Tesla's valuation has recently crossed 1 trillion dollars, Which pushed the net worth of Elon Musk to more than 300 billion dollars.

But the question that arises here is that the company whose stock was only on 178 dollars till June 2019, and was falling down continuously,

What the hell happened only in two years that the stock of the same company is trading at more than 1200 dollars today?

 

 

So the question arises that is Tesla a scam or they are doing something so crazy that we common people can't see that?

The Year 2019 was a very bad year for Tesla as they were facing production issues in their model 3, even their deliveries were delayed as well.

And also they were not even close to the price tag of 35 thousand dollars promised by them to their customers.

Tesla booked a loss of 702 million dollars in the first quarter of 2019, and not only this, even one of the most important employees of the company left the company as well, And that employee was JB Straubel.

JB was Tesla's chief technology officer.

But most importantly, JB was the guy who designed Tesla's superior battery technology.

And not only this, the time at which Tesla was facing all these problems on that same time CEO of General motors did an announcement,

That they have planned to bring more electric vehicles in this world than Tesla till 2025.

And not only this, great companies like Ford, Volkswagen are also going to enter in the market of electric vehicles.

And they will target bottom of the pyramid i.e, the segment where market of affordable electric vehicles exist.

But despite all these things, what the hell Tesla did due to which their stock increased by 704% in just 2 years,

And competing with them is way more far, none of the companies is nearby Tesla in today's date.

So, if you study the balance sheet of Tesla then you will get to know that a major portion of Tesla's profit use to come from the Sale of regulatory credit till 2021.

And that's why even today 90% of people consider that Tesla is a very overvalued company whose strong business model doesn't exist.

But the reality is that the business model of Tesla is so powerful, That the profit to be earned by Tesla in the upcoming 10 years will be greater than the profit made by Ford, GM & Volkswagen in their previous 100 years.

The question is how Tesla will do all these things?

Understand this thing very carefully,

This whole industry is Automobile industry whose major players are Ford, GM, & Volkswagen who are leading the market right now.

But there is a player here only whose name is Tesla, but Tesla is working only on 30% of the automobile industry.

What is its other 70%?

So, the answer of that 70% is Tech.

Actually, Tesla is not an Automobile company.

Major portion of company runs as a Tech company.

Now, this feels unbelievable in listening because most of the people know Tesla company as a Car company only.

They don't know even know the real business of Tesla.

So, its answer is hidden in the s-adoption curve and now how it works?

So look, whenever a new innovation takes place in the market so people start adopting that thing in s-curve.

Now, why so?

Look I will make you understand through an example.

In 1985, a great company of America AT&T hired Mackenzie & asked him

To predict how many peoples might be using wireless phones in this world 15 years later i.e, till 2000's.

So you know what figures he gave to them?

9,00,000 people.

But the reality is that in 2000, the total number of cell phone users in this world were 10,90,00,000 people.

I know that you might be thinking now that there's a huge difference in both numbers.

So, how all this difference is being created?

 

This happens because whenever any innovation takes place in the market then people take much time to adjust to it.

In it's starting very few people adapt to it then that graph starts increasing slowly- slowly,

But as the graph rises, the demand for those products starts to rise as well in the market.

And rest of the people who work in that market are able to see things,

And at that time they start making those products and bring them into the market & this same has happened with Electric vehicles.

So if we look into the market of smartphones, then Apple took the most late entry in it

But if we see in today's date, then Apple is a worldwide market leader. But why like this?

So its answer is the Product survey ecosystem.

So where all the players of the market sold smartphones to people, there Apple sold a whole ecosystem.

But do you know that Tesla is even more smarter than Apple?

In fact Tesla itself want more & more players enter into the EV market because as much competition will be there, that much Tesla will earn.

How will Tesla do all these things?

So answer to this is hidden in Tesla's strategy loop, so understand this thing very carefully.

So the secret of the real game of Tesla is hidden in these three things

1. Value chain illusion, strategy 

 

So the first strategy of Tesla is - Value chain illusion & how it works?

So value chain of the electric vehicles business looks something like - Cars, battery packs, charging stations, dealerships & customers.

So in this value chain itself, Tesla created a huge illusion as electric cars are waste without battery packs,

But the batteries of electric cars can be made from only two things - No.1 Iron & No.2 Nickel.

So Tesla in previous times and even today use to say that the most important element to make batteries of electric vehicles is Nickel,

And it is the most powerful element and the same thing attracted all the attention of all companies towards Nickel batteries.

Ford & General Motors, in fact even Volkswagen built long term partnerships with LG & SK innovations,

So that they can manufacture Nickel batteries and provide them.

And here only is the biggest twist of this game,

As the competition will rise in the market of electric vehicles - the manufacturing cost of their batteries will touch the sky as well.

This is because there isn't this much Nickel available in this world to fulfil the demands of all the companies.

But interestingly it won't affect Tesla, but why it's like that?

So there are mainly two reasons to it, First - LFP batteries

As Tesla use these batteries which are made from iron and there is lot of iron available in this world.

Tesla knew this from start that the available quantity of nickel is less than the available quantity of iron,

That's why they designed all of their cars based on iron batteries only whereas cars of other competitors are designed according to nickel batteries.

And second reason is Tesla's giga factories where their iron batteries are manufactured.

So as their production capacity keeps increasing that much their cost of battery manufacturing will deplete.

And then a time will arrive where companies won't be able to afford nickel batteries in the market,

And till that time more than 50 giga factories of Tesla would have been set up.

Now interestingly, what all those companies will do?

They will come to Tesla & ask them to build batteries for them,

Because till then capacity of Tesla will be so high that none other than them can make batteries cheaper to that extent.

And Tesla know this thing very well that in upcoming times many small players will also enter into this market.

But for them biggest issue will be their cost,

And in this thing only Tesla will be able to help them as their capacity will be so high so they will be the one generating batteries at cheapest extent.

So they will come to Tesla only firstly,

So whether it's a small or a large company, against their will they need to come to Tesla only because none can provide them batteries cheaper than that.

But the great companies like Ford, GM & Volkswagen! 

They are that much great that they can easily raise fund in market & setup their own battery production units & can sideline Tesla easily.

Well, Tesla know this thing as well & that's why Tesla designed it's second strategy i.e, Infrastructure leverage.

Now look how powerful this strategy is, as this strategy works exactly same to razor blade strategy.

Likewise, Gillette sells it's razors at very low cost and after that people need to buy their blades so that they can use their razors again & again.

And in those blades, Gillette actually earns it's profit. But as Tesla is an advanced company hence their way is a bit different.

So, Tesla's plan is that they will setup 90 thousand super charger EV stations in this world till 2025.

But interestingly today the speed at which they are setting up their super charger EV stations,

According to that instead of 90 thousand those people will have set up 1.5 lakh stations already by 2025,

And there is not even a single company who can reach even nearby to this number.

So in the upcoming time Tesla will own the greatest charging network, but Tesla is pure from it's heart

As they have already declared for today & upcoming times that they will keep their charging stations open for even non Tesla car owners.

Which means that even if you don't have Tesla's EV & have any other company's EV still you can go to charging station of Tesla & charge your vehicles,

But there's a twist which that even if you have any other company's EV still it will be charged easily on the station,

But it will charged very slowly & you will be required to pay 43% more than a Tesla EV owner.

Now why this thing will work for Tesla? So reason behind it is - High pressure environment.

So look, whenever you go inside any movie hall then you might have noticed that food is very expensive there,

But have you ever imagined that how do people pay money for such expensive food?

So reason behind it is - High pressure environment.

Whatever money you will ask for from a customer in a high pressure environment, he/she will pay.

And most of the customers either won't buy it at all or will buy it surely.

Similarly, Tesla created a high environment pressure on roadside. How?

So look, whenever you are on a road you have a time constraint as people need to go office & reach on time,None is having this much time that they will spend 20-25 minutes extra to charge their cars.

And using this thing very smartly, Tesla planned out all these things but such business moves work only in high pressure environment.

I know, many of you guys will say that what's the need to go on Tesla's station for charging, instead charge anywhere else.

But still you will charge on Tesla's station only & reason behind it is that capacity at other charging stations is of 50 Kilowatts,But the capacity of super charger stations of Tesla is of 250 Kilowatts.

So look, if you need 5 mins to charge on their stations and if you charge the same on non Tesla stations then you will need 25 mins, such a massive gap.

And as I said, there's a high pressure environment on roads so there will not be any guy who will waste 25 mins instead of 5 mins.

So Tesla's main profit will be coming from these four things,

No.1 - Car sales

No.2 - Battery pack sales,

No.3 - Super charger stations because Tesla will be owning biggest charging network of this world,

No.4 - Technology patents.

Tesla is such an advanced company that their technology will be used by many other companies,

But all these things will happen when anyone will buy Tesla's vehicles, what if I choose any other car?

But you won't even do that. Why? So it's answer is hidden in the checkmate move of Tesla.

So look, whether you buy any car but indirectly you will become customer of Tesla anyhow, not because of battery packs & charging stations.

But because of artificial intelligence. So Elon Musk is having a very powerful thing which other companies don't have.

Name of that thing is Interlinkage of technologies as Elon Musk owns another company whose name is Starlink.

So job of Starlink is to provide high speed internet connectivity through satellites throughout this whole world.

Now interestingly, all the vehicles of Tesla & their software are designed in such a way,It's AI is made in such a way that it will link itself directly to Starlink, now what's it's advantage?

So look, Starlink will be such a powerful network that it will directly provide data in vehicles of Tesla in such a speed,

That Tesla's artificial intelligence will get very smarter.

Because artificial intelligence works only on data,And if anyone knows how machine learning works then they will get to know that how much powerful thing Tesla is building in upcoming times.

Now Elon Musk isn't any superhuman, in today's date due to his social media presence he markets all his companies easily.

But what about the future? And that's why Tesla built a complete strategy of lifetime free advertising. Now how will this work?

So for example, you are a non-Tesla owner & you have an electric vehicle of any other company, not Tesla,

And you go to charge it, so very first you won't find other charging stations easily as compared to tesla's charging stations,

Now if you want to do charging on Tesla's stations then first of all you will require to download app of Tesla,

Then you will need to book your slot & then need to stand there and get charging of your vehicle done,

Which will be slow and you need to pay 43% extra money as well.

Slow charging & 43% expensive that too in a high pressure environment.

All these things will incline people very much that they should buy a Tesla vehicle itself.

But if you don't buy Tesla's vehicle, still you now know Tesla because you will need to charge your vehicle on their station only,

And that's why Tesla gets free advertising.

High speed production, super charging network & artificial intelligence,

All these things will earn so much money for Tesla that in upcoming times,

Even if Tesla sell their vehicles at half the prices that their competitors still they will be profitable.

And so because Tesla doesn't want to sell vehicles, instead it wants to control the whole ecosystem of electric vehicles.

 

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