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Tesla fans make critical mistakes




Many years ago, this unsupported argument came mainly from the more emotional areas of the pro-Tesla camp. Those who did that were pleased with the traditional automotive industry for their many sins from the past, hated the idea that they had to buy a car from it, and saw Tesla as a rescue company.

As Tesla has grown and experienced all the pain that car companies handle all the time, this view has gone back. People still love Teslas. But because many more own their own vehicles, they understand that Tesla creates something that has four wheels and windows.

Unrealistic expectation has migrated from the early adoption space into the financial world, where it has always been important to promote Tesla investment stories that are mega-bullish.

Gene Munster of Loup Ventures, for example, argued last year that Tesla's addressable US market could be 1[ads1]1 million vehicles annually. (Munster offered this before Tesla the summer of dissatisfaction in 2018, and even before the car manufacturer's model 3-ago struck severe production delays, since solved).

As I pointed out at that time, Munster's numbers are boundless nonsense. If Tesla were to sell 11 million cars annually in the US, it would control 65% at the 2018 level, which would reach over 17 million. And remember that General Motors captured just over 50% of the market in the 1950s – when it only had two major domestic competitors in Ford and Chrysler. It now leads all US sales by less than 20%.

Yet Ark Invest, whose CEO, Cathie Wood, believes that, in five years, Tesla will transform itself from being a car maker to being a mobility provider first and remember a stock price of as much as $ 4000. Tesla has nothing like even like an early mobility activity. Waymo, who has tested self-propelled vehicles for almost a decade, has just begun to roll out.

It does not require credibility to propose this as an investment task – it insults. (Ark was among Tesla investors claiming against Musk's failed attempts to take the company privately, and to Wood and its team credit seem to have delivered admirable returns to investors through efforts in "disturbing" technologies.)

It will get worse. Ark also believes that 17 million electric motors will sell annually by 2022. Forgetting that there is some unrealized contradiction between Tesla plugging EVs in a service, instead of the ownership model, the math is challenged by reality.

We would be much, much better as residents on planet Earth whose EV should grow rapidly over the next three years. Five to seven million in annual sales would be amazing. If you go to 17 million, you need to figure out how the world's automakers are going to either convert existing factories that now collect gas-powered cars to build EVs. or locate capacity expansion worldwide that will support production EV at a level similar to the annual US passenger car market, in a boat trip.

Disagreement with these Tesla ultra-bullies does not mean you're anti-Tesla, by the way. It simply means you prefer Tesla to be part of a reality-based scenario – one that Tesla does not dominate, but participates, in a robust EV market.



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