The adoption of electric vehicles has slowed, impacting company leaders. On Saturday, Tesla, Inc. TSLA bull Gary Black shared opinions on the strategy to address this challenge.
What happened: Black highlighted the responsibility of EV industry leaders like Tesla to lead efforts as the industry transitions from early adopters to rational pragmatists. “We have moved from Phase 1, in which early adopters of electric vehicles, to Phase 2, in which rational pragmatists must be convinced through facts, figures and analysis,” she said.
Black’s remarks were prompted by a Globe and Mail opinion piece discussing the fading of “electric vehicle hype.”
The Future Fund, managed by Black, holds Tesla as the fourth largest position with a 5.07% weighting in its active management Active ETF on futures funds FFND.
Contrary to popular belief, Black suggested that it is not high monthly interest payments that are holding back demand. Despite the federal funds rate being at a 22-year high of 5.25%-5.50%, management at electric vehicle makers, including Tesla’s Elon Musk, have cited higher interest rates as detrimental for the question.
Black disagreed, stressing the need for “more effective communication.”
“Think about how $AAPL convinced users of Blackberry, Motorola AND Nokia dumb phones to switch to smart iPhones,” he said.
See also: Everything you need to know about Tesla stock
Apple’s introduction of the iPhone in 2007 revolutionized the mobile industry, driving competitors out of business through “creative destruction.” By positioning the iPhone as a three-in-one product and emphasizing the attractiveness of its design, software, and touchscreen technology, Apple has lured customers away from innovation-resistant competitors.
Because it is important: For the last two consecutive quarters, Tesla has failed to meet both top-line and profit expectations. The company is expected to post lackluster first-quarter deliveries next month due to weakness across geographies. Tesla’s price-cutting strategy has failed to produce significant results, impacting margins and profits.
Musk previously hinted at selling Tesla electric vehicles at zero profit, offsetting losses with high-margin full-self-driving (FSD) software. Despite skepticism about the safety of FSD, many see it as a long-term opportunity.
Blacks support advertising to improve Tesla’s prospects, criticizing price cuts as a short-term solution. He believes Tesla should lead the charge in advertising the benefits of electric vehicle ownership and address customer concerns such as range anxiety.
Price Action: Tesla closed Friday’s session up 0.38% at $202.64, according to Benzinga Pro data.
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