The Tesla Battle GroundMay 7th, 2019
In this corner, you have Elon Musk on Twitter, Tesla Stores, Massive Battery Installations, 42,000+ Employees, the Freemont Factory (tent and all), Gigafactory 1 in Nevada, Gigafactory 2 in Buffalo, Tesla’s Seat Factory, Model X & Owners, Model S & Owners, Model 3 & Owners, Additional Fan-base, some Billionaire Analysts, Self Driving Capabilities already deployed, OTA update system, Great Speed, Top Safety, Superchargers, Law Team, and some catching up to do [Solar Roof] [Semi] [Model Y] [Roadster 2020] [Gigafactory 3 completion] [Best Parts & Service] [Insurance].
And in the other corner, you have all the livelihoods of everybody who stands to lose anything from the above doing well such as Car Manufacturers, Autoworkers Unions, Oil Companies, Car Dealerships, Trucking Companies, Ride Sharing Apps, Negative Analysts, Energy Companies, Lobbyists, Insurance Companies, Chip Manufacturers, Naughty Tweets and last but not least Short Sellers.
What have you done in your life? What was your greatest accomplishment? If you were to start a company, how big do you think you could make it? Even if you got lucky and accidentally patented something that made you a billion dollars, what could you turn that billion dollars into? How long would it take you to invest that billion dollars before you were able to post a profit? Can you imagine putting that money into factories for hundreds of millions? Could you imagine designing and building a new factory? Could you see yourself innovating to the point where you are the first to release something amazing?
Very few have done anything close to that. Elon Musk has.
Elon Musk is a Rock Star and Meme Lord on top of being one of the most innovative entrepreneurs of our time. He development background has a knack for seeing minimum viability.
If you are in the opposing corner, it sucks that you got dealt that hand. It sucks that you have to go up against Elon.
Many people have stated their admiration for Elon’s vision with Space X and the incredible innovation and sheer determination it took to land a rocket on such a fixed income.
But let’s look beyond the technology of that and delve into the financials. Let’s say it costs $500M to build a rocket. If you return that rocket once, you can save upto $500M in the cost of launching another rocket. If you return that rocket 10 times, you now have a $5B more than your competition. If you are their competition, how to you compete for contracts without the ability to return rockets?
Was Elon just lucky that such an opportunity occurred? No. He went out and made that happen. He put everything he had into seeing it through and he did it. The craziest thing is that he set his mind to returning a rocket from outter space and then exectued on that while only messing up 3 times.
How many times at making a car does he need before he nails it? Well, he actually nailed every car from the Roadster v1, Model S, X and 3.
But the 3 is just like a reusable rocket. Faster, Safer, More Cost Efficient, More Capable, More Reliable than anything in it’s class. Tesla didn’t just want to compete in the car market. They wanted to “land the rocket” in the market which can beat all other car makers in every single way. And just like it doesn’t make sense to build rockets that don’t return any longer, Tesla aims to raise the bar so high that the best others can do is do the same thing Tesla is doing.
But what about demand? All along, the opposing corner asserts weak demand. They turn a blind eye to the over 400,000 Model 3 reservations, and record deliveries from all over the world to bring a false narrative that Tesla has no demand.
But what about Elon’s crazy tweet? Well, let’s put it into perspective. How easy is it to send a dumb tweet? How easy is it to acquire a factory? For every tweet that has grabbed the SEC’s attention, Tesla has at least one online factory. And that is just factories. Tesla has designed and mass produced more car models than dumb tweets. The things Tesla does are amazingly difficult and cost hundreds of millions. And the mistakes that people point out to defame them cost $0 to Tweet $40M from Elon/Tesla to pay fines.
So when Elon and Tesla mess up, they pay fines. Of the tweets that attracted so much attention, only 1 merited a fine. And did it really?
People want to make Elon out to be a liar. A story teller who can’t make good. Elon landed rockets to create a space company so formidable they forced competition into doing the same or dying. His car company is making cars that are better in every way. They make over 1000 cars/day. How difficult is that? How difficult is the analysts job who says he is lying or you shouldn’t believe him, or he can’t do it?
Elon definitely makes some outrageous claims based on ludicrous ambitions. But he also brings outrageous claims to fruition. And while he may change his mind, pivot, underestimate, embellish and/or miss timelines, he also nails it over and over and over again.
jsturgis May 7th, 2019ABOUT THE AUTHOR:
I am TSLA long. I do not fear uncertainties and doubt. Numbers matter. Their i'n't e''ry word I gunna get edit'n'.