New York (AP) – Elon Musk has been called the master of visionary projects, the Edison of our era and the architect of the future, but today he has a huge problem in his automotive company and it is not known if he will be able to solve it: the damage that has caused him to his brand.
Tesla’s sales have collapsed amid protests and boycots against Musk for their extreme right positions. The profits have been reduced in two thirds so far this year, and rivals from China, Europe and the United States are on the prowl.
The brand received some respite on Tuesday when Musk announced at a telephone conference with investors that would reduce his work to cut government costs in Washington to “one or two days a week” to concentrate in his position as director of Tesla.
Investors promoted Tesla’s shares to a profit of 5% on Wednesday, although there are many challenges ahead.
Who wants a Tesla?
during his conference with investors, Musk seemed to reduce importance to the impact that the brand has had in the fall of sales in the first quarter. Instead, he emphasized something more fleeting – a update of the successful model and Tesla, who forced the closure of factories and reduced both the supply and demand.
Although the financial analysts who follow the company have stressed that potential buyers probably abstained a Tesla in what they expect the update – which harmed the results – even even the most optimistic affirm that the damage to the brand is real and more worrying.
“This is a crisis of great magnitude,” said Dan Iives, by Wedbush Securities, earlier this month. In a note to its customers, Bank JP Morgan warned of “unprecedented damage to the brand.”
Musk’s opinion about protests
Musk dismissed the protests against Tesla during his call with investors, and described them as the work of annoying people with their work at the head of the Government Efficiency Department (Doge), because “those who benefit from waste and fraud wish they continue”.
But the protests in Europe – thousands of kilometers from Washington – occurred after Musk expressed their support for extreme right politicians of the entire continent. Furious Europeans hung on an effigy of Musk in Milan, projected an image of his with a right arm extended in a Tesla factory in Berlin, and placed posters in London in which they urged people not to buy “Esvastiautos”.
Sales in Europe have fallen into the first three months of the year – with a 39%decrease. In Germany, sales collapsed 62%.
Another worrying sign: Tesla retracted on Tuesday of his previous promise that sales would recover this year after 2024 fell for the first time in 12 years. Tesla explained that there was too much uncertainty in the commercial situation worldwide and refused to repeat the prognosis.
The competition comes
Meanwhile, the competition has already started to take away customers from Tesla.
Among its main rivals is the Chinese giant byd. The electric vehicle manufacturer announced a few months ago about the development of an electric battery that is loaded in minutes. And the European rivals of Tesla have begun to offer new models with advanced technology that makes them real alternatives to Tesla, precisely at a time when public opinion has turned its back on Musk.
Tesla’s participation in the electric vehicle market in the United States has fallen from two thirds to less than half, according to Cox Automotive, a supplier of automotive services and technology.
His hope is in the cybertaxis
Another competitor, Alphabet – Google’s parent company – has already surpassed Tesla in a sector that, according to Musk, will help restructure his company: Cibertaxis.
One of the points highlighted at Tuesday was that Musk maintained its previous prediction that the company will launch an autonomous taxis service – without flying or pedals – from June in Austin, Texas, and in other cities of the country shortly after.
But the driverless cyberxis of the Google service, called Waymo, already have millions of trips in San Francisco, Phoenix, Los Angeles and Austin as part of a collaboration with Uber, leader in transport services.
A future without drivers for Teslas owners?
Musk also told analysts that this autonomous driving capacity will be available in Tesla vehicles that are already in circulation through wireless software updates, and established a term: “There will be millions of teslas operating autonomously in the second half of the year.”
But it has already made similar promises in the past only to not fulfill the deadlines, as in April 2019, when it promised total automation by the end of the following year. He repeated those predictions several times and delayed the date, several times, in later years.
An important problem is that federal researchers have not given green light for Tesla vehicles to drive completely alone. Among other investigations, security regulators analyze the Tesla system known as “Full Self-Driving” (total autonomous conduction)-which only offers a partial autonomous conduction-for their relationship with accidents in low visibility conditions, such as when there are solar reflexes.
The positive side
In competition with its rivals in the United States, Tesla currently has a clear advantage: it will be less affected by tariffs, since most of its vehicles are manufactured in countries where they are sold, including those in their largest market: United States.
“Tariffs are still hard for a company with margins that are still low, but we have localized supply chains,” Musk said Tuesday. “That puts us in a solid position.”
The company also reconfirmed that a cheaper version of its best -selling vehicle – the model truck and – will be available for customers during the first semester of this year. That could boost sales.
Another positive aspect: the company had a first spectacular quarter in its energy storage business. And Musk has promised to produce 5,000 Robots Optimus – another Tesla business – by the end of the year.
Faces
Even after almost 50% fall from its December maximums, Tesla’s actions are still too expensive if you take as a reference the only measure that really matters in the long term: its utilities.
With a value equivalent to 110 times its utilities per action planned for this year, the prices of its shares are more than 25 times more expensive than those of General Motors. The average S&P 500 index is quoted less than 20 times its utilities.
This leaves Tesla with little margin of error if something goes wrong.
