Analysts claim the electric vehicle industry is almost entirely dependent on the well-being of Tesla and CEO Elon Musk’s ability to weather deep financial headwinds.
If Tesla fails to make inroads in the auto market, then things look bleak for the electric vehicle industry, according to Paul Ruiz, a policy analyst with the group Securing America’s Future Energy. His position comes as Musk scratches his way back into Wall Street’s good graces.
“Losing Tesla would have a big impact on the EV market, especially in the short term,” Ruiz told reporters at Axios Friday before noting that other automakers like GM and Ford are bound to catch up.
He added: “On the other hand, in the medium and long-term, a lot of these automakers have made sizable investments in EVs, and the EV infrastructure nationwide is continuing to grow.” Tesla’s quarterly report indicates the California automaker appears to be weathering the financial storm.
Analyst Colin McKerracher of Bloomberg New Energy Finance mirrored much of Ruiz’s sentiment, telling reporters: “If Tesla were to disappear for some reason, our U.S. EV adoption forecast would definitely be reduced.”
His forecast shows Tesla selling about 100,000 Model 3s per year starting in 2019 – analysts and Musk himself have argued that the Model 3 is crucial to Tesla’s ability to become a big-hitter in a saturated auto market. (RELATED: Government Tax Credits Are Running Out For Musk As Tesla Hits The 200k Vehicle Mark)
Tesla currently represents a third of the U.S. market for plug-in vehicles, which includes electric vehicles. But the Silicon Valley-based company faces an uncertain future, as federal policies that help prop up Tesla sales run out and competitors work to crowd Musk out of the market.
Tesla has already delivered 200,000 vehicles, meaning the automaker will likely begin running out of the tax credits necessary to keep the electric vehicle market alive.
Tax credits for Tesla’s major vehicles will be reduced 50 percent every six months until they are completely phased out. The change gives rivals such as Mercedes-Benz, BMW AG and Audi AG the upper hand, as they bring electric models to the market with a full tax credit in place.
The $7,500 tax credit will drop starting Jan 1, 2019, to $3,750 around mid-year, according to Tesla’s website. GM is entering a similar stage — it is expected to hit the 200,000 vehicle point with sales of its Chevrolet Bolt EV, among other vehicles.
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