Don’t be too gloomy about Tesla and its EV rivals

-basher-in-chief, complained that they “cost too much” and “don’t go far”. Many car buyers seem to agree. In America deliveries have not risen in three quarters. In greener-than-thou Europe they fell last month, by 11% year on year. On April 23rd Tesla, a byword for the electric revolution, reported poor quarterly results, with falling sales and revenues. It has shed $330bn in stockmarket value since January 1st. FiveHaving raced to boostinvestments.

One reason for optimism is that the recent slowdown partly reflects cyclical factors. Sales grew rapidly in 2021 and 2022 as cash-rich consumers went on a post-pandemic spending spree. Manys that are not being bought now were purchased back then—as were lots of laptops, smartphones and other durable gizmos that are now languishing. Higher interest rates mean that Americans who paid less than 5% a year on a car loan two years ago now have to pay more than 8%.

electric cars are already the cheaper option on average, says the International Energy Agency, an official forecaster, even before running costs. Smalls are two-thirds the price of a comparable fossil-fuel runaround. A new survey by AlixPartners, a consultancy, found that 97% of Chinese car buyers say their next car will run on batteries.

Established carmakers may also draw lessons from the Chinese experience. Whereas early adopters bought a Tesla as a status symbol, the Chinese are now buying common-or-gardens because they are good value. Western makers should fixate less on high-end models and stop neglecting the middle-of-the-road. Until they do, high prices will keep demand subdued and economies of scale elusive. Ford expects its pickup-obsessedThe fact that investors are becoming more discerning should help.

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