In 2020, I wrote: “Tesla is a really nice car to drive. But Tesla is even the finest software & services company in the automobile sector. The fact is this: Tesla does not need to be overly valued just on the number of cars it has sold, just as we are not counting how many iPhones Apple has sold recently. Apple has moved into the services era, well beyond a life tethered on hardware. …I see Tesla as the only current “automobile” company in the world that has a clear playbook to make, possibly, more money on software and services than actually on sales of metals packaged as cars”
Today, we are learning that Elon Musk is arguing that Tesla is not a car company: “If you value Tesla as just an auto company — it’s just the wrong framework. ”
Right here, we understood it the way Musk has just explained. And last year, I dropped these lines: “It makes selling cars look like selling software. Because of that, investors give it the same multiples as software companies because every car produced by Tesla will keep earning money until it is moved to landfill. No other car brand can say that!”.
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Business model; that was what Microsoft brought during the IBM era, providing a better way to sell software via subscriptions. Tesla used pricing innovation to redesign a sector. Yes, Tesla is not a car company!
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Comment 1: And just by that claim, he raked in the fastest amount anyone on earth ever made in one sitting, about $10 billion. Imagine reporting an outrageous loss from poor sales but mustering an insane stock boost, a whopping 10%. For me, this reveals the power of a compelling vision to rip through mountains of obstacles.
Comment 2: We may want to hold back on this. Tesla sales numbers are falling big, and the Chinese are yet to infiltrate the markets with their EVs. Once they do, that significantely reduces what Tesla can sell. Ndubuisi Ekekwe mass market EVs is upon us, and Tesla will not win in this market, likewise will it have the Iphone effect. Tesla will have to rely on a TikTok style ruling to maintain some sort of status quo. Tesla will soon realise that as long as it moves on 4 wheels with rubber tyres on public infrastructure, it will be classified as an auto company, no iffs or butts. Legislation is being prepared to rid EVs of the large console touchscreen. When that goes, the software feel will also fade. Sole ise of proprietsry apps at charging stations is being revoked and replaced with traditional non proprietay bank contactless cards, opening up all supercharger networks to all vehicles. Lastly, tco for EVs is pushing more people away from it back to hydrocarbons, as govt backed tax incentives are withdrawn
My Response: “Tesla sales numbers are falling big, and the Chinese are yet to infiltrate the markets with their EVs. Once they do, that significantely reduces what Tesla can sell.” – You are making his point. He is saying do not look at the number of cars sold because that does not matter, as Tesla is not a car company to be reporting the number of cars sold!
Tesla isn’t a Car Company, Musk declares as he sells Robotaxi Vision to Investors
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