Why Tesla will soon be the most valuable company in the world...

A bold title at a time where Elon Musk and Tesla make news almost every week for the wrong reasons. Here are 5 reasons why you should look beyond short-term problems and focus on where Tesla is going...

1) Most knowledgeable car producing CEO

How many car producing CEOs know inside out what is holding back their success? The correct answer is one! Elon has been sleeping many nights in the sofa inside the Tesla factory. He, unlike its peers, will by the end of the year know exactly why traditional car manufacturing is hard and how via the clever use of artificial intelligence and robotics, you can build 10 times more productive factories in the next 5 years. Expect Elon to announce super productive factories in the next years. Especially since he will need to create factories globally to satisfy demand. The industry believes too much automation is counter productive. Elon is learning this year how to get to the same knowledge level of its competitors. Expect him to know more than them in 2019. Elon has proven traditional believes in the space industry to be wrong. He can do the same for car manufacturing!

Most other car CEOs haven’t made their hands dirty in years. They spend most of their time with spreadsheets and in board meetings instead of in the factory. They were all forced to throw away their future product roadmap and start producing electric cars. Most have no answer yet to self-driving cars as a service that are no longer owned by families. Elon wrote a ten year plan a decade ago and executed it well. Why would the next plan not go the same way?

2) Unexpected synergies

Elon is not only focused on cars. He is also “focused” on batteries, boring machinery, solar panels, space exploration, rocket building, artificial intelligence (OpenAI), trucks, satellite communications, and more.

SpaceX will bring Tesla a steady stream of innovations around lighter and stronger materials to build cars. OpenAI will enable the smartest brains to help fix issues with autonomous driving. Production issues solved in car manufacturing will directly translate into cheaper battery and solar panel production since automation can be applied in the other factories. Making boring machinery and scaling up rocket production will bring synergies around industrial machinery production which will enable car factories to be further automated.

3) Tesla does not have the same costs as others.

Tesla has major expansion costs but these will soon be under control when production goes up. Other car manufacturers have two major cost structures Tesla does not have. One is expensive pension plans that will get worse before they get better. But the most important one is marketing costs. Traditional car manufacturers spend most of their money on marketing. Tesla does not need to buy expensive television ads to sell cars. Its biggest problem is that it cannot satisfy demand fast enough. The only company that had this same problem a decade ago was Apple!

4) Cars are only the beginning

Trucks were already announced but in 2019 Elon can easily announce a Tesla bus, underground, train and plane. Trains would be easier to autonomously drive than cars. You don’t need a locomotive with many wagons behind it. The Tesla version could be autonomously driving wagons. Combining boring tunnels with specialised vehicles on top of which a Tesla car is transported, delivers the foundations for alternative transport vehicles like trains and undergrounds. SpaceX is doing rockets already. Planes would be easier.

5) Tesla failing would be worse for the industry than Tesla succeeding

Google was one signature and days away from owning Tesla some years ago. If Tesla runs out of money it will likely sell to Google again. Combine Google’s billions, Waymo and Tesla and what do you get? The most disruptive self-driving car company in the world. Making Tesla succeed is in the car industry’s interest. The alternative would be a lot worse.

When will Tesla become the most valuable company?

I don’t know exactly but what I do know is that I have recently bought a bunch of Tesla shares because last time I missed out on Apple. I don’t want to miss out twice...