Tesla: A Story, Mostly

by

For a long time, automobiles were just…there. Reliable, mostly. Boring. Then came Tesla. A company that promised not just transportation, but a future. The stock went up, naturally. Over ten years, about 3,190 percent. A number. So it goes.

But whether it’s still a good idea to buy some is a question. A sad little question, really. Like asking if the ice floe under your feet is sturdy enough.

The Present, and What Might Be

If you look at Tesla now, it’s not a pretty sight. Deliveries down nine percent last year. Revenue following suit. Competition? Fierce. The government stopped handing out tax breaks for electric cars. And the CEO…well, he has opinions. Strong ones. People notice. It all adds up. Margins are shrinking. A predictable outcome, if you think about it.

But Tesla isn’t just metal and circuits. It’s a dream. A belief that cars will drive themselves, and we’ll all be free to…do what, exactly? That’s the part nobody talks about. They want to build a fleet of robotaxis. “Quasi-infinite” demand, the CEO says. A big number. The idea is to make money not from selling cars, but from the software that drives them. It’s a shift. A gamble.

They’re behind on the self-driving thing, though. Others are further along. Right now, their robotaxis only operate in a few places – Austin, Texas, and the San Francisco Bay Area. More cities are planned. Eventually.

Some investors, at Ark Invest, believe Tesla will become valuable as a technology provider. They’re optimistic. It depends on bringing the cost per mile down, and building enough self-driving cars. Simple enough to say. Difficult to do.

Loading widget...

Valuation: A Fiction We Tell Ourselves

Tesla is a stock that divides people. The critics point to the present. Understandably. A struggling company, with a tarnished brand, facing more competition in a slowing market. It’s a reasonable assessment.

But the believers…they don’t care about the present. They believe whatever the CEO says. He promises a future of self-driving cars and robotics. They see a revolution. Tesla is a story stock, then. A narrative. A hope. It’s a beautiful thing, really. And often, entirely disconnected from reality.

If you’re a pessimist, avoid it. Simple enough.

Even if you’re an optimist, buying the stock isn’t a smart move. The price-to-earnings ratio is 293. A large number. It assumes a lot of future growth. A lot of things have to go right.

To justify that price, Tesla needs to execute flawlessly. They need to make progress on their ambitious goals. And they need to do it quickly. There are uncertainties – technological, regulatory, safety concerns. Betting on them to succeed is a risky proposition. But people bet on things all the time. It’s what we do. So it goes.

Read More

2026-01-26 10:22