people know how good FSD Beta is already and how quickly it's improving.

    I'm not saying TSLA will 30x from here, but there is a chance. It has a very good chance of 10x from now ($120 -> $1,200) sometime within the next 10 years. Again, all dependent on FSD being solved.

    If a man can land rockets back to earth then yeah, I feel that his team can solve FSD within a decade.

  • Anish Anish on Jan 17, 2023

    It’s called smart business. Tesla margins are hands down the best in the business. By reducing prices it puts enormous pressures on the competition. There is a reason why automakers tanked on the news of the price reduction and Tesla went down only 1%. They have done an incredible job in their manufacturing process. They created a molded medal instead of slapping metal together. All the fit and finish issues are gone with an enormous cost savings. Car manufacturing isn’t just about great cars. It is about manufacturing in scale. Look at Lucid they are losing money in each car they make albeit an interesting product. Not a viable business. Can’t wait for someone to retort back Tesla was in the red when they were at the same point. Not true they were making money on each car sold and since they were spending money on R&D they were bleeding cash. There is a difference between gross and net margins which is critical. Building a great car isn’t the challenge. Building a great car with manufacturing scalability is the secret sauce .

    • VoGhost VoGhost on Jan 17, 2023

      This is the strongest understanding of Tesla and the car business I've read on TTAC in years.