Tesla’s products have a captivating impact on consumers and shareholders alike; this advantage will be difficult to replicate. In the minds of its customers, employees, and shareholders, Tesla isn’t just another company. More so than any stock we’ve covered, Tesla engenders optimism, freedom, defiance, and a host of other emotions that, in our view, other companies cannot replicate. As they scramble to catch up, we think Tesla’s competitors only make themselves appear more desperate. With this in mind, even if the Model 3 production launch goes badly, we think customers (and more importantly shareholders) will withhold judgment.
We sympathize with bears – but their (arguably rational) arguments probably won’t matter. In many ways, TSLA seems to play by its own rules. The company burns through cash at a rate that better-established companies would likely be crucified for – especially considering TSLA’s rickety balance sheet and penchant for raising equity. Tesla’s production timelines are unreasonably fast, at least based on “expert” opinions in the automotive industry, and the company spurns various industry norms. For instance Tesla has avoided LiDAR in its self-driving systems (which some claim is dangerous), while pursuing a direct sales model that dealerships fiercely oppose. Yet, because of its superior products, loyal shareholders, and inspiring mission, TSLA remains unscathed.