Tesla's fate will have an outsized influence on something far more important than any one company: the future growth of electric vehicles.
Driving the news: Tesla's stock is up this week after its decent second quarter financials and a renewed pledge to be profitable later this year. But Tesla's long-term health is a question mark as it ramps up production of the Model 3 sedan.
- “What happens with the Model 3 is going to be hugely indicative of whether the EV industry is going to be successful,” said Sam Ori, the executive director of Energy Policy Institute at the University of Chicago.
Why it matters: The future of EV adoption, in the U.S. but elsewhere too, remains bound up with Tesla even as other automakers bring more models to market and overall sales rise.
- Tesla stands out as the clearest example of a disruptive player with a cool factor that can help transform EVs into something beyond niche status.
- Plus, EVs can help to fight climate change, quicken the arrival of peak oil demand, and alter the very nature of mobility when paired with autonomous tech.
Where it stands: Right now, Tesla represents a third of the U.S. market for plug-in vehicles (including full electrics like Tesla's line and plug-in hybrids), as the chart above shows.
- The company is now ramping up production of its Model 3, a more mass-market product that's key to its long-term future and already the nation's top-selling EV.
- But Tesla must still show it can consistently keep boosting production.
On the other side: Paul Ruiz, policy analyst with Securing America's Future Energy, says:
“Losing Tesla would have a big impact on the EV market, especially in the short term."
“On the other hand, in the medium and long-term, a lot of these automakers have made sizable investments in EVs, and the EV infrastructure nationwide is continuing to grow."
Meanwhile: Looking at China, where officials are strongly pushing EV deployment in the world's biggest auto market, Tesla wouldn't have as much impact as other manufacturers play a greater role. However, many parts of Europe would be affected by Tesla's fate.
Go deeper: Read the full story in the Axios stream.