Tesla: Beyond the Hype to the Hard Truths

Graph from CNBC app

If you follow this newsletter, you’ll know that I once was a Tesla shareholder. My decision to purchase Tesla’s shares in 2018 was driven by a significant accomplishment by the company, and a critical supposition about Tesla that eventually turned out to be misguided.

1. The major accomplishment was Tesla’s ability to scale manufacturing with the launch its Model 3 sedan. This was proof to me that Tesla actually had become a volume automaker, not just a producer of low volume, very expensive EVs.

2. The critical supposition Tesla was eventually developing Full Self-Driving (FSD) technology, potentially spawning a new robotaxi business. This represented what I liked to call Tesla’s potential “AWS moment.” FSD could usher in an Amazon AWS-like, incremental new business for the company, generating substantial new revenue not directly tied to the automotive business.

That was in 2018!