The Two Teslas

Tesla doubles down

“…the crowd was in awe when Musk revealed the new Roadster, which has a look inside and out that owes a lot to classic sports car design. The car also ripped up the runway at the hangar where the event was held, before pulling to a stop and being flanked by the two new Tesla Semi trucks on either side.”

This year, we have witnessed two Teslas.

The first Tesla is aspirational. The other Tesla confounds investors as a high-profile, poorly-performing business.

Aspirational

Let’s start with the aspirational.

Tesla’s CEO, Elon Musk, is trying to make, at scale, electric vehicles that look great and operate well. The aspirational Tesla is finally bringing innovation to the car industry. It’ll help us save the planet. It’ll eliminate fuel costs. We will feel good and proud when we drive it.

The aspirational Tesla just announced two new products: a freight truck and an updated Roadster.

The freight truck, which won’t go into production until 2019, has a 500-mile range and its battery will last for one million miles.

The Roadster goes to 0–60 in less than two seconds and has a 620-mile range.

Woah. What’s not to love?

Execution

As it turns out, there’s plenty to question about the other Tesla.

The other Tesla missed quarterly production goals by a country mile — 80%.

Although valued at $50+ billion — up 50% this year — Tesla only produced 260 Model 3s last quarter. For context, Tesla is now more valuable than GM, a century-old company that sold 10 million cars and made $9 billion in profit last year.

And here’s the catch: the aspirational Tesla feeds the poorly performing Tesla in a meaningful way.

Musk has mastered the pre-order. For the new Roadster, you can put up $50,000 now for the chance to buy an incredible vehicle in 2020 or, more likely, at some unknown point in the future. This pre-order builds on the jaw-dropping Tesla Model 3 pre-order success: $14 billion in implied future sales.

If you love innovation, you are rooting for Tesla. If you have money in Tesla stock, you may feel differently.