What happens to Elon Musk and electric cars if Tesla dies?

Tesla had a tough 2022 – to say the least.

Everything from the economy, to inflation, to the Russian invasion of Ukraine delivered body blow after body blow to the electric car manufacturer – and the rest of the technology and car industry in general. However, the recent actions of the company’s CEO Elon Musk, following his reluctant purchase of Twitter, have only dragged the beleaguered Tesla further into the deep trenches of a financial crisis. In fact, Tesla has lost nearly 70 percent of its market value so far this year.

It’s a sea change from just a year ago when the company, valued at an eye-watering $1[ads1] trillion, seemed like it could do no wrong. Some question Musk’s leadership, while others go further – speculating that this could just be the beginning of the end for Tesla.

There is no denying the impact the company has had in both the production and sale of electric cars. After all, it did something that once seemed impossible: convince the public that electric cars are actually pretty cool. Now older car manufacturers are playing catch-up to get customers to buy their own pictures of electric cars.

Tesla revolutionized the way the world sees and drives electric cars – but with its back against the wall and the economic situation looking more and more bleak from the tweet, we could very well soon end up in a situation where the biggest name in the game is gone man up.

Let’s be clear: there’s a pretty slim chance of that happening… but what if it does?

How to create (and burst) an EV bubble

To understand the impact Tesla’s disappearance would have on the future of electric cars, it’s important to understand how we got here.

“I give Elon Musk a lot of credit. He almost single-handedly made electric vehicles glamorous and sexy,” Ragunathan “Raj” Rajkumar, a professor of electrical and computer engineering and autonomous vehicle researcher at Carnegie Mellon University, told The Daily Beast. “People associated them with the person who transformed the automotive industry and did the right thing for the planet.”

However, this was a double-edged sword. Musk hyped Tesla up through lofty – albeit slightly unrealistic – promises and rubbish posts on Twitter. He cultivated an army of Elon-stans willing to go to war for him online to defend his companies from the tiniest of trifles. Meanwhile, the cars were finally selling well. All of this resulted in the perfect mix to boost the rise of Tesla’s stock into the stratosphere like so many SpaceX rockets.

But the value was always tenuous at best. It’s not like other car manufacturers should never make electric cars. So Tesla’s market cap became a bubble of epic proportions.

One of the people holding a pin was Musk himself – who he ended up appearing with the acquisition of his favorite social media platform, Twitter.

“It was just complete baloney,” Rajkumar added. “At the end of the day, business must be business. Sooner or later, things that go up must come down, and that’s what we see, and will continue to see.”

There are also fundamental economic factors. Demand is low across the board due to a failing economy. Plus the market looks very different than it did a year ago. Tesla is not the only horse in the race anymore. The electric car industry is much bigger now, and with the added competition, it was really only a matter of time before Musk’s company started feeling the pressure.

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A world without Tesla

Given Tesla’s profound impact on the automotive industry and consumer habits, there’s really no question that it would have a profoundly negative impact on the future of electric cars.

“If Tesla collapses and they’re completely out of business, I think there will be dancing in the streets at every giant [automaker] on the planet,” Sandy Munro, an independent automotive engineer, consultant and industry expert, told The Daily Beast.

Munro is known for his famous demolition reports which provide incredibly detailed analyzes of various vehicles. His glowing review of Tesla’s 2020 Model Y resulted in him not only being optimistic about the future of the company, but electric vehicles in general. A few years ago, he predicted that electric cars would make up more than 50 percent of the total vehicle market by 2030. Due to Tesla’s success, he has updated the prediction to 2028.

However, Munro admits that if Tesla were ever to go bankrupt, none of the predictions would ever happen, and he would “definitely walk away from electric cars.”

That’s because, to him, Tesla’s downfall would put out the proverbial fire under the bums of all legacy automakers to pivot to new, emerging technologies—and instead encourage them to revert to old ones. There would no longer be pressure to build new plants and devote so much of their resources to R&D for batteries, charging stations and electric powertrains. Even regulators would have much less incentive to make the change in the nation’s transportation and energy infrastructure.

Overall, we will see a return to our gas-guzzling, greenhouse gas emissions as normal. “If Tesla goes out of business, you see how quickly that Keystone pipeline goes through,” Munro added.

Rajkumar’s assessment is not quite so serious. He believes that the technologies and innovations that Tesla has championed will ultimately continue. After all, consumers already want EVs more than ever – and that number is only expected to grow. Car companies see this too, and are ready to exploit it.

“The global automotive industry has focused on electric cars now, and many companies are publicly announcing that they will switch to an all-electric product line. I don’t think it’s going to stop anytime soon.” Rajkumar said.However, he admits that it is not clear whether many of the goals outlined by these automakers are realistic due to an inadequate charging infrastructure and a slow pace of EV adoption by consumers in general.

The only real winner that would emerge after Tesla’s death would be China. The country is already making a concerted effort to electrify its transport infrastructure, aiming for 40 percent of all vehicles sold domestically to be electric by 2030, and having enough charging stations to service more than 20 million vehicles.

Munro said this could lead to a sort of geopolitical tortoise-and-hare situation in which China plays catch-up and soon advances much more exponentially than the Western world, eventually eclipsing the sleepy US with technologies like electric cars that will be critical to our collective future.

“China will survive,” Munro explained. He added that we may get to the point where the US has relatively few electric cars because we were so focused on short-term gains.

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Tesla will die another day

The future may seem a bit uncertain for Tesla – but it will likely survive the current downturn. Sure, it may not reach the $1 trillion peak it hit last year (at least for a while), but it will likely see this through.

“There’s no way Tesla is going to go up,” Munro said. “It’s just not going to happen.” He added that there are two primary factors that keep the company going.

The first is actually Musk. While many may be bothered by his antics on Twitter (the biggest Tesla stock investor among them), there is no doubt that he helped revolutionize and champion the industries the world will rely on the most in the future: electric cars and space travel. . If he can pull away from the social media albatross he has wrapped around his neck, he may be able to help Tesla through a rapidly crowded electric market and beyond 2030.

The other, Munro said, is children. Yes, children. He believes that children – more than any other market indicator, stock trend or McKinsey consultant – accurately point the way for the future of things like cars and therefore Tesla.

“If you talk to kids, you suddenly understand what they don’t like,” he said. “I don’t like the smell of petrol. I don’t like the black smoke coming out of the car. I want to do more for the environment. That’s why I don’t think Tesla will disappear.”