Tesla going flat as rivals charge

A combination of inconsistent information and further financial woes are starting to tarnish Tesla’s credibility ahead of the Australian arrival of the all-important Tesla Model 3 small electric sedan.

In March, Tesla's enigmatic CEO Elon Musk announced a price drop for the all-new Model 3, only to raise pricing back up a week later. At the same time, Tesla announced via Twitter that it would close a majority of its showrooms; another commitment Musk backtracked on almost immediately.

Un-kept promises from the smooth-talking or delusional, as some have suggested, Elon Musk, lead many to question the brand’s future.

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Financial dramas, ranging from a US$2.7bn contingency fund sourced from investors this year which Musk himself stated would only last “approximately 10 months” (reported by UK’s The Times newspaper) to the uncertainty surrounding the Model 3’s arrival in right-hand drive markets like Australia are just the beginning.

This week, reports surfaced that Tesla’s head office had even run out of toilet paper allegedly due to budget cuts, adding a farcical element to the growing list of dramas.

According to a report by Electrek (American EV news website), a “hardcore cost-cutting” scheme has chopped office supply orders, including toilet paper, with staff in Tesla buildings forced to bring their own… or worse.

Musk has denied the claims.

Basic employee hygiene aside, the company's share prices appear to mirror the gloomy prospects. From a peak of just under US$377 in December last year, that figure has plummetted to just shy of $190.

Tesla’s leadership in the electric car market is hard to refute. Others, like Mitsubishi (iMiev) and Nissan (Leaf) (below) beat Tesla to market with fully electric cars, but no other brand has garnered the global attention or the sales to match Tesla. Yet.

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It’s fair to say Tesla caught traditional automotive brands napping at the wheel of the electric revolution.

But the giants are waking; BMW, Hyundai, Jaguar, Nissan, Mercedes-Benz, Audi and Renault all have electric cars on the market now – or due to hit showrooms in the next 12 months – which means Tesla’s biggest challenge to its survival is only just starting. The honeymoon is, in other words, over.

Musk remains defiantly optimistic about Tesla’s future in the face of these reports. Just last month, he claimed his company would be able to build a car without a steering wheel or pedals by 2021.

Musk’s confidence in his company and its products is unshaken. In the US, Tesla has three of the six best-selling plug-in vehicles to date, and it still offers customers a seven-day (or 1000 mile) full refund if dissatisfied with their new EV. The Model 3 has overtaken the Chevrolet Volt as America’s most popular plug-in, with more than 174,021 claimed sales since its 2017 launch.

As for when that Model 3 arrives in Australia, we still don’t know exactly. Musk himself has tweeted that right-hand-drive deliveries would commence in the middle of this year, while the Australian version of the website states that the car will arrive “in 2019”.

Official paperwork for Australian-delivered Model 3s has been processed, though, which means that the five-seat, four-door EV should pass Australian Design Rules (ADR) requirements by the early part of June.

A large question mark remains over the brand, as more affordable EVs start to hit the market here and overseas. If Tesla’s financial woes continue, will investors continue to back Musk’s dream?

As well, Australia is still a good half-decade or more away from wide-scale adoption of an electric car lifestyle, with well less than 1000 EVs sold in 2018 in a market of 1.1 million cars. Selling a relative handful of Model 3s into a market on the other side of the planet might just be a step too far for the EV company that may be flying too close to the sun.

WhichCar contacted Tesla for comment on multiple occasions but was unsuccessful.