Can Elon spoil Tesla PH’s market play?
To say that the Tesla brand is having a rough year globally is an understatement. Its recent drop in stock price by around 41 percent, coupled with the clamor to boycott the brand in some parts of the United States, Australia, and Europe, hasn’t helped it one bit. What’s truly unfortunate is that Tesla’s misfortunes aren’t due to any faulty design nor technology of its game-changing EVs. The pitchforks are aimed at its CEO Elon Musk, who, ever since allying himself with a certain US political figure and party, and making that controversial “from-the-heart” arm salute, has attracted all sorts of negative vibes, and the public has taken out its anger on the one thing that represents Elon that they could actually touch (SpaceX’s ships are literally out of their reach).
Let’s just make it clear that Tesla as a company didn’t originate from Musk. Tesla founders were actually a couple of engineers who named their startup after Nikola Tesla, the legendary inventor and electric motor pioneer. On July 1, 2003, Martin Eberhard and Marc Tarpenning incorporated their new company, with Elon Musk, who at the time was already wealthy due to his PayPal, beginning to invest in 2004. Musk then invited JB Straubel, a car nerd who studied energy systems at Stanford University, to join the team.
Walter Isaacson, author of the book “Elon Musk,” wrote: “The pieces thus came together for what would become the world’s most valuable and transformative automobile company: Eberhard as CEO, Tarpenning as president, Straubel as chief technology officer, Ian Wright as chief operating officer, and Musk as the chair of the board and primary funder. Years later, after many bitter disputes and a lawsuit, they agreed that all five of them would be called co-founders.”
John Doerr, author of “Speed&Scale,” wrote of Elon’s three-step business plan: “Tesla would begin with a high-end sports car, the Roadster, to show that EVs were feasible and cool. The company was ready to enter production as soon as it raised cash. Next up would be a luxury sedan, the Model S, to compete with BMW and Mercedes. Finally, 10 years or so down the road, Tesla would launch a lower-cost EV for the mass market.”
Later on, Eberhard would be ousted following internal conflicts, and Musk would take over as CEO in 2008, “just after the company began selling its first model, the Roadster,” wrote Akshat Rathi, a Bloomberg News reporter and a host of “Zero,” a climate-solutions podcast for Bloomberg Green, in his book “Climate Capitalism.”
Rathi wrote: “Tesla sold about 2,500 units of the electric sports car, but Musk’s stated goal was to make a mass-market EV. With every iteration, the car models got cheaper and sales grew—turning Tesla into the world’s most recognizable electric car brand and the world’s most valuable car maker. As of 2022, the company was selling more than 1 million cars annually. Still, the cheapest Model 3–one that Musk promised would be the affordable car—costs well above $35,000.”
The Model 3 in the Philippines is priced at ₱2.109 million for the base variant, last I checked.
Isabel Fan, Tesla regional director (including the Philippine market), was on hand during the Feb. 26 launch of the new Model Y in Manila. She told me that she had worked for Musk for the past 11 years. She promised to get back to me regarding her view on Tesla’s viability in Asia and the Philippines, considering what was happening to the brand elsewhere in the world.
And so, without any official pronouncements yet from Tesla Philippines, I’ve gathered the observations of some of my industry sources about the prospects of this storied EV brand in the country.
Rico Severino, co-founder of Philippine EV Community, said: “I believe the Asian Tesla market, specifically the Philippines, will not be affected by worldwide geopolitics. Tesla has a niche of its own, being the standard bearer of quality and longevity amongst most brands available locally, not to mention proper pricing. Having said that, I can see overall growth shall continue despite our beleaguered economy and politics. The main driver of owning an EV is economic, due to reduced operating cost and lower maintenance and with less to zero tailpipe emissions as a bonus.”
Rommel Juan, chair of the Electric Vehicle Association of the Philippines (EVAP), said: “I think Filipino Tesla buyers would be affected by Musk’s political actions much less than American or European buyers, because we are far less impacted by them. Most Tesla buyers in the Philippines would be well-off individuals who are fans of the brand and have waited a long time to get it locally.”
Juan added: “Musk has always been a polarizing figure, especially since he decided to become politically influential. He has divided Americans and clashed with many European leaders over his controversial ideas. However, he has consistently been ahead of his time in terms of technology. With self-driving technology inevitably advancing, I believe Tesla will remain an irresistible force, regardless of how one views Musk politically. I think his political actions will have far less impact on Filipino buyers because we have our own political issues to focus on.”
Ferdinand Raquelsantos, EVAP chair emeritus, said: “I believe Tesla will sell well in the Philippines and Asian market. Though (their models are) pricier compared to the Chinese brands of the same category, there are still some people who doubt the quality and performance of Chinese models and would prefer to get a Tesla instead. Of course, the one being sold in the local market and in Asian countries are made in China and not from Austin, Texas or Fremont, California. I see the initial demand for Tesla in the Philippines to be excitingly high. There is a long queue of orders for the new Tesla Y model, with some even getting the full features like the FSD (Full Self Driving) at the price of P3.1 million.
“I personally would like to have a Tesla, but unfortunately I’m a Democrat and seeing Elon in the wings of Trump, makes me think twice. But generally, Filipinos think otherwise and with the geopolitical situation between the Philippines and China, some would rather have a Tesla, especially for those who can afford one.”
Raquelsantos added: “I see a tremendous downtrend sales of Tesla in North America (and) especially in California (which is a Democrat state). But Chinese brands are not readily available in the US market. That’s probably why the Vietnamese brand Vinfast and other European EVs are selling in Los Angeles.”
Edmund Araga, EVAP president, said: “The Tesla market in the Philippines has its potential, as we know that consumers are cost conscious and that branding is another key to keep at pace in the market. Issues with Elon Musk, the American trade war with China and others, are being observed by the market. Filipino consumers in general are more fascinated with the tech and innovation rather than the issue with Musk being scrutinized as part of economic adviser of Trump, and of trade wars. However, SUVs are still the preference of the buyers and that sedans are for young professionals or executives who are more into brands.”
Araga continued: “As for building confidence with the market, the visibility of charging stations add value for those who are looking forward to Tesla brands. To make the story short, consumers welcome that they’re getting a lot of options for their choice of e-vehicle.”
How about you, would you let the crazy antics of a certain billionaire named Elon Musk get in the way of your desire to buy a Tesla?
