Tesla isn't anything to be that impressed by. They have revenue that's trivial compared to any other auto company. They can't build enough cars to keep up on orders. They sell a vehicle and you might not have it in your hands 3,4,5 years later, and despite having a decade to figure it out and virtually unlimited capital they've never scaled production.
The reason they've got a market cap greater than the rest of the auto industry combined is simply the everything bubble. Money is easily available, interest rates are low for bonds, inflation is fairly high, so there's a lot of money chasing returns so the rich don't get poorer, so anything that's gone up continues to go up as the money finds places to grow. In the case of tesla, you've got a company whose PE ratio is 10 times a typical tech company which is already overvalued, but the price keeps rising so people keep investing.
There is no competitive advantage for Tesla. Other companies are making electric cars of comparable quality. Other companies are making self-driving cars of comparable quality.
None of this is because I hate Tesla or Musk. He's taking advantage of the opportunity provided to him, because he's the right person at the right time to take advantage of a certain way of looking and a certain way of operating to attract capital. If I lucked out and became a billionaire early in my life, I'd probably do the same sort of stuff he does -- playing around with cool stuff I like because it's fun. We just need to recognize that a high stock price isn't an indication of a successful company.
A lot of companies are going to be going down the drain once the everything bubble pops, and Tesla is at the top of the list. They're barely profitable and not capable of scale, the work they do is no longer unique and the field they're in is becoming crowded with more mature players.
The reason they've got a market cap greater than the rest of the auto industry combined is simply the everything bubble. Money is easily available, interest rates are low for bonds, inflation is fairly high, so there's a lot of money chasing returns so the rich don't get poorer, so anything that's gone up continues to go up as the money finds places to grow. In the case of tesla, you've got a company whose PE ratio is 10 times a typical tech company which is already overvalued, but the price keeps rising so people keep investing.
There is no competitive advantage for Tesla. Other companies are making electric cars of comparable quality. Other companies are making self-driving cars of comparable quality.
None of this is because I hate Tesla or Musk. He's taking advantage of the opportunity provided to him, because he's the right person at the right time to take advantage of a certain way of looking and a certain way of operating to attract capital. If I lucked out and became a billionaire early in my life, I'd probably do the same sort of stuff he does -- playing around with cool stuff I like because it's fun. We just need to recognize that a high stock price isn't an indication of a successful company.
A lot of companies are going to be going down the drain once the everything bubble pops, and Tesla is at the top of the list. They're barely profitable and not capable of scale, the work they do is no longer unique and the field they're in is becoming crowded with more mature players.
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