Tesla is an overvalued, overhyped company that woos investors with product ideas that are either half-baked or completely unreal.
At face value, those sentiments may appear overblown. But when you compare what the automaker has promised to what it has actually rolled off the lot, you’d quickly realize that Tesla isn’t all it makes itself out to be.
Over the past few years, the mainstream media has picked up the electric-vehicle maker’s unwavering ability to stretch timelines and miss production targets. But somehow, the Palo Alto, California-based company has managed to skirt well-deserving headlines about how many of its prized ideas haven’t come to fruition.
Its self-driving car still doesn’t exist on the road. Its Roadster apparently went poof, at least for now. And whatever happened to the fleet of robot taxis? You’d be hard-pressed to find any of Tesla’s carefully choreographed announcements aren’t somewhat inflated, or yet-to-be-proven.
Still, the company’s head Elon Musk has the world delightedly captivated, perhaps even duped.
Let’s start with the secret sauce that has the company’s stock priced out of the realm of automakers and an earshot away from tech giants: the promise of autonomous vehicles.
October marked four years since Tesla announced that all its cars being produced will house full self-driving hardware. Musk promised that with a flip of a switch, or through an over-the-air update, all its vehicles would be able to carry passengers from point A to point B with little interaction from the driver. That has yet to happen. And the timeline for a self-driving reality has continued to get pushed back. Now, the company says it has plans to unveil a beta version by the end of this year. We’ll see.
Then, there’s the high-performance Roadster, which the company claims is the fastest car in the world. It was supposed to debut sometime this year. But that’s been delayed to prioritize the Cybertruck, which was supposed to be virtually indestructible but faltered during a demonstration after a metal ball cracked the “shatterproof” windows. Musk also promised that Tesla owners would be able to lease their vehicles into a fleet of robotaxis in 2020. Still, no word on how those plans are going.
More recently, Tesla celebrated its much-buzzed-about “Battery Day,” but didn’t display a physical battery. It has had more cars explode, likely tied to its batteries, than any other EV maker. Yet all seems forgotten.
On October 20, Tesla posted an impressive earnings report, with revenue boosted by cash deposits from people hoping to own a Cybertruck — one day. Despite the automaker losing ground in overseas markets, and lowering the price of its vehicles indicating that they weren’t selling, investors fell for the charade.
Tesla’s market capitalization is up 400% during the pandemic when compared to its highpoint in 2019.
Even with its high flying stock, Tesla should focus less on lofty announcements that make attractive chyrons, and more on actually producing what it says it can do. Not only could that help solve issues with demand in critical markets like Europe and China, but it would also give investors reason to believe that the automaker’s stock price is justified.
Hitting its targets and actually producing the products on its to-do list would also help detract attention away from other issues bubbling beneath the surface, such as a rising number of autopilot-related accidents.
Sure, its stock price will drop some, but with its massive lead in EV space, it can afford a pullback. People will temporarily pay more attention to the growing landscape of competition. But that’s much less damaging than another SEC probe over potentially misleading investors. The last time that happened, Tesla settled. Musk had to step down as chairman and pay a $20 million fraud charge.