Will cheap gas stall Tesla’s rise

PayPal hero. Electric motor success story. New space race pioneer. Seems like nothing can stop Elon Musk. Except maybe a passive attack on what was making his electric car dream successful – high gas prices.

Here in the States, gas prices have plummeted to numbers not seen in nearly a decade. People are less interested in hybrid and fully electric alternatives when filling up at the pump isn’t cutting into their fun money. Perhaps, as a result, Tesla stock has fallen more than 25 percent.

Some analysts blame the poor performance on the slow consumer response to Tesla’s new crossover model. Yes, it was a crowded market dominated by brands with intense customer loyalty, but that didn’t matter as much when folks were cringing every time that needle inched toward “E”.

According to NY entrepreneur and Real Estate Developer Roman Temkin, “Of course, an innovator like Musk is not going to allow something like losing your main selling point damage him permanently. Tesla is currently working on a less expensive model, expected to price out at around $35,000, called the Model 3.” Could this, finally, be the fully electric car for “everyone”? Tesla is hoping consumers think so.

This is a vital tipping point for electric-based propulsion models. To date, electric vehicles have been viewed as luxury items, a choice made by people who could afford the five of ten thousand dollar increase for hybrids or the twenty or thirty thousand bump for Tesla’s fully electric models. But if a fully electric car was available for roughly the price of an average gas-powered car, that could really shake up the market.

Analysts say to expect the first Model 3s to be available in 2018. Musk promises them a year sooner. He has proven that betting against him is a foolish pursuit. Could the still-falling gas prices be motivating the faster release? Possibly. But it’s more likely that Musk understands his public relations cycle. He’s currently basking in the glow of success with SpaceX, but that won’t last. The news cycle is fickle and only wants increasingly amazing headlines from one of the more established wizards of this generation.

It’s the price of doing the impossible. Every time you try, people expect you to go bigger or stay home.


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