Bad News for Tesla: Gas Prices are Falling
At the heart of Tesla Model S is a proven powertrain which delivers great range and a thrilling driving experience. The car offers many battery options that set the benchmark for electric driving range. All of them use automotive-grade lithium-ion cells arranged for optimal energy density, thermal management and safety. The vehicle has a rigid body structure, nearly 50/50 weight distribution and a remarkably low center of gravity. This means that it offers responsiveness and agility nearly as a sports car. And all of these features of the Model S as well as other factors contribute towards its popularity.
In fact back in 2013 Tesla promised that it will expand its retail network worldwide in order to support its mission of engaging as many people as possible in driving electric vehicles.
These days something peculiar has happened: we've seen the drastic fall of the gas prices. This might be a quite big hindrance in Tesla's way of accomplishing the goal set.
Many probably ask themselves "Would it be still cool to own a Tesla, if this gas price continues to fall". In terms of power, performance and luxury the answer might incline towards the negative direction. If we do speak about environmental aspect – then yes, it is definitely worth it owning a Tesla and saving the eco-system.
Another difficulty in owning a Tesla might be the price tag. In fact, in the last couple of years it has risen. The same happened with the US gas prices which were hitting their maximum. They however appeared to be there to stay and no one expected what we are observing now.
Then again: If the gasoline is affordable then why would anyone need an electric car? Wall Street is having the same question, since the price of Tesla shares has fallen by nearly 20 percent. This happened from mid-November until this Tuesday after falling for seven straight trading days.
Ben Kallo, who is an analyst for Baird Equity Research, said that this recent decline in TSLA shares is actually driven by the low gasoline prices, which could impact demand if sustained for the long term.
A "pro" Tesla argument is that if one can afford a $70,000 Model S and a $30 for a tank of gas versus $60, this wouldn't be probably an issue. Then, he or she is definitely buying the electric car out of a sense of environmental responsibility.
Kallo continued that Tesla cars are purchased for performance and quality, and this is not affected by oil prices. He also estimates that Model S owners will still save nearly $1,400 per year even at the current average gas price.
Another problem for electric vehicles is keeping an electric car powered up via an infrastructure which is only in "infant" stage. Therefore, if gas stays cheap, the future building of this infrastructure will be even harder. Because, no matter how great the EV is, not having a place to charge it will leave one helpless.
Any thoughts on this debate? Are you "pro" or "contra" electric vehicles, and what do you think about the falling gas prices?