Elon Musk has done the impossible with Tesla.
He's turning to the most valuable automaker on earth while
introducing the world to E VS self driving and did
so you know Austin,
let's face it well juggling an impossible amount of billion
dollar companies
when we look at his success.
The Model Y even broke
1.2 million registrations in 2023.
I went to the store earlier.
It was all model wise.
It shocked me, but even with all the success,
the tide seems to be turning Austin.
So the question is what's going on with Elon Musk,
especially if we look at Tesla stock chart this year,
which shows kind of the direction it's been headed.
Yeah. You know, look, we don't want to take anything
away from Elon Musk's success,
but investors today are kind of kind of having a
what have you done for me lately moment.
And hey, investments are all forward-looking,
so they have to consider it that way.
So we're looking at a recent survey from KPMG,
which indicates that this enormous growth from Tesla and the
Model Y and the Model 3 in particular may have
just meant early saturation due to early adopters.
And the data suggested a few interesting conclusions.
One is that there's still a preference for gas vehicles
among the majority of Americans.
You know, we, I knew the EV adoption would take
a long time,
but people have been saying it would take a long
time for roughly a dozen years.
And the fact is that the majority of Americans still
prefer standard gas vehicles over hybrid or electric vehicles.
And that's even when accounting for parity of price and
features,
which E VS are still a little bit on the
expensive side.
So that's one really damning data point to come out
of this KPMG study.
The second one is that there's a very low EV
purchase intent today.
So only 20% of the customers they surveyed would choose
an EV over a gas or a hybrid vehicle.
Now it's also worth noting that hybrids are going gangbusters
right now
with some very good options out there,
particularly from Toyota. So that may actually tilt any EV
fence sitters in favor of the hybrid,
which is a more familiar option when you're coming from
an internal combustion engine vehicle.
So low EV purchase intent was the 2nd conclusion.
The third one is that they're frankly just there's a
global EV demand slowdown and the preference for gas vehicles
aligns with this global reduction in EV demand.
So we've seen automakers like Ford,
GM, Mercedes all reconsider and in many ways pull back
their EV strategies in light of this waning demand.
Additionally, nearly 80 to 90%
of new vehicle purchases are financed.
And at least in the United States,
when we see the rise in interest rates,
that kind of puts a wet blanket on all new
vehicle demand,
period, not just EVs. And you know,
Tesla is, you know, they are still an automaker.
So they are subject to those same sort of waxing.
Waxing and waning in the industry
#4 is just a difference of charging time expectations.
You know, Eric, I know you and I,
both Dr. EVs, and it is a bit of an
adoption getting used to charging times.
And it looks like most consumers and industry expectations are
still pretty far off when it comes to Rd.
trips. 60% of US consumers want charging in 20 minutes
or less,
which for for any long distance road trip,
it's simply not practical. And the last one is feature
prioritization.
So this KPMG study revealed that consumers show a much
lower likelihood to pay and be interested in self driving
and entertainment features which Tesla has really hyped and prioritized
relative to other automakers. Instead,
it looks like consumers, at least in the EV shopping
space,
are looking for
Wi-Fi and charging locator features,
which are really just kind of non differentiated factors among
the automakers right now.
Most CVS tend to be safer than internal combustion engines,
So that's not none of those elements are differentiators for
Tesla per se,
although their vehicles are quite safe.
So look, in short, Tesla and Elon Musk have done
amazing things,
but this data from KPMG really looks like it's going
to be a rough stretch ahead for Tesla.
And they can't lean on their higher margin vehicles like
the Model X and Model S to to pad waning
sales for the Model Y or Model 3 because those
are kind of tired models right now by at least
by automotive standards.
And they simply just don't sell in enough units.
And this is all not to mention competition that's coming
from
Lucid, BYD, Rivian and others.
So really what we're looking at is choppy waters for
Tesla for the next few years.
Yeah. And Austin, I think about,
you know, what point that Elon Musk has often made
is electric vehicles don't need to be as good as
gas.
Cars get adoption. They need to be better.
And we really saw a slowdown in things like
the amount of miles per dollar that EVs were offering.
We're seeing a lot of innovation from China that's probably
not going to come to the US because of some
tariffs here,
but some cars from BYD offering more than 1000 miles
per charge with the power trains they're using.
So I think Tesla is frankly going to need to
up the level of innovation,
the breakthroughs that are happening because consumers,
they're just speaking, they're not going to be buying electric
vehicles with the current feature set without some massive improvements
per dollar.
So I think, you know,
that's one thing that Tesla investors have to be watching,
whether or not they're seeing acceleration and some of the
features in cars.