Disruptive Stock Analysis of Tesla: A Reality Checklist

Tech stocks are dominating the market for more than a decade. This group – Facebook, Apple, Amazon, Microsoft, Google – share the same characteristics. They dethroned the incumbent, they defined a new business model, They reshaped the industry. In this article, Disruptive Stock Analysis of Tesla, we try to recognize whether the EV maker could reach the same level as the disruptor group.

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“Reality often disappointing” | Thanos

Disruptive Stock Analysis of Tesla: In This Issue

Most Desired Story on Earth

People love heroics stories. They love to see underdogs winning against the defending champion. It makes them believe in dreams, in miracles. The business is no different. The market will be enthusiast when newcomers bring something new and corner the incumbent.

This is a story about Apple – about Amazon, Google, and Facebook.

Maybe also Microsoft if we track back in the era of IBM OS.

Their product introduces something new – something that was unthinkable before.

In terms of business – not stock price1 – Tesla has the potential to follow this glamorous path.

Tesla is a sophisticated computer that takes the form of a sports car. It replicates Apple’s success: the vertical integration, the interface, the experience. Tesla sells directly to the customers, build supercharger facility, develop hi-tech navigation. It also takes care of the battery – one of the most expensive components in an EV.

Tesla reminds us a lot about Apple and other disruptors.

The question is, could all this stuff – the Tesla ecosystem, new business model, extremely good-looking car – deliver Tesla to the same level as the Big Tech? Does Tesla Business advantage have the same durability as theirs?

Disruptive Stock Analysis of Tesla: How Big Techs Conquer The World.

People always remember that the success of The Big Five is due to its disruption. Well, it is just part of the story. In our perspective, the secret of their spectacular growth lies in their global reach.

And it is nothing like them before.

MCD, KFC, Coca-Cola are global brands. You can take another name, another example. There are so many global brands, but there is no one like The Big Techs. They have scale and intimacy – things that make their scale even greater.

People around the world access The Big Techs every minute, every second. People read or sometimes post their favorite topic on Facebook, looking for an answer with Google. Meanwhile, they won’t eat McBurger every day or drink Coca-Cola on a regular basis. The intimacy of The Big techs is on different valence – this leads them to another level of economies of scale.

So, to test Tesla, we should propose the question: Could the EV maker and all its uniqueness reach global exposure.

Stand-Alone Devices, Stand-Alone Services.

One key of the global reach of Big Tech is they only need little or minimum infrastructure. Apple can distribute iPhone to India and people will use them without any issue. People in Vietnam can access Google, looking for the Latest Kendal Jenner news, People in London can post about Brexit on Facebook.

We just need a device with an internet connection.

Tesla does not have this luxury.

Tesla is different. This sports car could be delivered2 to the emerging market and make the owner face the annoying problem: availability of charger station. This isn’t a regional issue since Tesla will provide it, but outside the US, supercharger availability is surely another problem, especially for the emerging markets.

Unlike Tesla, ICE (conventional car) doesn’t face this problem. For decades, Together with Big Oil like Exxon and Chevron, ICE makers have built fuel stations to support the ICE travel range. To catch global exposure, Tesla needs third-party help to achieve these economies of scale, especially for the charging facility. The Big Oil could participate.

Maintenance Issue

Another problem outside the US is maintenance. In a country with a high population, a mechanics job plays an important role in the national economy. Removing them at once and replacing them with cloud maintenance will pose a serious threat to the National economy. If this happens, the regulator will take prohibitive steps for Tesla. Also, don’t forget about the economies of scale. Providing a network of maintenance facilities is as difficult as providing supercharging.

Accelerating Mandate

Let us assume that due to the green hope – a zero-carbon emission vision, governments around the world accelerate the adoption of EVs. This is a double-edged sword for Tesla. It is good for the whole EV industry, but it will spark competition also. When demand quickly piles up, The production of EV, supercharging and maintenance facilities could not catch up. This gap will be filled by competitors – whether it is EV pure player or ICE automaker that begin to enter the game.

Surely going global isn’t that easy.

Affordable, Repeatable, Product Life.

With just a slight improvement, iPhone 13 is surely a little overvalued. But it is still affordable. Another Big Tech has the affordable characteristic. Subscribing to Amazon Prime is cheap, even it needs no cost at all accessing YouTube or Instagram.

Tesla on the other hand doesn’t have this kind of advantage. Buying a car is a big thing, moreover, a family needs only one or two, but not more. No need for every person to get his own car – unlike iPhone.

Another concern is repeatability and product life.

People could buy a new iPhone every two years, replacing their old one. We doubt the same case for Tesla. How often is a family buy a new car?

Disruptive Stock Analysis of Tesla: Final Thought

Tesla has complete requirements for becoming the next big things except for global reach. Tesla needs improvement or a game-changer for its supporting facility, affordability, repeatability.

  1. Tesla gain has exceeded all the disruptor group, by the way []
  2. The delivery itself is a problem, The incumbent has so many factories outside the US []