Great companies are run by Visionaries.
The unquestioned entrepreneurial genius of the late twentieth and early 21st century is Steve Jobs. He started Apple in 1976 with Steve Wozniak and brought a vision for the company that was at odds with other electronic companies of the time; create the best personal computer possible, and don't let others modify it. Against Wozniak's and other's advice, Jobs insisted on making a "closed system" to ensure that his vision of the perfect machine remained intact. By holding on to this vision through many tough times (including being thrown out of apple and then brought back in,) Jobs ultimately created arguably the best products ever made, if you define the best product as one which virtually everyone wants.
Elon Musk has stated his visionary ambition for Tesla:
Our goal when we created Tesla a decade ago was the same as it is today: to accelerate the advent of sustainable transport by bringing compelling mass market electric cars to market as soon as possible.
Its about Brand Loyalty
I buy all my books via Kindle on Amazon. When you complete your order on Amazon, they give you a choice of where to deliver it to. You see a menu like this:
Every time I see this menu, I'm reminded of my brand loyalty to Apple. My wife and I have bought 9 devices from Apple! For the last 25 years, I did not buy a computer, phone or Ipad from anyone else. I have been tempted a couple of times....I had an Android phone for a few months, but basically I'm an Apple guy until something provably better comes along. Now that Jobs is gone, that may happen sooner than later.
I recently put in reservations for two Model 3 Teslas. When I went to my Tesla user page, it listed "my Teslas". It listed 4 cars; my first 2012 Model S 85, (which I sold and then bought a Model P85D), and my two cars on order, hopefully coming in 2017. So far, I am loyal to Tesla (like Apple), because they make a great product.
325,000 other people have also paid $1000 to reserve a Tesla Model 3.
Nothing like this has ever occurred for an automobile that will be delivered a year and a half later. Where does demand like that come from, considering many people still don't know anything about Tesla? It comes from the word-of-mouth accolades from present owners of Teslas. Yesterday, I was stopped by an older couple while parking in a Pasadena garage. They peppered me with questions about my S, said how great it looks, etc. They had heard of the car, but had never seen one close-up. It made me realize how much potential demand for the car has yet to be tapped.
Why other automakers haven't successfully competed.
I'm not saying that eventually Tesla will not have real competition, but I think Tesla has an open field ahead for at least a decade, pretty much like the Iphone had from it's inception. Early Iphone competitors were so far behind Jobs and his vision to build an amazingly beautiful and functional product that it took a decade before Samsung and a few others had made comparable products.
Why are other automakers so far behind? History teaches us that companies which have been disrupted by radical changes in their industry seldom make the transition to new products as long as their (presently) successful business model is working. The American ICE auto industry had a great year in 2015.
This bodes well for Tesla; the longer the big three stick to their ICE cars and drag their feet on BEV, the more time TM has to improve their product and grow their share of the BEV market.
Musk: "to accelerate the advent of sustainable transport."
Does anyone know what GM or Fords' ambitions are, other than to make money for shareholders?
As I write this, SpaceX just landed their rocket booster on a floating barge on the 5th try.
Now, that is visionary.
Disclosure: I am long TSLA.
Disclosure: I am long TSLA. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.
Disclosure: I am/we are long TESLA.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.