If we are to take him seriously, we should believe that the Supercharging network is worth “basically zero.” The fact that it is the single thing that made electric cars remotely comparable to combustion engine vehicles in terms of convenience. Before this network, range anxiety was real. Yet, it represents nothing to him, even if competitors are still so far behind the reach that the Supercharging network offers to its customers.
Yes, there will be a time when other charging companies will offer as many Supercharging stations as Tesla or even more. We may even see other carmakers adopting more convenient battery swapping systems such as NIO, CATL, and GAC Aion developed. Until that happens, Tesla has an asset it is not using or praising as it should.
In Portugal, Tesla has suspended at least two Supercharging locations: MarShopping, Matosinhos, and Castelo Branco. All because Tesla has not followed the rules to have public chargers in private parkings with public access. What should be a pretty straightforward process to follow is taking the company ages, harming more than 6,000 Tesla owners in the country. Treating one of its more obvious trump cards like this helps explain why Musk said Tesla is worth “basically zero.”
If we were to believe the Tesla CEO, we’d throw in the garbage allegations that the company is more than a car manufacturer. Musk recently said his main competitor is Saudi Aramco. In other words, Tesla is an energy company, correct? Why does an energy company need to solve FSD? Couldn’t it just invest in more competent solar installations, which would not leave people without their roofs, as we have already reported here?
What about the stationary power storage systems that Tesla sells, such as the Powerwall, Power Pack, and Mega Pack? They are worth “basically zero,” in Musk’s words. Would it be because of the issues the company has already had with them, such as the fire in the Victorian Big Battery?
If Tesla sees no value in being an energy company, why did Musk personally work to buy SolarCity? The investors that sued him said he did that to avoid personal losses if the solar company went bust. If that was not the case, how can the Tesla CEO say that the company is worth nothing without FSD?
Tesla used to have a service that was comparable to that offered by Lexus. After the company decided to go for high production volumes with the Model 3, it almost died in the process, making it completely ignore Tesla Service Centers. Customers now complain of long waiting lines and lousy service. Meanwhile, independent shops like The Electrified Garage flourish by focusing on the customers who Tesla fails to serve.
By saying Tesla is worth “basically zero” if it does not solve FSD, Musk is pretending he did not promise big things for the 4680 cells, “mega castings,” Cybertruck, and Semi. The batteries and the giant cast parts would give Tesla a manufacturing edge that other companies would only equate years after it revealed them. What happened to these upper hands?
Curiously, the Twitter user jaberwock shared images of dozens of scrapped Model Y bodies at Giga Grünheide. They should use front and rear massive castings with a structural battery pack built around 4680 cells in the middle. That suggests these bodies are having issues. Although 4680 cells are allegedly in some production vehicles, Tesla’s silence around that is concerning. Have they been sufficiently tested before being put into these EVs?
If they were, Musk would have more reasons to be wrong in saying Tesla is worth “basically zero” if it does not solve FSD. Even if they did not go as expected, there is plenty more to make Tesla valuable, even if not more valuable than all other companies combined.
The EV maker has customers in the most important car markets in the world: China, the U.S., and Europe. It has two mature factories and two more ramping up, a direct-sales model that works well in most places, and software expertise that is still superior to that offered by its largest competitors. That’s got to be worth something, especially for an executive that knows what he has in his hands. Elon Musk seems not only to ignore those strengths but to be bored by them, preferring the promises he likes to make.
As Taylor Ogan tweeted, that is a very worrying sign. He said that it is terrifying that Musk praises what is now more of a liability than a competitive advantage instead of what allows Tesla to offer “a lot of value.” Had Elon Musk paid attention to everything that made Tesla unique right at the beginning, with proper planning and real business management, the company would be in much better shape than it currently is.
To be honest, we have no idea in what shape Tesla is because we’re not sure we can trust what Musk says about that. He once made an April Fool’s Day joke about going bankrupt when Tesla really faced that danger. If the company’s investors did not take notes about that, that’s a concerning demonstration of blind faith.
According to Nassim Nicholas Taleb, Elon Musk illustrates the point he made in his book “Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets.” The mathematician argues that “solid financial success is largely the result of skills, hard work, and wisdom.” That would not apply to Musk and Tesla: both experienced wild success – in the far tail of that concept.
For Taleb, that “is more likely to be the result of reckless betting, extreme luck, and the opposite of wisdom: folly.” Lying about a bankruptcy threat to make the truth sound ridiculous is an excellent example of folly. So is saying your entire company depends on a promise you repeat every year to deliver 12 months from that. Tesla deserves better, and so do those who decided to trust it by buying any of its products or its shares.
I think Tesla has a lot of value in its EV biz (& ESS). However, when I hear the company’s CEO say they value the part that I see only as downside risk as the main (only) thing propping it up—& not the core biz towards which I assign majority value—it terrifies me as an investor. https://t.co/mC4B9Jj2YF— Taylor Ogan (@TaylorOgan) June 15, 2022
2/2— Nassim Nicholas Taleb (@nntaleb) June 7, 2022
Explanation: the point is simple; for most classes of probability distributions, you get to the tail by increasing the variance (or the scale) rather than raising the expectation.