Read this below as to why Tesla is more than just a car company
Tesla’s speed in innovation in the market for high-end vehicles is more like a Google or an Amazon than an automaker. And its soaring market valuation is a clear sign to all automakers that they’ll need to develop more innovative, Tesla-like business models in order to survive.
Speed in innovation. That may be the case but that view was held when Tesla's name was synonymous with EV a few years ago and their dominance was not challenged and EV was seen as transforming the entire industry, not just the car industry but the cab industry and the way people drive.
Back then, there were a lot of forward visioning that the cab industry would be EV driven and a brave new world of self autonomous EV would change and transform the way people moved. Fast forward to today, Hertz now is ditching its EV fleet citing deterioration in value, and the self autonomous car project has been more or less iced due to safety concerns.
So what makes Tesla impervious and standing out as more than a car company when BYD has stolen its lunch and Elon himself admitted to the China EV threat, suggesting that US should consider more tariffs on a fortcoming competition (from Chinese EV makers). All suggesting that Tesla is only as good as the choices consumers have in an increasingly competitive EV space.
So why does Tesla still trade at a significant valuation relative to its car maker peers? Not for long, and when Tesla price continues to make lower lows, the cult following which made many shareholders millionaires would be crushed. Tesla's forthcoming price slide would be strongly correlated with US lithium stock price.
You won't like me telling you this but it is better to know it sooner than later.
