If anything, their problem is that Tesla is not luxurious enough. Luxurious brands resist recessions better than mid-level brands.

That is correct. The type of people who can comfortably afford $300,000 cars tend to not be affected by recessions.

In that case, the main competition is not GM or Ford but Porsche. If their electric line is good enough, many Tesla buyers that will remain loyal through a recession could wander off.

My takeaway building on yours is that Tesla could survive but Elon Musk would be booted out in a recession.

Lets not forget that Tesla has impressive IPs wanted by generally most car companies and very well-trained staff, factories and huge customer demand (over-subscribing their orders) so if Tesla was to be sold for cheap in a recessionary period, any car company would raise money to buy Tesla.

Interesting point, seems obvious but isn't something I had directly thought about when considering Tesla's value.

I would wonder how long that demand holds, consumer "brand desire" if you will, if Elon is no longer at the helm. Maybe it wouldn't be affected much right away, but would it once they focused more on execution instead of innovation perhaps? Nonetheless, is an interesting line of thought.

_Can_ Elon Musk be booted if the board wanted to? I'd bet he still has a ton of control.

Ranges from either a Steve Jobs booted out of Apple to Travis Kalanick from Uber.

Based on those, if a board really wanted to boot you out, they will work hard to cut off any control as Steve Jobs had to wait quite a while and then get his company Next bought to come back.

Tesla did experience a recession in the early years of the company when trying to raise money and sell prototype visions. It nearly crushed the company but they came out on the other side. Today they're much better capitalized and Elon structured debt specifically to guard against dips in the economy.

Not saying he can't be wiped out with one or two bad decisions + a recession, but this isn't new territory for Tesla.

>better capitalized and Elon structured debt specifically

This goes against everything I know about Tesla's finances. You really have to provides sources if you want us to believe this.

> and Elon structured debt specifically to guard against dips in the economy

Please elaborate. Everything I've heard suggests the opposite.

musk took over as CEO in october 2008; the height of the recession. prior to that he was board chairman

> All of their products, while undoubtedly groundbreaking

But that's not true. None of their products are groundbreaking. It's all decades old battery tech. What was revolutionary was musk's ability to brand old tech as new/hip and get the government to bail out and subsidize Tesla.

What tesla is great at is marketing and attaining government funding. Just like solar city.

> How will Tesla handle the pool of buyers for a $75,000 sedan and $900/mo lessees shrinking dramatically?

It'll go bankrupt or get a bailout.

https://techcrunch.com/2009/06/23/the-government-comes-throu...

People forget that we've already seen this movie before with TSLA. It was saved from bankruptcy by Obama. I doubt Trump will come to Musk's rescue.

Also, TSLA's biggest problem isn't a recession. Just like solar city's biggest problem wasn't a recession. It's low energy prices and removal of favorable government policies along with our love of large vehicles.

http://6abc.com/automotive/ford-getting-rid-of-all-its-cars-...

TSLA might be doing well in norway, but it's just a blip in the rest of europe, north america and china. It's a testament to musk that he is able to keep such a marginal and ineffective company in the spotlight day after day. The guy is truly one of the great marketers of our time.

Tesla has multiple revenue streams though.

Solar installations (via SolarCity acquisition) should ramp up during recession if they still provide cost savings to consumers compared to utility rates.

Semi trucks are also a product line that at scale should be able to deliver savings to large delivery fleets.

You have to pay most up-front for solar. If you don't have the money at hand, forget about getting a credit when recession strikes. It's a good investment if you expect money devaluation without high interest rates but in a recession you expect deflation first and cash is king.

Recessions generally cause oil prices to fall.

Solar installations are a very competitive market. Semis are great, but Tesla manufactures very few.

Unless it's a global recession, I imagine they'll be able to find money.

Also, Tesla and Elon aren't just an electric vehicle company and a founder of a single company either, and this might give him the credibility and belief in him for a recession to be moot.