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Tesla has become the Talk of the Town, says EasyEquities

Photo: REUTERS/Mike Blake

Photo: REUTERS/Mike Blake

Published Nov 1, 2021


By EasyEquities

IT IS safe to assume that back in July 2003 when Martin Eberhard and Marc Tarpenning originally started Tesla Motors, they had no idea what kind of global behemoth it would morph into.

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Nor what a business cult symbol Tesla chairperson and largest shareholder since 2008, Elon Musk, would become. It is a massive tribute to Nikola Tesla himself, the Serbian-American inventor who died penniless even after the number of scientific contributions he brought to the modern world, to have the company named after him.

With TSLA (Tesla Inc) recently surpassing the $1 trillion (R15trl) mark – yes that is $1 000 000 000 000, 12 zeros if you don’t feel like counting – interest in this share has never been greater.

Comparing Tesla to the entire South African economy with a gross domestic product of $301.9 billion in 2020, it is crazy to think that Tesla is powered by only 70 000 or so employees.

Joining the 1 trillion Market Cap club only a year after it turned its earnings per share from a negative to a positive print, Tesla now sits with the likes of Apple (AAPL), Microsoft (MSFT), Alphabet (GOOG) and Amazon (AMZN).

This massive milestone also saw Elon Musk surpass Jeff Bezos as the world’s richest man with his 16.98 percent ownership of TSLA stock.

Whether it is electric cars, cryptocurrencies, launching rockets into space or selling “not flamethrowers” in The Boring Company, the Pretoria-born Musk loves to make a splash in the headlines.

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From his tweets to dating the Canadian musician Grimes to not sending his kids to conventional schooling and running his own curriculum, Musk often hogs the limelight.

But the latest and greatest news splash was when Hertz came out with its order of 100 000 Tesla vehicles.

That is approximately a quarter of the current Hertz fleet which will add $4.2bn revenue for Tesla.

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Hertz plans to make half of its Tesla stock available for Uber drivers – a very bold move coming from their new interim chief executive Mark Fields, who only took up his role in October 2020.

It’s not even six months since Hertz came out of bankruptcy and it is great to see the company embracing Environmental, Social and Governance investing.

The Hertz order should be completed towards the end of 2022, with the release of Tesla’s roadster second generation as well as the coveted cyber truck.

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We love the famous image showing the velocity of change : New York’s 5th Avenue on Easter morning 1900 where one can only spot one car in a sea of horse carriages juxtaposed with an image taken in the same spot 13 years later where you can’t even spot a horse in the sea of cars.

Pre-1900 cars were exclusively for the rich, with horses for the average citizen. Today horses seem to be for the rich and cost are constantly being driven down in the making of electric vehicles.

America’s largest and one of the oldest automobile manufacturers, who some revere as the backbone of American manufacturing, GM (General Motors) also made headlines recently, stating that they believe they will not only catch up but surpass Tesla by 2025.

GM chief executive Mary Barra has bold plans to “launch multiple electric vehicles including the GMC Hummer pick-up, Cadillac Lyriq and the Chevrolet crossover”.

It is going to be a race to the finish and many are backing Tesla to stay in front. What will your investment call be?

EasyEquities is an online investment platform

*The views expressed here are not necessarily those of IOL or of title sites