If Tesla Dies, What Happens to Elon Musk and Electric Cars?

Tesla has had a tough year leading up to 2022.

Everything from the economy to inflation to Russia’s aggression in Ukraine has dealt a body blow to the electric car maker and the rest of the tech and auto industry in general. However, CEO Elon Musk’s recent moves following his ill-fated purchase of Twitter have only dragged the beleaguered Tesla deeper into the trenches of financial crisis. In fact, Tesla has lost nearly 70 percent of its market cap year to date.

That’s a stark contrast from just a year ago, when it looked like the $1 trillion company could do no wrong. Some question Musk’s leadership, while others go even further – suggesting it could be the beginning of the end for Tesla.

The company’s influence in both the production and sale of electric vehicles cannot be denied. After all, it has done something that once seemed impossible: convince the public that EVs are quite delicious. Now, older automakers are working to get customers to buy their electric cars.

Tesla has revolutionized the way the world views and drives electric cars, but with its back against the wall and its financials looking increasingly bleak by the tweet, we could soon be headed for the biggest name in the game. to sink

Let’s be clear: the odds of this happening are pretty low… but what if it does?

How to make (and burst) the EV bubble.

To understand the impact of Tesla’s demise on the future of EVs, it’s important to wrap our minds around exactly how we got here.

“I give a lot of credit to Elon Musk. He has almost single-handedly made electric vehicles attractive and sexy,” Raghunathan “Raj” Rajkumar, a professor of electrical and computer engineering at Carnegie Mellon University and an autonomous vehicle researcher, told The Daily Beast. “People associated them with someone who changed the auto industry and did what was right for the planet.”

However, this was a double-edged sword. Musk surprised Tesla with lofty promises and bad posts on Twitter. He has cultivated an army of Elon stans who are ready to go to battle online for him to protect his companies from the tiniest of slights. Meanwhile, the cars were finally selling well. All of this resulted in the perfect mix to ensure that Tesla’s stock soared into the stratosphere, as did many SpaceX rockets.

If Tesla collapses and they go out of business completely, I believe every giant will have dancing in the streets. [automaker] on the planet.

Sandy Munro

But the value was always tenuous at best. It’s not like other automakers will never produce electric cars. And so Tesla’s market cap exploded into a bubble of epic proportions.

One of the people holding the needle was Musk himself—which came after he acquired his beloved social media platform, Twitter.

“It was just completely empty,” Rajkumar added. “At the end of the day, business has to be business. Things that go up sooner or later must come down, and we’ve seen that and we’ll continue to see that.”

There are also major economic factors. Demand is low due to the weakening economy. Moreover, the market looks very different than it did a year ago. Tesla is no longer the only horse in the race. The EV industry is much bigger now, and with the added competition, it was really only a matter of time before Musk’s company started feeling the pressure.

That feeling sunk in: Elon Musk’s takeover of Twitter has caused more turmoil and instability for Tesla’s finances.


A World Without Tesla

Given Tesla’s profound influence on the auto industry and consumer habits, there is no doubt that this will have a serious negative impact on the future of EVs.

“If Tesla collapses and they go out of business completely, I believe every giant will have dancing in the streets. [automaker] on the planet,” independent automotive engineer, consultant and industry expert Sandy Munro told The Daily Beast.

Munro is known for his popular teardown reports, which provide incredibly detailed analysis of various vehicles. His glowing review of Tesla’s Model Y in 2020 resulted in him being optimistic about the future of not only the company, but electric cars in general. A few years ago, he predicted that by 2030, EVs would account for more than 50 percent of the total vehicles on the market. Due to Tesla’s success, he updated this prediction to 2028.

However, Munro admits that if Tesla were ever to go bankrupt, neither prediction would happen and it would “definitely move away from electric cars.”

That’s because, in his view, Tesla’s downfall will knock every old automaker’s proverbial asses off their feet to switch to new, emerging technologies, encouraging them to go back to the old ones instead. There will no longer be an incentive to build new factories and spend most of their resources on R&D for batteries, charging stations and power units. Even regulators will have less incentive to make changes to the nation’s transportation and energy infrastructure.

Overall, we will see a return to our normal emitting gas-leaking, greenhouse gases. “If Tesla goes out of business, you see how fast the Keystone pipeline goes,” Munro said.

Rajkumar’s assessment is not that scary. He believes that the technologies and innovations that Tesla has championed will ultimately continue. After all, consumers already want EVs more than ever, and that number is only expected to grow. Car companies see this too and are ready to take advantage of it.

“The global automotive industry is now emphasizing EVs, and many companies are publicly announcing that they will switch to an all-electric product line. I don’t think it will stop anytime soon. “said Rajkumar. However, he acknowledges that many of the goals outlined by these automakers are unclear whether they are realistic due to inadequate charging infrastructure and the slow pace of EV adoption by consumers in general.

The only real winner to emerge from Tesla’s demise will be China. The country is already making a concerted effort to electrify its transportation infrastructure, aiming for 40 percent of all cars sold domestically to be electric by 2030 and enough charging stations to service more than 20 million vehicles.

This could lead to a geopolitical tortoise-and-hare situation in which China plays catch-up and soon becomes exponentially more advanced than the Western world, Munro said, eventually blanketing the sleepy U.S. with technologies that will be vital to our collective future, such as EVs. can

“China will survive,” Munro said. He added that because we focus so much on short-term gains, we could end up with relatively few EVs in the US.


Workers work on an electric vehicle assembly line at Dayun Automobile Co., Ltd’s factory in Yuncheng, China’s Shanxi province on December 8, 2022.


Tesla Will Die Another Day

The future may look a bit uncertain for Tesla, but it will likely survive the current downturn. Sure, it might not reach the $1 trillion mark it hit last year (at least for a while), but it probably will.

“There’s no way Tesla can go belly up,” Munro said. “It’s just not going to happen.” He added that there are two main reasons why the company continues to drive.

The first is actually Musk. While many are troubled by his Twitter antics (Tesla stock investors among them), there’s no denying that he helped revolutionize and champion the industries the world will most likely rely on in the future: electric cars and space travel. . If he can shake off the social media albatross around his neck, he could help propel Tesla into the rapidly congesting EV market and beyond 2030.

Second, Munro said, are the children. Yes, guys. He believes that children—more than any other market indicator, stock market trend or McKinsey consultant—point the way to the future of cars, and therefore Tesla.

“If you talk to kids, you’ll suddenly understand what they don’t like,” he said. “‘I don’t like the smell of gasoline. I don’t like the black smoke coming out of the car. I want to do more for the environment.’ That’s why I don’t think Tesla is leaving.”

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