For years, Tesla has had the top 99% of the electric vehicle market all to itself. In some ways, this is surprising. Its reliability record is spotted with long waits for repairs, body panel fit and finish issues, bumpers falling off, and mismatched paint. Interior quality doesn’t meet the standards established by traditional lux-brands.
So far, surprisingly enough, neither those issues nor Elon Musk’s summary removal from his chairmanship by the Feds, has fazed true believers. Hundreds of thousands await Tesla’s Model 3, their venture into affordable EV motoring. Others paid a $250,000 deposit to wait for the Roadster. There is still, to this day, some massive cool factor to saying, “Let’s hop in the Tesla.”
There is change afoot, however. There are competitors in pursuit, and at the worst possible time for Tesla. The just-released (and gorgeous to boot) Jaguar I-Pace is the first that should siphon off Tesla’s leadership, but there are more to follow. Tesla’s cachet has been without competition, but the company faces the arrival of desirable, quality EVs from prestigious nameplates. Think Audi, Mercedes, and Porsche. Can Tesla raise its game? Can it deliver on the promises it has made and quickly enough to maintain its advantage? Tesla passed the 200,000-unit mark where the Fed’s tax incentives start to wind down. Its competitors are just ramping up and remain eligible for those valuable tax breaks.
We know that Elon Musk’s leadership style can be described charitably as a bit on the manic side. We also know that Tesla’s inability to date to show a profit annually, and the current Administration intention to change the emissions rules (including the separate rules in California), make the challenges significant. To this point, Tesla has been one of the most interesting companies to watch grow. But, “interesting” is no guarantee of long-term viability or even corporate survival. Even now, whispers are being heard of a possible acquisition of Tesla by another company. Successful at becoming a premium brand for electric motoring tech? To be sure! But, Tesla could fail. Being the first to the market with a game-changing product can earn your place in the history books, but it’s not a guarantee of long-term success or even survival.