Disclaimer – I know nothing about investing, read the following at your own risk.
OK, I admit it, one reason I went to Teslive was to assess the health of our TSLA investment. I was particularly interested in what I would learn from the factory tour, Elon’s talk, general sense of everyone there, and a quick visit to the Santana Row store. So, in that order:
I have no frame of reference as I have never visited another auto manufacturing plant, however I came a way with distinct impressions:
1. They’ve already done the hardest part. It’s hard to grasp the process design and engineering that goes into a production as complicated as building a car, and after the tour it’s easy to see why no one’s started a new car company in decades. It’s incredibly complex. Just looking a any one segment of the production process (and there were dozens), I’d have totally believed you if you’d said that segment took 3 years to design, engineer, fabricate, and implement. Now do that dozens of times over and link them. Incredible.
Also, I think the 3D design and fabrication softwares, and this being a Silicon Valley company, played very heavily here. Probably nowhere else in the world is this possible in this timeframe, with this level of success. There are thousands of parts to the car, all essentially imagined from scratch. How they got something so awesome, so quickly is beyond me.
I think it’s one reason I feel very comfortable with the stock valuation – if they can do this, then what can’t they do? Really. Meanwhile spaceships are going up into the sky as a side hobby. Crikey. I feel very inadequate.
Also, TV on the factory floor said 5,454 cars produced in the 2nd quarter, and our tour guide said they are doing 2 shifts, 5 days a week.
If there was ever a war for the universe with aliens and we had to outthink them to win, I know who’d I vote to be the Supreme Commander of the Allied Earth forces.
His talk was great, filled with intellect, humor, wit, humility, warmth, grit, on and on and on. He said many things, most of which were covered in the post below this, but the real two kickers for me were:
1. He is a leader. He inspires people, enables them, challenges them, supports them. No wonder he has assembled such a great team up top and no one wonder they in turn have created such a culture of greatness throughout their organization (I grant lingering rough spots). You could sense that in the talk, see it, feel it. He was there with Talulah, a couple of his boys, and 300 admirers. It was great. Please watch the video.
2. He said that he was amazed that no one else has taken up the Tesla approach and come out full bore with a great EV. So am I, other than they just likely are YEARS behind. And so, since sustainable transport is one of his pillars, he sees that if no one is going to emulate Tesla because, you know, the car is AWESOME, then he’s going to have to get their attention simply by competing with them more directly and selling more cars. That’s great news for TSLA fans. Roadster proved the market, Model S/X are proving the desirability, and Gen3 will prove the simple practicality. I think he wasn’t expecting to have to go deeper to get acceptance and now he wants the challenge. I feel good as a long shareholder in TSLA.
Well, if there was ever a home crowd for an event, this was it. EVERYONE likes their car. Wait, everyone is irrationally in LOVE with their car and this company. Guilty too. This was a crowd of EVangelicals and the pervasive attitude was – how can we help. Help grow the movement, sales, the company, the stock price. Sure their is some selfish motivation there, but it is not the driver. What is?
Everyone identifies with this company. They see in it the best qualities they aspire to themselves – creativity, courage, perspicacity, family, responsibility – I could go on. An American company. A start-up. Trying a new approach. An environmental company whose value proposition doesn’t even really need that to sell the car. Whatever.
This is THE iconic brand of the next decade, replacing Apple (and letting Google have a couple years at the wheel right now). Seriously, done deal.
On our way to the airport, we stopped by the Santana Row store at mid-day Sunday. Wow. I asked a salesperson how many cars they sell a day right out of the store – he wouldn’t tell me so I said when I was in Denver they said they sold 2 per day and that Denver said the California stores sold a lot more than 2 per day. He just smiled and said, ‘we sell a lot more than 2 per day’. Everyone in there was totally into it. Recovering from recession, healthy stock market, healthy stock price, great product, better story. Perfect storm.
I wrote 6 months ago it was easy for me to see Tesla valued at $20B (similar to Porsche) as it had that upside in its grasp with simple numbers – 40K Model S, 40K Model X, 100K Gen 3 in a few years. This is bigger than that. Way, way bigger. They have technology to license, grid arbitrage to execute, and products people are falling over to get. Somebody recently called $1,143/share in 2020. I recommend looking up that article.