Tesla files for bankruptcy

Tesla is just a firm. Maybe a few governments in Asia would think that some government subsidies need to be given to the sector to jump-start it. This strikes me as a concern driven mostly by media attention on Musk himself – wealthy, vaguely futurish, handsome, etc – and quirky things like putting his car into space. But ultimately, the technologies Tesla represents are coming regardless of which firm finalises them. Mobile phones, for example, would continue even if Apple collapsed. What matters is the market demand – which is very high for Tesla’s products – and not individual firms themselves. There is so much interest in things like electric vehicles, solar power, cheap space travel, etc, that other firms will rise were Tesla to fall. Indeed, competition is always good, so we should hope more companies push into Tesla’s space, forcing them all to work harder.

Perhaps it would highlight to politicians that if they want to build a world with no transport-based carbon emissions or accidents, which can only be achieved by electric and autonomous vehicles, the state might have to support their creation through subsidies.

The effect would be minimal. Because electric cars are not widespread, there would be no serious dislocation of existing consumer practices.

It would cast doubts on the sustainability of electric and autonomous vehicle manufacturing for the immediate future, and would delay the development of the relevant sector. But it would also have some positive effects on competitor firms. In the longer term, the sector is likely to continue developing fast given the level of commitment by a number of manufacturers. For example, Jaguar is currently investing in autonomous electric vehicles and is working with Warwick University’s International Automotive Research Centre to achieve zero traffic, zero emissions and zero deaths on the road using these technologies.

A short hiccup; so capital movement out of the sector, which might encourage some government to subsidise it. But this sector is up and coming, and investment is more tied to the relevant technologies and the pace of their advance, rather than any specific company.

There would not be any major effect on financial markets.

Perhaps a short delay in the introduction of driverless electric cars which seem to be the Tesla product closest to direct consumer use.

It would strengthen the case of those doubting the feasibility of autonomous vehicles. There is naturally substantial disbelief on behalf of customers regarding the reliability of self-driving cars, as well as amongst business people regarding their marketability to a broad enough audience. Legal issues also have not been fully resolved in many countries. In parallel, Tesla’s bankruptcy would be bad news for the environment due to the loss of a champion of clean vehicles, the success of which can help reduce CO2 emissions. In view of scientific evidence, this appears to be an urgent issue.

There are many that believe in the Tesla brand and hobby investors that would be disappointed. However, it is unlikely that their bankruptcy would stall the automotive industry’s transition to electric.