This website collects cookies to deliver better user experience. Cookie Policy
Accept
Sign In
The Wall Street Publication
  • Home
  • Trending
  • U.S
  • World
  • Politics
  • Business
    • Business
    • Economy
    • Real Estate
    • Markets
    • Personal Finance
  • Tech
  • Lifestyle
    • Lifestyle
    • Style
    • Arts
  • Health
  • Sports
  • Entertainment
Reading: Elon Musk’s Decision to Slow New Tesla Models Risks Holding Up Growth
Share
The Wall Street PublicationThe Wall Street Publication
Font ResizerAa
Search
  • Home
  • Trending
  • U.S
  • World
  • Politics
  • Business
    • Business
    • Economy
    • Real Estate
    • Markets
    • Personal Finance
  • Tech
  • Lifestyle
    • Lifestyle
    • Style
    • Arts
  • Health
  • Sports
  • Entertainment
Have an existing account? Sign In
Follow US
© 2024 The Wall Street Publication. All Rights Reserved.
The Wall Street Publication > Blog > Tech > Elon Musk’s Decision to Slow New Tesla Models Risks Holding Up Growth
Tech

Elon Musk’s Decision to Slow New Tesla Models Risks Holding Up Growth

Editorial Board Published January 28, 2022
Share
Elon Musk’s Decision to Slow New Tesla Models Risks Holding Up Growth
SHARE

Elon Musk is betting that he can turn Tesla Inc. TSLA 10.68% into one of the world’s largest car makers while selling just a handful of models, challenging a long-held auto-industry belief that it takes a diverse stable of updated models to attract buyers.

It is another example of Mr. Musk’s defiance of industry orthodoxy—at a time when electric-vehicle competition has never been fiercer.

Tesla, which is aiming to increase vehicle deliveries by an average of 50% a year, doesn’t plan to bring any new models to market in 2022, Mr. Musk said this week. The company has punted production of its long-awaited Cybertruck pickup to 2023, he said, and isn’t working on the $25,000 car he previously teased.

Such delays are likely to make it difficult for Tesla to maintain its rapid pace of growth, Bernstein analyst Toni Sacconaghi said, questioning whether demand for the Model 3 and Model Y would be sufficient by 2024 for the company to meet its growth targets.

If Tesla were to increase vehicle deliveries by its 50%-a-year target, it likely would need to deliver more than three million vehicles in 2024. Its Model 3 sedan and Model Y compact sport-utility vehicle made up 97% of Tesla’s roughly 936,000 deliveries last year.

“There’s really no precedent for a single-model car to sell 1.5 million units per year, let alone two of them from the same company,” Mr. Sacconaghi said.

Toyota Motor Corp.’s TM 2.75% Corolla was the most popular vehicle in the world in 2020, with sales of more than 1.1 million vehicles, according to a Bernstein analysis.

Mr. Musk dismissed such concerns, telling analysts that Tesla’s advanced driver-assistance technology would make its vehicles more useful and, therefore, valuable.

“It’s apparent from the questions that the gravity of Full Self-Driving is not fully appreciated,” he said. “If the cost of our cars did not change at all, we would still sell as many as we could possibly make.” Full Self-Driving is a suite of advanced driver-assistance features that Tesla sells for $12,000. It doesn’t yet make vehicles autonomous.

Tesla’s production delays were met with skepticism on Wall Street, where the stock plunged more than 11% on Thursday, the day after Tesla reported a record annual profit of $5.5 billion for 2021. The stock recovered some of that decline Friday, rising 2.1%.

“‘It’s apparent…that the gravity of Full Self-Driving is not fully appreciated.’”

— Elon Musk

Tesla’s focus on ramping up production of existing models is likely to help the company pad its bottom line this year, but delaying the release of new models could eventually leave it more vulnerable to competition, analysts said. Car companies typically aim for 10% to 15% of their models in any given year to have recently undergone a significant update, Barclays analyst Brian Johnson said.

Mr. Musk has kept buyers waiting for new models before. The company’s Model X sport-utility vehicle, for example, was initially slated for production in late 2013. Roughly two years later, Tesla had delivered only a handful of the SUVs.

This time around, buyers have a bevy of alternative electric vehicles to choose from. General Motors Co. GM 4.96% has said it is aiming to introduce 30 new electric vehicles globally by 2025. This year alone, auto makers are expected to launch more than two dozen battery-powered vehicles in the U.S., according to Bank of America. Among them is an electric version of Ford Motor Co. F 3.89% ’s F-150 pickup truck. Rivian Automotive Inc., which went public in November, was the first to market in the lucrative pickup truck segment, launching its R1T last year.

Ford and GM recently introduced their first electric pickup trucks. WSJ auto reporter Mike Colias breaks down the different strategies the two legacy auto manufacturers are pursuing to bring their EVs to market. Photo Illustration: Alexander Hotz/WSJ

“Every day Tesla waits, there’s going to be a new entry,” said Tyson Jominy, who leads research firm J.D. Power’s data and analytics practice.

Ford’s experience roughly a century ago could offer a warning to Tesla, said Mr. Johnson, the Barclays analyst, in a recent note to investors. Ford controlled roughly 60% of the U.S. auto market in 1921 thanks to the success of the Model T, he wrote. Ford focused on the Model T in the years to come, but as it did so, rivals including General Motors released a wider range of cars that whittled away at Ford’s market share, which by 1927 had fallen to 16%.

“With little additional detail around future physical product, we see risk of Tesla repeating the Ford Model T history of the 1920s,” Mr. Johnson wrote.

Tesla didn’t immediately respond to a request for comment.

Mr. Musk has made his mark by steering an independent course in the car industry, defying doubters. He invested in all-electric vehicles when many industry stalwarts questioned their viability, eventually transforming Tesla into the world’s most valuable car maker and himself into the world’s richest person.

Tesla’s ability to meet its production targets with its existing lineup of vehicles is likely to depend heavily on the company’s success in China, the world’s largest auto market, said Mark Wakefield, a managing director at consulting firm AlixPartners LLP.

Tesla’s Shanghai plant became the company’s largest by output last year, but Tesla is facing a more difficult business environment in China, where it has been caught up in the government’s crackdown on big tech.

Mr. Musk, in Tesla’s analyst call, focused on the promise of the company’s efforts to develop fully autonomous vehicles.

“Over time, we think Full Self-Driving will become the most important source of profitability for Tesla,” Mr. Musk said, adding on Thursday that it would likely take rivals at least five years to emulate Tesla’s technology.

Tesla News

Read more articles, as selected by editors.

Write to Rebecca Elliott at [email protected]

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

TAGGED:Tech NewsWall Street Publication
Share This Article
Twitter Email Copy Link Print
Previous Article Robinhood Shares Swing in Volatile Session After Earnings Miss Robinhood Shares Swing in Volatile Session After Earnings Miss
Next Article Goldman Doubles David Solomon’s Pay to  Million Goldman Doubles David Solomon’s Pay to $35 Million

Editor's Pick

Nicki Minaj Calls Cardi B’s Daughter ‘Ugly’; Cardi Shoots Again That Nicki’s Son Is Nonverbal Because of Drug Use Throughout Being pregnant

Nicki Minaj Calls Cardi B’s Daughter ‘Ugly’; Cardi Shoots Again That Nicki’s Son Is Nonverbal Because of Drug Use Throughout Being pregnant

Studying Time: 3 minutes The Nicki Minaj vs. Cardi B beef has been occurring for years. Like, mainly for so…

By Editorial Board 4 Min Read
China opens world’s reported largest span bridge over Beipan River valley to visitors
China opens world’s reported largest span bridge over Beipan River valley to visitors

The Huajiang Grand Canyon Bridge opened to visitors for the primary time…

3 Min Read
Nicole Kidman-Keith City Divorce Particulars Revealed: Nicole Desires the Youngsters 10 Months Out of the 12 months!
Nicole Kidman-Keith City Divorce Particulars Revealed: Nicole Desires the Youngsters 10 Months Out of the 12 months!

Studying Time: 3 minutes Few celeb breakups have been as surprising because…

4 Min Read

Oponion

Six Pack of faculty soccer picks, predictions: Florida vs. LSU, Notre Dame vs. Texas A&M in highlight

Six Pack of faculty soccer picks, predictions: Florida vs. LSU, Notre Dame vs. Texas A&M in highlight

In final week’s Six Pack, I informed you ways sloppy…

September 12, 2025

ICE simply visited a California homeless shelter. New guidelines say how that’s imagined to go.

Round 8 a.m. on Wednesday, U.S.…

March 24, 2025

Horrible son of horrible president teases worst doable future

Oh, goody, this won't be the…

May 21, 2025

Scooter Braun & Sydney Sweeney ‘Overwhelmed’ by Backlash

Studying Time: 3 minutes Alleged couple…

September 30, 2025

Vacationers are hit with new 3% tax on in a single day stays to fund infrastructure in overwhelmed areas

As European cities grapple with overtourism,…

June 10, 2025

You Might Also Like

Our Favourite Prime Day Offers From Shops That Aren’t Amazon
Tech

Our Favourite Prime Day Offers From Shops That Aren’t Amazon

Amazon Prime Day—or Prime Huge Deal Days—is the star of the present proper now, however perhaps you wish to buy…

6 Min Read
We’re Monitoring All of the Gross sales and Developments Throughout Amazon’s October Prime Day
Tech

We’re Monitoring All of the Gross sales and Developments Throughout Amazon’s October Prime Day

{Photograph}: Kat MerckSharkFlexBreeze HydroGo Transportable Misting FanPrime Day is all the time a good time to top off on summer…

1 Min Read
Rating a Deal on Some WIRED-Examined Pet Gear This Prime Day
Tech

Rating a Deal on Some WIRED-Examined Pet Gear This Prime Day

Within the nice custom of Black Friday, Cyber Monday, and Amazon Prime Day, Amazon has unfold the financial savings like…

5 Min Read
I’ve Examined Dozens and Dozens of Wi-Fi Routers. These Are the Greatest for Your Residence
Tech

I’ve Examined Dozens and Dozens of Wi-Fi Routers. These Are the Greatest for Your Residence

Examine 12 Prime Wi-Fi RoutersDifferent Routers We Have ExaminedI've examined many different fashions and have a number of extra within…

37 Min Read
The Wall Street Publication

About Us

The Wall Street Publication, a distinguished part of the Enspirers News Group, stands as a beacon of excellence in journalism. Committed to delivering unfiltered global news, we pride ourselves on our trusted coverage of Politics, Business, Technology, and more.

Company

  • About Us
  • Newsroom Policies & Standards
  • Diversity & Inclusion
  • Careers
  • Media & Community Relations
  • WP Creative Group
  • Accessibility Statement

Contact

  • Contact Us
  • Contact Customer Care
  • Advertise
  • Licensing & Syndication
  • Request a Correction
  • Contact the Newsroom
  • Send a News Tip
  • Report a Vulnerability

Term of Use

  • Digital Products Terms of Sale
  • Terms of Service
  • Privacy Policy
  • Cookie Settings
  • Submissions & Discussion Policy
  • RSS Terms of Service
  • Ad Choices

© 2024 The Wall Street Publication. All Rights Reserved.

Welcome Back!

Sign in to your account

Lost your password?