On those terms, Tesla has been a weak performer, barely able to build and sell 80,000 vehicles a year while burning through cash at a ferocious rate to attack the low-margin, mass-market car business. Tesla’s disruptive identity was also trapped in 2010, reliant on the fading saga of the electric car. Uber and Lyft had created a new idea – shared mobility, electric or not – and Google was pushing forward on driverless cars.
That’s not a $50 billion company, or even a $20 billion or $30 billion company, which was where Tesla’s market cap hovered when this realization took hold.
The ongoing denial of Tesla’s core business – not to mention Jonas’ notion that Tesla is on the verge of creating a valuable new business, Tesla Mobility or the Tesla Network – is necessary to keep the surge of enthusiasm about the company going. And to be fair, while Jonas is a Tesla bull, he isn’t an unqualified one. He never said the car business would add up to the company’s valuation over the past three years.
But the core business is the core business, and really, it’s all Tesla has to pay the bills. After all, Tesla has rarely made money and has been forced to issue convertible debt and hit up the capital markets for additional funding. The company has even had to sell off chunks of itself, as it did to Daimler and Toyota before its 2010 initial public offering and more recently to Tencent, with the Chinese company taking a 5% stake.
Still, don’t expect Tesla’s push to move beyond a carmaker to let up, particularly as auto sales in the US plateau and the industry prepares for a downturn. Tesla needs a nontraditional narrative to see it through its first true downturn with a valuation so epic that it now exceeds more experienced players such as Ford and General Motors.