Is it Over?

Guest Post by Eric Peters

It took three long years for Sickness Psychosis to wane. Eventually, enough people figured out that the sickness was mostly in the mind – and that wearing “masks” wasn’t the cure for it.

EV Fever seems to be following a similar trajectory. Finally. It may now be at the point that “masking” was at about two years ago. As in, people are getting over it. And so, apparently, is the stock market.

Tesla stock is down 15 percent, representing a $94 billion loss so far. Bloomberg News styles this a “reality check as EV winter sets in.” The Financial Post says 2024 is the company’s “worst start to any year – ever.”

Part of the reason why has to do with fleet sales tanking. Car companies rely on these to move models that otherwise don’t sell well; fleet sales also fluff the numbers – making it appear there’s more retail demand for a given model than there is. Hertz – the rental car company – was a fleet buyer of Teslas. It very publicly dumped its fleet of these devices a few weeks ago.

The cold has not helped.

Or rather, it has – in the way that therapy can help a person afflicted by mental illness. Buyers of Tesla devices found out battery powered devices “work” in cold weather kind of like “masks” work when it comes to “stopping the spread.” Nothing cures a delusion better than a reality the afflicted has to deal with – such as shivering in the freezing cold waiting hours for their device to recharge. And even if these deluded people continue to wallow in their delusions – like those who continue to “mask” – the reality has become undeniable to others.

People see – and they want no part.

Rivian and Lucid – which make battery powered devices even more pricey than Teslas, are in even worse shape, chiefly because they (like the Vietnamese device-maker VinFast) got into the device-making game late, after the peak of EV Fever. By which time most of the affluent people who wanted and could afford a device that cost twice as much as a car (and that only went about half as far) had bought one (a Tesla, probably) already. Device or not, there are only so many people who can afford to spend the $50k-plus it takes to buy anything.

After they have, what’s left?

Not much.

It explains why Ford has drastically cut back on its “investment” in devices such as the $50k-to-start Lightning, which looks like the F-150 pick-up. The problem is that people who want a truck aren’t interested in buying something that looks like a truck, yet the production line continued to manufacture them – because the government’s regulatory regime has (effectively) required Ford to manufacture them. Selling these compliance devices is another thing.

The bulk of these sit unsold on dealers’ back lots, accruing interest payments and bleeding charge. Some 4,000 Ford dealers have said what the boxer Roberto Duran said back in the ’80s when he couldn’t take the beating anymore.

No mas!

Volvo’s EV spinoff, Polestar, isn’t just dying. It is essentially dead – financially speaking. Analysts for the Swedish bank SEB recently – publicly – said that Polestar is worth nothing. Ultra-expensive device maker Fisker is similarly on the edge of the abyss. GM’s Cadillac division – which has promised to offer nothing but devices by 2030 – is likely to be gone not long after 2030.

Along with other once-premium brands like Mercedes-Benz, which has also promised to offer devices exclusively by then. Which will mean the end of the exclusiveness of these brands, when all they are is expensive. When all they’re selling is the same thing everyone else is selling – but for twice or three times as much.

How much is an oversized plastic three pointed star worth paying for? (My saying so publicly probably is why Mercedes no longer sends me its devices to test drive.)

When EV Fever first etiolated, Tesla was able to rely on the cashflow it sucked from other car manufacturers – i.e., those who made cars rather than devices. They had to buy “zero emissions” credits from Tesla in order to be able to continue manufacturing cars rather than devices, thereby subsidizing the growth of their government-mandated “competition.” But that revenue stream has dried up because every major car manufacturer is now a device manufacturer – and gets credit for manufacturing its own “zero emissions” devices.

This leaves Tesla having to rely on sales – and stock market valuations based upon sales expectations. Which are diminishing as “EV winter sets in.”

Channeling Monty Burns from The Simpsons TV show:

Excellent!

It’s as encouraging to read about the declining interest in devices as it was to see people taking off their “masks” two years ago.

Signs of health are always encouraging.

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