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Tesla is interesting because even they've described themselves as an energy company masquerading as a car company. Put another way: battery tech is Tesla's core

by cletus 5y ago

Tesla is interesting because even they've described themselves as an energy company masquerading as a car company. Put another way: battery tech is Tesla's core business. They just happen to make cars as a way to sell batteries. It's a bit like how SpaceX is set to become a major player in regional Internet delivery but you wouldn't call SpaceX an Internet or a networking company. It's just a synergy between Internet as a business and reducing launch costs while proving reliability of first-stage reuse. I'm tempted to describe both companies as "engineering companies" more than "tech companies". I just looked at Tesla spends a relatively modest (for its size) ~$1.1B on R&D. So what's the difference? I'd say "tech" is largely about software and "engineering" is largely about hardware. Specifically, both Tesla and SpaceX are capital-intensive businesses where that capital is being used to produce physical products. To be clear, none of this is official in any way. This is just the framework for how I think about things.

alberth 5y ago
Interesting take and I largely agree. I wonder how Boston Dynamics should be characterized.
adventured 5y ago
> Put another way: battery tech is Tesla's core business. They just happen to make cars as a way to sell batteries. No it's not. That's a fake narrative that was invented by Tesla bulls to try to label Tesla as anything but an automaker. It doesn't make sense to categorize Tesla primarily as a battery company or energy company. Batteries and energy (including solar) are a fraction of their business in terms of dollar value and that will continue to be the case. That has been true for nearly two decades now. And it's not a close comparison, the battery is less than a quarter of the cost of the car. For the Model S and X it's far less than that. Tesla is an automobile company. GM and Ford are also not transitioning into being primarily battery companies. They're automakers. Want to test this out? Kindly ask Tesla to immediately end their automobile business and start only selling batteries, see what happens to the stock and their P&L statement. If in 20 years Tesla's battery business is finally larger than their automobile business, then sure, recategorize them.

by cletus 5y ago

alberth 5y ago

Interesting take and I largely agree. I wonder how Boston Dynamics should be characterized.

adventured 5y ago

> Put another way: battery tech is Tesla's core business. They just happen to make cars as a way to sell batteries. No it's not. That's a fake narrative that was invented by Tesla bulls to try to label Tesla as anything but an automaker. It doesn't make sense to categorize Tesla primarily as a battery company or energy company. Batteries and energy (including solar) are a fraction of their business in terms of dollar value and that will continue to be the case. That has been true for nearly two decades now. And it's not a close comparison, the battery is less than a quarter of the cost of the car. For the Model S and X it's far less than that. Tesla is an automobile company. GM and Ford are also not transitioning into being primarily battery companies. They're automakers. Want to test this out? Kindly ask Tesla to immediately end their automobile business and start only selling batteries, see what happens to the stock and their P&L statement. If in 20 years Tesla's battery business is finally larger than their automobile business, then sure, recategorize them.