Tesla Is a One-Model Car Company

Tesla has long been a problem for efficient markets theory, or the universal wisdom of value investing, or the notion that retail traders know what they’re doing. If Tesla’s sales reflected its ticker price, then it would sell more cars than Toyota and Ford combined, but that isn’t, and has never, been true. At one point, this value was suspended on the idea that Tesla would reach that scale and have unprecedented margins given their efficiency. Musk once promised that the company would sell twenty million cars a year, with the implicit promise of doing so without reducing per-car profits. With that notion long abandoned, investors try to justify its value on Tesla’s beta-testing robotaxi business, or its even more theoretical line of home robots.2025 Tesla Model 3. Courtesy Tesla2025 Model Y. Courtesy of TeslaHowever, in the meantime, Tesla needs to sell cars, and the recent Q2 sales numbers weren’t promising. Global sales are down by more than 13 percent in Q1, which itself was down eight-and-a-half percent on Q4 of 2024. This is bad news, but the more striking number is the breakdown of sales numbers. The Model 3 and Model Y — which are fundamentally the same car, but in sedan and crossover formats — accounted for 97% of Tesla’s sales. By comparison, its “other models” — the Model S premium sedan, Model X premium SUV, and famous Cybertruck — made up only three percent of sales, or 10,394 cars. That’s 3,000 fewer cars than the first quarter, and almost half of Q1 2024, despite the ancient Model S and Model X both receiving facelifts in June, and a less expensive Long Range RWD version of the CyberTruck launching in April.Tesla Roadster. Courtesy TeslaTesla Semis are not included in this number as, despite being announced in 2017, it is still in a beta program, and there are only about 200 trucks in use. Tesla promises volume production will begin this year, but they have missed repeated promises for several years in a row. This still puts it ahead of the second-generation Tesla Roadster, which Musk announced at the same event — where Tesla took $250,000 deposits for the Founder’s Series edition — but likely will never exist.The low sales of the S and X are not a surprise, nor particularly disappointing, as Tesla doesn’t care that much about them. Yes, they had a facelift, but these were minor changes to cars that have been on sale in essentially the same form for more than a decade. If you want to buy a premium electric car, who would choose a Model S or X — which are still dogged by build quality issues — instead of newer, better reviewed, and more premium competitors from Porsche, BMW, Lucid, Rivian, or Mercedes?Lucid Gravity. Courtesy of Lucid MotorsGovernor Kemp of Georgia stands next to a Rivian electric truck during a ceremony to announce that the electric truck maker plans to build a battery and assembly plant east of Atlanta. Courtesy of AP/John BazemoreThe CyberTruck is an absolute failure, though. It’s been on sale for less than two years, was extremely costly to develop, and ought to have been a dominating entry to the electric truck segment, but likely sold fewer than 5,000 vehicles this quarter. This is partially due to the CyberTruck’s late arrival, underperformance, and overpricing compared to initial promises; partially due to its divisiveness, especially with its newfound political associations; and it’s also due to the EV truck segment never becoming as large as initially anticipated. I have written about this in these pages for more than two years, and until companies solve the range, towing, and temperature issues, I don’t expect the situation to change.However, if any pickup could have been resistant to this, it ought to be the CyberTruck. It was supposed to be the truck for truck-people and non-truck-people alike. Instead, it’s the truck for almost nobody.Tesla Cybertruck. Courtesy TeslaThis leaves Tesla in a vulnerable position, producing only one model that sells: the Y and 3. It helps that these are among the best-selling cars on sale, but that mightn’t last. With their sales declining, the new Toyota RAV4 beat the Model Y to be the best-selling car of the quarter; and that’s despite both the Model 3 and Y recently receiving comprehensive chassis-up refreshes. These are brand new models, and the Q2 sales are inclusive of a theoretical post-refresh sales bump. Meanwhile, inexpensive, well-built Chinese EVs will continue to take sales in non-tariffed markets like the United Kingdom and Australia; American sales will fall with the imminent end of EV tax credits; and customers in left-leaning states will continue to replace their Teslas with models from different manufacturers. No number of Epstein conspiracy tweets will make Californian customers forget Musk’s past year of political commentary, nor will the Germans; Tesla’s two biggest markets.Tesla Robovan and Robotaxi. Courtesy TeslaSo, where does Tesla go from here? At his October 2024 event, Musk previewed a ground-up Tesla Robotaxi, meant to go on sale for $30,000, and followed this with a promise to have a Tesla Robotaxi service active by this June. He came through on this, but only in the most technical definition. The taxis are all Model Ys and 3s; they only operate within a small geofenced zone in Austen; and there are only a few dozen cars in operation. Tesla is significantly behind Waymo — which operates far more cars in much larger areas across five cities, and whose LiDAR-assisted self-driving systems are far safer — and a production Robotaxi faces a lot of regulatory hurdles, even if Tesla can make it possible. The Optimus home robot is such a far-off dream that it’s hard to take seriously.But, on news of these sales figures, Tesla’s share price bumped up, so what do I know?

Tesla Is a One-Model Car Company

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