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Earlier this week, Tesla unveiled its cheaper versions of the Model 3 and Model Y, and not many people were impressed. These aren’t the Model 2 some were expecting, and these definitely aren’t the $25,000 to $30,000 car that Tesla needs to compete with the updated Nissan Leaf, Chevrolet Bolt, and others.
Tesla must be desperate for cash, though, because a recent in-car update is basically an advertisement for Disney’s new film, Tron: Ares. With a 54% Tomatometer rating, it’s not exactly a great movie. But Musk said, “It’s Morbin’ time” and made a deal with his sworn enemy, Disney.
The update, according to Electrek, allows owners to turn their in-car visualization into a Tron bike. I guess it could be cool, and Tesla is known for Easter eggs in its vehicles. But owners feel much more icky about it, as it appears to be Tesla’s first effort at forcing users to experience in-car advertising.
💡Do you have information about Tesla or its Disney deal? I would love to hear from you. Using a non-work device, you can message me on Signal at chadkirchner.1701, or with another secure communication method.
Tesla had a solid third quarter in terms of deliveries, beating expectations. But most industry experts who aren’t long TSLA also expected that quarter to be solid for most EV makers. With the ending of the federal tax incentive, people who might have been on the fence about when to purchase an EV decided to do so before the incentive ran out.
Some automakers tried to use the IRS’s guidance about 30D’s expiration to continue to offer some value to their dealerships and customers, but Bernie Moreno saw that that didn’t happen. Other automakers announced big price cuts on their EVs to make up for the lack of the incentive.
So even though its third quarter was fine, Tesla is likely in some hot water. Its CEO, Elon Musk, is still hugely unpopular. The updated cars aren’t significantly refreshed, and there’s nothing that’s truly been innovative from that company in a long time. Plus, with the expiration of 30D, Tesla will no longer collect (and be able to sell) regulatory credits to other automakers. Those regulatory credits were how the company remained profitable in the first part of this year, when the CEO was too busy taking a chainsaw to the government.
At the low end, Tesla is being undersold by more established and more diversified competition. The company no longer has the advantage of exclusivity to the Supercharger network. On the more profitable models, the competition is better than ever, with some premium brands (like Mercedes’ new EV platform and BMW’s Neue Klasse) making the Model S and Model X obsolete. And, it won’t be able to make money selling regulatory credits.
Earlier this week, I spoke to ABC News about this, and during the conversation, I mentioned that it’s hard to bet against Tesla because the company always finds a way to survive, even when you think it shouldn’t. Even when the fundamentals aren’t there.
But now, with the introduction of in-car advertising like this, it’s easy to see that the company is more concerned about cash flow than ever before. For the first look at the cheaper Model 3 and Model Y, Tesla even managed to invite two legacy publications to check out the car (even though they might be critical of Tesla), along with the usual gaggle of pro-Tesla influencers.
This particular advertising deal might be a one-off, but it has a certain ick to it that feels like it’ll be more than that. Once Musk and company realize this is a way to keep the cash flowing, it’s likely to continue to do it. Heck, even the shareholders might like this idea.
It’s also possible that some of the negativity around it is the fact that it’s Disney. Electrek points out that one commenter said, “I’m sorry, but this is an absolutely worthless update. Also, when did Tesla start partnering with woke companies like Disney? Didn’t Elon just go on a rampage LAST WEEK against woke?” Real classy owners of Teslas these days, huh?
People don’t want DLC for heated seats. People don’t want advertising in their cars. Maybe, just maybe, there’s a brand collaboration that could work if done authentically, but those are incredibly difficult to pull off. The juice, most of the time, isn’t worth the squeeze.
But when it comes to squeezing, it appears to me that Tesla is starting to feel the pressure of the squeeze for cash.