If you think Tesla is an impressive, but relatively small and certainly very young, automotive company, you live in a lonely world.
At the confines of your sparsely populated kingdom, you will find the Hatelandia Empire and the Kingdom of the Fans. The policy of these diametrically opposed regions is not particularly complicated. Hatelandia thinks that Tesla should disappear amid the bankruptcy shootings and rescues SEC investigations. Fandom thinks that Tesla will conquer everything and that the future of mobility will be ruled by the benevolent, but sometimes crazy king, Elon.
The conflict between these two parties reached an alarming level last year. The enemies can smell the blood. The fans do not want to give up their hyper-optimism and their naivety more and more difficult to defend.
It's only on Wall Street and in the global financial world that the conflict has been mild – but mainly for upbeat investors, and Tesla's biggest supporters have reduced their enthusiasm while lowering their target prices on the stock from Tesla. Bears, on the other hand, have gone into destruction mode.
Unfortunately, the encouraging and somewhat exciting reality of society has been lost in the whole bellicose trend and parry.
Over time, Tesla has demonstrated a reliable model
Tesla has been around for 15 years – a downfall in the auto sector, where automakers such as General Motors and Ford have been around for more than a century – and CEO Elon Musk's automaker has demonstrated a model reliable.
First, announce something ambitious and cool. Generate enthusiasm for the cool new thing, but launch it later than planned. Struggle to build it, initially. Challenge the waves of skepticism. But then, find the awesome new thing, largely thanks to quick trial and error, and go for something like the status quo.
Then repeat the whole crazy process.
When Tesla launched its Model S sedan in 2012, the vehicle was well received but experienced early production problems. Likewise with the Model X SUV, launched in late 2015. Both vehicles are now delivered by truck to the Tesla factory, heading for a steady production rate of 100,000 per year.
Between 2012 and today, the Tesla stock has become parabolic. The arrival of this worn model with the Model 3 sedan has therefore attracted a lot more attention, mostly negative. This obviously did not help that the production hell that Musk started talking about during the Model X challenges in 2016 was much more infernal with Model 3.
But Tesla and Musk seem to have solved many of Model 3's growth problems, and although the company had to resort to extreme (and even retrospective) solutions such as launching an assembly line under a tent in the factory parking lot. , Model 3 production has now reached a sustainable tempo.
That does not mean that Tesla will soon produce one million model 3 cars a year, but that does not mean less than 2,000 cars a week.
Tesla could become … of average size!
Tesla overtook FCA and Ford in 2017 and challenged GM. Andy Kiersz / Business Insider
Let's take a broad view and say that Tesla can manufacture something like 200,000 to 300,000 vehicles in total in 2018. That would be, at the bottom of the scale, twice as much as in 2017. And that would be nowhere near GM 10 million and sold last year.
If you simply reduce these numbers, you come to an infuriating conclusion for the Hatelanders and Fandomaniacs: Tesla is a small, promising company that could become a successful, mid-sized car company serving the two top tiers of electrical power. -market and a large part of the luxury vehicle market.
Accept this conclusion, and two more follow: the company's shares have been overvalued by bullish investors, and Tesla will probably not please bears by disappearing.
A few analysts looked at an interim position a few years ago, before Tesla shares hit $ 300 in 2017 and climb to $ 400. The argument was that all the potential was already taken into account. Obviously, some of these tweeners missed the 2017 rally, but they also avoided the subsequent volatility that weighed on stocks recently. They also dodged all the circus "go private".
It's hard to be neutral about Tesla
The Tesla 3 model. Hollis Johnson / Business Insider
We do not hear much about this Neutral Switzerland camp in the Great Tesla War because, frankly, its members are right. Their basic analysis is correct: Tesla does not deserve between $ 300 and $ 400 per share – $ 150 to $ 250, that's more. Their opinion that bankruptcy is not insignificant, but unlikely is also correct. And they certainly do not think that Tesla will defeat the rest of the auto industry – as by the end of 2018, EV sales only represent 1% of the global market.
However, if you think the silent pitch is boring, think again. The Middle Realm wants you to know that in less than five years, Tesla has produced the three best electric vehicles ever made in the history of mankind. Of course, Tesla struggled to build these cars, but the company did not have much practice and took no break to consolidate its experience. Meanwhile, the revenue from the production line has grown predictably by $ 200 million per quarter.
From this perspective, the Middle Realm looks less like the home of the small automobile company than I mentioned at the beginning, and even more so to one of the greatest successes, facing spectacular odds, the world of business has never seen.
