I’m an investor who collects businesses. And there are two things I must know.
First, is the business fundamentally sound?
Second, am I paying a reasonable price for that piece of business?
For Tesla, I find it hard to answer both questions. Tesla’s cult-like loyalists may not like what they are about to hear: Tesla faces some real problems today.
I’ll explain.
Let’s kick off — Tesla’s background
Two engineers – Martin Eberhard and Marc Tarpenning founded Tesla in 2003. Elon Musk invested in Tesla a year later, took over the company as CEO, and became the electric vehicle (EV) company’s largest shareholder.
Musk saw what many others couldn’t see — the huge potential of electric vehicles.
Tesla first launched the Tesla Roadster in 2009, and failed. In 2012, Tesla pivoted to create a mass market “premium” car — the Model S.
Over the years, Tesla also tested different models, including the Model X SUV and the Model Y. So far,...