Tesla got a lot of press recently for lowering the asking prices of its electric cars. The first time this has happened. It was touted as a sign that the cost of electric cars – which had been rising – was falling.

In fact, it is a function of Teslas not selling.

Orders have plummeted from more than 476,000 as of last summer to around 72,000 as of right now.

“Tesla is clearly transitioning from being supply constrained – where delivery volumes grow in line with production capacity and prices increase – to being demand constrained – where prices fall to stimulate demand and production outpaces delivery,” says Bernstein analyst Yoni Sacconaghi, who advises selling rather buying stock in the company.

As in, cut your losses.

Alexander Potter of the investment banking company Piper Sandler says “wait times (for new Teslas) haven’t spiked meaningfully, so Tesla may cut prices further.”

So, what’s up with all of this?

Several things, probably.

The first is that we may have arrived at Peak Tesla. We may have actually passed it. Sometimes, you can only see things behind you in the rearview mirror. Tesla’s models are all old. Some of them – like the Model S – are ancient. The 2024 model is essentially the same car as the 2012 model and that was 11 years ago. Dodge is still selling the equally ancient Charger and Challenger, but the difference is those two still sell well – because they are what they people who buy them want. Which is what’s “old” – as in burly American cars with burly V8 engines. It is a selling point.

People who buy Teslas want what’s new. The very latest thing. Buying a new car that is the same as an eleven-year-old car isn’t that.

Also, Tesla’s other models are not – generally speaking – the kinds of models that sell well, regardless. The Model 3 is a small sedan; the Model Y is the same thing bulged out a little – but it is still little.

And the market favors larger, roomier cars. And trucks. And SUVs. Ford sells about half a million F-150s (not the electric ones) each year.

The Model X is a little larger – but its almost-six-figure base price ($94,990) means it will never sell in other than small numbers – because there just aren’t that many people who can afford a six figure car, electric or not.

But the more profound problem – for Tesla and EVs generally – is that the market for EVs may have already reached or is beginning to reach saturation. The majority of people who want an EV have already bought an EV. That leaves not many who are willing to buy an EV. Maybe because they don’t want one. Maybe because they cannot afford one (even with the price cuts, the compact-sized Model 3 still has a base price of more than $40,000 – and that’s with the standard limp-dick battery that provides a best-case/optimistic 272 miles of range; if you want more you’ll pay a lot more to get it).

Regardless, the point is that electric cars are specialty cars for which there is an inherently limited market, due to their cost and their functional limitations. The people who have bought them so far are willing to overlook the latter and are able to afford the former. Most people can’t – and won’t.

And so, they don’t.

That leaves Tesla – and everyone else trying to sell EVs – trying to sell them to fewer and fewer people who want (and can afford) them. Hence the price cuts, as regards Tesla (and Ford, which recently announced the same for the Mach e “Mustang” electric crossover wagon). But price cuts don’t obviate undesirability. Would you buy a house in a crap neighborhood because it cost less? Some might. Some do. Most won’t.

Also, price cuts sometimes have the ironic effect of causing sales to decrease even more – as they are a sign that the item in question isn’t selling. It is a sign of weakness, in other words. That gives buyers power. If the seller is willing to reduce his price then maybe he is desperate to sell – and will reduce it further. Why would anyone pay sticker for what they know the seller really needs to sell?

EVs will sell for less – for a while. But sellers cannot afford to continue selling them on that basis because that is how you go broke “selling” things. Ford reportedly loses $60,000 on every EV it has “sold” so far. That is astounding if true. But even if the loss is only a few hundred per EV, it is not – what’s that word – sustainable.

Electric cars – or electric toasters – you cannot spend the money to make them and lose money selling them. Not for long.

At least so long as there is a lower cost (and better) alternative to them.

Some suspect – and I think they are right – that there is an understanding between the Biden Regime’s EV pushers and the car industry that has allowed itself to be pushed around by them. The agreement, broad-brush, is probably along the following lines:

Don’t worry about losing money. We have your back. We will make sure that people have to buy what you’re selling. We will make other cars more expensive than electric cars – to buy and to drive. That will cause people to buy your electric cars.

It is possible there is even a plan in the works to eliminate buying – and owning – electric cars altogether, in favor of paying to use them. This “transportation as a service” thing is very real, in that it is a means by which they can continue to extract money from people who can no longer afford to buy a new car.

You will own nothing – and be happy.

But – just maybe – the whole thing will just fall apart. It may be on the verge of doing just that. EV mania is just that. A mania. It is not a reality. It is not a natural evolution from one thing to a better – as in more desirable – thing. As was the case when people transitioned from buying tube TVs to flat screen TVs. Or to Model T Fords from horses and buggies.

It is a thing being pushed.

The problem, fundamentally, with EVs is that they’re not better – except insofar as they are (briefly) quicker. They are more expensive and less practical. There is probably a limited market for that.

And we may have already passed the saturation point.

. . .

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