Tesla’s Bullish Pitch 🚗

by 10 Jan, 2020

Tesla’s Bullish Pitch

Elon Musk has grabbed the bull by the horns in the second half of 2019, posting killer delivery numbers to resurrect Tesla’s share price from the doldrums of $178 to the sunny uplands of nearly $500. Way to go!

Despite this, Tesla continues to divide opinion like no other company. A stock market love affair for some, here’s the bullish elevator pitch for the ambitious electric vehicle (EV) maker. You be the judge!    

First and foremost, Tesla cars are a joy to drive. The company shattered the perception of electric cars as just whizzy golf buggies long, long ago, coupling revolutionary technology with an eye for design. But it’s not just the first mover. Tesla is ahead in nearly all aspects of original equipment manufacturing (OEM) in its niche, setting industry standards.

The firm has an innovative business model, too! In times gone by, a strike-prone workforce would build a car before revenue from its sale was split with sales reps. Then, dealerships enjoyed the recurring revenue of servicing, gas companies enjoyed the recurring revenue of fueling, and insurance providers enjoyed the recurring revenue of legal cover. It’s an automaker’s recurring nightmare!

But think, Tesla does its own servicing. Tesla makes ‘powerwalls’ and Super Chargers. Tesla is hiring from a non-unionized Chinese workforce. So long as the Silicon Valley giant continues to deliver incredible cars, economies of scale will allow all of that infrastructure to be built out more cheaply, and investors won’t be forced to share when it comes to profitability!

Finally, Teslites believe they have a once-in-a-generation visionary steering the ship. Elon Musk has skin in the game and routinely clocks 100-hour weeks to push his company to success. This is a romantic story stock, which for many investors, is priceless! But not all investors…

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