Is Tesla a Car Company or a Tech Company?

Tesla is a car company and a technology company — it couldn’t survive exclusively in either camp, writes Carolyn Fortuna in Cleantechnica. Tesla's CEO Elon Musk created a business model that disrupted the slow-changing auto industry by streamlining design, manufacturing, and distribution processes, and, in doing so, created a technologically savvy and very loyal brand following.

There are some great arguments that Tesla is a car company. But also, there are equally convincing arguments in favor of Tesla being a technology or software company. But does it matter which one it is?

Some people say the tech company vs car company discussion is nonsense. Ford, GM, and Tesla are all car companies. Ford and GM are well-established car companies with legacy products and ICEV mindset and shrinking market share. Tesla is a high growth car company with products of a type that will dominate the market in the future and a huge advantage in knowing how to build such products. It is not a car company vs tech company but a negative growth company vs high positive growth company. Tesla is a sustainable energy company. From the beginning their mission has been to “accelerate the transition to sustainable energy” and they’ve never taken their eyes off that ball. They develop and deploy the technology needed to accomplish that mission. AI, stamping presses, better robot programming, etc.

The most important technology they’re deploying for that mission: batteries. One could say that Tesla is a battery company but that’s incomplete too. It’s a sustainable energy ecosystem.

Others say Tesla is a Tech company, plain and simple. Building cars is only the beginning and is a huge part but not necessarily the biggest part. This company is still in its infancy.

They cannot be compared to other auto manufacturers as no other automaker is even trying to match the breadth of reach Tesla is implementing.

It is like a diversified portfolio, each component supports the other and compounds the portfolio overall.

From an ideal and mission standpoint, they are redefining what capitalism should look like.


In the meantime, Tesla Is Now The World’s Most Valuable Car Company With A $208 Billion Valuation. But interestingly, while Tesla now has a higher market cap than Toyota, it still lags the Japanese automaker in several key metrics. Toyota still produces a far greater volume of vehicles than Tesla, for example: In the first quarter of 2020, Tesla said it produced about 103,000 vehicles, while Toyota produced 2.4 million during that same period. Toyota also has a greater enterprise value ($290 billion), which factors in a company’s debt, than Tesla does ($252 billion), according to FactSet data.

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Reference
Cleantechnica https://cleantechnica.com/2020/06/30/...