Tesla Is Not the Next Apple, Nor Was Apple Ever The Previous Tesla
For a few years the clickbait media has been pumping out one dumb headline after another about Tesla Motors. The giveaway is always whether the headline ends with a question mark. As a rule, if you ever see a Tesla headline with a question mark at the end, don't waste your time reading it, because what that publication is basically saying is, "We don't know, but we want the ad impressions, and maybe some you think we do know, and you'll be fooled into clicking."
I'm going to state categorically that no, Tesla is not "the next Apple." But I am going to go further. I am going state categorically that Apple was not "the previous Tesla." They are very different companies, with very different visions, different timelines. They are companies that emerged in different eras.
In 2006, Elon Musk posted the very first Tesla blog post, "The Secret Tesla Motors Master Plan (just between you and me)" in which he laid out the long-term vision of the company. The plan was hugely ambitious but at the same time very simple and straightforward. First they would build a few very expensive toy sportscars, to prove the concept of electric vehicles, and demonstrate that you could build an EV and make it as attractive and desirable, if not more attractive and desirable, than a gasoline car. If they could pull that off, then the era of dismissing EVs as glorified golf-carts would be over. The next phase would be to produce a still-expensive, but still very attractive and desirable sedan vehicle. That was the Model S. Then for phase 3, they would introduce a more affordable, large-scale EV that could sell in the millions. That is the Model 3, announced on March 31st of this year, and for which there are now over 400,000 pre-orders, proving there is a robust demand for EVs, just like Tesla always said there was.
If Apple were "the previous Tesla," then Steve Jobs would have announced, in 1976, or, to be fair, since Elon's blog post happened 3 years after Tesla was founded, so let's say 1979, that Apple's long-term master plan involved launching a primitive personal computer, the Apple I, then a more sophisticated machine, the Apple II, then really change the world with the third generation graphical machine, which would ultimately be known as Macintosh. Or, better yet, Apple would have announced, in 1979, that the first generation of the company was going to be personal computing, which would enable them to evolve into a second generation of personal music devices and music selling (eventually the iPod and iTunes), and then really go all-out with the third-generation platform of smartphones and tablets that would sell to hundreds of millions of people worldwide, changing the world.
But Apple made no such announcement. Largely because the technology didn't exist for the second and third generations back in 1979.
Tesla, on the other hand, has had a crystal clear vision, a vision that has been remarkably consistent to anyone paying attention, for ten years straight. And they have been executing like clockwork against that vision. Today they announced that they are accelerating their plans for ramping up the new Model 3, with the goal of shipping 500,000 cars in 2018, and potentially a million by 2020, two years ahead of what we all were led to believe until today. This is because of the 400,000 pre-orders for the Model 3, of course, which has lit a fire under the company.
Wall Street, and even more so, the tech media, has been generally slow to understand and appreciate how consistently Tesla has been working against this 2006 master plan. Even though it was right there, laid out in plain pixels since 2006. All they keep doing is looking at the quarterly results and even the slightest deviation from guidance for the next quarter would result in a butchering of the stock price. They've been either impatient, or bored, or had their expectations raised then dashed. They've been trying to position Tesla as an Apple when in fact Tesla, as a car company first, and now really more of a transformational energy company second, has a completely different model, vision, set of priorities, and product life cycle cadence, than Apple. Plus, it's building big complicated pieces of hardware and software that weigh in the tons, rather than tiny handheld gadgets that weigh in the ounces.
Rumors are flying that Apple is building a car. But does Apple have the culture to switch from personal digital devices to multi-ton transportation vehicles? The media so badly wants to paint Apple as, in a way, the next Tesla. And if anything, I think Apple aspires to be the next Tesla. I don't think Tesla now, or ever, aspires to be the next Apple. I think Apple's peaked. They could buy Tesla, or Google could. But the culture clash would be phenomenally bad in both instances. Google is an advertising business. Apple a personal digital device and content-distribution business. Neither has the DNA for vehicles. I suspect that both will try to change their DNA (Google is more obviously trying to do that since they became Alphabet, using that corporate arrangement as a way to figure out what is going to make them something other than just an advertising business).
For me, the answer to the big question is, Tesla is the first Tesla, not the next Apple. They are doing something different. The other car companies are reluctant to admit it, but they will all need to aspire to become the next Teslas, but none have the DNA to pull it off, I don't think. I suspect as Tesla keeps growing and hits 1 million vehicles shipped in 4-5 years, we'll start seeing some car companies merge with each other, or declare bankruptcy, thanks to outdated business models (ahem: auto dealers and old-skool franchise laws), outdated technology (gas/diesel engines), and outdated manufacturing models (outsource everything except the motors).
As an investment, I think Tesla continues to represent an insanely great opportunity to make some money on the long term. It is a wildly volatile stock, and will continue to be. The world economy could tank tomorrow. A madman in the White House could wind up being worse than madmen in other palaces, and start WWIII. But barring those macroeconomic risks, I can't think of a better thing to invest in than Tesla. It may, with the Model 3, have its iPod moment, or iPhone moment, like Apple did. But it is not the next Apple, and for that I am extremely grateful. Apple has said for 20 years, "Think different." Tesla took that seriously. Tesla is different.
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