Elon Musk has spewed an abundance of nonsense over the years but the granddaddy of his incredulous comments likely will forever remain his 2019 prediction that Tesla would defy a century of automotive economics and its vehicles would become an appreciating asset.
“Buying a car today is an investment into the future,” Musk said on a podcast. “I think the most profound thing is that if you buy a Tesla today, I believe you are buying an appreciating asset – not a depreciating asset.”
The rationale for Musk’s argument was that Tesla vehicles were being built with a new self-driving computer that he said would deliver full autonomous driving through future software updates. Musk promised the sci-fi technology would be available more than 10 years ago, but like a certain pal of his who lives in the White House, Musk is known to engage in considerable hyperbole.
Jalopnik, a Starkman-Approved-esque blog focused on the automotive industry, produced a damning roundup of Musk’s self-driving promises over the past decade that haven’t materialized.
iSeeCars a few days ago released its analysis of the used, or pre-owned as dealers like to say, EV car market. The findings are ugly and should certainly make anyone who cares about value think twice about buying a Tesla. Rather than being an appreciating asset, a Tesla loses more of its value upon customer possession than most gas-engine vehicles due to its plummeting resale value.
The average price of a 1- to 5-year-old used EV has dropped 15.1% ($5,709) from a year ago, compared to a modest 0.8% ($239) decline for all used car vehicles. Tesla’s used models lost 13.6% in value on average over the past year, more than any other nameplate. Maserati was second at 10.6%, followed by Chrysler at 7.6%, Chevrolet at 6.5% and Genesis at 4.8%.
“It’s hard to ignore the prominence of EVs when it comes to lost used car value, with six of the top 10 models being electric vehicles,” said iSeeCars Executive Analyst Karl Brauer.
To iSeeCars’ credit, it resisted amplifying the corporate media’s narrative that Musk’s unpopularity is the major reason for Tesla’s plummeting used car value. Rather, it blames Tesla’s new vehicle price drops to maintain market share, its aging product line, and stalling demand in new and used EVs as the likely biggest contributors.
Tesla still accounts for more than 40% of new U.S. EV sales, so it stands to reason that it would be most impacted by declining used EV sales because it has more electric vehicles on the market. Musk exacerbated the plunge with his refusal to support Hertz when it embraced Tesla in 2021 and committed to buying 100,000 Tesla vehicles to use as rentals.
The cost to maintain the vehicles far exceeded Hertz’s expectations, as did the resistance from customers who didn’t want to drive them. In January 2024, Hertz dumped 20,000 Tesla vehicles on the market at fire-sale prices, which possibly explains the 30% price drop in EVs in the first half of last year.
Musk is a brilliant technologist, but his Tesla brand management was abysmal.
Tesla’s new and used car sales could further decline because of virtue signalers like Arizona Democratic Senator Mark Kelly, who just traded in his Tesla for a 2025 Chevy Tahoe Z71, a major diss to Mother Nature. The Tahoe is an all-gas vehicle that gets an estimated 15 miles per gallon in the city, 20 mpg on the highway, and 17 mpg combined.
Kelly dumped his Tesla because he only now discovered that Musk is an “a-hole.” I wish I could say that Kelly is no astronaut, but unfortunately, he was.
It’s telling how during the Biden years, Democrats said EVs were vital to combating climate change, and now encourage and relish Tesla’s decline, furthering the politicalization of EVs. It’s bad for the market, and Rivian CEO RJ Scaringe agrees with me.
The good news for believers in EVs is that Toyota, unlike GM and Ford, hasn’t scaled back its EV ambitions. The company committed to invest more than $20 billion on its electrification efforts in the U.S., and the trade publication InsideEVs this week published an enthusiastic roundup of EVs the Japan-based automaker has in store.
Recall that the corporate media slammed Toyota because the company insisted that consumers weren’t ready to embrace EVs and that hybrids would allow for a smoother transition. That prediction proved correct, as hybrids have gained popularity and Toyota is making a killing selling them, as they are more profitable than gas engine vehicles.
President Trump would have us believe that you can indeed bullshit a bullshitter.
Reuters’ David Shepardson reported that President Trump claims GM CEO Mary Barra wants to commit to investing $60 billion in the U.S., although admittedly he didn’t specify over what period.
Let me put that in perspective: According to GM’s website, the automaker only invested $35 billion in its U.S. facilities since 2014, meaning that the automaker supposedly plans to increase its investment spending by more than 70% since the last decade. That would immediately transform Barra from America’s most anti-MAGA CEO to the sort of patriotic business leaders that China enjoys.
Not surprisingly, GM has neither embraced the massive investment nor confirmed it.
“We share President Trump’s goals of a strong and competitive American manufacturing base and economy,” said a spokesperson who Reuters shamefully didn’t identify despite the BS claim.
GM hardly shares Trump’s goals of a strong and competitive American manufacturing base. GM is the biggest auto manufacturer in Mexico, where the company operates four manufacturing facilities, an engineering center, and employs more than 25,000 workers. Mexico is where GM manufacturers its most affordable EVs, and Barra says battery powered vehicles are GM’s future.
Americans should be alarmed if Trump’s $60 billion investment claim proved correct. GM ranks among the biggest feeders of the public trough in corporate America, so rest assured if you are an American taxpayer, you’d be paying for much of GM’s “investments.”
I’d love to be a fly on the wall listening to Trump and Barra talking to each other. It would be better than attending a TED Talk on the art of crafting and heaving bullshit.
Ford talks a good game about the benefits of artificial intelligence, but it’s clear the automaker has so far resisted incorporating AI to determine CEO and other compensation.
Just one day after I incorporated AI to call out Ford CEO Jim Farley’s leadership failures, the automaker disclosed that it had awarded its flailing CEO $24.9 million in compensation for his dismal 2024 performance. That’s about a 6% cut in pay from the year earlier period, when Farley received a 26% bump in pay, despite Ford’s mounting shoddy manufacturing issues. (Thank you, Breana Noble of the Detroit News, for crunching the percentage figures, although your editors were seemingly too embarrassed for Farley to include his comp on your story’s headline).
I’ve railed ad nauseam about Farley’s “performance,” but the $20.4 million executive chairman Bill Ford received also is obscene. As executive chairman, Ford’s job is presumably to babysit and boss around Farley, so his performance is hardly inspiring.
Bill Ford has always struck me as a stand-up guy, but he needs to be honest with himself and admit that picking CEOs isn’t one of his strong suits. Ford Motor hasn’t had a competent CEO since Alan Mulally left more than a decade ago.
GM has yet to disclose Barra’s 2024 comp, and despite failing on all cylinders don’t be surprised if she scored another $28 million payday like she received in the previous two years.
Barra also serves as chair of GM, but she should declare herself executive chair so she could argue she has the responsibilities of both Farley and Bill Ford and that investors are getting a bargain paying her a mere $28 million, while Ford pays $45 million for the combined talents of Farley and Bill Ford.