Part 4/12:
To illustrate Tesla’s potential, Basher compares Tesla’s revenue growth to a Falcon 9 launch. Just as a rocket’s ascent is gradual but destined for significant milestones, Tesla is building momentum for future revenues. The investments Tesla makes today—building gigafactories, developing AI, and pioneering autonomous tech—are akin to laying the foundation for a space mission. Although these investments are costly and may temporarily reduce margins, they are crucial for achieving the company’s grander ambitions.
Short-Term vs. Long-Term Investment Strategies
Short-term profit maximization involves:
Keeping capital expenditures negligible
Limiting R&D spend
Reducing SG&A expenses
Paying modest stock-based compensation
Raising prices to boost margins