Every new electric vehicle is compared to Tesla. Mary Barra, CEO of General Motors, even said her company will sell more EVs than Tesla by the mid-1920s. Lucid and Rivian are “Tesla Killers”. And Henrik Fisker seems to have a peculiar bee in his hat on Elon Musk, who left Twitter to the prospect that he owned it. But Tesla’s challenge is not for the auto industry. It is much bigger than that.
The more sensible electric vehicle companies (possibly the Volkswagen Group) are deliberately avoiding being too directly competitive with Tesla. Admittedly, the Porsche Taycan has outlived the Tesla Model S for a while and is rather strictly aimed at the same market. But most of the new electric vehicles of the VW, Audi, Skoda and Cupra brands of the Volkswagen Group are not. They are right not to choose a direct fight with Tesla, because Musk’s company is not trying to eradicate them, but only to force them to change.
Journalists, myself included, are complicit in this narrative that Tesla is at war with the traditional auto industry. The company has grown in sales volume while others suffer much more from supply shortages, which would imply a conflict Tesla is winning. But while there will be casualties from the rise of electric vehicles, with traditional companies forced to hedge their bets as they curtail their internal combustion business and increase their EV production, no one wants a world where every car is a Tesla. , including Elon Musk. What Musk is pushing for is a switch from the internal combustion engine. Companies that successfully make this transition can continue to survive, along with Tesla.
“When the market capitalization of Tesla, which produces sustainable energy products, surpasses that of Aramco, which produces fossil fuels, you know the future will be good for the Earth,” he said.
That dream is still far away. As of May 2022, Saudi Aramco had a market capitalization of $ 2.431 trillion, while that of Tesla was $ 786.98 billion, less than a third. It was higher (over $ 1 trillion in 2021) and Tesla is still currently number 6th most valuable company in the world by market capitalization. It is also interesting to note that all the companies between Tesla and Saudi Aramco are digital (Apple, Microsoft, Alphabet / Google and Amazon). But since Tesla’s stock has been on a slight dip in recent times, it is likely that it will be a few years before Tesla reaches the top spot.
Musk’s statement shows that Tesla isn’t really a car company; is a sustainable energy company that produces many cars as part of that strategy. How many other car manufacturers also sell their own home chargers, home batteries and solar panels? Tesla is even rumored to be considering an entry into the power supply industry, which somehow already is with its industrial-scale batteries as the storage facility in South Australia.
Tesla was criticized for its interior and harmless exterior design. They are definitely an acquired taste. However, since cars are not the end in themselves but the means to the end, this is not such a pain in the ass. Let traditional manufacturers keep making great interiors and enticing exterior designs. Put them on electric vehicles instead of internal combustion cars. But a Tesla or not, just make sure if you don’t, you still get an EV.
If Tesla can continue to increase its market cap beyond Saudi Aramco, this will truly send a message to the world. Perhaps it’s the message Tesla has always cycled, that while you can save the world from the climate crisis by limiting people and preventing them from having the things that are causing the problem, there is another way. The alternative is to innovate in a way that makes something desirable and profitable to achieve the same goal. Being green doesn’t have to be a limit. It can be a change that is both ambitious and also makes a lot of money.