If Tesla stops making cars today, what are the options for us to purchase an exciting and cool car similar to Tesla? We have none. No other OEM has a similar product that we can compare to Tesla. That’s the point.
Tesla will not fail because they make the best EV in the world, their full self-driving software, commercial energy storage solution, solar roof business, Tesla insurance, and their future growth plan, including electric VTOL, Robo Taxi, trucks, dirt bike, and $25,000 car.
There was a time when I hated Steve Jobs. As a result, I also hated Apple and all Apple products. My unreasonable bias and Steve Jobs’s hatred turned me negative about Apple. I always wanted Apple to fail. But I forgot that facts do not care about emotion. I forgot that my emotion clouded my judgment.
I was wrong about Steve Jobs and Apple. When Steve announced the iPhone, I thought it would fail. However, one year later, after the iPhone release, I realized I was wrong. Later, I discovered Steve Jobs maybe was not the nicest person to work with, but he was a product genius, a visionary, a perfectionist, and knew what he was doing. Users love Apple products. When users love their product, no hatred can hurt a company.
Later, I changed my mind and admitted that I was wrong and invested in Apple. Over the long-term, that investment made me a lot of money.
As you can see, I was not too fond of Steve Jobs and Apple. That’s why my hatred for Steve clouded my thoughts about Apple’s product. I misjudged Apple. I completely missed the fundamentals behind all the Apple products at that time. I wanted to see Apple fail, but it was my wish. It was not grounded on reality and Truth.
Again, I was wrong at the time. I corrected my mistake and invested in Apple, and made a lot of money over the decade.
I see the same mistake people are making today with Tesla and Elon Musk.
Not everyone likes Elon Musk. I know Elon Musk is unique, eccentric, and not likable by many. However, this dislike for Elon Musk has turned many people against Tesla, SpaceX, Neuralink, Boring Company, and everything he does.
Because of their hatred for Elon Musk, they want to see Elon Musk fail. They want to see Tesla fail because they don’t like Elon. Tesla shorts repeatedly claim Elon Musk is a fraud. However, it’s all wishful thinking. These are not grounded on Truth.
In this article, I’m going to show you why Tesla will not fail. Why in the coming decades, it will become one of the world’s largest companies, maybe surpassing Amazon and Apple.
Before I proceed, I want to say that sometimes our hatred and emotion cloud our thinking. It prevents us from making a clear judgment.
There are numerous reasons why Tesla will not fail. I’m going to discuss a few of them in this article.
Tesla Manufacturing:
First of all, many people freak out to hear that Tesla is not a car company. They refuse to believe Tesla has the technological advantage over other OEMs; they refuse to see that Tesla is leading in the electric vehicle market. They refuse to accept that the traditional automaker will not be able to transition to EV. They deny that Elon Musk is a visionary.
I see many people in the short seller’s community always complain, how can Tesla’s valuation be more than all the automakers combined? They forget that all the automakers are only making cars, but Tesla has numerous products besides the car business.
All the traditional OEMs are building their vehicles the same way they were doing 10 to 20 years ago. On the contrary, Tesla is trying to transform the whole car manufacturing facilities. They’re doing different kinds of experiments to build cars that other automakers will never venture into. For example, in Model Y, they’re using cast machines to make a unibody Model Y. Other OEMs never thought of this revolutionary unibody design approach to making cars. Because of this, Tesla can make cars cheaper and faster. Moreover, these vehicles are safer during an accident.
They are also making Tesla Cybertruck using 30x cold rolled stainless steel. This steel does not bend, dent, or corrode. SpaceX is using this same steel to make the Mars rocket, Starship. Only Tesla has access to these types of rocket grade materials. The exoskeleton design of the Tesla cybertruck is also revolutionary.
These few examples show that Tesla is not a traditional automaker. They are inventing new stuff in every way possible for their cars and their manufacturing facilities.
When was the last time you found some innovative technology in your Toyota or Ford? At least I did not find any.
Other car companies are stuck in the past. They fear change and don’t like to experiment with new things. They’re building their cars in the same way they did 20 years ago.
Traditional OEMs employ hundreds of thousands of workers. Sometimes, those workers work in their plant for 15 to 20 years. They only have a fixed kind of skill set. As a result, these workers can’t change their job easily. If a car company wants to modernize manufacturing facilities and cut back human workers, Unions will not allow them to do that. Even layoffs are not possible at these car manufacturing facilities.
For example, if an automaker wants to install a casting machine to make a unibody car and lay off thousands of workers, the Union will not allow it.
Another example, even if an OEM wants to transition to EV, they can’t. It’s because they employ thousands of engineers who specialize in engines and other car stuff. Those talented engine engineers have zero background in EV. If a company wants to transition to EV, they need to hire new engineers and lay off those engine engineers. However, the Union will never allow it to happen. Moreover, even if an OEM makes an EV, there’s no guarantee the project will be successful. Therefore, these traditional car manufacturers are in a very precarious situation.
Elon Musk built Tesla from the ground up. Therefore he did not have any dilemma as outlined above.
Elon Musk wanted to make a factory that makes vehicles without any humans. Though initially, Elon failed to fulfill his dream, I don’t think he will stop until he makes a factory like that. Elon never quits. Is there any CEO who is as ambitious and tenacious as Elon? Of course NOT.
Whatever Elon dreams, he tries his best to achieve that. Therefore, definitely, he will make a factory full of machines that make EVs without human intervention. When that happens, maybe two to three years later, no other car company can compete with Tesla manufacturing.
If you have a set of skills that are relevant today, it doesn’t mean the same skill will help you grow faster in the future. For example, there was a time when feature phones were popular. However, those phone makers are now obsolete.
I mean that traditional automakers may have manufacturing facilities today, which makes millions of engines and cars. However, it does not mean their manufacturing facilities are relevant for making EVs. As we discussed previously, traditional automakers are not only reluctant; they don’t have the ability to change in a changing world because they failed to innovate.
In the last 40 years, traditional OEMs even failed to give us a decent infotainment system. Every car has a crappy radio. Only a few cars support Android Auto or Apple Carplay. The OEMs have failed to show us that they can give us advanced software features in their vehicle in this modern world. How can we expect all of a sudden they will come up with a revolutionary infotainment system like Teslas?
Tesla Full self-driving software solutions:
I see sometimes people freak out hearing Tesla is not a car company. Because they believe Tesla is only making cars and have no technological advantage over other car manufacturers.
Here’s another example. Tesla has been trying to develop full self-driving software since 2016. By looking at the progress Tesla made, we see that Tesla’s full self-driving is years ahead of its competitors, for example, Waymo or Cruise. However, people deny Tesla’s advantage by saying that it’s only a driver assist system. This denial comes from the fact that they already realized Waymo or Cruise is stuck at the same place for many years. They are complacent with their progress.
Whenever I say that Tesla’s full self-driving software is years ahead of Waymo, people don’t like it. They criticize me for saying that. However, there’s a saying: facts do not care about your feelings.
Let’s analyze Waymo and compare it to Tesla’s full self-driving. In 12 years, Google’s Waymo could not expand beyond Phoenix, Arizona. They’re testing their software over there for the last 12 years. Why Phoenix, Arizona? It’s because Phoenix, Arizona, has the perfect weather. The problem with Waymo’s solution is that it is expensive and costly to expand to other areas. It’s because it’s only a specialized solution for the phoenix area. If you take Google’s Waymo self-driving car from Phoenix, Arizona, and drop it at New York City, their self-driving car will not work. Moreover, their software is not available for consumer purchase. At this moment, it seems that Waymo’s primary business plan is to make Robo taxis.
On the other hand, Tesla’s full self-driving software is not a specialized solution for a single area. It’s a generalized solution that works throughout the world, on any road, and in any weather condition. Moreover, as a customer, you can purchase this software from Tesla. So, Tesla is not only making cars; they are also developing full self-driving software.
Tesla energy solution:
Tesla does not stop there. Tesla also makes their batteries now — 4680. No other car manufacturers in the world make their batteries except Tesla.
Tesla also has battery packs for the grid energy storage solution. It is an important business in the renewable energy sector. We don’t have an unlimited supply of gas or oil. Soon we will run out of oil. In the energy sector, all renewable energy sources need electrical energy storage. In this growing market, Tesla has positioned itself as one of the leaders.
Tesla also sells Powerwall to home consumers. At the same time, Tesla also makes solar panels and solar roofs for houses and businesses. It’s also a growing market. In the future, as technology improves and the price of solar panels decreases, this business has massive growth potential.
Tesla Insurance:
Elon Musk also announced Tesla Insurance. Insurance is another huge industry where Geico, Allstate, and other insurance companies are dominating. At this moment, Tesla is experimenting with Tesla Insurance in California. They’re soon going to expand this insurance throughout the US and the rest of the world. Once it rolls out, it’s definitely going to interrupt the insurance industry.
Tesla VTOL:
VTOL stands for Vertical Takeoff and Landing. In simple words, VTOL means flying vehicles or cars.
During an interview, the DHL CEO asked Elon Musk about the electric airplane. The CEO asked Elon Musk about his opinion and plan regarding electric airplanes. Elon Musk said that according to his calculation, for an electric aircraft or VTOL to be practical, we need 400 watt-hours per kg energy density battery. Tesla’s battery currently has 350 watt-hours per kg of energy density. Though there are 400 watt-hours per kg energy density batteries, those are expensive to be practical for mass production.
As Tesla improves its battery chemistry and energy density, and once the battery reaches 400 watt-hours per kg energy density, Elon Musk will make an electric VTOL at first. It’s a vertical takeoff and landing helicopter. However, it will be quiet, small, fully autonomous, and electric.
So as you can see, Elon Musk already has an idea for VTOL in his mind. He can’t make it because of the technological difficulty. Once Tesla gets to that point, they will make an electric airplane, no doubt about it.
The current car industry can’t even make an excellent electric car. They don’t even fully commit to making an incredible electric vehicle. They don’t have the technology, expertise, or R&D center to create a compelling consumer battery electric vehicle. How they’re going to compete in this sector when Tesla comes out with an electric VTOL within the next two to three years?
Electric dirt bike:
Tesla is also going to make an off-road electric dirt bike. Though it’s a niche market, Tesla’s electric dirt bike will still capture a lot of market share.
Pickup truck industry:
Let’s talk about the most popular truck in the US, Ford F-150. Ford F-150 is the bread and butter of Ford. However, in 2021, Tesla is going to come out with the Tesla Cybertruck. Though many people don’t like the design, they think it’s ugly. However, no one can deny the performance and practicality of this Cybertruck over the Ford F-150. Initially, it may not capture a reasonable market share, but five years down the road, they will eat Ford’s business.
$25,000 Tesla:
Tesla is also planning to make a $25,000 electric car. Soon they will be able to do it because of their 4680 battery. If Tesla comes out with the $25,000 electric vehicle, more people will be able to afford Tesla. This car will eat away from Toyota and Honda’s business worldwide.
Moreover, we know that Toyota’s president doesn’t think that electric vehicles are the future. He repeatedly said that electric cars are overhyped and overpriced. He doesn’t realize that people can buy a Tesla Model 3 for $35,000 now, and in two to three years, they will be able to purchase a Tesla for $25,000. Toyota’s president denies electric vehicles’ practicality and in its future. I always say that Toyota is the new Nokia. Soon they will become obsolete. Same as other car manufacturers.
No Dealership:
Tesla does not have a dealership to sell their cars. They sell directly to consumers. There’s no middle man. For the current car industry, it’s a bottleneck for growth. Who likes to visit a car dealer? They are dishonest. Visiting a car dealer is a nightmare. They treat their customers disrespectfully.
On the contrary, Tesla does not have a dealership system. Anyone can buy a Tesla by visiting Tesla.com.
No Advertisement:
Tesla does not spend a dime on the advertisement. Other car companies spend billions of dollars, still can’t generate enough buzz similar to Tesla. It’s because Tesla customers love their cars. They spread the word about this company, which is another massive advantage of Tesla. Moreover, Tesla consumers are very loyal to Tesla.
Conclusion:
Tesla has branched it’s business in many sectors. People may deny Tesla’s advantage over traditional car manufacturers, but their denial will not hurt Tesla’s future growth. Tesla has positioned itself in such a way that Tesla will not fail.
