The Final Nail in Tesla’s Coffin?
The next chapter in the Tesla story is unfolding…
Tesla is trying to figure out how to make all their own parts in house without running out of cash.
This could be a big pitfall for Musk and Co.
But it means new opportunity for you while things play out.
Today I am going to tell you all you need to know about this, including the one company I’m banking on to set new highs as electric vehicles and automated driving tech goes mainstream.
Slaughter in the Smart Electric Car Market
Elon Musk, founded Tesla in 2003.
I’ve been a big fan of the visionary entrepreneur — especially for his work at SpaceX.
I’ve also rented and driven Tesla’s vehicles over the years. I still remember the first time I drove one.
As I exited my old Mercury (thankfully since retired) and hopped in a Tesla I was told it was going to be like going from an old flip phone to a brand-new iPhone in terms of experience.
Was that ever true! The performance and feel of these smart electric automobiles was incredibly impressive.
But if we’ve learned anything so far this year, it’s that Tesla is in big trouble. There are a number of reasons, including cash burn, scaling issues, production quality problems and scandals including Musk’s incredibly erratic Twitter behavior (which may yet land Musk in an SEC investigation).
And there’s huge doubt as to whether Musk will be able to take the company private.
But even if Tesla delivered its new model vehicles on time, and with the sort of quality Tesla buyers expect, it could still be in hot water.
The biggest issue is follow-on competitors. Cars from other automakers have been getting “smarter,” and we’re not too far off from seeing autonomous driving become commonplace.
Many of Tesla vehicles’ unique features aren’t that unique anymore.
Tesla could survive the competition and still maintain itself as a premium brand. The company has created a huge following of fans over the years. The only other brand that comes to mind with such a loyal base is Apple.
That really helped Apple develop staying power. Apple weathered a storm of cheaper Android phones after it introduced the iPhone thanks to the great strength of its brand, the connection people felt to its iconic founder Steve Jobs and the very high quality of its products. Even today, many people prefer the iPhone to their competitive equivalents and they pay top dollar.
But the Tesla brand is taking a huge hit. Musk’s Twitter rants are alienating people and hurting the brand. And the stories of parts falling off cars within minutes of driving off the lot aren’t helping either.
Tesla’s cars just aren’t as special as they used to be. Electric drivetrains are now available from many automakers, many of them excellent. And high-tech wizardry like semi- or fully autonomous driving is becoming available on more and more high-end models.
Even though Tesla’s future seems uncertain, the trend it helped start is clear as day… with enormous profit potential for investors.
Your Stake in Smart Vehicle Tech
One of the best smart car plays is still Nvidia (NASDAQ: NVDA).
Nvidia has worked closely with Tesla in the past, and not just on high-end auto infotainment systems but also on autonomous driving features.
Nvidia has bucked the first-mover failing trend with its core product — the graphics processing unit.
Nvidia is the market leader in GPUs… and it has successfully leveraged the basic technology to create powerful computers useful for processing real-time data and using machine intelligence to help guide a vehicle down the road without the need for a human driver.
Tesla dropped Nvidia some time ago in order to work on self-driving on its own, although that could change if the automaker can’t pull off the feat alone. If Tesla can’t manage with its in-house AI efforts, Nvidia’s mobile supercomputers could come back to the future vehicles.
But even if they don’t, it doesn’t matter for Nvidia. Tesla is just a tiny slice of the market. The company is working with hundreds of industry players — including Audi, BMW and Honda — to bring its technology to far more vehicles than Tesla alone.
Even though it has pulled back a bit over the past few weeks (as have many tech stocks), there’s still tremendous growth potential at this company.
For Technology Profits Daily,
Chief Technology Expert, Technology Profits Daily