Consumers are realising Tesla isn’t the only electric car

It’s hard to disagree. A few weeks ago, I test drove Chevy’s new Bolt EUV, the squat electric crossover that is the slightly larger cousin of the Bolt EV, the entry-level electric car that General Motors began selling in 2016. I was bowled over by the new Bolt electric utility vehicle. I found it surprisingly roomy and much nicer on the inside than its staid exterior would suggest.

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I also liked that its interior felt a lot more like a normal car than Musk’s all-touchscreen automotive design style. In the Bolt you can control the air conditioning and other systems with hefty buttons and knobs that are easy to find and manipulate while you’re driving; in a Tesla almost everything is controlled by touching a big screen mounted in the centre console.

The best thing about Chevy’s Bolt EUV: The model I tried, which was kitted out with nearly every available option, including GM’s fantastic driver-assistance program, Super Cruise, carried a sales price of just under $US38,000. Tesla’s cheapest car, the Model 3, sells for upward of $US45,000 ($65,600). As I drove the Bolt, I asked myself a question that came up often this year: With such great alternatives that carry none of Musk’s political baggage, why does Elon keep acting as if customers have no choice — as if he’s the only game in town?

Tesla’s new vulnerability is a surprising development. At its towering peak, last Northern Hemisphere autumn, Musk’s car company hit a stock market valuation of more than $US1 trillion, greater than the combined value of the five largest automakers in the world. Tesla looked unstoppable. While rival manufacturers suffered punishing supply shortages that held back sales through much of 2021, Tesla’s once-mocked investments in building its own software and components allowed it to ride out supply-chain kinks, resulting in record sales.

Then, inexplicably, Musk turned to Twitter and pushed Tesla off a cliff. This year, as he sold tens of billions of dollars of Tesla shares to finance the Twitter deal and seemed to stake his reputation on taming the squabbles roiling one of the most divisive places online, Tesla’s shares plummeted by more than 60 per cent. Its slump is deeper than that of most of its rivals and far more than that of the S&P 500, which is down about 19 per cent for the year.

‘Tesla is Musk and Musk is Tesla.’

Wedbush analyst Dan Ives

Not all of Tesla’s problems are of Musk’s making. Like other global manufacturers, the company has faced production delays in China related to COVID-19. It has struggled to ramp up production at its new facilities in Austin, Texas, and Berlin. The Federal Reserve’s steady increases in interest rates and the looming prospect of a recession have also dampened Tesla’s fortunes. On Twitter, Musk has repeatedly blamed the Fed for Tesla’s stock swoon.

But analysts and investors I talked to said these were side issues.

“Tesla is Musk and Musk is Tesla,” said Dan Ives, an analyst at Wedbush Securities who follows Tesla.

Unlike just about every other carmaker, Tesla spends almost nothing on advertising. Musk is and has long been the company’s sole marketer and chief evangelist, the main force driving the world’s desire to buy Teslas. And so any alteration in Musk’s cultural standing will affect the company’s standing, too. Musk’s time running Twitter has been “a massive brand destruction for Musk and for Tesla,” Ives said.

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It’s not impossible for Tesla to shake off these problems. Musk has pledged to step down as Twitter’s chief executive as soon as he finds a replacement; Ives and Gerber told me that if this happens relatively quickly and Musk somehow becomes newly disciplined at keeping away from polarising stances online, Tesla could quickly recapture its former glory.

Tesla still enjoys some advantages over rivals, especially its network of over 40,000 chargers around the world, making Teslas easier to juice up than other EVs. Colin Rusch, an analyst at the investment firm Oppenheimer & Co., pointed out that Tesla also enjoys a multiyear lead in certain EV technologies. It has invested deeply in advanced battery design and more efficient manufacturing processes, areas in which its rivals are only just getting started.

Still, Rusch recently downgraded his expectations for Tesla’s stock price, citing increasingly negative sentiment toward Musk.

A lot of people think of their cars “as a way to signify a kind of identity,” Rusch told me, “and the Tesla brand and what it signifies has come to mean a few more things than it did before.”

This article originally appeared in The New York Times