With 2023 barely underway, Tesla has multiple obstacles to overcome
MARY LOUISE KELLY, HOST:
So far, it's been an unhappy new year for Tesla. The transformational electric automaker has seen its stock values plummet. Meanwhile, its CEO, Elon Musk, does not always seem like he's paying attention. NPR's Camila Domonoske joins me to talk about what is going wrong at Tesla and maybe also what's going right. Hey, Camila.
CAMILA DOMONOSKE, BYLINE: Hi, Mary Louise.
KELLY: Hey. So I want to begin with a fact, which is Tesla delivered a record number of cars last year. So why exactly was this an awful year?
DOMONOSKE: For any other company, this would have been great. I mean, they didn't just increase. They didn't just set a record. They boosted sales 40%. But I don't need to tell you, Tesla isn't any other company. right? It is an extraordinary company. Its stock values used to be straight up astonishing. It was at one point a trillion-dollar company. And this year, it grew less than it had hoped to grow month after month. And on the stock market, the market cap of the company lost $700 billion. That's more than most of the established automakers are worth combined.
KELLY: Why? Why did the stock value crash so much?
DOMONOSKE: Well, partly there were forces that affected the entire auto industry. Overall, car sales dropped over the year. Automakers started the year without enough parts. They couldn't make all the cars they wanted to make. Now they have parts, but buyers aren't exactly lining up. Prices are incredibly high. Teslas were expensive to start with. Now it's worse. Interest rates are up. All of that hurts demand. And then for electric vehicles specifically, sales actually did go up last year. People bought more electric vehicles. But Tesla is also starting to face real competition for the first time, basically. Vehicles like the Kia EV6, the Ford Mustang Mach-E, they're giving their Model 3 a run for its money. And then I have to mention, of course, Elon Musk went off and bought Twitter.
KELLY: True, which is a whole different story. But Musk - he's had a bunch of different side projects. He's done all kinds of things while he's run Tesla. Why does the Twitter sideline seem different?
DOMONOSKE: I think there's three things. One is it's hurting Tesla's brand. Elon Musk is Tesla for a lot of people, including a lot of car buyers. His sort of aura of genius is part of why people like the vehicles. And right now, Musk is basically a professional Twitter troll, and he's embraced some right-wing positions, which may turn off some people, especially liberals who are more likely to buy electric cars. So that's one item. Then there's the fact that it's a distraction. He's spending a lot of time on Twitter. Some investors who are big fans of Elon Musk think he's spending too much time on Twitter and not enough time on Tesla. And finally, he had to sell a lot of Tesla stock, which directly helped drive values down.
KELLY: So is Tesla in serious trouble?
DOMONOSKE: It kind of depends if you're asking about Tesla the stock or Tesla the company that, like, sells cars in the real world to real people, right? On Wall Street, it was an atrocious year for Tesla. It's kind of hard to overstate. But in the real world, Tesla grew. It's selling more electric vehicles than anybody else. It has the best charging network out there. And, again, electric vehicle sales are going up. So even as there's more competition, Tesla can still sell an awful lot of cars. Stephanie Brinley is with S&P Global Mobility.
STEPHANIE BRINLEY: Their share of the total market can come up a little bit. And their volumes are still going to come up. And they're still going to make money.
DOMONOSKE: So, yes, Tesla did not grow as much as it wanted this year. But, look, they set a very ambitious goal. The company got 94% of the way there. If I get that close to my New Year's resolutions, I think I'm going to round it up and call it a win.
KELLY: (Laughter) Here's to rounding up New Year's resolutions. Thank you, Camila.
DOMONOSKE: Thank you.
KELLY: That's NPR's Camila Domonoske. Transcript provided by NPR, Copyright NPR.