3 Car Brands That May Disappear Before 2025


The largest problem facing Mitsubishi is filling the huge gaps in its vehicle offering. Consider that the largest segment in the U.S. in terms of sales volume is the midsize sedan segment. Mitsubishi hasn't had a car competing in that segment for three years -- not since dropping the Galant in 2012. Mitsubishi recognizes the need for more product and has entered talks to develop a midsize sedan in partnership with Nissan , to help the former balance the research and development costs.

In fact, how many Mitsubishi vehicles can you name? Personally, other than the Eclipse and Lancer, I really haven't come in contact with any Mitsubishi vehicles in my lifetime, and that emphasizes another problem facing the automaker: advertising.

Mitsubishi couldn't afford a Super Bowl ad this year, and instead ran a spot dubbed "Protect the Pie," which spotlighted a Boston pizza delivery guy across social media in an attempt to generate attention for its 2015 Outlander. While multiple automakers skipped this year's Super Bowl, this emphasizes to me that Mitsubishi isn't willing to pay the big bucks on advertising to get on the big stages needed to revive its often forgotten and overshadowed brand.

2015 Mitsubishi Lancer. Source: Mitsubishi.

The difficulties facing Mitsubishi are exacerbated by the fact that its Detroit counterparts are more competitive than they have been in a decade. Ford's Fusion and Chevrolet's Impala have garnered much critical acclaim, and they prove Detroit vehicles compete in segments where they were once left for dead.

On top of that, Detroit competitors have long been known for their SUVs and trucks -- segments that are surging as gas prices remain low -- and these automakers have spent the last couple of years largely refreshing their vehicle lineups to gain market share.

Consider that General Motors expects to have 90% of its vehicles in the North American market redesigned, refreshed, or replaced by 2016. Ford launched 16 new vehicles in North America last year alone, which was more than three times the launches it rolled out in 2013.

Detroit's increased competitiveness in the SUV and crossover segments is a huge threat to Mitsubishi's future in the U.S. auto industry, as the company has planned its SUVs and crossovers to be the cornerstone of the brand's revival in the U.S. market. Furthermore, as North America only represents roughly 12% of Mitsubishi Motors' global sales revenue and a meager 1.4% operating income, Mitsubishi hasn't yet proven it is willing to spend the capital to build out its vehicle lineup and sufficiently advertise the models to revive the brand here. I'd be surprised to see the company in the U.S. automotive market 10 years from now.

Sean Williams : I'm fully aware this is going to be an unpopular opinion (and expect the pitchforks and fire-breathing dragons will be unleashed in the comments section), but I believe Tesla Motors ' success could be short-lived -- so much so that it may not be around by the time 2025 hits.

Elon Musk and the Tesla Model S. Source: Flickr user Maurizio Pesce.

Before I get into my reasoning, I'll give credit where credit is due to CEO Elon Musk for having the vision to introduce the first successful new car brand in five decades. Right now, consumers are clearly enamored with the Model S, and the near-tenfold rise in the company's share price over the last five years demonstrates this to be true.

But as someone currently short shares of Tesla Motors, I have five reasons to be genuinely skeptical of its ability to survive the next decade.

No. 1: Where are the profits? Sure, Tesla has been able to use adjusted accounting tactics to turn non-GAAP profits, but Musk himself has commented that GAAP profits aren't likely until 2020. Are you really willing to pay $25 billion for a company that's not "really" profitable and has nearly four times as much debt as equity? I'm not.

No. 2: Tesla is going to have to make significant strides to make its cars more mainstream. The Model 3, which is budgeted at $35,000 and slated for a 2017 launch, could go a long way to massaging its price point toward a greater swath of car buyers, but we're still looking at the need for more charging infrastructure and other exclusionary factors. For instance, what do condo owners without a garage do about charging their cars? There are far too many questions here.

Tesla Model S. Source: Tesla Motors.

No. 3: Tesla has a hard time staying on track . The Model S was delayed prior to its launch, the Model X SUV was delayed on two separate occasions, and I wouldn't be shocked if the Model 3 launch is pushed back. With the company also building its Gigafactory, can we really trust that Tesla will stay on schedule and on budget when history trends otherwise?

No. 4: Will the Gigafactory even be relevant or profitable ? By the timethe Gigafactory has fully ramped its production capabilities toward the end of the decade , will lithium-ion batteries still be the most efficient choice for electric vehicles? Sodium-sulfur and flow batteries have also been thrown around as a possible EV solution one day. These questions make Tesla's huge bet somewhat scary.

No. 5: Last, and my biggest concern of all, EV technology isn't exclusive to Tesla. BMW , General Motors, and countless other automakers will have EVs with improved driving ranges introduced within the next two years. I expect Tesla's comparative advantage will quickly dwindle as the decade marches on.

Does Tesla have staying power? It's possible, but the skeptic in me says this car brand may not be built to last.

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The article 3 Car Brands That May Disappear Before 2025 originally appeared on

Daniel Miller owns shares of Ford and General Motors. John Rosevear owns shares of Ford and General Motors. Sean Williams has no position in any stocks mentioned. The Motley Fool recommends Ford, General Motors, and Tesla Motors. The Motley Fool owns shares of Ford and Tesla Motors. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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