Warning: this is long.
12 years ago, I was a very early Tesla investor. That same year, I received Tesla's email entitled "Infinite Mile Warranty for Model S Drive Units" - I'm going to quote it because it was the critical point to me doubling down on Elon. This is a cut/paste from the email sent to me.
Re-read what Elon said back then and the 'why' behind what he said:
"Infinite Mile Warranty
The Tesla Model S drive unit warranty has been increased to match that of the battery pack. That means the 85 kWh Model S, our most popular model by far, now has an 8 year, infinite mile warranty on both the battery pack and drive unit. There is also no limit on the number of owners during the warranty period.
Moreover, the warranty extension will apply retroactively to all Model S vehicles ever produced. In hindsight, this should have been our policy from the beginning of the Model S program. If we truly believe that electric motors are fundamentally more reliable than gasoline engines, with far fewer moving parts and no oily residue or combustion byproducts to gum up the works, then our warranty policy should reflect that.
To investors in Tesla, I must acknowledge that this will have a moderately negative effect on Tesla earnings in the short term, as our warranty reserves will necessarily have to increase above current levels. This is amplified by the fact that we are doing so retroactively, not just for new customers. However, by doing the right thing for Tesla vehicle owners at this early stage of our company, I am confident that it will work out well in the long term.
Who, in their right mind, applies a retroactive, infinite mile warranty, to cars they have already sold because "...doing the right thing..." will "...work out well in the long term".
I bought more Elon. He just happened to be driving Tesla which means I bought more TSLA.
I was one of the first Model 3 reservation holders on April 1st of 2016. I canceled it due to quality concerns. 10 years later, I finally bought a Model YP, my first Tesla. In the same year that it was the best-selling car in the world. It also happened to be Electric.
Let that sink in for a second.
If you want to get to know Elon,
read the court transcript from his compensation trial. Observations:
- Only amazingly brilliant and CONFIDENT people can respond to Plaintiff questions, under oath, with such certainty.
- He brilliantly navigates Plaintiff's attorneys maneuverings.
- He doesn't take the easy way out and 'plead the 5th'
This Transcript is an amazing look into Elon's brilliant mind. He wraps the attorneys around his finger. (and this actually has nothing to do whether the outcome is that he wins or loses). It is very long. The more I read, the more I respect. Here's one exerpt:
"
Plaintiffs’ lawyer, Attorney Greg Varallo: Mr. Musk, welcome back to Delaware. Nice to see you again. I hope your travels weren’t too difficult, and I appreciate your giving us this time today. I know you’re occupied in many different directions.
Elon Musk: Yes, I might be a little slower than otherwise since I flew in overnight on a red-eye, so...
Q. I appreciate it. You are the
Technoking of Tesla; is that right, sir?
A. Among other things.
Q. And you came up with that title yourself; correct?
A. Yes.
Q. And, for the record, you were stone-cold sober when you came up with the record — with the title; right?
A. Yes.
It’s always nice to see lawyers have fun at work. Like when they get to ask one of the world’s wealthiest men under oath if he was “stone cold sober”
when appointing himself “Technoking”, a real thing that Elon Musk did. Imagine writing that SEC filing!
Q. And Tesla filed an 8-K announcing that appointment because you wanted to follow the process required for a title change. Is that also true, sir?
A. Well, it was more of a title increment, but yes.
Q. And you didn’t consult with the board before giving yourself the new title; right?
A. No, I believe we did consult with the board.
Amateurs.
Finally:
As a long term shareholder, I am actually coming around to the view that Tesla should be a bit more like apple, and just not announce anything.
Cliff's absolutely spot-on. I've been doing this for about 10 years now and it works. There are too many turns, too much unexpected, too many pivots, too many high-class problems. If you fall into the trap of announcing before your product is ready, everyone hates you for being 'late' when you're just trying to make sure that your product is great --- and even more importantly, the timing to the market must be accurate. It's the only way to disrupt and to provide world class products that don't 'chase' the market. I got Apple to chase me for several years. That was a hoot
Tesla, not so much. If you announce too early it takes you years to deliver (uhh, FSD). If you wait until you have the disruptive product, and then announce that it will deliver Friday, you win. (iPhone).
Consider this. Before the pandemic, all of the roadmaps for all of the products, and all of the contracts, said you had to deliver x, y, and z. The the panedmic happened, no one wanted to touch anything, and contactless, plexiglass, and QR codes IMMEDIATELY became the rage. Every company with contracted work failed because they couldn't get out of their contracts fast enough. Every company that maintained control, immediately pivoted and had contactless solutions, multiple drive thrus, support for outdoor seating, etc. and thrived.
