The Church of Tesla

2016 Tesla Model X 1 photo
Photo: Image edited by autoevolution
I'm not going to talk about the so-called Mactards, but I'm probably not the first to notice a somewhat awkward similarity between Steve Jobs' Apple and Elon Musk's Tesla Motors.
Both companies were pretty much built using mostly community marketing and word of mouth to their advantage, much to their rivals' anger. There is a significant difference, though, apart from the type of products they each sell, and it naturally revolves around money.

Say what you want about Elon, but the man is truly a visionary when it comes to the future of transportation. He also has more than a knack for talking his way out of almost any negative situation that his company finds itself in.

Does this sound familiar? Of course, since it's pretty much how the late Steve Jobs used to operate as well, and it is how he almost single-handedly took Apple to the heights at which the company sits now.

It's actually pretty easy to compare Jobs and Musk, ergo Apple and Tesla as well, but I don't really want to do that because of the major difference mentioned above. Apple is full of money while Tesla is currently in dire need of paper.

Apple finished 2015 with a net income of $53.394 billion. That amount of money is so large that it's probably difficult to fully comprehend for some people. Let's put it this way: if Apple Inc. were a country, its GDP would have put it in the top 77 wealthiest countries on the planet. Heck, that amount of moolah could probably buy and enslave entire countries.

Do you know what the net income of Tesla Motors was over the same period? -$888 million. Yes, that is a pretty big “minus,” as in Tesla is bleeding money faster than you can spell “Teslaphile” or “Mactard.”

Sure, everyone is praising the funky EV maker for its bold strategy and its green/fast cars, but if there is one thing that Elon Musk hasn't proven to be very good at is starting a car company and keeping it successful in the long run.

Tesla is actually pretty far from reaching a sustainable business model, despite what most of those tongue-in-cheek tweets from Elon Musk are trying to say. Yeah, the Model E so-called launch was the most successful vehicle unveiling in history, with over 325,000 deposits being registered in just the first week.

Each of those reservations is worth a thousand bucks and has increased Tesla's coffers with at least $325 million, even if the product itself is at least a couple of years away from being built. You have to keep in mind two things, though.

First of all, each of those $1,000 deposits is fully refundable, meaning that they are not necessarily translating into sales when the time comes. If the time comes, more specifically, since Tesla is having a hard time building Model S and Model Xs as it is.

Second of all, it's not entirely clear if those +$325 million raised in that first week from the Model 3's unveiling can be used by Tesla. If all that money is labeled as a liability on the balance sheet, then Mr. Musk can do what he pleases with it, including founding another company that actually works, like PayPal.

On a more serious note, all that moolah is actually debt until each of those Model 3s will be manufactured. Tesla says that production will start by the end of 2017, but most automotive analysts out there are less optimistic, especially given the EV maker's track record when it comes to delays.

Considering 2015 ended with over $800 million in losses, it's probably safe to say that 2016 will widen the gap to profitability even more, so not everything is as rosy as Elon's tweets and the media's praising of the company are letting us know.

So no, Tesla is no Apple of the car world, despite what everyone seems to think. At least until its innovations and early marketing success transform in scalable income that doesn't depend on Government incentives and the likes to keep the company afloat.

From some perspectives, I'd rather compare it with a Kickstarter project that sounds too good to be true and isn't viable until everyone gets a piece of the product in return for their donations. And no, I'm not talking about those complementary T-shirts or coffee mugs.

The Tesla Model 3 sounds like a great idea and it blows everything out of the water in its segment and even beyond. Its biggest problem is that it doesn't exist yet, nor it will in the next couple of years if all those analysts are right. Plenty of things can happen in the automotive world until 2018, one of them being that the rest of the industry is slowly waking up.

No matter what all the Teslaphiles think about some of the dinosaurs from Detroit or those snazzy Europeans from Germany or France, things are already moving in the right direction. In its quest to profitability, Tesla will soon find itself surrounded from every corner by the very carmakers that its fans think it has already beaten to the punch.

Remember that some of those slow-moving car giants have had over a hundred of years to grow and sustain themselves until this point, so they're not exactly rookies. They're not the underdog either, even though Elon's tweets may paint them as such sometimes.

Maybe those unpaid Tesla evangelists will need a new church to pray to in the near or far(aday) future. Or maybe not, but one thing is certain, there are no such things as certainties in the business of making cars. Just ask Volkswagen's head honchos, who probably still think that VW will recover even stronger after Dieselgate.
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About the author: Alex Oagana
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Alex handled his first real steering wheel at the age of five (on a field) and started practicing "Scandinavian Flicks" at 14 (on non-public gravel roads). Following his time at the University of Journalism, he landed his first real job at the local franchise of Top Gear magazine a few years before Mircea (Panait). Not long after, Alex entered the New Media realm with the project.
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