Tesla’s recent struggles and controversies have left shareholders concerned about the company’s future. Elon Musk’s own admission that they have “dug their own grave with the Cybertruck” seems to be coming true, as every Cybertruck on American roads is now subject to a recall due to a poorly-glued accelerator pedal pad. This comes after the firings and price cuts that followed the recall, which were seen as desperate attempts to mitigate the damage.
One of Tesla’s main challenges is its slipping market share in the EV industry, especially with the failure to release the anticipated low-end $25,000 Tesla Model 2. Internal documents cited in a Reuters report suggest that the Model 2 has been killed, despite Musk’s denial. Musk’s solution to this slip was the Cybertruck and cybertaxis, but these ideas are facing criticism and skepticism from Tesla’s biggest supporters. Additionally, the Tesla board is pushing for a $50-plus billion stock package payday for Musk, a move that has already been struck down by a Delaware judge.
While Tesla faces headwinds along with other EV manufacturers in a market where gas-powered auto sales are still prevalent, it’s important to note that EV sales are still rising year-on-year. The EV market is growing, and even though there may be a temporary slowdown due to confusion over federal tax credits and the pandemic, the market is far from mature. Rivian, one of Tesla’s competitors, has faced its own challenges with doubling production and deliveries but selling trucks at a loss.
Despite these market dynamics, it is Elon Musk’s behavior and decision-making that are causing concern among investors and potential customers. His far-right lurch and conspiracy theories are turning off Democratic-voting would-be Tesla customers just when the company needs them. Analysts believe that Tesla’s stock is overpriced and has further to fall. Musk’s ego, paranoia, and pettiness, as well as his insistence on the Cybertruck, are seen as threats to the company’s success.
The Cybertruck itself presents a significant challenge for Tesla. The R&D costs are expected to be substantial, and the vehicle would need to sell 300,000 units a year just to break even. However, with only 3,800 Cybertruck sales so far, it seems that mainstream consumers are not embracing the unique design. Concerns about safety, functionality, and design have gone unanswered by Tesla, and viral videos showcasing the Cybertruck’s flaws have added to the skepticism.
Ultimately, the success or failure of the Cybertruck will determine Tesla’s future. The company has made many promises and attracted a large number of pre-orders, but it remains to be seen if those orders will convert into actual sales. Additionally, Tesla shareholders must question whether they are willing to continue supporting Musk’s one-man show and if they can influence the company’s complacent board. If not, Tesla may have created its own grave with its ambitious yet controversial projects.
