Are Tesla’s Golden Days Over?
Tesla fails to demonstrate the Cybertruck at the 2019 unveiling
Even though its margins plummeted to a five-year low last quarter, shareholders remain bullish about the company’s prospects, especially in autonomous vehicles (AV) and robotaxis (which Tesla is scheduled to announce next month). Even though Tesla’s margins fell to a 5-year low in the last quarter, investors remain optimistic about its prospects, particularly for autonomous vehicles (AVs) and robotaxis, which Tesla is scheduled to announce next month. Tesla’s business model will change completely once fully autonomous vehicles are developed. This is the case for investing in Tesla.”
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The Tesla cybertruck in a BBC Top Gear episode from 2023.
The 845-bhp Tesla Cybertruck appeared on an episode of BBC Top Gear in 2023. The review stated that the car is “obscenely fast… makes you instantly famous” and also noted a lack of interior buttons or stalks. It was also noted that “price was higher than promised”. Some claim that Tesla oversold its self-driving capabilities and is in fact significantly behind competitors like Waymo (Google), Cruise, and China’s Baidu. After all, Waymo has been providing autonomous ride-hailing services since 2018, while Baidu claims to have the world’s largest robotaxi program.
Tesla’s detractors further argue that its long-term success would ultimately be determined by how it handles quality and manufacturing challenges rather than software or autonomy.
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This is based on the fact that in J.D. Tesla was ranked among the lowest-performing brands in J.D. Power’s Vehicle Dependability Study for 2024 (VDS) with 252 issues per 100 cars (only Volkswagen Audi Land Rover and Chrysler were worse). In J.D. Power’s Initial Quality Study (IQS), Tesla was the third-worst brand with 266 problems per 100 vehicles (tied with Rivian and ahead of Dodge and Polestar).Watch this Cybertruck fall apart : Tesla whistleblowers told me that many vehicles are delivered with missing bolts and cracked parts, which unsuspecting fanbois discover the hard way, or with fatal consequences. $TSLA blames owners when vehicles fail.pic.twitter.com/hioaICpSfA
— Facts Chaser (@Factschaser) August 3, 2024
Complaints about the quality of the Cybertruck have become more frequent since the company began shipping it last year. The pickup, which has a starting price over USD 62,000, was expected to revive excitement for the Tesla brand. Instead, consumers and enthusiasts have complained about faulty windshield wipers, corrosion and rust on the stainless steel, and safety concerns due to sharp edges and hidden blind spots. Owners and professionals have not been shy in pointing out the flaws of this vehicle. It’s not just the futuristic aesthetic of its dumpster that gives critics plenty to work with. “I’m talking about its frequent recalls and unique design features, which make it an unusual beast to see on the road,” says a CNN Business article dated August 2024.
The Cybertruck was unable to win Car and Driver’s 2024 EV of the Year Award because it broke down in the middle of the review. The magazine said that a DNF results in a mission-fulfillment score of zero. The magazine stated that a DNF resulted in a score of zero for mission fulfillment.
Although Tesla has issued several recalls in response to the complaints, the negative publicity will still affect the brand equity. A survey by the marketing agency GfK revealed that 79 per cent of car buyers consider “reliability,” to be “very important,” surpassing safety (75%) and fuel efficiency (69%) and smooth, quiet ride (52%). Autovia Group also found that automakers’ “reputation for high-quality products” is the key factor in attracting buyers. Tesla was initially successful in China. However, it is now facing fierce competition from local brands such as BYD and NIO that offer cheaper, more tech-focused EVs. Tesla is also struggling to improve its quality in order to compete with the Chinese market. Tesla’s handling issues such as factory safety complaints and recalls has also damaged its image. Additionally, Asian customers value reliability and affordability, areas where Tesla has struggled against local competitors.
The rise of Chinese automakers like BYD and NIO poses a direct threat to Tesla’s market share in Asia. These brands are more affordable and offer comparable technology. In many cases they also outperform Tesla in terms of range and features. China recognized EVs in the 2000s as a strategically important sector. Since then, it has implemented a number of policies, including USD 230 billion worth of subsidies and significant investments abroad to gain an advantage in low-cost EV production and target markets traditionally dominated by Western brands and Japanese marques. China’s subsidies and infrastructure investments for local EV makers puts Tesla at a competitive disadvantage. The long-term, Tesla could find it difficult to compete with the domestic giants.
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are backed by an increasingly capable support ecosystem, including everything from the quality of the R&D conducted at Chinese universities and research institutions to a deep local supplier base.” “
are backed by an increasingly capable support ecosystem, including everything from the quality of the R&D conducted at Chinese universities and research institutions to a deep local supplier base.”
Ultimately, Silicon Valley can often overestimate the value of software and digitalisation due to the quick returns that they generate. Tesla has to avoid falling into this trap, as the car industry is still very different from the tech world, even with the advent of SDVs. Apple abandoned its automotive project for a good reason. Read more:
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A car can be one of most expensive products that people purchase. It is therefore important for manufacturers to provide the highest level of quality and reliability, which may take years or even decades to perfect. Tesla faces a steep learning process, even though electric cars are easier to produce than internal combustion engines (ICEV). Its future success will be determined by how well it handles this. While Tesla used to be a symbol for technological innovation and environmental awareness, appealing to wealthy and progressive clients, its appeal has diminished, especially as the premium electric vehicle market has grown and Tesla’s unique point of differentiation — being at the forefront of EV technology — has been diluted. Tesla’s Autopilot software and Full-Self Driving FSD have been plagued by numerous failures in the public eye, including fatal accidents. These incidents have been investigated by the National Highway Traffic Safety Administration and other agencies, which has raised concerns about Tesla’s safety standards. The lawsuits filed over these malfunctions fuel further skepticism and a waning public confidence. Some early adopters may have been disillusioned by the association of Tesla with Elon Musk’s controversial public persona. Musk’s antics have damaged Tesla’s brand, from his erratic behaviour on social media to his divisive leadership.
