Tesla CEO Elon Musk says – and does – stupid, outrageous things. The tech tycoon’s public antics are an uneasy hodgepodge of sarcasm, goofy humor, idiocy, and – occasionally – honest, straight-world sentimentality.
Sometimes, however, he hits the mark with uncanny precision.
Tesla shares have surged to start 2020, helping the electric-car maker become the most valuable US automaker ever. And Musk appears to have seen it coming.
Musk’s Cheeky Joke?
In August last year, the controversial mega-entrepreneur tweeted that he had a buyer that would take Tesla, private, at $420 a share. At the time of Musk’s tweet, the share price was $379.57 – far from $420. That’s why many thought the tweet was another one of Musk’s cheeky jokes: 420 is associated with cannabis culture.
But then share prices did climb to $420 on their own in late December – and they continued to rise into the New Year.
Now with a market capitalization of $81.39 billion, the company has gone from being a quirky, lovable little media darling to being an actual industry leader. That is hard to ignore.
Silencing the Competition
The company’s ascent is made even more remarkable when considered against the backdrop of previous criticisms.
There has been a group of folks working together for years in hopes that Tesla would collapse. As the company excels, the harder they have pressed their agenda. A favorite claim is that Tesla’s vehicles are niche products that will never catch on beyond a subculture of well-heeled greenies.
But Tesla’s quarterly deliveries show a steady rise until 2018 – when the Tesla Model 3 hit the market. They shatter the ceiling after that.
Old industry giants have definitely taken notice. While Ford’s stock rose in 2019, it’s still cheap by historical measures. The company is over 100 years old, after all, and Tesla is a startup.
Toyota is still the world’s largest auto manufacturer by volume, yes, but Tesla is already worth around 30 percent of the Japanese company.
What’s behind Tesla’s remarkable progress?
For all their much-publicized advantages, today’s electric cars are hobbled by two critical factors: high costs and less-than-optimal batteries. And that’s precisely where Tesla is making a difference.
The company’s groundbreaking battery and charging technologies have given it a significant lead in making batteries cheaper and recharging quicker. This is helping Tesla lower costs faster than its competitors.
However, analysts insist that Tesla’s valuation isn’t driven solely by technology or its current financial performance. Many in Wall Street believe the company’s worth is propped-up by investors’ expectations of its future growth.
Why so much faith in the performance of a 16-year old company headed by a man famous for taking seemingly delirious risks?
Fairytale or Real Progress?
The answer might be as simple as it is optimistic. Behind the company’s rosy financial outlook seems to be a growing consensus that a straightforward conversion between big money and clean, climate-friendly technology is possible.
Now that’s not an easy pill to swallow. To do so is, effectively, to assert that a better world is possible, which is – today as throughout history – an unavoidably revolutionary idea.
But what if somehow the revolution does triumph, as even the most jaded could be tempted to hope?
Then we may yet save ourselves from annihilation, break free in victorious escape from what right now looks to be a terrible certainty. We may rescue the environment, grow food for everybody, and cleanse the world of industrial greed gone berserk.
In fact, we may realize all the wistful, crazy pipedreams of our times.
The question is, of course, dare we believe?