If a self-driving future is one pillar of Tesla’s (TSLA) “excellent” market valuation, electric cars that are cheap enough for most households are another.
But changes from within and outside the company are rapidly complicating that vision.
Tesla’s stock price relies in part on its mass-market EVs, which are leading a paradigm shift in how much of the country gets around.
However, rising prices for cars, especially EVs, are reducing consumer demand and lengthening implementation timelines.
While governments around the world begin to steer societies toward electric vehicles, traditional automakers are readjusting their timing to adapt to waning demand. Several major companies, including Ford (F) and General Motors (GM), have recently scaled back their EV plans, while others have begun moving to hybrid vehicles.
Just as competitors are leaning toward cheaper hybrids and better-selling gasoline models, Tesla is pivoting away from its long-anticipated entry-level EV and establishing itself as a luxury automaker. It seems there is.
At the same time, resources from the affordable Model 2 EV project were allocated to the prodigious robotaxi program.
Against an increasingly pessimistic backdrop, the Model 2 was intended to be a bright answer to Tesla’s short-term woes. But barring some bold entry-level steps to reinvigorate Tesla’s finances, the company’s challenges appear to be more than temporary. For some analysts and investors, Tesla has no future without the Model 2.
The idea of ​​driving without human intervention plays a key role in Tesla’s technology-enabled growth story. But what if it’s the only part?
