Tesla CEO Elon Musk has made it clear for some time that the future of his company is not in building regular cars. That’s been the genius of Elon Musk’s version of Tesla from almost the beginning. Initially, this meant building electric cars when almost everyone else said they were decades in the future. Now it’s robots, self-driving taxis, and artificial intelligence.
That’s what Musk says is coming, but it’s mostly not here yet, and until it is here Tesla is still mostly a carmaker. In fact, Musk said something yesterday in an all-hands with employees that made me realize something: Tesla is now the ‘legacy’ automaker that’s long been the target of his ire. The core of what made Tesla special or unique as a car company is largely not there anymore.
It’s easy to look at the news and assume it’s just the politics that are hurting Musk. They certainly aren’t helping, but if it were just an issue of politics then the issue might easily be fixed. I don’t think this is easily fixed. As I’ve said before, when you remove the huge benefit-of-the-doubt given to Musk you have to evaluate Tesla as an automaker, and there’s new data from Edmunds that shows Tesla’s cars are more replaceable than they’ve ever been.
Maybe Foxconn and Mitsubishi will replace them? The Taiwanese company didn’t invent the iPhone, it merely made gobs of money producing them. Foxconn seems to be planning a similar path with Mitsubishi.
It’s Friday, so let’s end this last Morning Dump of the week on an up note: If you live in England you might be able to buy John Entwistle’s big ol’ Caddy at a surprisingly reasonable price.
‘I Can’t Walk Past A TV Without Seeing A Tesla On Fire’ Elon Musk
Musk hosted an all-hands and Q&A with employees yesterday and, as usual, it was mostly a rah-rah affair seemingly designed to excite investors as much as actual employees (Tesla is historically good about providing shares to employees, so the lines are probably blurry in that crowd).
If you follow Musk on Twitter/X you know his skin can be as thin as a Motel 6 pillowcase, so the questions weren’t particularly probing. This doesn’t mean that Musk didn’t acknowledge the huge drop in share price or all the vandalism surrounding the company. He did make a mention of it, somewhat randomly in between points.
“So… Teslas will be worldwide. So, overall, you know, it’s good. If you read the news, it feels like Armageddon. I can’t walk past a TV without seeing a Tesla on fire,” said Musk. “Some people…. listen, I understand if you don’t like our product don’t buy it, but you don’t have to burn it down.”
That’s not unfair. Destroying someone else’s property is bad. Not only does it hurt a random person you don’t know more than it hurts Musk, if that’s your aim, it’s also probably not as effective as actual protesting, encouraging your pension fund to divest from the company, or asking lawmakers (if you live in California) to exempt the company from being able to sell carbon credits to automakers.
What Musk didn’t mention was why people might feel this way. To pick out something entirely random from the last 24 hours, there was a New York Times report that Elon Musk would get a briefing that laid out how the United States would fight a war with China, an absurd thing to give someone who desperately needs help from China and has so far acquiesced to China’s current government. President Trump has since called this “fake news,” which is a giveaway that this may or may not be true.
Musk ended his interlude by saying: “Like this is psycho, stop being psycho, OK… So we launched the new Model Y!”
That’s quite the transition.
Getting to the point I made in the headline, Musk also mentioned that Tesla was likely to sell its 10,000,000th car in the not-too-distant future. “That’s a lot of cars man,” exclaimed Musk, who acknowledged that building and selling cars is a difficult business. When Tesla hits that number it’ll be quite the accomplishment and prove that it is about as established as an automaker can be at this point. But a “legacy” automaker? I know that’s a charged term so hear me out.
Lamborghini was founded in 1963; is that a “legacy” automaker? Probably. There’s no set age for what is or is not a legacy automaker. Tesla might be a young company when compared to, say, a Renault or a Ford, but the company is newer than a bunch of startups like Lucid, Rivian, and this version of Polestar. It is the legacy electric carmaker, no doubt, but in this new era, I’d argue that it’s also just a legacy automaker.
Why? Because “legacy” was a term practically invented to pit Elon Musk’s Tesla against old car companies like Ford, GM, and Volkswagen. It was, more than anything, a bit of a ‘pejorative’ that implied that those automakers weren’t capable of catching up with Tesla by building a product as good or desirable. But now it’s Tesla that’s on its back foot in China as it faces competition from companies building more interesting products — ones that outprice Tesla and even offer free self-driving that’s built specifically for the market. In a younger market like China, Tesla is definitely a “legacy” automaker.
In the United States, it’s a little different, but many of the things that gave Tesla an edge (ADAS, direct-to-consumer sales, OTA updates, Supercharging) have been matched or even surpassed by the competition. I’ve spent the last week with a Cadillac electric car that can go over 300 miles on a charge, drive itself hands-free on the highway, accelerate at nauseating speeds, and even looks cool. All at a price that’s competitive with Tesla.
Oh, you want more evidence that people think they don’t have to buy Teslas anymore?
Tesla Trade-Ins Now Approaching Record Levels
While the share price seems to have stabilized in the $225-$250 range for the moment, here’s a bit of data for you, from Edmunds, that shows the politics of this all does seem to be working against the automaker. For the first half of March, MY2017 or newer Teslas represent 1.4% of all vehicles traded into traditional dealers, up from 0.4% in the same period the year before. This would be a record for Tesla if it holds, and surpass last month’s 1.2% turn-in share.
Note: This isn’t people sending Teslas back to Tesla to get a new vehicle, nor does this cover people turning them into Carvana or similar companies. These numbers are people who are, for whatever reason, over the idea of owning a Tesla so they’re turning vehicles in for something from an automaker that still has dealers.
Here’s something from the Reuters report on this that caught my eye:
“Brand loyalty is becoming a bigger question mark as factors such as Elon Musk’s increasing public involvement in government, Tesla depreciation concerns and its increased saturation in major metro areas leave some longtime owners feeling disconnected from the brand,” said Jessica Caldwell, Edmunds’ head of insights.
[…]
Tesla’s sales likely fell 10% in February, hurt by declines in its Cybertruck pickup, Model 3 sedan, and Model Y SUV, separate estimates from market research firm Cox Automotive showed on Thursday.
“These shifts in Tesla consumer sentiment could create an opportunity for legacy automakers and EV startups to gain ground,” Caldwell said.
Jessica Caldwell is a pal and also one of the smartest analysts in the game, but I think this data points to Tesla being a legacy automaker now. If someone can easily swap one of its cars for a Ford Mustang Mach-E or a Hyundai Ioniq 5 and not feel like they’re losing out, that competitive advantage is gone. There is no moat. And with most automakers offering NACS-style adaptors that play nice with Tesla Supercharging and more, like GM, offering hands-free driving, what Tesla can offer that other automakers can’t has shrunken dramatically.
Even before the robots and robotaxis arrive, it would be silly to call Tesla a traditional automaker. That’s going too far. A legacy automaker, though, I think is fair. It’s older than roughly 500 Chinese EV startups and at least two versions of Chrysler.
You can’t ruin a legacy if you don’t have one, and — while there are plenty who have recently become fans of the brand and love its CEO — the numbers imply that quite a few people think that’s exactly what Musk is currently doing.
Foxconn Will Reportedly Make EVs For Mitsubishi
Hon Hai Precision Industry Company, better known as iPhone producer Foxconn, has reportedly finally gotten what it’s long wanted: An agreement to produce electric cars for someone else. Specifically, Foxconn landed the Mitsubishi deal that Honda is rumored to have wanted.
Per Nikkei Asia:
Shares in Mitsubishi Motors rose significantly on Friday following Nikkei Asia’s news that Taiwanese electronics manufacturer Foxconn is finalizing a deal to collaborate with the company on electric vehicles, in what could be the latest in a series of partnership initiatives by Japanese automakers to boost their electrification plans.
Mitsubishi’s shares hit 465.8 yen at one point in the morning, up 21.4 yen, or 4.8%, compared with the previous day’s closing. The shares ended the day at 443.1, off 0.3%.
The Taiwan-based iPhone assembler aims to expand its presence in the EV industry, with plans to manufacture EVs for Mitsubishi, Nikkei Asia reported Thursday. Mitsubishi is believed to be looking to sell these EVs in the Oceanian market from 2026, and then expand to other markets.
This doesn’t preclude Honda or Nissan from making a deal with Foxconn, of course. A big appeal of Mitsubishi is that it performs well in Asian markets that Honda doesn’t necessarily reach, so starting in Oceanian markets sounds reasonable.
Check Out John Entwistle’s Big Black Cadillac
Auctioneers H&H Classics will have an event on April 9th and if you’re in the area, might I suggest buying The Who bassist John Entwistle’s 1971 Cadillac Fleetwood Series Seventy-Five Limousine? The car, which is rumored to be the inspiration for his song ‘Big Black Cadillac,’ is estimated to fetch between $20,000 and $35,000.
That seems like a good price to me. Here’s how H&H describes it:
The car was imported by John Entwistle from America during The Who’s heyday and became part of the legendary bass player’s entourage, with period photos showing it parked outside John Entwistle’s house and also in the grounds of bandmate Keith Moon’s estate.
The rare model is finished in black with black leather upholstery and appears to be substantially original. It is now offered for sale from a private collection.
John Markey, motorcar specialist at H&H Classics, said: “This American classic has lived a fascinating life and if only cars could talk then I’m sure it will have plenty of tales to tell.
Even without the rock connection, this is a handsome car.
What I’m Listening To While Writing TMD
I had to do it, here’s The Who performing “Magic Bus,” though I’m sure some of you would have preferred “Pinball Wizard.”
The Big Question
What is a ‘legacy’ automaker? How would you define it?
Top photo: Tesla
“What Musk didn’t mention was why people might feel this way.”
Maybe because it absolutely doesn’t matter why, when your tender feelings lead you to commit property crime, vandalism, assault, terrorism, and general mayhem.
I wouldn’t even support this sort of behavior toward AMC Matador coupes or Fiat ProBastard vans, the absolute two worst vehicles ever made.
Throwing out all the piss and vinegar, just looking at Teslas as cars, only the Model S is good looking. When you’re still making payments, a car should at least make you feel good when you look at it. Looking like an old Motorola PEBL isn’t enough to keep loyalty. Then add in that a foreigner is using profits to buy his way into various governments, and it’s a recipe for losing. If you bought a Tesla before Nutjob McBoingboing showed his colors, you have my sympathy. I will be happy to dance on Teslas grave.
The Model S is, was, and will forever be a gorgeous car. Unfortunately it was all downhill from there…in myriad ways
I guess they exited their startup phase built factories but didn’t really innovate the same way the rest of the industry did. I’ve always looked at tesla like apple. Proprietary some good ideas maybe first to market on some idea but expensive and falling behind not long after. I’m not sure Tesla fits in with all the other legacy autos yet but it’s definitely in a weird middle area. Maybe they will learn from their mistakes as others did and they will get to that status they probably don’t really want or it will all fall apart. BYD almost seems to be in that legacy phase or some kind of middle phase now as well especially with their gigantic 32k acre factory they are building. But they continue to innovate in more proven metrics. Maybe part of legacy status is when you start trying to sell nonsense to people instead of actual features and innovations.
Tesla can only hope your Apple comparison holds up. Apple is consistently one of the most profitable companies and has been for decades now.
I fear Tesla is more like Atari
Tesla was founded in 2003, which makes them about 22 years old now
The original incarnation of Chrysler was founded in 1924, by the time the company was 22 years old (1946), it was definately already considered part of the traditional, legacy establishment as the third member of the Big Three
Yes, Chrysler was *technically* a restructuring of Maxwell, in the same way Fox was technically a revival of the DuMont network, but, still
Waaay back in the 70’s when this was a thing. I was visiting an economist and we were watching the news as some UAW folks were taking a sledgehammer to a Toyota. He calmly reminded us in the room that Toyota still booked a profit on that sale. Leaving it in one piece would have done more harm to Toyota in that it would have been around to compete with a new sale, instead it induced demand for another.
I would be more than happy to see Elon standing in line at a food bank someday, but performative destruction is just so stupid.
The same would apply to those big displays of police departments destroying seized property, like driving tanks over super cars.
Also, I know five people who have bought/leased Teslas. None traded them for another. Four got other EVs and one aged out of driving. All of this happened before Elon went certifiably nuts so he may or may not have been a factor, but I think it was more likely they made their choices on not having been happy with the Teslas or were attracted to more competitive options.
That’s a good point the union Toyota hate was strong. I still remember their strange saying “you can’t eat your Toyota”. From a North American standpoint they were the new guys but had proven engineering and manufacturing in Japan with ideas that worked well in a down economy with oil crisis. I guess at a certain point maybe the mid 80s or early 90s? they become mainstream
“What Musk didn’t mention was why people might feel this way.”
And that’s where Musk is putting effort into being disingenuous… or merely incredibly stupid. He needs to learn about “political blowback”… And why it’s a good idea not to to do business and politics at the same time.
And people who think that “running government like a business” is a good idea are naive morons.
“What is a ‘legacy’ automaker? How would you define it?”
To me, it’s an automaker that is still heavily invested in and is still making new versions of ‘legacy technology’ such as vehicles with internal combustion engines.
My self-awareness detector just imploded.
Musk stupidity aside, I predicted this would happen when everyone adopted NACS. The real competitive advantage for Tesla has long been the Supercharger network. Once that stopped being exclusive, the biggest reason to buy a Tesla over anything else was gone.
Elon is one of those people who, when his time comes, will be found alongside jars filled with his toenail clippings.
I’m curious as to which electric Cadillac you’ve been testing out. I was fortunate enough to test-drive a Lyriq at the 12 hours of Sebring IMSA race last weekend. I still remember the first time I got to drive a Tesla and was utterly amazed by it. The Lyriq brought that feeling back and unless Tesla has something newish and interesting to offer, they’re going to have a tough time with the current competition. And that’s not even counting Elon’s current maximum-dipshitery antics.
Anyway, back to the Cadillacs. I got to do that right after test-driving a V-series Escalade. What a fun juxtaposition – old school hot rod combined with an insanely luxurious interior up against a rock-solid, whisper-quiet, amazingly-quick EV. I would’ve liked to bring both home, yet neither quite compared to the experience of the CT5 V-series Blackwing with the six-speed manual. Holy Shit… that’s the first time I’ve experienced Tesla-style acceleration in a gas-powered car and it was Glorious.
And speaking of Glorious, I’d sure like to bring that ’71 Fleetwood home and park it next to the triple-black ’71 Sedan deVille currently in my fleet.
Your car is absolutely beautiful.
Gott in Himmel – that is one beautiful chariot!
That Cadillac is a work of art, in the sense that if you shine a black light on the interior it’ll look like a Jackson Pollock.
Tesla is cooked as a brand at this point. They are Elon, and Elon is them. The lack of new models that arent a rolling vanity project shows. FSD has been 6 months away for 5 years it feels like.
Just a matter of time until they get pushed out of china, or I could see that government kicking them out as retaliation for a ban or tariff on Chinese brand EV sales in the US. Europe is fed up with him as well, especially Germany with the
AfD-ebacle
And to think, we can trace his decline all back to a bunch of poor 12 year olds wanting to check out a cave. Buying his way up the path of exile leaderboards is hilarious though, its the most fragile thing I’ve ever seen.
I agree rando Teslas should not be lit on fire.
The ones at the dealerships, though…
“We don’t need no water (wouldn’t help anyway)…”