Tesla - Debunking the Myths

By Ayal Shmilovich

They say there is a fine line between genius and crazy and, to be fair, Elon Musk has flirted with that line on several occasions. There has been no shortage of Elon Musk and Tesla headlines in the last few months, most of them negative. However, what has been lost in all of the mayhem and the crazy headlines is the true revolution that is going on with Tesla. If you read the news, you may think that Elon Musk is crazy or that Tesla is just a flash in the pan. Many think they are on the verge of bankruptcy and have no shot at challenging the big dogs of car manufacturing. Let’s challenge some of these Tesla questions that are out there.

Can they really make that many cars?
According to the earnings report released last week, Tesla Model 3 was the highest grossing revenue car in the US, with over $3 billion in revenue for the quarter, almost 50% higher than its closest competitor, the Toyota Camry. They also boasted the fifth highest sales by volume of any car in the US with over 50,000 Model 3s delivered and over 70,000 total cars delivered.

Yes…but can they be profitable doing this?
This question was also answered with the most resounding “yes.” Tesla reported a profit of $516 million in the previous quarter.

What about the competition in EV, though?
According to insideevs.com, Tesla is not losing ground, it is gaining significant ground. In the month of September, Model 3 deliveries were more than 10x greater than the nearest competitor, the Prius Prime. Additionally, Tesla held 3 of the 4 top spots and delivered almost 30,000 vehicles just in September.

But more competition is coming!
One of the “Tesla Killers,” the Porsche Taycan, is not even set to be produced until 2020. Additionally, many more EVs will come to market by 2025, according to Business Insider. 2025 is so far away. Keep in mind, according to Tesla’s last earnings report, they were already on pace to make 340,000 cars as of now.

Is this the top though?
According to the Wall Street Journal (WSJ), global car sales will surpass 90 million in 2018. Tesla will offer luxury vehicles (Model S and X), low and mid-level (Model 3 and Y), luxury sport (Roadster) and semi-trucks. They will help pioneer all these levels of the EV market and will give them that first mover advantage they have enjoyed unit now. Competition is coming, no doubt, but that does not mean they will beat out Tesla. There is competition coming, but there is room for many players. There is not only one traditional car company; therefore, there will not only be one EV carmaker.

Wait...there is just one more thing
We have not even factored the energy and software that Tesla offers as part of its ecosystem. They have a treasure trove of driving data, especially with autopilot, that can be a gold mine for them. Additionally, their battery packs and solar roofs will only further help their electric infrastructure and ecosystem. These are not even being considered when people think about Tesla, which I believe is a big mistake. There is huge potential here over the next several years for Tesla to further its mission as being the electric revolutionary.

Hate Elon or love him, you cannot deny that he is one of the biggest revolutionaries of our time. He is transforming our lives with Tesla (not to mention SpaceX, Neuralink, and the Boring Company) and is upending the car business. He is disrupting car manufacturers, the oil industry, car dealerships, and the electrical grid. Risks still and will always exist and Tesla has already encountered several of them, Elon’s behavior being one of them. However, you cannot upend industries without risk and these risks will continue in the future.


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