Californians Sour on Tesla Model S and Model X

In their most important US market, the plunge in registrations far outpaced their already stunning global decline. Which opens a whole new question.

The Model S and the Model X are Tesla’s high-dollar high-margin vehicles. Some versions clock in at over $100,000. Sales of them have been declining globally ever since the Model 3 showed up in quantity. But in the second quarter, registrations in California of the Model X plunged by 40% compared to a year ago. And registrations of the Model S plunged by 54%, to just 1,205 vehicles.

California is the most important market for these models in the US. In 2018, the state accounted for 40% of Model S registrations in the US. It’s Tesla’s home turf. In California, the Tesla buzz has been deafening for years, supported by hefty state subsidies from day one.

This registration data was collected by Dominion Cross-Sell, cited by the Wall Street Journal. A delivery occurs when the customer takes possession of the vehicle. A registration occurs later, when the sale of the vehicle is registered with the DMV, and the DMV completes its process.

Global deliveries of the Model S and the Model X have deteriorated sharply – but not like in California. Tesla, which will report second quarter earnings on Wednesday, doesn’t disclose US deliveries. It only discloses global deliveries. According to Tesla’s own disclosures, global deliveries of the Model S and Model X combined fell by 33% in the first half, with a 44% drop in Q1 and a 21% drop in Q2. This type of drop – 33% in the first half – is devastating enough for any automaker, unless it plans to discontinue the model in the following years.

But the fact that California car buyers are souring on the Model S, attested to by a 54% drop in registrations, is rough. By the looks of it, high-dollar Model S and Model X sales are getting brutally cannibalized by lower-dollar Model 3 sales.

Model 3 registrations in California nearly doubled to 16,372 in the quarter, according to Dominion Cross-Sell. It is definitely getting popular. In San Francisco, I now see them driving and parked every time I walk around. And they’re involved in accidents. Just on Sunday, an allegedly speeding driver in a (peer-to-peer rented) Model 3 ran a red light in the Tenderloin, collided with a Mini and then hit pedestrians. The headline in the SFGate: “Husband killed, wife hurt after being hit by Tesla in SF.” If the car had been a Ford Fusion, the vehicle’s make would not have made it into the headline.

Tesla is special. That is one of the things CEO Elon Musk has accomplished. Some terrible tragedy involving a Tesla has “Tesla” in the headline. If some terrible tragedy involves a Ford, well, forget “Ford.” Any publicity is good publicity, they say.

But the high-dollar and high-margin Model S and Model X are like so 2017.

The Model S has some issues, including it’s expensive, it’s no longer unique – there are many EVs out there now – and it has been around since 2012. Though there have been many updates over the years, including mechanical and software updates, battery improvements, and some changes to the exterior, the car is fundamentally unchanged and is getting a little long on the tooth, by auto industry standards. It used to turn heads. Now people are used to it.

But the biggest issue the Model S faces is the Model 3. It looks similar — like a slightly smaller re-skinned Model S — but under the new pricing tiers, the Model 3 costs a lot less. And this gap is growing. Last week, Tesla raised the price of the base Model S to about $80,000. This is over twice the amount of the base Model 3. And the most expensive Model 3 sell for about $15,000 less than the base Model S. So, for buyers, these are massive differences.

But for Tesla, gaining volume of lower-priced lower-margin vehicles by gutting its volume of high-dollar high-margin vehicles is a tricky strategy for its cash flow, which needs every help it can get.

And with deliveries plunging 33% globally, and more in its most important market, which could be a harbinger for global trends, there is now a new question: How long can Tesla maintain the Model S and the Model X? If Tesla cannot stop this plunge in deliveries, after a year or two, the Model S and Model X will fall into oblivion and will have to be discontinued.

Kudos to the private equity firm behind this deal. These things don’t happen overnight for companies. They happen overnight only for investors. Read…  Everything’s Fine Until Suddenly it Isn’t: How a “Leveraged Loan” Blows Up

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  101 comments for “Californians Sour on Tesla Model S and Model X

  1. David G LA
    Jul 23, 2019 at 8:33 pm

    Maybe Elon’s latest project – Neuralink – planting a chip in your brain – will save Tesla. Or at least distract the investors for another year or two.

    • Old Dog
      Jul 23, 2019 at 8:55 pm

      Elon Musk is a textbook narcissist. Like all narcissists he’ll do whatever it takes to draw attention to himself. The minute Tesla stops making headlines, Musk will lose interest and will move on to the next project. That bet is so safe that no sane person would take the other side.

      What I don’t quite understand is our seemingly infinite fascination with narcissistic people. Whether they are Hollywood celebrities or political figures. We are hungry for their eccentricities, we absolve them for their sins and accept that they bear no responsibility for the crimes they commit.

      It’s one of most puzzling aspects of our humanity.

      • New reader
        Jul 24, 2019 at 12:02 am

        say what you will about tesla’s valuation or his iffy record of predicting just when things will happen.

        however, this man has single-handedly dragged the auto industry into the EV age. Just 7 years ago it was an open question if EVs would even be the future. Now it is taken as a given. He’s restarted space exploration in the US as well.

        maybe he’s a narcissist? maybe i’d be too if i were a significant force in shaping human progress.

        what i don’t get is the level of vitriol and jealousy from armchair critics. its as if you people want to see him fail at making the world a better place just so you can see someone ‘taken down a notch’.

        at least he’s trying to change the world by doing something. what are you doing with your life?

        • Old Dog
          Jul 24, 2019 at 2:07 am

          I didn’t merit or demerit Tesla. I said that Musk is a textbook narcissistic and that he’ll move on to the next thing when Tesla stops making headlines. Another thing textbook narcissistic types do is credit themselves for the work of others. They never share credit. People working for them will be squeezed like lemons and discarded. Musk has a history of doing that. Their need for attention trumps their ethics.

          Didn’t question Musk’s IQ either. I question the credit he has accrued over the years.

          There’s plenty of invention in my life and the companies I worked for had the decency of acknowledging it. I wouldn’t work for Musk for all the lithium-ion in China.

        • intosh
          Jul 24, 2019 at 2:53 am

          “what i don’t get is the level of vitriol and jealousy from armchair critics.”

          Maybe some people just don’t like narcissistic ego-maniacs, just like some people don’t like cheaters, rude people or liars. What’s wrong with that?

          “making the world a better place”

          Maybe, maybe not. History will be the judge of that.

          “at least he’s trying to change the world by doing something. what are you doing with your life?”

          Please grow up. Being a critic is not exclusive to people who changed or trying to change the world or to those who are “doing something with their lives”.

        • A Citizen
          Jul 24, 2019 at 8:00 am

          “a significant force in shaping human progress”

          Whatever.

        • Jul 24, 2019 at 9:34 am

          New Reader, Elon didn’t invent the EV. He didn’t invent the batteries. EVs were popular for awhile over 100 years ago, until they went out of style and were too costly.

          That said, Tesla might have had a chance if they had stayed with the luxury vehicles and didn’t bail-out himself and his family by assuming Solar City debt. But NO!!

          This whole EV craze is bullshit. We need cheaper (and less regulated) vehicles not more expensive ones. We need cheaper energy, not more expensive (solar/wind). Governments are giving subsidies when they don’t have the money! Talk about absurdities!

          BMW agrees with me. They gave up on EVs saying they lose money on everyone sold. This is true for Tesla when all is said and done. Give it a year

        • Jul 24, 2019 at 10:46 am

          Douglas B Neal,

          “BMW agrees with me. They gave up on EVs saying they lose money on everyone sold.”

          Time to update your knowledge. At the end of June, BMW got rid of their CEO Harald Krueger because he allowed the company to fall behind in EVs. He delayed EV models, lost key EV engineers, and was too focused on ICE engines (BMW hallmark). In the US, BMW lost sales to Tesla. So BMW shook things up and brought in a new CEO to lead the company in the EV era.

          It announced an all-electric Mini coming out next year, belatedly, with technology that BMW had developed three years ago but delayed under Krueger. Now that car is behind the curve before it’s even out. It announced that it has 20 electrified models in the pipeline. The company is way behind in the EV field.

          Peak sales for BMW USA was in 2015, when it sold 405,400 vehicles in the US. By 2018, this was down about 13% to 354,200 vehicles. This year so far, deliveries are down another 1.1% from 2018. Tesla is eating BMW’s lunch in the US — high-dollar high-performance sports sedans! That’s smack-dab in the bull’s-eye of BMW’s specialty. BMW was asleep brushing off EVs with Krueger’s nonsense arguments.

          And now other automakers with EVs will be eating its lunch. This company is fixing to go through some real turmoil until it gets its mojo back, and that will have to come from a whole new series of EVs that have to be better than anyone else’s EVs. Not sure if BMW can catch up, though.

        • JZ
          Jul 24, 2019 at 10:09 am

          Elon Musk, as a CEO runs a corporation that should be profitable and return capital and interest to share holders, in stead, use investor’s money to advance “mankind”, which sounds so righteous and attractive that makes followers forget what a corporation should do in a capitalism based market that will eventually do natural selections and filter out companies that are NOT profitable.
          In the end, Elon Musk makes personal gains in both money and reputation as the EV founder and the investors get to proudly hold up the slogan saying “we have advanced man mind” with a share in their brokerage account worth 0 to 10$.

        • Just Some Random Guy
          Jul 24, 2019 at 12:51 pm

          ” Just 7 years ago it was an open question if EVs would even be the future. Now it is taken as a given. ”

          If EVs ever make up more than 20% of the worldwide car market I’ll eat my hat. It may be a “given” in San Jose or the trendy areas of LA. But in the real world, people don’t really want or need them.

        • Gandalf
          Jul 24, 2019 at 1:09 pm

          Aha, just a few comments-

          Musk was in fact NOT one of the original founders of Tesla. He was invited to invest in and head the company by the founders who then got squeezed out.

          As for BMW – seriously, the ONLY purpose of a car is to get you from Point A to Point B as safely and efficiently as possible. Comfort and use as a utility vehicle for special purposes are nice if you can afford.

          The main purpose of a BMW from what I’ve seen is to compensate for some other deep personal need in life and to show people that you’ve made it in the social ladder enough to afford to way overpay for a car like this. And to emphasize that point you can use that German engineering blow past them and cut them off in traffic

        • MCH
          Jul 24, 2019 at 11:29 pm

          Honestly, the Germans are getting too greedy. I saw this note from a year or two ago where BMW decided to charge for Apple CarPlay on a subscription model after the first year. A feature that is standard permanently from other manufacturers.

          But that’s the money grubbers for you. Although I have to say, I do like the i8, the look and feel, don’t really care if it’s a half EV.

        • NBay
          Jul 24, 2019 at 11:47 pm

          The REAL problem, I think, “they” should be working on is braking energy recovery. Last EV repair class I took (was mostly NMH batts then, I think, even Prius we learned on) 2012.
          Anyway, “claimed” energy recovery was 30%, IIRC.
          We’ve had throttle by wire for years now (following a few Toyota programming glitches that killed a few folks), so I’d MUCH rather see redundant enough software/hardware brake by wire that recovered closer to 100%, than this TOTALLY stupid self parking, self auto stopping, self stay in your lane, etc, etc, useless bling. F-1 is getting quite good at it, albeit having a bit more of a budget for R&D.

        • NBay
          Jul 25, 2019 at 12:53 pm

          Add on to previous EV comment: Not to mention the idiotic self driving notion.

        • Gian
          Jul 26, 2019 at 7:39 pm

          Lots of “green eyes” on this site who have it in for anyone who makes money, be it Musk, Realtors, Investors, Landlords, et. al. They see doom and gloom where others see opportunity.

      • Phoenix_Ikki
        Jul 24, 2019 at 2:06 pm

        Couldn’t agree with you more. Sadly we live in the age of narcissism especially in the US. Just take one look at what’s on TV, Instagram and our POTUS. Narcissism is the MO for this country just as much as gaslighting people that exercise critical thinking and refuse to be a sheep. Perhaps this is fitting for a place that value bigger, badder, go big or go home personal above the rest.

    • Das kapitals
      Jul 23, 2019 at 9:47 pm

      Does the chip make you buy a Tesla….

  2. Kasadour
    Jul 23, 2019 at 8:45 pm

    Microsoft invested a billion dollars in Musk’s AGI as exclusive cloud network for OpenAI. I suppose Musk could keep Tesla going for a few more quarters. Personally, I couldn’t sit directly above an LI Ion battery back while traveling at any speed. Hard pass.

    • Shawn
      Jul 24, 2019 at 4:49 pm

      “sit directly above an LI Ion battery”, which is all the more problematic when the doors in a Tesla do no operate after accident.

  3. roddy6667
    Jul 23, 2019 at 9:08 pm

    The model “S” sells for an average price of $108,000 in the US. The average buyer has an annual income of $500,000. It is an expensive toy for rich trendoids. It’s not green or innovative. Almost all the technology is off-the-shelf. Twenty year old Li-Ion battery technology driving 100 year old electric motor technology. The only real proprietary tech is the battery controller that sets the cars on fire.
    If Tesla thinks the Chinese market will bail out the company, they will be disappointed. In my neighborhood here in Qingdao, luxury cars are everywhere. BMW, Audi, Jaguar, Porsche, Mercedes, Range Rover and others seem to be every other vehicle these days. Did you know that Maserati, Jaguar, and Bentley make SUV’s? We have a few on my block. These people can afford to drive just about anything. How many Tesla’s? None. If I go downtown in this city of 3 million, I might see two all day.
    BTW, I bought ten years ago, when this neighborhood was plain old middle class. I’m not rich.

    • alex in San Jose AKA Digital Detroit
      Jul 23, 2019 at 9:57 pm

      Electric cars and rich trendoids are like p-nut butter and jelly …. there’s a youtube video about the Godlike violinist Jascha Haifetz and sure enough, it shows him tootling around in an electric car.

      In other news, Wolf, I wonder if your page is under some kind of a weird “ghosting” algorithm? When I type in the URL it never auto-completes; I have to type in the whole thing. And it doesn’t show up as one of the “buttons” on Pocket although other pages I visit less often do.

      • Jul 23, 2019 at 10:47 pm

        Bookmark the page and it will auto-complete.

    • Robert
      Jul 27, 2019 at 10:57 am

      Isn’t China planning the elimination of ICE automobiles, at least in major urban areas and that is the major reason for for EV push by U.S. automakers?

    • Martin
      Aug 2, 2019 at 2:58 am

      Great point. So much of the reporting and commentary on contemporary life remains stuck in a Western’centric cosmology.

      I live in Bangkok, and I’ve yet to see a Tesla in my +5 years in the city. However, like you, I see lots of HiSo SUV’s and other assorted 4 wheel nonsense. None of which suggests any appetite for kind of profound change in automotive tastes that could salvage Tesla.

      As I have said before on this excellent site, Musk is an uber narcissistic fantasist. That legions of halfwits follow this shyster’s every word, and ascribe to him almost biblical powers is testament to the utter failure of our public education systems, in particular our teaching of science and math(s), in the Western world.

  4. Gee
    Jul 23, 2019 at 9:15 pm

    I dont see how this is so hard to understand. It’s a new product intro that doesnt need to be replaced every year, and is a luxury good, and was essentially first to market. The cache of owning, the newness, the self importance that it brought to people, well, that need was waiting for a while, and once the opportunity arose to fulfill the need, well, those sitting around with the kind of loot to fill it, did just that. Why would you expect them to do it again the next year? How many Teslas does one need? 2 at most, an X and an S. After that initial demand is filled, the demand will grow at the rate that CA creates NEW rich folks. That isnt anywhere near the pace of all the previous unmet demand from all the already existing rich folks. This is standard new product penetration rate stuff, and why the model 3 (at profitabile production levels/costs) was so important. Now, it is just more so. Hence, the Model Y is the last stand, unless you think a pickup truck is in the works. But at a certain point, all the newness is done, and Tesla will have to stop pouring money down the drain and earn some. Either you get costs down, or you get prices up, and we already see that you cant get prices up when you are selling a low priced luxury car as your savior. Good luck, and thanx for all the fish.

  5. 2banana
    Jul 23, 2019 at 9:32 pm

    I remember the time of the war on SUVs where the fake legacy news media identified them in every accident. We used to joke about “Killer SUVs.”

    ####

    “Some terrible tragedy involving a Tesla has “Tesla” in the headline. If some terrible tragedy involves a Ford, well, forget “Ford.”

  6. Max
    Jul 23, 2019 at 9:52 pm

    I’ve wondered for quite some time when Tesla dies, what do the owners of these cars do when they need service or parts.

    • alex in San Jose AKA Digital Detroit
      Jul 24, 2019 at 4:58 am

      This happened with Saturn; Saturn owners have to go to their local Cadillac dealer now.

      • Just Some Random Guy
        Jul 24, 2019 at 12:54 pm

        That was different. Saturn was a GM product made with GM parts. It was basically a Chevy and anyone who works on Chevys can work on a Saturn.

        Tesla on the other hand…al proprietary parts that very few mechanics will know what to do with.

        • Jul 24, 2019 at 3:47 pm

          I’d say a good model is what happened with Delorean. A different company specialized in the parts after the failure.

          This will happen even quicker if Tesla failed because current Tesla owners have plenty of money to make it worthwhile. It wouldn’t be cheap, but Tesla owners would continue to get the repairs they need.

        • alex in San Jose AKA Digital Detroit
          Jul 24, 2019 at 5:59 pm

          Haha kind of like having a Rolls. The old joke was that you had to have a fulltime mechanic. (In reality, I believe a lot of chauffeurs did at least minor mechanical work too.)

    • Kasadour
      Jul 24, 2019 at 6:30 am

      Owners are having trouble now getting parts and service. Can you imagine what it will be like when this company is gone?

    • Mark
      Jul 24, 2019 at 7:53 am

      The batteries are full of sulphuric acid and other goodies. The “re-processing” of these batteries is already a nightmare, soon to be huge.

      Not to mention the incredible devastation of lithium strip-mines – some of the worst ecological damage ever brought forth.

      And coal-fired no less, a virtual golf cart for rich folks. Plus flames and a “killer” auto-pilot …. what’s not to “like” ?

      • A different Mark
        Jul 26, 2019 at 5:17 am

        No, not sulphuric acid! That’s legacy lead-acid chemistry you’re thinking of.

      • A different Mark
        Jul 26, 2019 at 5:20 am

        . . . and lithium strip mines?

        You’re just trolling, sad to say. Lithium tends to be extracted from brines.

  7. Iamafan
    Jul 23, 2019 at 9:57 pm

    I have my eyes on the new 60k Corvette mid engine beauty. Forget Tesla. My wife said OK (0 to 60) in less than 3 seconds.

    • Bobber
      Jul 24, 2019 at 10:01 am

      There is only one problem with that. There are plenty of teenage girls driving SUVs while checking their Instagram, and you would be sitting at the same height as their front bumper.

      I was driving the highway one morning and saw a young lady veer off the highway to the right for no reason, the she hit the business end of a guard rail. She spun around about two times then got hit by other cars. Everybody rushed to check on her, and she still had the cell phone in her hand (but was OK).

  8. cd
    Jul 23, 2019 at 10:27 pm

    Bay area auto dealer clients are feeling a slowdown on sales side….this will be interesting

  9. ZeroBrain
    Jul 23, 2019 at 10:50 pm

    I expect Teslas, and eventually all major car models with cameras, to form a surveillance network that will provide government access of some sort. Alerts for stolen cars will be a thing of the past – the network will automatically find them. If they so choose, they can also record the daily driving patterns of everyone they come across.

    The Tesla Model 3 has 8 cameras, 2 facing the interior. The vision module (or whatever you call it) has event-detection, wherein Tesla can make vehicles search their video feeds for events of interest – accidents or close calls of a certain nature, for example. The cars search their own feeds, i.e. the video is not uploaded unless there is a match for the type of event being searched. This makes it practical. It will be trivial to request that the network notify Tesla when it encounters a car matching a certain license plate, for example. Or it can try to match driver or pedestrian faces against a list of suspects.

    Welcome to the future. Wouldn’t this sort of surveilance be worth a few billion to the US government per year – enough to keep Tesla a going concern?

    • California Bob
      Jul 24, 2019 at 12:06 am

      re: “I expect Teslas, and eventually all major car models with cameras, to form a surveillance network that will provide government access of some sort. ”

      You’re giving way too much credit to ‘government.’ Amazon, maybe, but not ‘government.’

      • ZeroBrain
        Jul 24, 2019 at 2:13 am

        I suppose you wouldn’t care to hazard a guess as to who put up the video cameras that appeared at every major intersection a few years ago. I’m not talking about the red-light cameras. Hint: it wasn’t Amazon.

        Anyway, I said “some form of access”, not direct control. For example, Google runs its own servers, but complies with government requests for user emails.

      • Brant Lee
        Jul 24, 2019 at 6:33 am

        Yeah, the government can’t even stop robocalls. Look out, here comes AI.

        • doug
          Jul 24, 2019 at 6:53 am

          perhaps ‘chooses not to stop robocalls’?

    • alex in San Jose AKA Digital Detroit
      Jul 24, 2019 at 5:00 am

      Read it too fast and got “close calls of nature” LOL years ago I was driving back from the post office in Sunnyvale and was very sick, and kept spotting likely pine trees to park near and ralph behind on my way back home. Fortunately I made it OK.

    • EchoDelta
      Jul 24, 2019 at 5:39 pm

      Minority Report.

  10. Bet
    Jul 23, 2019 at 11:01 pm

    My neighbor bought an S a few months ago. A total Super expensive toy. About 90k As he gave us a ride to show it off He had to pull over on the freeway trying to program it to find its way home with a touch of a button. ( I just drive my car home ) Totally creeped me out as it backed out of the garage silently by itself

  11. Foxman
    Jul 23, 2019 at 11:19 pm

    I am a 53 yr old original owner of a 2014 Model S. Has 97,000 miles on it with only a couple minor problems along the way (door handles). I’ve owned new Acura’s, Mercedes, Audi’s, and Porsche’s. Tesla Model S is first American made car I’ve owned and honestly is the best car I’ve ever owned. I want a new car, but will never go back to gasoline. Electric is so much easier. Full tank every morning, and no need for annual service. Its been 7 years since the Model S, it is time for a new generation….hence I will buy Porsche Taycan.

    • RD Blakeslee
      Jul 24, 2019 at 9:15 am

      I take it you don’t live anywhere near the Northern U.S. border, particularly in a rural area. If you do, I also take it that you own an ICE vehicle to drive in the winter.

      • Unamused
        Jul 24, 2019 at 12:39 pm

        Over half of auto sales in Norway are electric, and they have plenty of ice and snow. No ICE vehicle needed.

        Naturally the fossil-fuel industry has it out for Tesla in particular, and alternatives to carbon-based energy in general, and are determined to protect their market domination for as long a possible by the usual extreme tactics. They’re particularly frightened of emerging hydrogen technologies, which promise to make auto batteries obsolete in short order. Altogether, the relative economies of the competing technologies are already decisive and can only become more so.

        Not that any of it will matter. The present extinction event continues to accelerate, but that is another story and shall be told another time.

        • Just Some Random Guy
          Jul 24, 2019 at 1:01 pm

          Norway is like a vegan cattle rancher. Their wealth is due to oil and gas, but their population is uber environmentalist. It’s an interesting dichotomy.

        • Oliver Singer
          Jul 24, 2019 at 4:37 pm

          “Naturally the fossil-fuel industry has it out for Tesla in particular, and alternatives to carbon-based energy in general.”

          Are you serious?! Where does the electricity for your Tesla come from? And how was the power generated to build the cars and the batteries.
          Time and again I am stunned by the short sighted euphoria of ev supporters!

        • Unamused
          Jul 24, 2019 at 5:10 pm

          Where does the electricity for your Tesla come from?

          Good question. We don’t have a Tesla. We have a Bentley, technically a fuel cell electric vehicle (FCEV) and not merely an electric vehicle (EV), with a range of 1500 km or so. We had a German company which specialises in such things replace the Rolls Royce engine and related hardware. Ultimately the electricity comes from a fusion reactor conveniently situated 150 million km away, which has zero maintenance costs and which we’d be more than happy to share with you, no questions asked. No charge, so to speak.

          I suppose Tesla owners can get their electricity from anywhere, like cheap high-efficiency solar panels, and aren’t tied to getting it from fossil fuels.

          Musk thinks FCEVs are ‘stupid’, but that’s probably because he’s kicking himself for locking Tesla into a path dependency on demonstrably inferior battery technology and figured out too late that CA has lots of hydrogen stations.

          cafcp.org/stationmap

        • robt
          Jul 24, 2019 at 5:21 pm

          The fossil-fuel industry has sufficient resources to enter any energy business they wish to, if it’s viable. They also have innumerable service stations in place if they want to implement electric car charging. If they wish to provide distractions for people to enjoy while their cars are charging up for a period of time instead of just gassing up and going, they can. If they want to enter the battery business, they can. They would not be ‘frightened’ of alternate energy sources if viable; they would embrace them as a business opportunity.
          Nobody has it out for anybody; if businesses don’t deliver what people want at a reasonable price, they die. If businesses can grow by providing new services, they will. If there are niche businesses offering alternative services, and people wish to pay more for those services, they will. If the niche businesses comprise 3 or 5% of the market, they will coexist with the existing dominant economically viable businesses.
          Meanwhile, the owners of billions of vehicles that are serviced by fossil fuel companies will partake of their offerings, at a competitive price, pretty well anywhere and anytime in the world.
          Everything is a function of economics.

        • alex in San Jose AKA Digital Detroit
          Jul 24, 2019 at 6:04 pm

          I remember reading about the “coming” take-over of hydrogen in OMNI Magazine in the late 70s. We’re still waiting.

        • Just Some Random Guy
          Jul 24, 2019 at 9:52 pm

          “Where does the electricity for your Tesla come from? ”

          The wall. Duh!

  12. MCH
    Jul 23, 2019 at 11:38 pm

    The thing about the Tesla is that model S was a huge fad that was aimed directly at appealing to the liberal minded folks in CA, more specifically the bay area. Elon did this for two reasons.

    1. Geographically speaking, the bay area is relatively confined, certainly compared to LA, and Elon has to ability to put in enough service capabilities so people can rave about the cars, and usually not have too much trouble.

    2. The bay area (and CA at large) especially is receptive to the environmental message (the liberal minded side) and also the people most receptive to those messages are rich and want to demonstrate their enviro cred to their friends, after all, being demonstrably liberal is very important in CA especially for the rich people. Those are also the same people that bought the earliest versions of the Prius.

    The down side to this is that after a while, the fad gets old, and let’s face it, you usually don’t need more than two Tesla for each family. There are a limited number of people that makes $500K annual. Sure, there are a bunch of people who want to buy it to demonstrate their status, either in terms of wealth or enviro cred, but those are the model S and X folks. But once the 3 came on the line and the plebians and humanoids started getting them, well, suddenly, it’s no longer fashionable. So, it’s back to McLarens and Lamborghinis. So not surprised that the prices are dropping. I mean give me a break, even the most base model of the S is considered a luxury car, and there just aren’t that many rich people.

    By the way, no matter what else anyone might think. Teslas are awesome as a car to drive, it literally feels like a high tech gadget more than a car. And for me at least, there aren’t that many cars on the road that makes me look twice, but the roadster and the model S are two of those.

    Yep, I’m a bit of a fan boy. Elon might be a charlatan, but he isn’t that much different from another charlatan who stole other people’s ideas, was a whiny bitch toward others around him, but somehow, he “dented the universe” and is celebrated worldwide. The only difference is he had the good graces to kick the bucket early before he became truly intolerable. But I figure Elon in the end would’ve had more of an impact overall, and he is still alive.

    • Niko R.
      Jul 24, 2019 at 3:19 pm

      Sorry, can you tell me the road where you’ve spotted the Tesla Roadster. Is this the same road where they drive Tesla Semis, sell Tesla insurance, settle on Mars, and cure epilepsy?

      • MCH
        Jul 24, 2019 at 11:25 pm

        Yeah, well, they have been around since 2008. So in the Bay Area, quote a few places. Elsewhere, probably not so much.

        What? You think I was talking about the new one?

  13. Eamonn Harter
    Jul 24, 2019 at 1:34 am

    Time for Mr. Musk to introduce the successor to the Model S: the Model T!

    • Phoenix_Ikki
      Jul 24, 2019 at 4:33 pm

      Before that I think they need to introduce Model H and Model I first.

  14. Ian
    Jul 24, 2019 at 2:48 am

    Trying to go down market/mass market was a huge strategic blunder from the walking ego. He had a niche product, he should have put the development cash into upgrading that. He is already facing competition on the up market side from Audi etc. Instead he dives down to the territory of the big mass market automakers who can crush him. He wasn’t making money selling the niche product now he supposed to make money on the “low” margin units.
    Oh and another thing, yes Tesla makes the news when they crash. But a “Ford” does not spontaneously combust due to sitting on a pile of volatile metal. A “Ford” does not also claim to have an autopilot. And why these idiots think they can trust this thing to self drive is laughable. Any other autonomous vehicle has gizmos sprouting everywhere and they still get it wrong, where are the Tesla gizmos?

    • SnotFroth
      Jul 24, 2019 at 1:48 pm

      Actually, petroleum cars do spontaneously combust while parked. I’ve personally seen it happen twice.

      Once as a kid sitting at a flea market in the 90s, a random parked car started to smoke then went up in flames. Badly scorched the two cars next to it as well.

      More recently I was in a restaurant and as I ate and looked out the window, I saw what was either a parked Camery or Accord, don’t remember which, start to smoke from the engine bay then eventually totally go up in flames. The smoldering burned-out carcass was being hauled onto a flat bed tow trunk at the time I finished eating. A bit later I heard about a recall for one of those two models because apparently the power steering pump leaked onto the exhaust manifold and presented a fire hazard.

  15. Endeavor
    Jul 24, 2019 at 7:28 am

    Yes, Tesla is the solution for the people that count, subsidized by those who don’t.

  16. Unit472
    Jul 24, 2019 at 7:35 am

    Ok Tesla and other EVs have been around for a few years now. How does their resale value compare to equivalent ICE cars?

  17. RangerOne
    Jul 24, 2019 at 8:50 am

    Not surprised. Commented online echo the point you make that the Model S acctually has lost luster next to the Model 3 from a design and novelty standpoint.

    It also doesnt seem a stretch that some is Tesla’s model S customers would never have touched a model S, given it’s high price, as most of what they really wanted is now offered in the form of a cheaper model 3.

  18. IslandTeal
    Jul 24, 2019 at 9:07 am

    Tesssssla……..

  19. MF
    Jul 24, 2019 at 10:04 am

    Letting Model S deliveries dwindle while raising the price makes sense. It bears the iconic Tesla shape and can be shepherded through a successful long-term design evolution similar to the Porsche 911.

    The Model X is more like a Delorean. Lots of wow factor but soon to be DOA.

    The problem with the Model 3 is it’s not a truck. The average price of a full size truck is $40k — right about where the Model 3 wants to play — but it comes to the game in the wrong outfit. Too bad Australian Utes are snubbed in the U.S., since it’s the perfect car for that sort of treatment.

    I think if I were the product manager, I’d throw the Hail Mary. Lop off the back, ship to Australia and let the rest of the fanbois scream bloody murder about how unfair it is they can’t have one too.

  20. Max Power
    Jul 24, 2019 at 10:11 am

    This is to be expected.

    It’s a novel (at least at the time of its introduction) niche luxury product which lasts a long time and whose design hasn’t changed that much, while at the same time more competition in its specific market segment has appeared.

    This means that once the market for the S reached saturation, unit sales were bound to drop off significantly as at that point sales begin to shift from a first-to-market structure to a replacement cycle structure.

    • Gee
      Jul 24, 2019 at 6:54 pm

      Apparently people here dont bother reading prior comments. ;-)

  21. Senecas Cliff
    Jul 24, 2019 at 10:36 am

    I think another thing is that the cool factor has worn off due to the types of folk you see driving them. I always look when I see a Tesla to see what type of person is driving and they nearly all fit the mold. In the movie “Jurassic Park” Jeff Goldblum play’s a shifty , self absorbed character that is the first one eaten by the re-created T-Rex, but no one in the audience is sad to see him go. Thats who I see driving Teslas. People have figured it out and no one wants to be that guy (or girl) any more.

    • BaritoneWoman
      Jul 24, 2019 at 1:00 pm

      Re “Jurassic Park”: that was Martin Ferrero who played the “shifty, self-absorbed” lawyer.
      Jeff Goldblum was the cynical, skeptical mathematician who questioned everything about the project/park and pointed out that “life finds a way” despite human attempts to circumvent it.

      • Ripp
        Jul 24, 2019 at 1:38 pm

        He also didn’t get eaten by a T-Rex or die at all for that matter. He’s the main protagonist in the sequel, and he also reprises his role in the latest movie…you know FYI.

  22. Ed
    Jul 24, 2019 at 11:00 am

    When the subsidizing stops, the sales will drop.
    Big disadvantage of the Tesla is, all the wrong people are driving. In the Netherlands you could buy one for 84k in euros up front and within 4 years you get back around 64k in taxes. So who could buy these cars?

  23. Brian P
    Jul 24, 2019 at 11:11 am

    While I agree that Tesla is considered special, I think the reason for the make and model being on headlines was becuase it was claimed to be on autopilot at the time.

  24. Bobber
    Jul 24, 2019 at 12:13 pm

    If the Model 3 could be the standard sedan in the EV market, like the Accord and Camry were in the ICE sedan market, Tesla could make it big one day.

    One problem though. The Accord and Camry were highly rated and dependable. The quality and dependability were astounding.

    Tesla Model 3? Well, Consumer Reports says it’s not that great. I guess that’s what happens when you quickly throw parts together to meet the ridiculous expectations of drooling Wall Street analysts.

    • panatomic-x
      Jul 28, 2019 at 6:34 pm

      @bobber – i’ve actually seen a video of the parts breakdown of the model 3. it’s an astoundingly good design from a manufacturing point of view. very few parts and the computer networking is much simpler than something like an s-class mercedes. tela’s issues seem to be manufacturing. running assembly lines is very difficult and it takes years of relentless attention to detail. you’re right toyota and honda have that nailed and that’s why they are the leaders at the model 3’s price point,

  25. Just Some Random Guy
    Jul 24, 2019 at 12:46 pm

    Tesla is like the hot trendy new restaurant that comes to town. All the cool kids want to be seen there. Until the next hot cool trendy new place opens up and the old one is forgotten. Tesla was THE CAR to be seen in for the early to mid 2010s. But now a lot of new shiny toys are available and Tesla is yesterday’s news. Before long Elon won’t be able to give them away.

  26. Jul 24, 2019 at 1:05 pm

    What does the DMV charge you to register one of these? What does you insurance company think? More of a sports car? More of a theft target? Expensive to repair. Bet the cost of just owing the car would be more than most of us could handle even if they gave it away? Has Drew Carey ever given away one of these? (Probably nobody that goes on Price is Right would want them)

    • Just Some Random Guy
      Jul 24, 2019 at 2:22 pm

      Median income of buyers is $500K. I doubt DMV registration fees are a concern.

      Where I live, the registration fees are based on weight. Two cars, one costs $10K one costs $100k, but both weight the same, the registration costs the same. Which is the right way to do it, since weight determines how much impact a car will have on roads, not how much it costs.

      As for repairs, it’s a lot cheaper than an ICE vehicle. No oil changes, no spark plugs, no wires, no fuel or air filters, no fuel lines, no valves, co heads, no gaskets. None of that stuff comes into play, ever. There isn’t a multi speed transmission, virtually all transmission related items in an ICE are also gone The only real cost is the battery and when that wears out the car is basically scrap metal. But by the time that happens, the original owners will have parted with the car.

  27. Unamused
    Jul 24, 2019 at 1:23 pm

    Appearances aside, the major obstacle to Tesla’s success isn’t Elon Musk, it’s the trillions the fossil-fuel competition gets in subsidies. Musk doesn’t seem equipped on any level to deal with that. So far it hasn’t even been possible to determine whether he really has a core competency, but in fairness the same could be said about most categories of prominent billionaires.

    • Just Some Random Guy
      Jul 24, 2019 at 2:26 pm

      WOW! The US govt’s budget is 4 trillion. So that means according to you 50% of the budget (you said trillions, which means at least 2) of the United States is devoted to subsidizing the oil industry. That’s interesting.

      I’m dying to see your evidence.

      • Unamused
        Jul 24, 2019 at 7:48 pm

        I’m dying to see your evidence.

        You shouldn’t bet your life on your own bad information, but who am I to say?

        https://www.imf.org/en/Publications/WP/Issues/2019/05/02/Global-Fossil-Fuel-Subsidies-Remain-Large-An-Update-Based-on-Country-Level-Estimates-46509

        Notice that I didn’t say the US alone provides all the subsidies. Also notice that the estimates do not include the costs of military adventurism conducted on behalf of the fossil-fuel industry, i.e., Iraq et al, or the cost of environmental destruction, industry worker deaths and medical costs, and so forth, so the indirect subsidies take the total quite a lot higher than six trillion.

        • Just Some Random Guy
          Jul 24, 2019 at 9:57 pm

          his is like Obama’s jobs “saved or created” nonsense.

          Anything the govt spends money on indirectly “subsidizes” the oil industry since whatever that something is has to be delivered. And that delivery requires oil to do it. Hence….SUBSIDY!!

          It’s a ridiculous argument to make. And IMF…snort.
          .

  28. Unamused
    Jul 24, 2019 at 1:29 pm

    And registrations of the Model S plunged by 54%, to just 1,205 vehicles. California is the most important market for these models.

    Um, well, no. Tesla sold 3,760 units last month in Norway, mostly Model 3.

    • Ripp
      Jul 24, 2019 at 1:51 pm

      Um, yes? I mean you just quoted it in your comment. The quote specifically says Model S, and that California is the most important market for that model, not the Model 3. From what I can gather, Norway has averaged maybe 3,000 Model S sales per year since they were available.

      • Unamused
        Jul 24, 2019 at 2:09 pm

        The quote specifically says Model S

        Other quotes say something else:

        California is the most important market for these models.

        Still, the numbers say otherwise. Sorry.

        My chauffeuse likes Entropy, what we call the old Bentley. The fuel cells run on hydrogen generated from the solar panels.

        • Ripp
          Jul 24, 2019 at 2:47 pm

          I mean the title of the article is “Californians Sour on Tesla Model S and Model X”

          Context is slightly important here since California IS the most important market for these models (X and S) not Norway.

          I just don’t understand what Model 3 sales in Norway have to do with declining Model X and S sales in California? Sorry.

    • Jul 24, 2019 at 1:59 pm

      Unamused,

      Doing the math here, roughly: Tesla sold a lot more vehicles in California last month than Norway’s 3,760 vehicles — just taking California Q2 registrations divided by 3 to get a monthly average. In Q2, it sold 16,372 Model 3s in California, divided by 3 = 5,457 per month. Plus about 900 Model S and X = about 6,360 vehicles in California v. (as you said, I didn’t check it) 3,760 in Norway.

      • Denise Hartman
        Jul 25, 2019 at 2:34 pm

        Wolf, I live in North Palm Beach County, Florida. Tesla has been out selling BMW in the luxury care market for a while . Where I live is the perfect location for EV’s. The terrain is flat and electricity is cheap, about 12 cents a KWH. The model 3 is crushing both BMW and Mercedes in the 3 and 300 series markets. My upper middle class neighborhood has more than a few 3’s driving around. It is the status car for dual income professionals who are not doctors or lawyers. They (D & L) were buying S and X’s but admittedly are awaiting the next best EV thing. A bigger SUV or a truck.

        The upper income millennial’s are just coming into their own. They are big on technology and the environment. They give me hope for the future.

        Sadly this pro fossil fuel administration has favored the past (ethanol and oil subsidies) over the future but the market is speaking and corporate marketers are listening. Sadly the biggest deterrent to progress is the DC managed trade war. I currently drive a hybrid and had signed up for a 3. But when Tesla knocked on my door my hybrid had little trade in value but many years of useful life left. My next car purchase will be positive for the environment. I hope Tesla is still here when the time comes for me to make that purchase.

  29. Unamused
    Jul 24, 2019 at 2:24 pm

    If Tesla cannot stop this plunge in deliveries, after a year or two, the Model S and Model X will fall into oblivion and will have to be discontinued.

    Apparently supplanted by the Model 3, just as the Ford Model T was supplanted by just about everything.

    Demand for the Tesla Model 3 remains very high in California, with 15,805 sales throughout Q1 2019, giving it the #1 spot in terms of revenue out of all vehicle models sold — and by a huge margin (79% more than the runner up). As reported last night, it also held the third spot in terms of unit sales. The Tesla Model 3 was only marginally beaten on unit volume by the Honda Civic (+18.5%) and Toyota Camry (+1%), both of which sold for approximately half the price. The Tesla Model 3 also took 46% of the premium midsize sedan market, almost 4× the volume of the category runner-up Mercedes C-Class.

    cleantechnica.com/2019/05/25/tesla-model-3-1-top-selling-car-in-california-in-terms-of-revenue-q1-2019/

    Quibbling about numbers and market shared aside, it looks like Tesla is doing ok in California after all.

  30. Jon
    Jul 24, 2019 at 2:48 pm

    If I want to buy a good EV, there is no option other than teslas.
    It’s a fact.

    I like Model 3 barring few things in it else I’d have bought it.

    I can see market for Model S diminishing over time.

    • Shawn
      Jul 24, 2019 at 5:15 pm

      “If I want to buy a good EV, there is no option other than teslas.
      It’s a fact.”

      For future reference, you need to place your “facts” inside your blog post. Or a link would do as well.

  31. PaulJ
    Jul 24, 2019 at 6:09 pm

    Two types of people in the world. Those with ideas and don’t no how to make money off them and those with no ideas of their own, but know how to exploit other people ideas and make a motza. Elon is one or the other, a bit like Bill Gates.

    • Unamused
      Jul 24, 2019 at 8:06 pm

      Two types of people in the world . . . Elon is one or the other

      So is everybody else. Weren’t taking any chances here, were you?

      Sorry, couldn’t resist.

    • NBay
      Jul 24, 2019 at 11:25 pm

      Two types of people in the world, those that think there are two types of people and those that don’t.

  32. Erle
    Jul 29, 2019 at 12:48 pm

    California and Florida do not make the entire car market. An EV that must be left outside during the winter in the upper midwest is a non-starter.
    One has to have a shelter for it and likely heated to properly charge the battery pack. The range stinks at zero F which makes it terrible.
    I wonder how well the heater works as compared to a Ford Escort of 1988. It must be a riot in snow too.
    Admittedly I am supremely prejudiced against complex cars so these hold no desires in me.
    Chucky will eat anything was the TV ad.

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