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I assume the price is based on self driving. We can see how hard this is to achieve with companies like Tesla/Google putting huge money into this for years and

I assume the price is based on self driving. We can see how hard this is to achieve with companies like Tesla/Google putting huge money into this for years and we are still a way off. Now when someone achieves real self driving its likely there will be one company a few years ahead and then a small handful. Those companies should make serious dollars as they will dominate the market. Once a car can drive itself it will take a little bit to earn trust but my guess is across the modern world no-one will be buying the manual versions for long (assuming safety record beats humans). From this I could see a handful of companies dominate the market over a fairly short time cycle. Kinda like an OS enviroment where you have 2 or 3 players only and its near impossible for anyone else to survive or enter the market now. I dont know if that view is correct, but if so, Tesla is probably one of the better placed car companies for that possible future outcome if you were looking to invest for the future value. That to me seems to be were a large part of the value comes from.

jollybean 5y ago
Tesla stock price is based on 'CEO Founder Bitcoin Hype Mania and Rockets'. Companies with visible, bold, charismatic leaders tend to bring a disproportionate amount of attention and hype to a stock. If that CEO can paint an 'Unlimited Future' because they are doing something new, in a big market, the stock takes on some odd characteristics. People become 'believes' as much as investors, more so among small retail investors who can collectively drive the stock up. Your point about 'Self Driving' is reasonable, but I don't think a 'few years advantage' is going to help the winners. Why? Because 'Self Driving' will be phased in over decades. It's not going to 'turn on'. There might be some shakeup, but it seems at least one German, Japanese and American auto maker will have the wherewithal to 'keep up' to norms. Most importantly, in the long run, people are price sensitive and for cars they care about brand to the extent it's related to quality. Late stage buyers are of a different mindset than early stage aspirational Tesla owners. As far as this 10% failure rate, it's hard to say - Tesla has good brand positioning, but a constant stream of these headlines won't bode well for them. Outside of American, Nationalism is 'normal' but it's generally not of the flag-waiving kind, it's more basic ethnocentrism. Germans take their cars very seriously and I wonder if after a stage of Tesla fertilization, they return to their 'Superior German Technology'.

jollybean 5y ago

Tesla stock price is based on 'CEO Founder Bitcoin Hype Mania and Rockets'. Companies with visible, bold, charismatic leaders tend to bring a disproportionate amount of attention and hype to a stock. If that CEO can paint an 'Unlimited Future' because they are doing something new, in a big market, the stock takes on some odd characteristics. People become 'believes' as much as investors, more so among small retail investors who can collectively drive the stock up. Your point about 'Self Driving' is reasonable, but I don't think a 'few years advantage' is going to help the winners. Why? Because 'Self Driving' will be phased in over decades. It's not going to 'turn on'. There might be some shakeup, but it seems at least one German, Japanese and American auto maker will have the wherewithal to 'keep up' to norms. Most importantly, in the long run, people are price sensitive and for cars they care about brand to the extent it's related to quality. Late stage buyers are of a different mindset than early stage aspirational Tesla owners. As far as this 10% failure rate, it's hard to say - Tesla has good brand positioning, but a constant stream of these headlines won't bode well for them. Outside of American, Nationalism is 'normal' but it's generally not of the flag-waiving kind, it's more basic ethnocentrism. Germans take their cars very seriously and I wonder if after a stage of Tesla fertilization, they return to their 'Superior German Technology'.