Another Financial Guru Is Wooed By Tesla’s Efforts Compared To Rivals

NOV 5 2018 BY EVANNEX 9

HEDGE FUND MANAGER: BIG AUTO’S ELECTRIC CARS ARE ‘BLAH’ COMPARED TO TESLA

Brad Cornell teaches financial economics at Caltech. He also happens to manage a hedge fund. And when it comes to Tesla, he’s by no means a bull. He still believes Tesla is overvalued. However, much like short seller Andrew Left, he’s becoming disillusioned with EV efforts from legacy automakers.

*This article comes to us courtesy of EVANNEX (which also makes aftermarket Tesla accessories). Authored by Matt Pressman. The opinions expressed in these articles are not necessarily our own at InsideEVs.

Above: Chevy Bolt and Nissan Leaf (Image: Mike Suding)

Cornell did a U-turn on Tesla. Why? He explains (via Valuewalk), “One thing I did not evaluate accurately when I began constructing valuation models for Tesla in early 2014 was how slow the competition would be to produce electric cars that people would want to drive. Tesla competitors, to the extent that any appeared, seemed to be saying that the point of an electric car was to be green and efficient, not sexy or exciting.”

Above: BMW i3 and Renault Zoe (Image: Avto Magazin)

According to Cornell, “When I see a Chevy Bolt, or a BWM i3, or a Nissan Leaf, or basically any electric car other than Tesla my reaction is – blah. And sales figures demonstrate I am not alone. Apparently, people feel morally good about driving one of the Tesla competitors, but they don’t actually feel good. Only Tesla had the design, the pizzazz and the performance to make driving special and not a chore.”

Above: GM’s critically-acclaimed design aesthetic for its Volt concept car, shown at 2007’s Detroit Auto Show, never made it to production (Image: Ultimate Car Page)

Indeed, one glaring issue is that Big Auto releases lackluster designs for their electric cars. Diarmuid O’Connell, Tesla’s former VP of business development once explained that legacy automakers have “delivered little more than appliances. Now, appliances are useful. But… they tend to be unemotional.” Tesla CEO, Elon Musk, goes one step further, pointing out that an electric car shouldn’t “feel like a weird-mobile.”

Above: Daimler’s Smart electric cars (Image: Cars Guide)

Cornell admits, “My mistake in 2014 was thinking that competition for Tesla was just around the corner. Now, at the end of 2018, it is still just around the corner. Although Jaguar has been promising the iPace for some time, my visits to dealers have been rewarded only with promises. The same is true for the Porsche Taycan… there is not a meaningful Tesla competitor available today or in the near future.”

Above: Teslas are imbued with a different electric vehicle design sensibility than what we’ve seen from legacy carmakers (Image: Tesla)

Granted, Jaguar’s I-Pace deserves kudos for beating Das Auto to market. Audi is celebrating its e-tron at high-profile parties. And electrified concept cars are often front-and-center at auto shows. But right now, Cornell notes, “If you want a fun, cool, sexy, tech looking ride the choice is Tesla – period. And that is what my valuation models missed. The stock may still be overpriced, but how much depends on how quickly real competition emerges.” And he concludes, “It has not been emerging very quickly.”

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Source: Valuewalk (via Brad Cornell)

Categories: Tesla

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9 Comments on "Another Financial Guru Is Wooed By Tesla’s Efforts Compared To Rivals"

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JoeInTheUK

Stunned to see that Volt concept car. Wow! Imagine if they’d produced that as a Volt or a Bolt.
(and FFS why on earth did they name them that way round)

CCIE

It is unfortunate. I believe the comment at the time was that a brick had better aerodynamics in the wind tunnel.

Nix

^^this
Plus they ran into interior packaging challenges making the passenger ergonomics work

Chacama

The demise for the design and the need to streamline as much as they were able was in the battery packaging. I have always wished my Gen1 had the full cabin space available and wondered why GM didn’t place a flat pack through the floor but instead went with a limited and limiting T shape. Had GM went with their prismatic cells in a flat pack they would have been able to easily pack 35kWh and had they choose to not limit (overprotect) the USoC to 60% but rather 70% for 90+ EV only miles GM would have created an absolute winner overall with the Voltec architecture.

Chacama

That thing would probable have had an efficiency of 400w/mile… Still an amazing design though.

Bjørn Vabo

Still only one company that really want to make Electric cars. That axplains a lot!
Please Elon, bring the 3 to Europe asap!

Pushmi-Pullyu
“One thing I did not evaluate accurately when I began constructing valuation models for Tesla in early 2014 was how slow the competition would be to produce electric cars that people would want to drive. Well on that subject, I don’t blame him at all for being wrong. I was wrong, too. Back in 2012, I never dreamed that 6 years after Tesla started making and selling the Model S, the major auto makers still would not have responded with any serious competition for Tesla! Yeah, I get the whole The Innovator’s Dilemma situation, and how that makes it difficult for legacy auto makers to move strongly into the EV segment. But I never dreamed that aside from the rather limited production I-Pace from Jaguar, they would leave the entire market segment wide open for Tesla to capture! I say Go Tesla! quite often, but that doesn’t mean I want every legacy auto maker to ignore the EV market so completely that they offer nothing but overpriced EVs with very limited appeal made only in small or moderately small numbers. Tesla can’t possibly grow fast enough to replace 90% or more of all the gasmobiles in the world with plugin… Read more »
eferg

Throughout the last 70 years, GM has showcased concept cars that rarely translate into production. I guess it’s all in the name of brand promotion. When Tesla shows a car, it’s pretty close to what goes into production.

Nix

Tesla doesn’t have much choice. They don’t have the budget for concept cars.

At least GM put real effort at making the Volt a sales success. Which Fiat and others never even tried to do in the US