Tesla's Cars Are Just Not That Good!

Tesla's Quality Is A Problem

Simply put, "Tesla's Cars Are Just Not That good!" There I said it, someone had to. While many people have tried to put Elon Musk on a pedestal the factors that brought him to where he is today seem to be on the wane. The recent unveiling of Tesla's new Model Y was considered by many as an event aimed at distracting analysts and the company's critics from its cash balances but the fact that the car won't be delivered to customers until the fall of 2020, has instead become a cause for concern. Beside the fact the car has no "Wow factor," several analysts and some in the media, such as Bloomberg's Dana Hull, rushed to point out this is later than some analysts expected.

Of course, Musk predicts the Model Y will sell better than the Model S, Model X and Model 3 combined saying, the crossover will have “the functionality of an SUV, but ride like a sports car.” The long-range version of the Model Y, with a battery range of about 300 miles, will have a starting price of $47,000. A less-expensive standard-range model will be available in spring 2021 for about $39,000. Some Tesla watchers speculate the new model could further weigh on current Model 3 demand as some consumers may decide to wait a little longer so they can purchase a Tesla crossover vehicle. This comes as the introduction of a cheaper Model 3 could also dent Tesla’s overall margins.

Tesla Appears On A Mission To Self-destruct

This is being taken by many as a sign that Tesla is increasingly becoming "liquidity-constrained." The company is slated to start taking pre-orders, at $2,500 per car, more than twice the $1,000 it asked to reserve a Model 3 but few people are predicting a huge rush to pony up cash for Tesla's new vehicle. The Model Y was originally supposed to be an add-on product with the Model 3 which was expected by now to be rolling out at 10,000 units a week. The fact is Tesla has been plagued by production problems resulting in quality issues at the same time that demand doesn't seem to be where it needs to be in order to handle even that many cars. This translates into confusion with Tesla currently losing money, cutting jobs, and closing stores.

While his vision and what many people still see as "top-notch" engineering had merit, Musk has failed to execute his mission to build a quality vehicle. This has been particularly true when it comes to the lower end of the price spectrum. Mass producing an automobile is no easy or small task. Many large experienced companies have failed to stay competitive in this cut-throat industry where any misstep has massive ramifications. One of the biggest problems Tesla faces is that it is poorly managed and seems to be making up its business plan on the fly and missing deadlines. This means broken promises to those buying their cars.

High-profile Tesla Crashes Have Been Noticed

Circling back to the crux of this article which is Tesla simply has not been able to produce a constantly quality product, articles of high-profile Tesla crashes do little to improve the company's image. The tales of owners being jerked around when it comes to having their cars serviced also detract from the brand and as time goes by more and more of these are surfacing. Fickle consumers, when asked to spend a great deal of money on a product, have little tolerance for a product straight off the production line that is chalked full of flaws and defects.

Government subsidies may have caused buyers to be a little bit more forgiving in the past but as they end and competition picks up those who have supported Elon Musk and Tesla seem to be leaving in droves. With over 100 different electric cars expected to hit the market by 2025, Tesla's problems are about to become overwhelming. Many of these "Tesla crushers" are just months away from hitting showrooms. These new introductions into the rather small electric car market add to the long list of the problems nibbling away at Tesla's credibility and affecting future sales.

Ironically up until now, Musk's greatest strength may have been that so many investors doubt his ability to perform. This means that a slew of impatient clowns have shorted Tesla stock in search of quick profits. Like Musk, these bearish investors have continually shot themselves in the foot at every opportunity. They do this by constantly finding reasons to rush to the exits in short covering panics that invariably brings the share price back up. Each time this happens Musk rushes to claim the stock price as proof all is well, however, after his run-ins with the SEC this also may be about to end. Over time it is likely both Elon Musk and the value of Tesla will continue to dwindle, decline and diminish.