CNN reported that Tesla “disappoints Wall Street despite strong profits,” and honestly, I believe the headline is disappointing. It shows again that some in the media simply don’t either understand or want to understand what exactly Tesla is doing as a sustainability company.
However, it also reflects that for legacy auto, critics, and short sellers, the news is actually disappointing. For years, critics, especially those who are vehement short sellers, have been banking on the theory that Tesla is a failure and will go bankrupt any second. Tesla’s phenomenal year is proof of the total opposite, and I can imagine the disappointment after losing $40 billion last year.
Of course it does. pic.twitter.com/3QOM2DrLgi
— @spotted_model (@spotted_model) January 28, 2021
The “disappointment” seems to stem from the fact that Tesla (TSLA) shares fell around 5% in after-hours trading. And that number was actually up from a steeper drop just after Tesla published its Q4 2020 earnings report. So, to some extent, some traders were disappointed.
Algo freaked out because EPS was off by $0.20-$0.30 from the estimate.
— vincentyu.eth (@vincent13031925) January 28, 2021
To base the success of Tesla on its every move in the stock market, however, shows just how much some are not paying attention to Tesla itself. I want to point out that $2.8 billion in free cash flow for a company that was written off as a “failure” by many a few years ago is not just progress, but proof that demand for the clean energy and and electric vehicle tech Tesla is specializing in is very high.
Tesla came into the market with only electric vehicles and was either written off as a small startup or a company that simply wouldn’t make it because legacy auto is too big. And for it to surpass Toyota as the most valuable automaker can be pretty disappointing for those over at Toyota.
Back in November, Toyota’s president, Aiko Toyoda, seemed pretty bitter about Tesla’s success and claimed that Tesla hasn’t created a real business. “They have not created a real business in the real world yet. They are trying to trade recipes. The chef is saying ‘Our recipe is going to become the standard of the world in the future!’ At Toyota, we have a real kitchen and a real chef too and are creating the dishes already. There are customers, who are very picky about what they like to eat, sitting in front of us, and eating our dishes already.”
Our true competition is not the small trickle of non-Tesla electric cars being produced, but rather the enormous flood of gasoline cars pouring out of the world’s factories every day
— Elon Musk (@elonmusk) January 31, 2019
So, it does make sense that Tesla’s success would be disappointing for its competitors. Tesla’s success actually threatens the successes of its competitors, especially those who produce ICE vehicles. Tesla has two factories that will be coming online this year — Giga Austin and Giga Berlin — which is a pretty much “in your face” approach for Tesla to take against Europe’s legacy automakers. For those of us rooting for clean energy to win, Tesla’s ongoing success is most definitely not a disappointment.