Wake up Americans, the best thing to happen to U.S. manufacturing and innovation in the past 50 years is being fought left and right within this country!
Yes, I agree with fellow Tesla Bull Ross Gerber that Tesla has made multiple communications missteps over the past 90 days! Yes, I think that Elon has made a number of silly mistakes with his use of Twitter (bang your head moments for someone as smart as Elon) … but here is the forest through the trees perspective:
- There is no product, (let alone car) whose customers love as much as Tesla – EVERY Tesla owner I have ever spoken with raves about their car
- Every other car manufacturer is years behind Tesla – while these car companies are presenting future models that some consider competitive with today’s Tesla, Tesla is developing tomorrows capabilities that will continue to be a step ahead of their current products – just a few weeks ago Tesla announced the $35k Model 3 – a BMW level car at a Honda/Toyota price. Now what do BMW and Honda/Toyota do … (and that is exactly what is being discussed in the boardrooms of these companies right now!)
- While the U.S. market is large, the Chinese market is larger, and the European market is a similar size to the US market … the Chinese and European markets have barely been touched by Tesla!
In the next ~10 days, Tesla will announce sales volume for the quarter – the results will be as follows – record production for the quarter, a similar sales volume to last quarter, with a large portion made up of China/Europe sales. Large volume of cars in transit to customers in China/Europe, and sales volume in the US having dropped in Q1 vs Q4 – and volume of Model S/X having dropped.
Overall – amazing results, and a reflection of the massive global opportunity for Tesla!
But, why will sales volume drop in Q1 in the US for Tesla:
- Tesla aggressively sold every car it could in Q4 to take advantage of the expiring tax credit – it knew that the combination of historically soft sales in Q1 and the consumption of demand in Q4 would result in less US demand in Q1 – so it used its capacity to build out China and Europe sales
- Tesla has fixed capacity, so given the above, its taking advantage of the massive demand for its product in China and Europe
- The huge amount of negative reporting on Tesla is taking its toll on American buyers …
Which takes me to the following – there are huge forces at play in the United States trying to challenge Tesla outside of the marketplace of may the best product win – specifically:
- Regulators in states like Michigan and Texas (two massive auto markets) are specifically targeting Tesla to make it hard to sell and service their cars in these states
- The Federal tax credit is now incentivising the sale of Cars from non-US manufacturers over US manufacturers – yes, that’s right, american tax payer funds are encouraging the sale of non-US manufacturer cars – how is this – the two largest EV manufacturers in the US are GM and Tesla – the federal tax incentive for both is expiring this year, while it remains in place for Nissan, BMW, Toyota, Honda …
- Everyone in the oil and car business are working overtime to spread false rumors, and create barriers for Tesla
That sounds pretty bad … but what about outside the US …
- China – Tesla is being fawned over in China and the Chinese love Elon Musk. More important, its the largest market in volume for gas and EV cars, and the largest growing market – Tesla only needs the Chinese market to be a successful company!
- Europe – Germans are saying that Tesla is the best car! Germans have immense pride in the German auto companies … imagine Germans saying an American beer was better then a German beer – or a French person saying California wine is better than French wine – that is what’s happening with Tesla in Europe … and there is no area ripper for takeoff of EVs then Europe – with its strong environmental orientation and backlash against Diesel!
Why should this matter to Americans?
- Tesla will succeed in China and Europe (and therefore will succeed as a company) – every tail wind is behind them
- If Tesla does not have a strong market in the US, Tesla will have little leverage as forces in China and Europe push Tesla to move manufacturing and R&D capacity to these areas, at the expense of American workers
So – I ask you, do you embrace the best product that is also the best thing to happen to American manufacturing and innovation in the past 50 years, or do you risk it being a mere American symbol with its foundation moving to other locations …