What Goes Up . . . by Eric Peters

Some of Tesla’s models are looking long in the tooth. From Eric Peters at ericpetersautos.com:

Tesla got a lot of press recently for lowering the asking prices of its electric cars. The first time this has happened. It was touted as a sign that the cost of electric cars – which had been rising – was falling.

In fact, it is a function of Teslas not selling.

Orders have plummeted from more than 476,000 as of last summer to around 72,000 as of right now.

“Tesla is clearly transitioning from being supply constrained – where delivery volumes grow in line with production capacity and prices increase – to being demand constrained – where prices fall to stimulate demand and production outpaces delivery,” says Bernstein analyst Yoni Sacconaghi, who advises selling rather buying stock in the company.

As in, cut your losses.

Alexander Potter of the investment banking company Piper Sandler says “wait times (for new Teslas) haven’t spiked meaningfully, so Tesla may cut prices further.”

So, what’s up with all of this?

Several things, probably.

The first is that we may have arrived at Peak Tesla. We may have actually passed it. Sometimes, you can only see things behind you in the rearview mirror. Tesla’s models are all old. Some of them – like the Model S – are ancient. The 2024 model is essentially the same car as the 2012 model and that was 11 years ago. Dodge is still selling the equally ancient Charger and Challenger, but the difference is those two still sell well – because they are what they people who buy them want. Which is what’s “old” – as in burly American cars with burly V8 engines. It is a selling point.

People who buy Teslas want what’s new. The very latest thing. Buying a new car that is the same as an eleven-year-old car isn’t that.

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