Feb 13

Today I dedicate time to know more about the “recent” most valuable U.S. carmaker ever: Tesla

1. The history of Tesla in 5 minutes (Visual Capitalist)

2004: Elon Musk joined Tesla as an early investor, then brought simple but genius strategies:

• Focused on Li-on battery instead of “lead Acid” like the market leader: GM. 
• Started with high-margin sport cars, used the revenue to fund a more affordable car
• Achieved economy of scale, aimed for other applications of green electric

2008: Tesla nearly went bankrupt, Elon Musk became CEO and made drastic changes: fired labor, recalled on-sale cars and raised more money from public and government.

2010: Tesla went IPO, started to build gigafactories (2013) to reduce production cost of lithium-ion batteries, then it was able to build an electric car for the masses (2016)

Tesla is executing its mission: “accelerate the world’s transition to sustainable energy” by two fundamental goals:

• Create automatic factories, then boost economies of scale, produce more products like pick-up trucks and even public transports
• Change the energy paradigm: let homeowners use green energy for not only their cars but also other appliances 

2.  The York Times updates

What’s going on?

Tesla stock is going up 36% in two days. The article reviews what happened to Tesla since the beginning of 2020, then the contradict ideas on this growth

Zooming out

• What happened? Tesla’s shares closed at $887 on Tuesday, 36 percent growth compared to 2 days ago. Since the start of 2020, the price has more than doubled.
• Why enthusiastics? (1) Numbers is speaking: cost declined, sales increases, 

(2) Promising global expansion plan and (3) They have a lock on EV’s battery

• What are critics? (1) The company is having real problems producing cars on time, (2) Tesla does well when it enters new markets, often benefiting from customer tax incentives, but then struggles to keep sales growing at a fast rate, and (3) Lack of quality control.

However, these critics are driving up Tesla’s stock price with “short-squeeze” effect

3. Why Tesla’s expected to have lowest battery costs for years

In the first article, one reason that makes investors so enthusiastics on Tesla is “they have a lock on EV’s battery”. That’s right. Current average battery pack costs Tesla ~$156/kWh, which is $45-$50 cheaper than any other EV makers. Also, with constant investment and initiatives in electric battery research and development, this area will be Tesla’s competitive advantage in the far future.