Tesla in turbulence: Elon Musk has these seven problems

Created: 05/26/2022, 07:09

By: Marcus Efler

Stocks crash, China lockdown, chaos surrounding the Twitter purchase: Things are not going well for Tesla at the moment.

These are the biggest construction sites.

Austin (USA) – Sales figures, share price, image: For years, Tesla has only been going uphill.

Speculators who bet on a crash of the allegedly completely overvalued stocks reliably burned their fingers.

But now the problems are piling up.

CEO Elon Musk and the electric car pioneer are not to blame for all of them - but it is precisely the combination of difficult environment and deficits typical of Tesla that makes the situation precarious.

These are Tesla's six biggest problem areas:

• 1. Share price crashes:

  Since its high in the fall of last year, the share price has almost halved, and more than $500 billion in company value has evaporated.

  Although there have always been a few setbacks, such a strong minus is unique in the company's history.

  There are many reasons for this: for example, a fundamentally difficult environment.

  In the case of tech stocks in particular, there are increasing doubts as to whether the exorbitant valuations are justified.

  In addition, Tesla flew out of the S&P 500 sustainability index, which lists particularly environmentally friendly and social companies.

  The latter classification apparently no longer applies to Tesla after allegations of racism and reports on how Elon Musk treated his employees.

• 2. China is worrying:

  The drastic lockdown in Shanghai, where Tesla has a plant and is planning a second one, is slowing down production, and at times it had to be stopped entirely.

  Ports and many suppliers are closed.

  In addition, there is growing concern among important Chinese customers about the future economic situation and their personal situation, and they are putting off high expenses such as for a new car for the time being.

Tesla in turbulence: Elon Musk has these six problems

• 3. The competition is growing.

  Almost all traditional car manufacturers are now investing massively in electric mobility, competitors such as Audi and Hyundai's luxury brand Genesis (with the electric SUV GV60) also want to be on the road with electricity in the future.

  For Tesla, this has two unpleasant consequences: because the comfortable monopoly on electric cars is crumbling - and, perhaps even more importantly, the demand for emission certificates is falling.

  So far, Tesla has sold these on a large scale to manufacturers of combustion models, who use them to offset their poor CO2 balance, and this is how they generate the bulk of their profits.

• 4. Twitter purchase distracts boss:

  The back-and-forth surrounding Elon Musk's purchase of news network Twitter isn't going down particularly well with investors and fans.

  In the meantime, there are more and more voices accusing Musk of being too distracted by this private matter.

  After all, he doesn't just have to take care of cars, but also other business areas such as the aerospace company SpaceX or the tunnel company The Boring Company.

  Recently, Musk even felt compelled to clarify that he was fully committed to business,

Tesla boss Elon Musk is currently fighting on several difficult fronts.

(Iconic image) © Patrick Pleul/dpa

Tesla in turbulence: canceled models, bizarre political posts

• 5. Model policy confuses customers:

  Announced, postponed - or canceled altogether.

  Plans for new models that impress investors or (potential) customers more and more often turn out to be air bookings.

  The Cybertruck pick-up has been postponed again and again over the years, but now it should really come in 2023.

  The Ford F-150 Lightning, the Chevrolet Silverado EV or the Rivian R1T have long been with customers.

  And the entry-level Tesla for 25,000 dollars (which would have cost a good 35,000 euros in Germany anyway) that many fans were hoping for was completely canceled.

• 6. Technically no longer top:

  Although the central control software of the Tesla models is still considered outstanding, there is now some catching up to do in other disciplines.

  The range of competitors like the Lucid Air is higher than that of the Tesla Model S, which prompted Musk to start a discussion on Twitter.

  When it comes to autopilot, Mercedes-Benz has left the Americans behind.

  And now there are growing doubts about the security of the Bluetooth technology used.

• 7. Musk's political opinion irritates:

  Car managers don't usually talk about their political views, after all they're nobody's business, but they could alienate some customers.

  Elon Musk, on the other hand, doesn't hold back with his.

  He described the relatively lax corona lockdown in his former home state of California as "fascist", and he did not even mention the much more drastic measures in Shanghai - but was publicly pleased that the employees there could not leave the plant for days.

  He recently described the US Democrats as a "party of division and hatred" - and announced that he would vote for ex-President Donald Trump's Republicans.

  Possibly a deliberate provocation, but one that is unlikely to go down too well with the mostly liberal buyers of electric cars in California and the US east coast.

also read

Do you know the "hidden" bottle opener in the car?

Masks in the first aid kit mandatory?

What drivers should know about it

After all: Tesla is still reporting sales records.

The earlier momentum, however, is gone.

In the first quarter of this year, worldwide deliveries exceeded those of the previous quarter by a hair's breadth at a good 310,000.