The Leviathan
Tesla can power ahead, growing into the realm of myth
Beyond the Squid (Netflix) and the Whale (Amazon), the third most interesting company in my book today is Tesla. Let’s call it the Leviathan, as it’s entry here is a bit mythical for now (which is both a compliment and a warning). To be clear, I think the company would be more interesting than either Netflix or even Amazon if Elon Musk combines all his operations into one unit. He’s already done that with Tesla and SolarCity. Adding SpaceX and the recently unveiled Neuralink into the mix would launch the company into a whole new realm. And I certainly wouldn’t put that past Musk.
As it stands, Tesla simply has a shot — albeit a pretty good one — at being one of the most important companies of the next fifty years. The cars themselves are a small miracle — I don’t own one myself, but each time I’m in one, I’m blown away by the craftsmanship and precision from a company that just a decade ago, hadn’t even yet produced a single car — but it’s the broader angle that really interests me: power.
Tesla as a car company is amazing. Tesla as a power company can be truly transformative. If the Powerwall and SolarCity deal didn’t make the intentions clear, the (obvious, in hindsight) name change did. This is a company meant to live up to its namesake’s goals.
And so when the recent press narrative shifted to the “insanity” of Tesla being valued first more highly than Ford, and then more than GM, I had to laugh. If a company’s valuation is really supposed to be pegged to the future and not the present, who on Earth wouldn’t value Tesla higher than those two dinosaurs? As I quipped on Twitter, they’re building faster horses.
The truth is more nuanced, of course. Both Ford and GM (and every other automaker) seem to understand the need to move into spaces like self-driving and ride-sharing, pronto. And that’s fine. Maybe it works out for them, maybe it doesn’t. But what Tesla is thinking about is clearly so much larger of an opportunity. Cars are but one part of the equation.¹
As Musk himself wrote in 2006 — over 10 years ago — outlining the vision for Tesla:
This is because the overarching purpose of Tesla Motors (and the reason I am funding the company) is to help expedite the move from a mine-and-burn hydrocarbon economy towards a solar electric economy, which I believe to be the primary, but not exclusive, sustainable solution.
Emphasis mine. Though really, Musk’s. Right there, hidden in plain sight.
And so, like Amazon, if you believe in Tesla, then you absolutely should believe they’re “worth” more than their main competitors today. And maybe even all of them, combined — like the other sea monster. No, this is not crazy. Because those competitors will not only soon be in the rearview mirror, they’ll be racing on an entirely different plane. As Tesla will have taken off — perhaps literally, if SpaceX merges into Musk’s grand Tesla plans.
It’s no slam dunk, of course. And the risks are far greater than they are with Netflix or Amazon that any number of things could go wrong. But I wouldn’t bet against it. The upside is so massive. Almost mythical. A Leviathan.
¹ Albeit also a huge part, if the bet being placed on the Model 3 pays off…
