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Yahoo
2 hours ago
- Automotive
- Yahoo
Is Musk's Political Pivot Good for Tesla? Experts Weigh In
It's been a rough ride for Tesla (TSLA) over the past few months. As CEO Elon Musk focused his attention on the Department of Government Efficiency (DOGE), Tesla's company and stock saw some dramatic volatility. Musk left DOGE in May and committed to focusing on Tesla. Since then, however, he had a public blowout with President Donald Trump and is now talking about forming a political party called the American Party, according to a post he wrote on X, which is creating chaos for the brand and uncertainty for investors. Read Next: Explore More: While Musk redefined the car industry, his avid political interests have shaken up the market and spooked investors. Read on for experts' take on whether Musk's pivot is good for the company and the stock. How Musk's Political Aspirations Impacted Tesla In the first quarter, electric vehicle (EV) sales increased more than 11% year over year, per Cox Automotive, but Tesla hasn't been riding that wave. Tesla saw its sales fall, and many attributed that, in part, to Musk's political involvements earlier this year. In the company's first quarter earnings release, it reported that net income fell by 71% year over year, per NPR, and in the second quarter, it reported that sales plunged a record 13.5% year over year, per CNN. Its stock also saw a lot of volatility during this time. On the first trading day of 2025, Tesla stock closed around $380. By the end of March, it had fallen to around $260. It has since recovered some of those losses and is trading around $330 as of July 22. 'When Musk got into politics, it created confusion for investors,' said Gilbert Michaud, Ph.D., assistant professor of environmental policy at Loyola University Chicago. 'When he removed himself from DOGE, things got better.' However, Musk is still involving himself in politics and offering criticisms of the president on social media, which has led to more volatility in the stock. Check Out: Musk Could Still See Backlash From Investors Investors expect a strong visionary at the helm of a company to guide it to success, and Musk was that trailblazer, but some people are now questioning his choices. 'Every time Musk leans heavily into politics, Tesla's stock tends to react and not always positively,' according to Michael Foguth, founder and president of Foguth Financial Group. 'Investors typically want leadership that's focused on operations and innovation, not controversy. His new political party initiative could become a distraction and raise concerns over long-term vision and brand stability.' 'Musk's personal brand creates uncertainty for many. If Musk weaves his way back into politics or anything else that is perceived as risky, some backlash may occur,' Michaud said. Is Musk Still the Right Fit for Tesla? Musk's behavior is playing out on a global stage, and it's making some people nervous and skeptical that he can continue to lead Tesla. 'While Musk built Tesla, he may not be the right face for its next chapter,' Michaud said. 'The pivot into politics has definitely alienated many consumers and investors, and the company may want to be more disciplined and strategic in its next moves, especially if he forms a new political party.' And the question people are asking is whether Musk is still good for Tesla. 'Yes, in terms of innovation and brand,' Foguth said. 'But the more he strays from that lane, the greater the volatility risk for shareholders. Musk Still Has an Impact on Tesla 'Musk's influence on Tesla is still significant,' Foguth said. 'His technological vision has created massive shareholder value.' However, Musk's lack of commitment to Tesla could cost him a lot more over time. 'If politics continues to dominate headlines, it could erode investor confidence, especially among ESG investors or those with short time horizons,' Foguth explained. It's undeniable that Musk reimagined what a car could be like and completely transformed the driving experience for countless consumers, but his recent involvements and politics have caused the company some trouble. While he has since committed to spending more time at Tesla, it remains to be seen what's in store for the company and stock going forward. Editor's note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on More From GOBankingRates Mark Cuban Tells Americans To Stock Up on Consumables as Trump's Tariffs Hit -- Here's What To Buy This article originally appeared on Is Musk's Political Pivot Good for Tesla? Experts Weigh In
News.com.au
2 days ago
- Automotive
- News.com.au
EV sales plunge forces Porsche, Fiat to slash prices across Australia
Car companies have slashed thousands of dollars from the prices of electric vehicles, with widespread discounts as buyers hit the brakes on electric vehicle sales. Electric vehicle sales in Australia are down 6 per cent compared to 2024 in the first six months of this year – and that's despite more EV options being available to customers than ever before. And we aren't just talking about the cutthroat Chinese brands reducing costs to compete – there are some surprising discounts to be had. The Porsche Macan is the most surprising offer on the table. Industry veteran Paul Gover posted on LinkedIn: 'Through all my many years in motoring I had never seen a discount on anything new from Porsche Cars Australia. Until today. 'Do Macan owners and shoppers want a Macan EV? The sales results say 'not yet' and dealers have been sounding the alarm bells for more than 18 months. Some even ordered a full year's supply of the combustion Macan before the final cut-off for production in Germany.' The German sports car specialist rarely offers deals. But Macan EV shoppers get a '$5000 Trade-In Bonus' on all cars, plus a 'Deposit Contribution' for the new plug-in Porker ($3000 on the Macan, Macan 4; $4000 on Macan S; $5000 on Macan Turbo). And the brand is further sweetening the deal with a five-year factory warranty and five years roadside assistance at no cost. Another European brand doing discounts is Fiat. The pint-sized Fiat 500e is now being offered at a more fitting price of $38,990 drive-away – some $16,000 off the existing price ($52,500 plus on-roads). And the hotter pop-and-crackle Abarth 500e is now $43,990 drive-away, about $18,000 less than the original price with on-roads included. Fiat – part of the Stellantis Group – isn't the only marque in the stable to be chopping it up. Jeep is still doing $40,000 drive-away deals on the Avenger electric small SUV, which is the country's cheapest vehicle of its type. And there are even better prices on in-stock models with low kilometres, as low as $34,990 drive-away for a car with 2000km on the clock. There are also budget bargains to be had from China, too, with the outgoing Chery Omoda E5 being offered with up to $6000 off retail. The 430km-EV-range small SUV starts at $40,300 drive-away, and includes a free home charger – and it's one of the only EVs on the market with a full-size spare wheel. Cox Automotive analyst Mike Costello says the raging retail offers point to potentially bigger concerns in the industry. 'Discounts or incentives tell us there are still challenges to overcome in terms of increasing consumer demand, although there are plenty of signs that consumers will consider an EV if the price and performance is right for them. 'Over the next few years carmakers are expected to increase the number of EVs they offer to meet government efficiency targets, so there's every change that great deals will become a common sight,' he said.
Yahoo
4 days ago
- Automotive
- Yahoo
Analyst Explains Impact of Trump's Bill on Tesla (TSLA) – ‘Direct Hit to Cash Flow'
Tesla, Inc. (NASDAQ:TSLA) is one of the . Jed Dorsheimer, William Blair energy and power tech group head, recently talked about Tesla during a program on CNBC. He believes Trump's new tax bill will directly impact the company. 'I mean it's going to affect the cash flow of the business certainly. And so when you look at the combination of the $7,500, that just meant that the pricing of US vehicles are going to get more expensive. Or they're going to have to cut the pricing in order to keep that same level of demand, and that will cut into margins and affect cash flow. And then the tax credits going away in terms of the zero emission — that, you know, is a direct hit to cash flow.' Tesla's EV sales are falling all over the world as the company faces challenges from competitors. Even if Elon Musk increases his focus to fix the company's problems, it would take a lot of effort to come out of the demand crisis. For example, in California, the largest U.S. market for electric vehicle adoption and sales, Tesla sales fell about 12% year over year in 2024, causing its market share to drop from 60.1% in 2023 to 52.5% in 2024. Was it because Californians are buying fewer EVs? No. Californians purchased more than 2 million electric cars during the year, almost double when compared to the past two years. Photo by J Dean on Unsplash Macquarie Large Cap Growth Fund stated the following regarding Tesla, Inc. (NASDAQ:TSLA) in its Q1 2025 investor letter: 'At the individual stock level, the greatest contribution was attributable to not owning Tesla, Inc. (NASDAQ:TSLA), and our positions in Intercontinental Exchange Inc. (ICE) and Visa Inc. Tesla faced well-publicized headwinds last quarter that may bleed into future periods. This has remained a constant stock of debate among the investment community and is volatile as a result. The business has never met our quality standards and we are happy to sit on the sidelines of this battleground stock.' While we acknowledge the potential of TSLA as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the . READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now. Disclosure: None. This article is originally published at Insider Monkey. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
4 days ago
- Automotive
- Yahoo
Demand for Elon Musk's Tesla Cybertruck plummeted in the second quarter, new data shows
Sales of the Cybertruck, Tesla's electric pickup, plunged 51% year-on-year in Q2 to just 4,300 vehicles, according to Cox Automotive. Design head Franz von Holzhausen had confirmed in December 2023 the company had collected deposits to fill over 2 million orders — enough to fill production for 16 years. Instead, the high price combined with build quality problems means it is looking less likely the Cybertruck will even eclipse its 2024 sales of 39,000 vehicles. Switch Auto Insurance and Save Today! Affordable Auto Insurance, Customized for You Great Rates and Award-Winning Service The Insurance Savings You Expect It's probably a good thing Tesla refuses to publish detailed sales figures, otherwise everyone could see just how badly Elon Musk's Cybertruck seems to have flopped. Only in its second full year on the market, the full-size electric pickup saw a staggering 51% year-on-year decline in demand during the past three months, according to new data published by market researcher Cox Automotive. The extimated 4,300 sold in Q2 were even eclipsed by rivals from legacy brands, including the Ford F-150 Lightning and GMC Hummer EV truck. 'Suffice it to say, the hyper-competitive EV market is providing the troubled automaker no relief,' Cox Automotive reported, referring to Tesla. The company, which reported only aggregated quarterly global sales at the start of this month, did not respond to a request from Fortune for comment. Tesla said at launch it had deposits to fill 2 million orders Launched at the end of 2023, the Cybertruck had collected deposits for 2 million vehicles, design chief Franz von Holzhausen confirmed at the time. With Tesla officially installing capacity to build north of 125,000 vehicles annually, that was the equivalent of 16 years of demand before the company would have to find more customers. No wonder Tesla had initially hoped to double assembly line output by mid-2025 in order to meet this tidal wave. Yet those orders either keep getting pushed back or reservation holders have simply refunded their deposits. With 10,700 Cybertrucks sold through the first half, it's looking increasingly doubtful the model will crack the 39,000 units sold in 2024. The chief complaint about the vehicle has been just how far short it came to matching the original price promised in during its reveal, despite having two extra years' time in development. The most popular Cybertruck, the all-wheel-drive version with one motor each for powering the two axles, clocks in at $80,000 without extras instead of the $50,000 promised at its reveal in November 2019, when reservation owners could make a deposit. Multiple recalls and quality problems dogged the Cybertruck Then there were the build problems: two official investigations by U.S. federal traffic safety officials and eight recalls in all just for the 2024 model year. The most recent was perhaps also the most damaging for its image, as customers shared videos online in which they complained the glue holding parts of the truck's stainless steel exterior sheet metal in place failed, causing the panels to dangle precariously. The questionable quality of its underlying engineering was furthermore shown in numerous videos. Most notably, critics criticized Tesla's decision to substitute a conventional steel frame for less durable aluminum castings that can break when towing enough weight. On Tesla fan forums, opinions are now divided as to what if anything should be done about Musk's expensive flop. Some argue the vehicle should be scrapped for a more conventional look while others feel its iconoclastic take on the otherwise timeless pickup ought to be kept as Musk intended. Some relief should come in the current quarter as buyers previously on the fence could opt in favor of a purchase before the $7,500 federal tax credit expires at the end of September. 'The second half of the year will be a critical test of EV demand. Q3 will likely be a record, followed by a collapse in Q4,' argued Stephanie Valdez Streaty, senior analyst for Cox Automotive. This story was originally featured on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
5 days ago
- Automotive
- Yahoo
New Tesla report reveals staggering extent of automaker's problems with Cybertruck: 'The final product was disappointing'
While more drivers are going electric, interest in Tesla's Cybertruck seems to be diminishing, as a new report revealed sales aren't living up to expectations. What's happening? According to Electrek, a Tesla delivery report revealed the EV company planned for a Cybertruck production capacity of more than 250,000 units annually. However, the company is selling just about 20,000 units per year. "The final product was disappointing in that the promised specs were not delivered," one commenter wrote. Tesla's second-quarter report also showed results from the brand's "other models" category, which includes the Cybertruck. Other models sales are significantly lower now than before the Cybertruck joined the group, per Electrek. The Cybertruck also faced stiff competition from other electric pickups on the market. While sales for Ford's F-150 Lightning dipped year over year, the automaker still sold about 5,800 units. GM had an edge in the category too, given the combined sales of its various electric pickup options. Why are electric vehicle sales important? Another report found that at least 1 in 4 cars sold worldwide in 2025 will be an EV. Per the International Energy Agency, the market is expected to exceed 20 million EVs sold this year. Experts have called EV market growth a vital factor in curbing the effects of heat-trapping pollution. According to the Environmental Protection Agency, EVs produce zero tailpipe emissions, making the planet-friendly options a more efficient way to travel than gas-powered alternatives. Despite the booming EV market, Tesla sales have struggled in 2025. Some analysts have attributed the downfall to Tesla CEO Elon Musk's involvement in politics. According to Reuters, Tesla needs to deliver more than 1 million vehicles in the second half of the year to prevent an annual sales drop. What's being done about Tesla? There have been some signs of a turnaround for Tesla in Europe. Teslarati reported that EV registrations spiked in the United Kingdom, Spain, and the Netherlands, with Tesla topping EV sales charts for June. The company also introduced the updated Model Y in Australia, which prompted a boost in sales in May. For the time being, it seems like drivers can find a good deal in the used EV market. A report found that some older Tesla models were being sold for more than $50,000 below their original prices. Not only that, but buying a used EV can save drivers hundreds of dollars on gas and maintenance each year. How much cash back would it take for you to switch to an EV? $5k $10k $20k I already have one Click your choice to see results and speak your mind. Join our free newsletter for good news and useful tips, and don't miss this cool list of easy ways to help yourself while helping the planet. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
