Cheap Gas Spells Trouble For Tesla

Tesla Model X (Credit: Tesla Motors)

While so many people are reveling in the low gas prices of today, Tesla Motors is facing some potentially rocky times as a result. It seems like a no-brainer that cheap oil means people will stop buying electric cars, but it’s not quite that simple.

The average current Tesla customer doesn’t really care how much gas costs. They’re well-heeled, enjoy having expensive toys and believe in reducing their carbon footprint (at least in theory). Where the trouble comes in is how Tesla is seeking a more mainstream owner base, and that means making its vehicles appealing to people who are more price sensitive.

This development, combined with a reportedly lower demand for the Model X than anticipated, is making things dicey for the company. While CNN Money is reporting that Tesla’s stock prices are still outrageous when compared to earnings estimates for 2016, it also pointed out that a growing number of investors are feeling skittish about the automaker. Some are advocating selling off the stock, avoiding it or taking other precautions.

Even if the Model 3 will appeal to consumers, there are a few other problems Tesla likely needs to address. Justifiably, many doubt that the company will be on schedule for launching the Model 3, because quite frankly it’s been late with every other product. Instead of the budget-friendly sedan coming out in 2017, quite a few industry analysts expect it will actually happen in 2018.

The other big hurdle is increased competition, namely from the Chevy Bolt. GM will introduce its budget-friendly EV first, making it a potential threat in an untested market from a foe that can survive more financial damage.

Another interesting development has to do with Stewart Alsop, the guy we reported about before who wrote a scathing rant about the Model X launch event. Apparently Elon Musk took the customer’s criticism as a personal attack and made sure the man’s Model X order was canceled. Musk seemed irritated that the media even mentioned this turn of events, taking to Twitter to call Alsop a “super rude customer.” And just like that Musk has become like the Soup Nazi, denying unruly customers the right to own his all-electric crossover.