Investors REJECT Elon's "New" Stripped-Down Cars, TANKING shares…

At least Elon’s announcement wasn’t as lame as Lebrons… 

Well, if you still want to feel superior in traffic but can’t justify dropping sixty grand to do it… make sure you tip your local Elon Musk for the gift. Tesla has finally unveiled its long-promised budget cars… the Model 3 Standard and Model Y Standard with new prices starting at $38,630 for the Model 3 and $41,630 for the Model Y. So technically cheaper, if you ignore that they both still cost more than a loaded F-150 did five years ago. 

(Source: Giphy) 

With that said though, these aren’t technically “new” cars. They’re rebranded, downgraded versions of the ones already in showrooms… like when the US government kneecapped the H20 chips hoping China wouldn’t complain (spoiler: they complained). Additionally, the Model 3 Standard loses the second-row touchscreen, the subwoofer, and half the sound system. The Model Y gets passive shocks and cloth interiors. Zesty. As for the range, it’s shorter, the 0–60 is slower, and your sense of financial freedom is roughly the same as the car’s acceleration: muted.

(Source: CNN) 

Still, it’s a move designed to patch a problem Elon can’t meme his way out of… demand. With the $7,500 EV tax credit now expired for most Teslas, the company’s U.S. sales pipeline is looking thinner than patience for Jerry Jones. What’s more is that the cheaper models arrive just as BYD… a.k.a. Warren Buffett's old flame, is inches away from passing Tesla as the world’s largest EV seller. Meanwhile, Hyundai and Kia are dropping prices just to keep up. 

Now is this because Tesla is struggling financially? Well not yet. The company’s coming off record sales in Q3… and record declines in Q1 and Q2. U.S. demand is down, the factories are overbuilt, and the political fallout from Musk’s high-profile bromance and breakup with Trump has alienated both sides of the aisle. Meaning, the “Standard” rollout is Tesla’s way of keeping the assembly lines busy while pretending it’s doing the Lord’s work in affordability. Are you sure about that tho??

(Source: Giphy) 

So given this, what does this all mean for investors? For now, not much… except maybe a clearance rack full of Teslas that can’t quite decide if they’re luxury or middle-class trash.  Investors clearly weren’t impressed, tanking the stock 4% post-announcement. However, it also signals that the long-rumored “$30k Tesla”... the EV for the everyman, the Prius killer, the final form of Elon’s messiah complex… isn’t coming any time soon.  The man can land rockets, build brain chips, and buy Twitter on a whim… but apparently can’t make an affordable car without stripping it like a Spirit Airlines seat.

Still, don’t count him out. This is Musk’s ecosystem of chaos. Every time he looks dead, he tweets something insane and the stock jumps 12%. So who knows… maybe the next Tesla announcement will be the Roadster. As for me? I’m not holding my breath. Until next time, friends… 

At the time of publishing, Stocks.News holds positions in Tesla as mentioned in the article.