Four Reasons Why Tesla Won’t Sink, Despite Cheap Gas – News – Car and Driver | Car and Driver Blog

Four Reasons Why Tesla Won’t Sink, Despite Cheap Gas – News – Car and Driver | Car and Driver Blog.

Tesla’s stock price has fallen below $200 per share for the first time in seven months. Shock! Gasp! But the electric-car wunderkind is not collapsing, and while we do not pretend to be Car and Shareholder, we are deeply involved in the automotive industry and think it’s worth explaining what this development for the ultra-hyped company actually means.

1) Tesla is not reliant on oil prices

According to the Energy Information Administration, the per-barrel price of U.S.-grade crude oil dropped 42 percent this year from a high of $107.95 in June to $63.13 last week. You’ve seen and likely thoroughly enjoyed paying for sub-$3.00/gallon gas. But oil has nothing to do with Tesla’s earnings.

Tesla only builds high-speed luxury cars, none of which move for a penny under 71 grand. With options and go-faster gear, most Model S cars leave the factory closer to $100,000 and even higher in overseas markets like Norway, where the company ships the pieces and reassembles them to avoid heavier import duties. Model S customers, by and large, are not swayed by gas prices and already own at least one other gas-powered luxury car.

Unlike the Nissan Leaf and similarly affordable compact EVs, the Model S is both an indulgence and a prohibitively expensive social statement. This was true of both the Tesla Roadster and it will be, too, for the Model X. Tesla purchases are fueled entirely by passion and/or fashion, not by value or a desire to reduce one’s fuel costs.


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