The News
Tesla’s stocks fell 7% in pre-market trading on Wednesday, a day after the company said its second quarter profits fell 45% from last year due to weak electric vehicle sales.
The drop comes as consumers move towards other automakers for EV purchases — or, in many cases, away from EVs entirely.
SIGNALS
Buyers might be avoiding Tesla over Musk’s politics
In recent months, Tesla CEO Elon Musk has posted prolifically on X, the social media platform he purchased in 2022, and publicly broadcasted his politics. He has said he will support US Republican presidential candidate Donald Trump’s election bid through the creation of a super political action committee, and often decries “wokeism.” Musk’s political leanings could be driving consumers away from Tesla, The New York Times noted: As the CEO shifts to the right, Tesla’s often left-leaning buyers are seeking other options. “You’re basically driving around a giant red MAGA hat,” one consumer who decided to purchase an EV from a different brand told the Times.
EVs are cheaper than ever, but manufacturers need to woo buyers
The overall price of an EV has sunk, and consumers now pay an average of just $1,500 more for electric vehicles than internal combustion engines. That’s down from $8,400 about a year ago, The Wall Street Journal reported. Despite the price drop, many consumers are avoiding purchasing EVs altogether: Mercedes, which was previously eyeing plans to become fully electric by the end of the decade, is pivoting to focus on combustion engines, Fortune reported. Mercedes CEO Ola Källenius told shareholders the “transformation might take longer than expected,” and said the automaker plans to make combustion engines “well into the 2030s” depending on demand.