When Tesla (TSLA) hosted an investor day, the stock backed off sharply from $200 before rebounding the next day. Tesla’s master plan looked like an epic failure to the market. However, its “save the earth” mantra is more threatening to established automotive firms than markets realize.
At the event, dozens of executives took to the stage. This lowered the attention and the spotlight on CEO Elon Musk. Musk opened the event by noting that sustainable sources could power the world’s current population. He said this needed an expansion of energy storage and renewable power.
The need to invest in manufacturing includes eliminating fossil fuels.
Tesla will carry out its plan by opening a new manufacturing platform that will build next-generation electric vehicles more efficiently. This will cut costs and decrease its manufacturing footprint at scale.
Firms with high costs like General Motors (GM) and Ford (F) continue to fall behind as Tesla accelerates its manufacturing efficiency. The two firms have billions in support costs for their gas-powered vehicles. They must spend billions more to catch up to Tesla.
Your Takeaway
Tesla’s “epic fail” investor day is only the market’s initial negative reaction. In the long term, the EV firm continues to widen its moat. It is leading the shift toward renewable energy use and cleaner energy infrastructures.
