In general, I don't get Tesla. I think it's a company where the Beta has taken over and any evaluation based on actual metrics and deliverables makes almost no sense. ## Assessment 2022 Tesla is still a [[Story Stock]], however the story is crumbling. The story largely hinged around outrageous claims and [[Domesticated White Elephant]] stories from Elon Musk. However with the Twitter acquisition, Elon is finding that he cannot turn Twitter into a story and that it actually has to function as a social platform (see [[Virtual Worlds#It's all the same]]). This failure negatively impacts Tesla. Above that, he pulled out huge amounts of stock money out of Tesla. This will likely lead to Tesla stock price re-aligning with fundamentals. It might lose around 3/4 of the valuation from the 2022 high, with Elon being questioned and potentially ousted as CEO. The situation will be weird as Tesla will have good [[Business Fundamentals]], but still lose value (see [[Personal Future Predictions]], 26.12.2022). ## Assessment 2021 Tesla is a [[Story Stock]]. Otherwise it is a car manufacturer and infrastructure company. In terms of cars it does design, manufacture and sell cars in a very vertical way, owning a lot of the platform and components that are usually outsourced to suppliers, for example the control systems. Then again, Tesla is not completely vertical yet. Even in core technologies they work with suppliers, for example with batteries they are [partnering with Panasonic since 2011](https://www.tesla.com/blog/panasonic-enters-supply-agreement-tesla-motors-supply-automotivegrade-battery-c). Panasonic produces the battery cells used in the cars as well as the stationary storage devices (Power packs, Powerwall, Megapacks etc.) However Tesla does also source these cells from Samsung to keep up with demand. In terms of batteries, they bought Maxell in 2019 for that reason I guess: [Tesla Completes Acquisition of Maxwell Technologies | Tesla Investor Relations](https://ir.tesla.com/press-release/tesla-completes-acquisition-maxwell-technologies). ## Early assessment In 2012 I talked about Tesla as an infrastructure provider. I didn't think the cars were that interesting really, but they were the first ones that talked about a car as a platform, embedded in an e-mobility infrastructure: * The car is a platform, it can be updated, extended and run services. * It runs within an ecosystem of charging stations, including areas like batteries, sustainable energy and so on. They thought not only about the car, but about the roads, the roadside and the things fueling all that. So my assumption was that Tesla's biggest value would not be cars, but to be the "operating system" of e-mobility. That's also when I made a long term bet with a friend who claimed: "Tesla will sell more cars than VW group (in total)." I argued that Tesla (all models) won't beat VW's (individual) best selling individual model for quite a while. That still hasn't happened. For reference, the 2018 best selling VW model was the Polo (835,000 units) and the Tiguan in 2019 (778,000 units). Delivered Tesla's in 2019: 368,000. ## Assessment by Scott Galloway One reason of Tesla's success is operational and revenue growth is accelerating faster than other auto firms. But beyond that the company is vertical: * Selling directly to consumers * Owning a large part of the technology stack (in contrast to traditional car manufacturers strong supplier mentality) * This is paired with the perception of luxury and brand desirability As a luxury product he argues that the production capacity of Tesla is not that big of a problem as they don't overproduce, don't need to keep stock or let cars sit idle. They produce enough to grow faster than the average, but not so much that they need to discount them. Artificial scarcity also plays into the luxury brand image. They also mix this with pre-order capitalization, almost like a Kickstarter (not that they need the money with this kind of evaluation, but they won't complain either). **Scott's 2023 prediction:** > *I’ve been a Tesla bear for a long time, which means I’ve been (very) wrong for a long time. The lesson was to “never bet against a company with a great product.” And that’s still true. The problem for Tesla is that greatness is relative, and the industry is catching up. > > Tesla pulled the future forward with EVs that bested internal combustion cars. But the future is finally here, and TSLA is catching up to our prediction. Last year we said (again) that Tesla would be cut in half in 2021, and it was. The slide will continue. Why? Tesla still trades at 35 times earnings, while the competition (something Tesla didn’t have before) trades at 5 times earnings.* > Link: [2023 Predictions | No Mercy / No Malice (profgalloway.com)](https://www.profgalloway.com/2023-predictions/) ## Assessment by Marcus Naumann Marcus wrote a couple of great articles around Tesla: * https://medium.com/child-studio/teslas-smile-9a7a9ca8cd98 (English) * https://medium.com/child-studio/teslas-maschine-64b4c3ede263 (German) In them he argued that the big challenge in previous years had been to create a car engine. One that was small, powerful, fuel efficient and clean. Lesser parts were outsourced to suppliers, like breaks, electronics, software. Today, the big challenge is digital - so based on the competencies the car companies gave away. While Tesla is doing over-the-air updates for years now, German premium manufacturers still struggle. In other words: You need to go vertical and own as much of your supply chain as possible to create integrated products.