Currently reading: Inside the industry: Tesla's success starts on the playground
Elon Musk's marque is cool (like it or not), and it's looking more and more credible long-term
Jim Holder
News
2 mins read
22 June 2020

There it was, in black and white: a few weeks ago, fleetingly, Tesla was the most valuable car maker in the world, based on its stock price. In these tumultuous times, investors have been backing it like never before, pushing it beyond Toyota and the Volkswagen Group (it had long since eclipsed Ford, General Motors et al).

It’s a remarkable tale that I can validate only through talking with my 12-year-old. Where I see sales figures over 17 years that have only recently topped one million, full-year financial results that have never seen a profit, an endless (but admittedly reducing) stream of quality complaints and aftersales issues, plus a borderline relationship with common sense as far as Autopilot is concerned, he sees the future. Emboldened by Top Trumps, he and his mates are genuinely more excited if I bring home a Model 3 than a Ferrari 488 Pista, such is Tesla’s playground cachet.

And there’s the rub. So-called experts have spent recent days trying to justify Tesla’s dizzying valuation, citing everything from it having more advanced battery technology than its rivals (hard to believe) through to it now producing a credible, decent-selling four-car line-up globally (hardly impressive against the opposition). But my suspicion, in the absence of any genuinely hard facts, is that the stockbrokers have caught playground fever.

And that’s not a criticism. There’s no rational reason why ‘legacy’ marques can’t make EVs just as capable as Tesla’s (or better, if you want to argue the toss over the likes of the Jaguar I-Pace and Porsche Taycan). But while the perils of listing on the stock market are all too obvious (just ask Aston Martin), the latest evidence suggests that, by moving first and fast, Tesla has seized the initiative for a generation or more. There isn’t a car maker on Earth that wouldn’t like a sprinkle of its stardust right now.

Where will it end? The straight-talking ex-BMW, Chrysler, Ford and GM boss Bob Lutz recently labelled it “psychosis”, suggesting that the constant ramping of hype just keeps pushing the price higher, generating more hype and so on. To heavily summarise Lutz’s views, bubbles always burst.

However, just 18 months ago, Lutz claimed Tesla was “heading for the graveyard”. I wouldn’t have bet against him then. But now? I’m not prone to committing the thoughts of stockbrokers or children to print, but even if that market valuation is grounded in turning fiction into reality, and even if reality ends up biting hard, you have to acknowledge that Tesla is probably both too big to fail yet small and well-funded enough to adapt to a rapidly changing landscape better than most.

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Comments
32

22 June 2020

Bit embarrassing for all the luddites predicting the company to crash over the years. Oh as to 17 years that might be technically true but they've only really been building production cars of their own design for 8 years.

22 June 2020

One of my 11 year old sons friends Dads has a model X P100D.  Other Dads have 911's or Range Rovers, even a 458, etc but it's the Tesla they all love.  Like another teenager recently commented - Ferraris and BMWs are cars that your Dad and Grandad think are cool.....

289

22 June 2020

Well written and balanced piece Jim.

Personally I dont understand the hype around Tesla, wouldnt have one as a gift, but then that also goes for all EV's.

Those that I have seen arent what I would term 'well finished' and certainly are priced beyond the realms of reality.....and yet kids just love the name 'Tesla', (lets hope that Tesla can last long enough for todays youth to be able to afford the ticket price), in the same irational way buyers of Apple product currently queue up to buy overpriced electronics with a picture of a fruit with a bite out of it stuck on the back.  I think Bob Lutz's 'Psychosis' probably sums both Brands up well and is maybe a metaphore for todays hunger for 'style over function'. A fascination for 'Labels' as if this makes them a better, or more highly regarded person - a selfie outside the Hotel de Paris in Monaco wearing your  'poshest frock' when in truth you dont have the where-with-all to cross the threshold!

Hopefully this planet will wake up before it is too late, and realise that ILLUSION, is just that.

22 June 2020

Why does Tesla's battery efficiency appear to be so much better than rivals? It will be interesting to compare with the ID3, another bespoke EV. The 2.5 tonne SUV EVs from Audi etc just consume so much energy to motivate themselves.

22 June 2020
scrap wrote:

Why does Tesla's battery efficiency appear to be so much better than rivals? It will be interesting to compare with the ID3, another bespoke EV. The 2.5 tonne SUV EVs from Audi etc just consume so much energy to motivate themselves.

A lot of it is to do with the efficiency of Tesla's electric motor design. A lot of smart cookies working in Teslas engineering department, and years of extra development over other carmakers. There will be a decent jump in battery tech once Tesla and Panasonic split, and Tesla focuses on designing their own cells, backed by Maxwell. 

22 June 2020
I wouldn't have an ICE car as a gift, not now...

22 June 2020
The CT man. wrote:

I wouldn't have an ICE car as a gift, not now...

Strange logic - there are shit EVs and there are good ICE cars, as well as good EVs and shit ICE cars.

22 June 2020
289 wrote:

Well written and balanced piece Jim.

Personally I dont understand the hype around Tesla, wouldnt have one as a gift, but then that also goes for all EV's.

 

I understand you dont like Teslas, neither do I, but cant understand why you dont like all EVs ?

289

22 June 2020

I am afraid I am a petrolhead through and through.

Years of competition and many interesting cars. I find the whole driving experience of EV's anodine, and I have driven many. I particularly hate the silence, and the 'one pedal' accelerate/brake.

It has about the same attraction of choosing and stocking a Fridge/Freezer.

Its just never going to work for me.

22 June 2020
Nice to see censorship is alive and well...

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