Elon Musk, he’s polarizing. He should probably go, Or at the very least, he should take a Zuckerberg type-role and find his own Sheryl Sandberg.
But the cars are a different story. It’s hard to, say, watch Marques Brownlee and say to yourself, “Damn, I want that car…”
[I, on the other hand, opted for the Boosted Board as my own electric vehicle]
Anyway, Tesla didn’t begin shipping the Model S until 2012. That means that the company has never faced a downturn in the automotive sector. Nor has it faced a world with rising interest rates. A few quick thoughts:
- The company has never existed as car sales fell: The challenge becomes – can they still increase sales even as the broader auto market shrinks? Maybe. It’s probably unlikely, but it’s a company that is dependent on brand value. That should help the company weather any economic turmoil, but it’s not a given that fanboy-ish behavior will outweigh broader macroeconomics. Not to mention increased competition in the electric auto space. Electrek wrote recently that Mercedes-Benz is building a new battery factory for electric vehicles in the US. VW wants to sell 1 million EVs in the next seven years, according to The Drive. Meanwhile, Volvo is working wtih Nvidia on a self-driving platform (The Verge). There is no shortage of action in the space, and while Tesla has the competitive advantage right now, it may not always be the case.
But this begs the question, could a downturn in the US economy actually help Tesla? If rates come down as investors seek the safety of US Treasuries, could the company actually tap into cheaper capital? Or would the company’s ongoing (and growing?) risks force investors to demand a premium to shuttle cash Elon’s way?
Again, Tesla has never really existed in a time when spreads between corporate bonds and Treasuries have widened. But on one hand, this is Tesla, which has track record of squirming out of financial jams. On the other, 2008.