Tesla competition heats up from GM and Ford
Pras Subramanian of Yahoo Finance discusses the competition in the EV market from legacy automakers as well as the differences among auto companies’ car lineups.
Video Transcript
PRAS SUBRAMANIAN Welcome back to “What Just Happened?” I’m Pras Subramanian. Elon Musk is a part of the Tesla story. His extraordinary achievements have taken the company to incredible heights. However, now there are distractions from Twitter and China’s demand worries, as well as strong competitors, that threaten the company once considered the leader. Let’s look at some of Tesla’s biggest competitors.
GM, the EV giant, was slow to develop a strategy centered around the Ultium battery platform. This year will see the release of three EVs, in addition to the Chevy Bolt, Hummer EV and Cadillac LYRIQ. GM intends to make 1,000,000 EVs each year by 2025.
Ford is another company that sells thousands upon thousands of Mustang Mach-E and Ford Lightning pickups. Jim Farley, the CEO of Ford Motor Company, decided to split it up through an EV division and a legacy gasoline power division in order to focus on the future. Ford claims it plans to produce 2 million EVs before 2026, when new factories are available. There’s also VW.
The German giant was firmly in the game with the ID sub-brand. This car was unveiled at CES last week. Volkswagen plans to launch 25 new EVs on the market by 2025. Some of those models will also be manufactured right here in America, which means they’ll qualify in federal tax reductions.
BRAD SMITH Elon Musk’s empty promises of the future are another problem. Pras, can he fulfill those promises?
PRAS SUBRAMANIAN Brad, you’re right, there have been a lot more vehicles around the past than Cybertruck. Cybertruck debuted in 2019. It was expected to be released in 2021. We will, but it’s likely we won’t see it until next year. We’ll see.
The Tesla Roadster is right. This supercar costing at least $200,000 was launched in 2019. However, we haven’t heard much about its release date and that it won’t be available for a while. And they’ve already taken huge deposits. The Gen 3 robotaxi, the $25,000 Tesla cheap– Elon Musk talked about it in 2020. Now we hear that they will actually show a possible platform or what it might look like at their investor meeting on March 1. If we can see it, who knows when it might actually be released in the future?
RACHELLE AKUFFO: Pras, let’s now discuss Tesla’s car designs. Unpopular opinion, but I really like the Cybertruck’s design. While the overall design of the Cybertruck is appealing, it’s long overdue for a redesign.
PRAS SUBRAMANIAN Yeah. You can see that the models are very old. The Model S was launched 10 years ago. Automakers will usually have a refresh every three to five years and then a complete redesign every seven years. So, the Model S was launched 10 years ago.
It was refreshed last year. The Model X SUV was released seven years ago. It received a refresh last summer. The Model 3 has been around for six years. There were reports that they may update interior components, though not a complete overhaul.
These models are still in production. They are still being bought by people, but you might consider looking at them when new models come out.
BRAD SMITH Pras, I am old enough to recall when you took me outside our office in one those Mercedes-Benz luxury competitors. There are many other luxury competitors. What are the facts about luxury competitors who are entering the fray in this market?
PRAS SUBRAMANIAN Brad, that’s hilarious. It was a great day with the QS. Tesla doesn’t break out US sales. But “Automotive News” has new data showing that they passed BMW this year in the US as the top luxury brand overall.
You can see that Tesla is in a very enviable position. Like you mentioned, Mercedes with those EQS model– Brad, that’s the EQB SUV. It’s a small SUV and I’m going to pick it up later today. This is a small EV SUV. Mercedes continues to be strong.
Right? BMW with the i4 or iX– Audi, with its E-trons. It’s clear that there are many other competitors in the luxury EV market. Tesla, as we have said, used to own the road. It is now joined by a number of other cars.
RACHELLE AKUFFO: Because this field is so crowded right now, will people still purchase Teslas?
PRAS SUBRAMANIAN Rachelle, it is a true yes. Because we were just talking earlier about the price cuts that will see these Model 3s, and Model Ys be included in that price cap for the IRA credit. This is a massive, huge demand type of push for them. This quarter will be a great example of that.
Rachelle’s biggest factor is, I believe, the charging network. The Tesla Supercharger network remains the best in America, perhaps even the world. There have been a lot of complaints about EV Go, Electrify America and other charging networks. They are all broken and there are not enough chargers. Superchargers can be found everywhere, but they are often empty and quite fast. That’s why I believe that pricing and charging are key factors.
RACHELLE AKUFFO: It’s all right, Pras Subramanian reports for us.