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Tesla Is Not Toyota. It Is Apple. Here Is How to Understand Her Valuation.
It is misleading to think of Elon Musk’s company as a legacy carmaker.
For the last decade, Tesla grew at a startup speed. While their most famous products were sports cars with insane acceleration but prohibitive pricing tags, that is just a fraction of what they developed.
During this period, some of the brightest brains in the USA wrote millions of code lines, software patches, while the company is building Gigafactories, developing a Supercharger network, designing its own self-driving processor, and much more.
Tesla did all that while competing against car companies that have plenty of cash surplus, decades of experience, and often are government-backed.
For these reasons, analysts are tempted to compare the financial indicators and the operational performance of the Electric-Vehicle (EV) American company with global behemoths like Toyota or Volkswagen.
But Tesla is not a car company. It is much closer to Apple than Toyota — and not only because Elon Musk’s firm has a habit of hiring people from Apple and import their design language and culture.
One of these former employees from Apple said:
Tesla is not an automotive company, it’s a tech company that builds cars.
In the next paragraphs, I will tell how reality confirms the above quote, and why this explains how Tesla and Toyota have similar valuations, even though the Japanese corporation sells 19 times more automobiles.
What Is Wrong With the Toyota vs Tesla Comparison
1st — Stability vs Vertiginous Growth
Toyota is an 83-year old company that experienced explosive growth during the 70s, boosted by the 1973 oil crisis and consumers seeking fuel-efficient cars. From then on, it sustained its place as one of the leading global cars manufacturers.
One could say that the innovation of smaller, less fuel-consuming cars from Toyota is comparable to what Tesla is doing.
It is not.
