This has been achieved despite many professional and traditional investors doubting the sustainability of this run. However, being able to achieve this during an economic downturn has me amazed as well as it has proven something relatively important from my view; it is being traded like a technology Company instead of a car maker. Given this association, it has benefited from the strong rebound in shares prices that the sector has had since the lows in the markets in March. This means that investors have ignored the short term noise of the shutdowns and have provided them with historical high price multiples.
Management continues to be an important factor as they have raised capital during these times which will provide a cushion to sustain longer periods of economic weakness if it continues. While not short term positive for investors as they are diluted, it proves that the demand for exposure to innovation and technology is strong. The recent exposure to Elon Musk and his SpaceX success has also helped to cement them in these views as the possibilities continue to expand past their industry.
I have personally been wrong about Tesla as an investment and their recent success is also not going to suck me into becoming an investor as the risk/reward profile at these prices remains a challenge to overcome. However, as a customer I am happy to see the success which will lead to value and improved experiences for me. This doesn't mean it cannot continue its run as we have seen, but it does seem rich when compared to the others in its group. It is great to see Companies rewarded for their innovation and focus on the customer.
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I think it's a crazy price as well. Considering how big the other companies there are and how much of a product they supply. I'm sure tesla are good but I've only ever seen a couple on the roads here and know nothing about them.
It is truly an amazing but yet simple product which is why they have had the success. Between the customer experience and branding, they have made a new way to be in the transportation business!
I do think that people are buying shares in Elon rather than the company to some extent but they have a good business and its working so fair play to him.
This is very interesting, isn't it? The problem with incremental changes (which the car manufacturers have done to bleed more profits) is that they are no longer able to compete on innovation - they are trying to catch up now though.
Yes, more will move towards more EV models but the question is if the first mover advantage has separated Tesla already? Considering the way Tesla has approach an innovative but yet simple experience, I think others will sacrifice costs and simplicity on their way to challenge Tesla.
think they will have an advantage for some time, but they may also suffer in range to some degree as the other manufacturers will go with their incremental change and difference approach. However, like Apple, this will likely keep Tesla profitable and scalable to some degree.