Is Tesla a crypto asset and does it have any value? No it is not a coin but a trading stock however it does come under the disruptive technology banner
About the Tesla vision
Elon Musk did not start Tesla in fact it was well into development before he threw some money at it.
JB Straubel, Martin Eberhard and Mark Tarpenning started Tesla in 2003 named after the legendry Nicola Tesla.
Straubel was a battery man, Eberhard a car enthusiast and Ian Wright as CEO.
The problem was they had no money and needed a financier. Along came Musk with a $6.5 million investment and Chair of the company.
Electric cars were not new in fact GM had introduced one earlier however it failed and they bought them all back. In Fact Henry Ford built one for his wife back in the early days of Ford so the idea was there but the technology lacked.
Did Musk start with a vision of changing the world or simply adding to his growing wealth. What ever it was he did come with an overwhelming desire to change the world.
Defeat loomed so many times that bankruptcy was only a Pay check away when he considered off loading the company to others.
These were tough times.
When times are tough the tough come forward
After the Roadster which was a Lotus Body with a power pack came the first all Build Tesla S in 2012.
The story is told that cash was so short that a future for the company was in doubt. To solve the problem Musk rallied every head that he could find from Engineers to office boys to get on the phone and start selling cars. They rang anyone and everyone they new with a sales pitch that resulted in enough sales to save the company.
A sales technique they maintained.
Furthermore they made a decision to market the cars them selves and not use the traditional Auto dealer networks established across the US. This was not a popular decision at the time and received much pushback from every direction. In typical Musk fashion he took this on and created a sales channel that used almost no major advertising. Other manufacturers spent millions of dollars on TV and newspaper advertising whilst Must ploughed it into his cars. The model still exists to this day.
An Interesting aside was the naming of the car range that went around the word SEXY. However the E had already been used by a competitor so it became the legendary Tesla 3. Way back in 2017
Selling cars may be easy but building them takes investment.
The building of the Tesla range required a new production line that could churn out a volume of cars to meet the expanding market. Again Musk broke the rules and started building Giga factories that could churn out sufficient cars to nearly meet the demand. Not just in California but China and very soon in Germany as it nears completion.
Other manufacturers had years of experience building a large volumes of cars or vehicles . Tesla had to start at the beginning but this year should see the Million cars produced barrier jumped over. With Germany and Texas coming on stream this will double the output.
Again Musk faced blinding criticism from the Government for not employing unionised labour something all the other did. In fact they even penalise Tesla by not providing the same incentives as the other manufacturers for EV manufacturing a Penalty of several thousand dollars a car.
This penalty still exists
With new Technology comes new problems
Following several partnerships in battery production Tesla were still limited in supply. A vital part of the car that needed a whole new focus.
In a short version the story tells that Tesla now produce there own batteries and therefore do not entirely rely on others, however with the volumes required they said;
The company would continue to use batteries supplied by Panasonic, China’s CATL, South Korea’s LG Chem, and others. Not only that, but Tesla would buy more batteries from its suppliers than normal.
The Verge
The new Tesla 4680 tab-less cell is a step ahead
Tesla is calling 4860 cells, will give the company’s EV batteries five times more energy capacity, make them six times more powerful, and enable a 16 percent range increase for Tesla’s vehicles.
The Verve
Battery production is essential to their future.
And then a world wide chip shortage
This is a problem confronting every car manufacturer and stalling production across the world. It may be short term as many more chip facilities are being built however in the mean time we have a problem.
Again Must stands out from the crowd and does things his own way by reinventing the wheel’
The unique properties of silicon-carbide make it much more energy efficient and durable relative to traditional silicon wafers. Due to their improved thermal conductivity, SiCs reduce energy loss by as much as 50%. Tesla’s accelerated move away from standard silicon wafer usage during the pandemic is particularly impressive and their innovation has inspired other companies to follow suit.
So when you can’t get what you want from the market you do it yourself.
Building the car a different way
Because the battery packs are quite heavy and even bulky keeping rigidity in the chassis has always been a problem. Most cars have a three piece chassis bolted or welded together to form a frame on which to perch the body.
Again the Musk insistence on both cost savings and innovation came forward with the solution.
The new Giga Presses now print out a full one piece chassis that takes almost no labour to produce thus creating greater strength at considerably lest cost.
This has taken production into the new world and leaving traditional manufacturers floundering in the wake.
Then they introduced AI to take the self driving to new levels
Artificial Intelligence (AI) has been in every Tesla produced however it has come forward in leaps and bounds
In fact they have been monitoring performance in all cars since the first one hit the road to make changes when and where required for a better driving experience.
Crash alerts, lane change warnings, auto pilot etc really make the car stand out.
Charging stations across the US
Being an Electric vehicle with a limited range on the go charging can be required on long trips. Large charging stations have been installed so you can transverse the country and keep topped up. Charging time is still a minor inconvenience however this is being covered with super charges and battery swaps
What is next from Tesla
Having produced the S, the 3 and the Y they have pretty well covered the car market with an extraordinary vehicle that has dragged the competitors into EV.
Not just the fastest production car in the world it was also voted by the automotive industry as the safest vehicle on the road, get out of the way Volvo.
The aim has been to ramp up production of the range to meet Global demand and importantly make profits to expand even further.
In the pipe line are the amazing small truck, the van and the semi all waiting to enter the market.
The long awaited small truck , based on the Ford F150 size is rumoured to have over a million orders lined up for delivery.
I know several that are in the queue so this may well be understated.
What will come next is a well kept secret however the truck has been touted for so long that it must come soon.
Then there will be self driving taxis
This is but a short time away when driverless taxis will roam the cities dong an Uber of a job.
The AI is installed, the cars are capable it is only regulatory requirements that stand in the way.
This change along with all the others will really be Disruptive Technology and we shall never return to the old days of hailing a cab.
Is their competition to Tesla
Nearly every car manufacturer in the world now has an Electric Vehicle and are intent on phasing out Petrol by 2030 at the latest.
Toyota were one of the first to adopt a Hybrid technology with the Prius in 1997. However in recent times Toyota decided to pursuit a Hydrogen dream because of Electricity demand. However they have been proven wrong and are about to go back to full electric vehicles.
With a massive manufacturing ability they have the ability to rock the market.
Next is the VW group who have moved to EV across the range and producing a credible supply and variety of EV’s. Off course a force to be reckoned with and we will see many of them in the future.
F150 and Mustang in EV have been introduced by Ford US . They and will certainly find a share of the market.
The big difference is profit
Because Tesla has been hell bent on producing cars at a price point to sell they are also very strong on costs.
Musk is really focussed on producing a us$25 k car to take the market by storm. Every single step of their manufacturing is monitored for lowest cost production. The use of Giga factories, giga Presses and Robotic assembly controls labour cost to a minimum.
This is recognised in the value of the Tesla company worth over a Trillion dollars or equal to all the others put together. Third Quarter earnings in 2021 were $1.62 billion when VW made a loss and Toyota made about $5 billion in the same period.
Will there be another Tesla in the market. In pure EV manufacturers. It may be worth watching the rise of Rivian. This is an adventure truck wannabe that recently entered the market..
Conclusion
I do admit to owning Tesla shares but nothing in this is Investment advise. However I do admit to owning Tesla shares and booking a good profit so far.
love him or hate him the Elon Musk story is one to be admired, he is undeniably a legend in his time.
From SpaceX to Tesla via the Boring company he has achieved more for humanity than any one in his generation.
Electric vehicles will change the world and make transport emission’s a thing of the past.
His Rocket technology has allowed satellites to be launched at a fraction of the old price. Furthermore the installation of a world wide broadband network a thing of the future. Internet anywhere and for everyone.
I admire the dream and the accomplishments that come without talking them up but creating with action to solve the problems.