A response to Angus MacKenzie of Motor Trend (who lambasted Musk)

This editorial appeared in Jan, 2023 Motor Trend)

Value Has Absolutely Tanked. It's Probably Still Overvalued.
Slick storytelling powered the electric automaker to a historic valuation of more than $1
by Angu MacKenzie



Much of the market's infatuation with Tesla has been rooted in the idea that Elon Musk is a different sort of tech titan. The other guys develop software and provide services. Elon Musk makes things, futuristic things such as cars that don't need gas and rockets that can land back on earth, a real-life Tony Stark.


But Musk's Twitter fiasco has revealed the feet of clay in the Iron Man suit. Put simply, Musk's tenure as CEO of the social media company for which he engineered a $44 billion takeover last October has proven an unmitigated disaster. Twitter, which in 2021 lost $221 million, is now on track to lose $4 billion a year as advertisers flee a platform whose billionaire boss seems intent on using it to play out an increasingly bizarre psychodrama.

Twitter's capricious and queasily divisive Elon Musk seems nothing like the clever and inventive entrepreneur who made electric vehicles cool. More crucially, the distracted Musk doesn't appear that interested in Tesla anymore. That's not a story investors want to hear, and the collateral damage has been real. However, it could be argued that even at around $100 a share Tesla is still overvalued. Here's why.

Analysts have calculated the world's automakers are spending more than half a trillion dollars this decade on new EVs that will hit the market by 2030. But Tesla's product pipeline looks desperately bare for automaker that still started 2023 ostensibly worth more than twice as much as Toyota, more than four times as much as Mercedes-Benz, and seven times as much as General Motors.


Tesla now has one of the oldest EV lineups of any automaker, and there's no sign of replacements for vehicles that, despite their still impressive performance and range, are starting to look stale and boring, and whose build quality and after-sales service doesn't reflect their hefty price tags. The long-awaited Cybertruck might appear later this year, and there's vague talk of a smaller, cheaper Tesla arriving in 2024 or 2025. But these will be the first Teslas in history to enter market segments where rival automakers already offer genuine alternatives.

Tesla's tech is no longer cutting edge, either. Legacy automakers and startups such as Lucid Motors are spending billions developing new generations of cheaper, more efficient electric motors and higher-performing battery chemistries that will threaten Tesla's performance and range advantages and put pressure on the company's cost structure. While safe and functional Level 2+ and even Level 3 autonomous drive systems are now available from other automakers, Tesla's endlessly hyped Full Self-Driving system, a $15,000 option, remains an unreliable work-in-progress, years after Musk said owners would be able to use it to earn up to $30,000 a year employing their cars as robotaxis.

Elon Musk's slick storytelling may have in the past convinced investors and markets Tesla was a sexy Silicon Valley tech company, a fast-moving disruptor poised to upend an industry more than 100 years old. And Tesla has profited hugely from its first-mover advantage over the past decade. But today it looks increasingly like a regular automaker that's simply not investing and innovating enough, in the hardware as well as the software, to create vehicles that will excite customers over next 10 years.

On that basis, Tesla's certainly not worth more than Toyota. Indeed, it's probably not worth more than Mercedes-Benz, or even, perhaps, more than General Motors. That's the real story.

-------------------------------------------------------------------------

Now my response:

Angus, I'm sorry, my man, l know you're a foreigner (didn't I first read your byline from the UK?)

I suspected with your deep dive into the American auto industry that you would be as situation aware as any American car journalist of what is happening.

But your Jan. editorial sadly reveals to me that you refuse to recognize the genius of the man who
is forcing the biggest shift in the American car industry's history , namely Elon Musk and his Teslas.

You ridicule him for having long-in-the-tooth designs but don't realize by eschewing the annual model changes m he saved enough money to continually improve his engineering.

Are you really proposing we go back to the taller-fins-next-year days of Harley Earl?

Musk is looking at a more far off target, new foundations, new mixes for batteries, not rushing through changes in chrome, hiplines, hood scoops, etc.so the new model will make obsolete last year's model. (Though to make you happy Tesla will have a slight "refresh" coming up...)

On the Self Driving, you're right. He promised but never quite delivered. But his attempt at least
forced Cadillac and Mercedes to come up with improved driver assist. If it wasn't for Musk, the other automakers in America could relax at the Grosse Pointe Yacht Club, order another drink and continue to ponder what color next year's headliner choices should be.

As far as dedication, I am from Detroit, and have known many auto executives like William L.Mitchell
and Chuck Jordan but never have I seen one sleep on the factory floor because there was a problem that needed solving.

Or maybe there's another reason that you're mad at Elon? He doesn't waste money on car ads.

In some countries Teslas are pretty close to being the top selling luxury brand (all without ads.)

As a former Motor Trendee (worked there probably before you were born) I know how a brand being elected Car of the Year had a lot to do with how many pages of advertising were bought. Tesla buys none;hence they are scoffed at.

You imply competitors are coming. I feel sorry for those readers. on the basis of glowing reports,
invested in Lucid, Rivian, all the wanna-be EV makers. Last I read Lucid was only losing $60,000
per car. The truth is, when EV sales were 2% of the US market the Big Three just repeated
the mantra "2 %-- why worry?" Well, now EV sales are past 6% and in some countries Tesla is close to beating out BMW, Mercedes and other luxury cars.

I am not pro Musk because I'm anti-performance (A Model S Plaid will blow off Ferraris up to 100 mph). I've owned a Porsche, two gullwings, a V12 Ferrari, but I see the writing on the wall--the whole industry has changed and your editorial sounds like something a docent would read in a car museum.

I went through this with other technology. For instance I shot film, But when i met Ansel Adams he admitted to me on some of his most famous photos he spent 9 hours in the darkroom making one print. He fiddled the results. Now if he were alive he'd be into filmless cameras. But I still meet young folk
carrying old film cameras hoping to be the next Ansel...

So in closing, I hope you realize how your lambasting Musk doesn't matter anymore. You might as well be trying to convince us to use Kodachrome...

---------------------------------------------------------------------------------------------
Hey FC readers--anything I left out?