Tesla's Valuation: Auto Company or Tech Platform?
I recently had a fascinating chat with a friend who leads a top Chinese hedge fund. He forwarded an article highlighting former Stellantis CEO Carlos Tavares’ prediction: that Tesla might not exist in 10 years, citing its unsustainable valuation and the threat from BYD’s manufacturing efficiency.
My instant response challenged that narrow viewpoint:
The Core Argument: Don't Conflate "Auto" with "Platform"
The comparison to BYD fundamentally misunderstands what Tesla is building. Are we still viewing this solely as an automotive play?
• Does BYD have FSD (Full Self-Driving)?
• A Robotaxi network on the horizon?
• A humanoid robot like Optimus?
These are multi-trillion-dollar bets that transcend traditional manufacturing. To dismiss Tesla's valuation while ignoring its deep-tech aspirations is to miss the entire ambition of the company and its leader.
The Test of Conviction: A Personal Investment Story
Talk is cheap; long-term conviction is what truly matters. I bought Tesla stock at $12 in October 2013. For five years, from 2014 to 2019, the stock went essentially nowhere. Five years of stagnation! Yet, I remained resolute and did not sell a single share. That conviction is why, 12 years later, that investment has yielded a nearly 40-fold return.
While it’s fair to say Elon Musk occasionally over-promises, history shows that a significant portion of those audacious goals—like the seemingly impossible "chopsticks" catching a Super Heavy rocket at SpaceX—eventually become reality, even if they take longer than expected.
It’s easy to critique from the sidelines, but one must respect the magnitude of the vision being executed. The biggest rewards go to those who bet not on the present-day financials, but on the future reality being built.
What is your personal threshold for long-term conviction in a truly disruptive company? And which part of the Tesla/Musk ecosystem do you believe is most overlooked by traditional CEOs and analysts?
