Investors nervous about Tesla’s future were probably not relieved by the company, which lowered prices by up to 20 percent on Thursday. In addition to the anger of customers who felt “cheated” when they bought vehicles at previous prices, many Tesla followers are bemoaning the revaluation and the perceived mistakes of both the company and its mercurial CEO Elon Musk.
Earlier this month, Tesla posted deliveries that fell short of Wall Street expectations despite discounts to U.S. consumers.
Brianna Wu, a software engineer and former congressional candidate, took to Twitter on Friday to share her thoughts on Tesla’s price cuts and their implications.
Wu has been a thorn in Musk’s side. Last month he dared him sends out a Twitter poll asking if people want him to step down as CEO of Twitter amid the social network’s chaotic overhaul. He did, and the majority of respondents said he should. He then promised to resign when he finds someone “stupid enough to take the job.”
A drop in Musk’s fortune
He also blamed him for the huge decline in his personal fortune in 2022, by tweeting“You worked hard this year and lost more than 200 billion. I think this year you will outdo yourself with even worse decisions.
He replied, “Thanks for paying me $8” in response to having a Twitter Blue subscription service.
At the top of his Twitter thread on Friday, Wu wrote“Cutting Tesla’s prices by $13,000 will destroy the company in the long run… First, the profit margin on every car will drop, which will deeply affect their revenue. Sales are expected to increase, but revenue will decrease.”
He added later“How will Tesla get their prices back to mainstream models? They have no new cars in sight, Selling a rapidly aging 9 year old car and a 5 year old car. It costs hundreds of millions to bring new cars to market. It’s going to be a cash crunch.”
For Tesla owners looking to sell their vehicles, this week’s steep price cuts have been frustrating. Who spoke Luck said it listed its 2018 Model 3 with the Full Self-Driving Beta software package for about $51,000 in December, but would likely lower the price to $30,000.
Tesla’s “horror stories”
Wu also predicted “too many dirt cheap Teslas on the road” being bought by people who may not be able to afford repairs, which can be notoriously expensive in Tesla’s case. In late 2021, one customer blew up his Model S in a YouTube video rather than pay $22,000 to fix it.
He expected “horror stories of working-class people who buy these things and the battery packs fail and they don’t have $10,000 to $15,000 in cash to fix them.”
Tesla customers don’t feel like they and their vehicles have been revalued. Musk’s net worth is still tied up in Tesla shares, which topped $400 in 2021 but are now below $130. Some Silicon Valley insiders expect SpaceX’s Starlink to go public this year, in part to give Musk some “breathing space.”
In early December, Musk’s bankers considered offering him new margin loans with Tesla stock to replace some of the high-interest loans on his Twitter deal, Bloomberg reported at the time.
This followed Musk personally investing billions after buying Twitter and selling Tesla stock to help make it happen.
Last month All in podcast, Musk reiterated his belief that the economy is overdue for a recession, saying, “I would advise people not to have margin debt in a volatile stock market, and you know, from a cash perspective, keep the powder dry. You can have some pretty extreme things happen in a down market.”
Musk, of course, is still one of the richest people in the world and has at times taken note of the dramatic drop in his net worth. On January 1, he replied with a shrug emoji to a post in which he noted that he had lost $200 billion, “but he was still joking on Twitter.”
Luck reached out to Tesla for comment, but did not receive an immediate response.
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