People seem to think you're joking, but I think you're spot on.
Putting it in the best possible light, Tesla represented a bet on developing both a new carmaker and the dominant car of the future: electric and fully automated. That was a big gamble, and it required gobs of money. Existing carmakers could try to-self fund that, Tesla couldn't. So Musk, marketer extraordinaire, built up a Jobsian reality distortion field around Tesla. He made his cost of capital incredibly low by hyping the stock to the moon.
If the bet pays off, Musk will historically be seen as a genius. But if it doesn't, he'll be seen as a fraud who milked credulous investors for a project that was never going to work out. And I think that's true even if he ends up with a modestly successful niche carmaker. Many others would see that as a huge accomplishment, but it'll be so far short of what investors thought they were paying for that even visions of an automated future won't make up for their large losses.
I know this was wit, but Tesla has and always will be an energy company.
The cars have obviously done well for them, but their solar and charging are the real innovations. I’ve been waiting for the day there’s pressure to split the car business away from Tesla
I'd expect a commodity like charging to be a very tough sell in the stock market. Turns out charging is actually not easy, and having boots on the ground in lots of places where people actually want to charge makes a formidable moat (booths on the ground, if we stretch the term just a tiny bit). But I don't buy into any claims that this was a planned outcome from the start. It's not failure when you do something well and stumble into something better while doing the thing you set out for. Not everything is Bezos launching "anything that has a GTIN and fits in a box" with the subset where the number happens to be ISBN.
Snark aside this is pretty true. Tesla's valuation by the market is completely detached from reality. Something about market can remain irrational but if/when people start believing that Tesla is a mature company whose stock price has to ride on realized quarterly numbers instead of future growth/ambition then they're gonna have a lot of trouble maintaining their price.
whose stock price has to ride on realized quarterly numbers instead of future growth/ambition then they're gonna have a lot of trouble maintaining their price.
Sure, that's also true of every tech company. Tesla's P/E ratio is around 47, which isn't great, but also isn't terrible.
A publicly traded company is whatever those with capital (or those managing capital) and the highest grade of optimism about the company want it to be. Obviously when it comes to Tesla, there's some very strong optimism in the market. Seen from that perspective, I'd say that Tesla remains refreshingly far on the car side of the "product is car vs product is stock" spectrum.
But I agree that taking on the robotaxi market does move them further towards the stock end. In financial terms, deep integration is awesome until it isn't. Eventually most, perhaps all, layers will rely too much on the rest of the stack propping them up and then it all falls down. Mid-term investors will happily bet on abandoning ship right before that happens.
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Is Tesla a transportation company or an automaker? They're going to have trouble trying to be both.
Tesla is a stock company. Their main product is their stock.
People seem to think you're joking, but I think you're spot on.
Putting it in the best possible light, Tesla represented a bet on developing both a new carmaker and the dominant car of the future: electric and fully automated. That was a big gamble, and it required gobs of money. Existing carmakers could try to-self fund that, Tesla couldn't. So Musk, marketer extraordinaire, built up a Jobsian reality distortion field around Tesla. He made his cost of capital incredibly low by hyping the stock to the moon.
If the bet pays off, Musk will historically be seen as a genius. But if it doesn't, he'll be seen as a fraud who milked credulous investors for a project that was never going to work out. And I think that's true even if he ends up with a modestly successful niche carmaker. Many others would see that as a huge accomplishment, but it'll be so far short of what investors thought they were paying for that even visions of an automated future won't make up for their large losses.
I know this was wit, but Tesla has and always will be an energy company.
The cars have obviously done well for them, but their solar and charging are the real innovations. I’ve been waiting for the day there’s pressure to split the car business away from Tesla
Selling Tesla as an energy company is why the stock price is so much higher than any other car manufacturer.
Didn’t they just cut their supercharger team though?
They were subsequently rehired. Or most of them were anyway. You know, sensible business decisions, forward planned, so on and so forth.
Seems about as planned as the cyber truck.
Musk has this ability to put the right people in the right places so that when he’s not around things run well.
It’s when he starts getting involved that weird stuff happens.
I'd expect a commodity like charging to be a very tough sell in the stock market. Turns out charging is actually not easy, and having boots on the ground in lots of places where people actually want to charge makes a formidable moat (booths on the ground, if we stretch the term just a tiny bit). But I don't buy into any claims that this was a planned outcome from the start. It's not failure when you do something well and stumble into something better while doing the thing you set out for. Not everything is Bezos launching "anything that has a GTIN and fits in a box" with the subset where the number happens to be ISBN.
And battery production, of course!
Snark aside this is pretty true. Tesla's valuation by the market is completely detached from reality. Something about market can remain irrational but if/when people start believing that Tesla is a mature company whose stock price has to ride on realized quarterly numbers instead of future growth/ambition then they're gonna have a lot of trouble maintaining their price.
Sure, that's also true of every tech company. Tesla's P/E ratio is around 47, which isn't great, but also isn't terrible.
A publicly traded company is whatever those with capital (or those managing capital) and the highest grade of optimism about the company want it to be. Obviously when it comes to Tesla, there's some very strong optimism in the market. Seen from that perspective, I'd say that Tesla remains refreshingly far on the car side of the "product is car vs product is stock" spectrum.
But I agree that taking on the robotaxi market does move them further towards the stock end. In financial terms, deep integration is awesome until it isn't. Eventually most, perhaps all, layers will rely too much on the rest of the stack propping them up and then it all falls down. Mid-term investors will happily bet on abandoning ship right before that happens.
Is Apple a software company or a phone maker?
Lifestyle brand.
Yes.