The Toughest Tesla Question: What Is The Company’s Biggest Asset?

DEC 26 2018 BY STEVEN LOVEDAY 40

The answer that’s most likely correct may surprise you.

Of course, many people would immediately say that Tesla’s most valuable asset is CEO Elon Musk. Despite any of his shortcomings, he’s a brilliant visionary with a massive net worth and a huge social media presence. The Model 3 may be another answer that tops many peoples’ list. This makes perfect sense since the automaker has sold an impressive number of Model 3s and has really only just begun. However, our good friend Sean Mitchell did some digging, and he seems convinced that Tesla’s owner base is its largest asset by far and wide.

Sean is presenting this newest video as part one of a two-part series. His followup will look at the company’s biggest risk. As soon as that video becomes available, we’ll share it with you here. In the meantime, let’s take a look at how he came up with the information to determine the Silicon Valley automaker’s most valuable asset.

Sean says he posted a survey asking if the Tesla Roadster referral prize should go away. Not surprisingly, some 70 percent of respondents voted “Yes.” The electric car maker doesn’t advertise in the traditional sense, but it uses its referral program to round up new customers, and it’s clearly working. But, we know of multiple YouTubers that already have a free Roadster coming and at least one person that has already secured two! If the company can afford to give away multiple Roadsters, the success of the program is clear.

The survey started a conversation between Sean and another Tesla owner, which enticed Sean to try to get a rough idea of the monetary value of a Tesla customer. While he doesn’t have access to all the data to assure a truly accurate figure, he takes the time to estimate based on the information that’s available. The result may shock you. Essentially, if not for Tesla’s supportive owner base, the company wouldn’t be selling nearly as many cars.

Check out the video and let us know your thoughts in the comment section below.

Video Description via Sean Mitchell (AllThingsEV.info) on YouTube:

What is Tesla’s most valuable asset?

Tesla’s most valuable asset

A two part series where in the next video I will cover Tesla’s biggest risk.

Intro: Is it Elon Musk? Bloomberg estimates at 23.6B as of December 2018

Is it the Model 3? Which as sold nearly 100K vehicles as of October 2018

I would say it is its current owner base.

Some Tesla critics even call it a cult.

I posted a Twitter poll last night asking if the Tesla Roadster referral prize should go away. Of the 300+ that have voted 70% say yes.

That spurred on a discussion with Tesla owner Marc Benton on if there was any other car maker who has as active of an owner base as Tesla. We both agree that we could not think of one.

That got me thinking, what is the monetary value of Tesla’s customers.

Since Tesla does not do traditional advertising, I surmised a lot. After looking at the data I was blown away at how much ‘a lot’ actually is.

That’s just car sales, what about brand awareness?

Digiday estimates that the going rate for a YouTube sponsorship is around $2,000 per 100,000 subs

If we take a few of the most prominent YouTubers promoting their referral code, we find something really interesting.

Summary: Tesla has a more than $3.5B annual cash cow on their hands which I believe no other car company has figured out.

In my next video I’m going to cover the areas I believe Tesla is at risk of losing their largest asset and how they can preserve it.

Categories: Tesla, Videos

Tags: , ,

Leave a Reply

40 Comments on "The Toughest Tesla Question: What Is The Company’s Biggest Asset?"

newest oldest most voted

Ownerbase, but that pales in comparison to the brand. People know (or think) Tesla to be superior product, even the non owners. I saw a Tesla logo and P100DL sticker attached to a beat up old Rav4 and a sticker on a truck “I want to grow up to be a Tesla” (no, it’s not my truck).

It’s the billions of miles of road mapping data by Tesla drivers that are uploaded to tesla cloud. No other OEM has that much data.

True, but there is cause and effect. The effect of dedicated owners does not spring into existence fully formed as Athena did from the forehead of Zeus, it was built over time by building a superior ev, at a company piloted by Musk, so that is the cause, there is a codependency, one depends on the other.

Exactly, and thank you! The idea that Tesla’s customer base is the company’s most valuable asset is looking at things skin deep; looking at merely the proximate cause rather than the ultimate cause.

What causes Tesla to have such a loyal customer base? It’s the fact that Tesla makes cars which are so desirable and such a pleasure to drive, that’s what! And what makes Tesla cars so desirable and such a pleasure to drive? Tesla’s ability to integrate the style, performance, function, and controls of its cars into an ergonomic, intuitive, pleasing gestalt.

You can’t point to any one thing that makes Tesla cars so much better. Tesla’s cars, perhaps more than any other, exemplify the maxim “The whole is greater than the sum of its parts.”

So arguably, Tesla’s greatest asset is its ability to design superior form, functionality/performance, and controls/ user interface for its cars, and to integrate those into a model much better than any other auto maker.

It’s the data

Yep assets like loyal ownership base and Model 3 can all be traced back to the visionary leadership of one person: Elon Musk. Like it or not, despite his quirks he is the main asset.

It’s their 2170 battery and GigaFactory. They use it for the model 3, Power Wall, Power Pack and new Mega Pack.

Anyone can get 2170 batteries an order from a battery cell company like Tesla does…

No, not in guaranteed enormous quantities and price. A significant asset is their expertise in software, which far exceeds other automakers. They produce entirely software-defined vehicles with an integrated powerful central computer. This makes the sensors ‘dumb’ and cheap, and offloads the complexity to the operating system, entirely written and owned in-house. All other automakers integrate multiple boxes from varying suppliers embedded with opaque firmware and no clear path to full integration. They do this so they don’t have to bother to be experts in, say ABS measurement and control signal processing, etc etc etc, and offload the manufacturing risk to suppliers. Tesla’s solution is to become experts in all of that and control the hardware which they make. In long run, it brings in the suppliers’ margins to them and allows significant performance, feature and safety updates OTA that others can’t possibly replicate without a titanic re-engineering of their business model and engineering capability, not merely redesigning and EV architecture. Not coincidentally—that’s how spacecraft are designed. How does NASA and JPL manage to entirely reprogram spacecraft to overcome significant hardware failures, e.g. Kepler, Galileo, etc? The areas where traditional automakers have experience and advantages will be easier for Tesla… Read more »

Yeah but so far no one builds there battery packs that are as good.
There not producing in the volume, range, reliability or cost.

“Anyone can get 2170 batteries an order from a battery cell company like Tesla does…”

Wow! It’s just amazing how many, many different ways that one sentence is wrong.

And incredibly, he even got two up-votes for it! 😯

2170 is just a form factor. And the batteries in the cars and the stationary applications use a different battery chemistry even though they use the same battery casing.

Speculawyer Thanks
I always thought there had to be something different about the cells. That’s why I was surprised when several people commented that Tesla would just get the 2170 cells from a Chinese manufacturer,
If Panasonic is so secret about there operations at the Gigafactory. What would they have to hide if everyone’s doing the same thing.

The actual form factor is 21700. “2170” is Panasonic’s designation for its cells from Gigafactory 1. So no, you can’t get those from other battery makers.

Yes, you can buy form factor 21700 cells from other battery cell makers. That previously obscure form factor has, I think, suddenly become more popular since Tesla started using it in the Model 3.

But no, those 21700 cells from that other cell maker are not going to have Panasonic’s proprietary chemistry and/or internal structure. Tesla even has patents for internal cell structure, so it may be that Panasonic is using one or more Tesla patents in the cells it makes exclusively for Tesla.

The claim that Tesla’s battery cells are just “commodity cells” which you can buy anywhere, is just part of the claim that Tesla has no unique technology of its own. That is a persistent bit of FÜD pravduh which the anti-Tesla “Wolf! Wolf! Wolf!” pack has been bleating for years, and of course is completely false.

Tesla hasn’t used commodity cells since the days of the old Roadster.

Nope it’s the data

The cult combined with the it-factor.

It’s the data stupid lol

Engineering. Tesla has an engineering department orders of magnitude smaller than the major global automakers, but has shown world-class automotive engineering creativity, especially in the drive train and software/hardware, that has enabled them to create a vehicle that even Tesla skeptic/automotive engineer Sandy Munro had to rave about….

Frankly, at this stage of the game, Tesla has outgrown Musk. His stubborn insistence to defy manufacturing wisdom and press for full robotic automation almost killed Tesla and continues to hamper Model 3 production 1.5 years after “Job 1”. A conventional state-of-the-art Toyota-system-type assembly line would have been rolling out 5K Model 3’s/week a year ago using just 2 shifts/ 5 days/week, without the supplemental “tent” final assembly area, and could be producing 10K producing 24/7 as they currently do.

Another Euro point of view

Yes, I too believe Tesla has outgrown Musk, there was an article not long ago about a Tesla engineer who told them that Model 3 design was so good that we could build it in massive numbers despite our CEO breaking down to pieces.

I bet he thought his engineers could do the similar creative magic on the manufacturing process that they do on the designs, and pressed them to accomplish the almost impossible as he has successfully done before.

The big flaw in that plan is that failure in this cost the company macro $. It was Musk’s flawed risk assessment.

If the engineering team fails to come up with an innovative design for part X they can fall back on a conventional design, and it didn’t cost very much. At SpaceX they test all the innovations in the lab instead of making 100 rockets with them and blowing them up.

If they want to innovate in manufacturing process they have to set up a lab to do inexpensive experiments before committing to full production.

Going heavily automated is the best way to reduce costs because the biggest cost in cars does tend to tbe labor. So he went for it. But as problems popped up, he did change course. As is typical Musk…he shoots for the best thing but he does adjust as needed.

Like most people Musk admits a mistake and changes course.
Our President never admits a mistake only looks for a non participant to take the blame and fire.

Model Y’s manufacturing will be even MORE automated than M3 is. And I believe (hope?) that he will chase the changes that he has mentioned.

Are you under the false impression that Tesla gave up on automation? Tesla shot for high levels of automation on the Model 3, and they famously had a huge delay because their battery pack production ramp-up failed. They were understandably delayed, but then 2 quarters later Tesla’s automation division built new battery assembly lines. Now their latest assembly lines are cranking out orders of magnitude more battery packs in the US than any other car maker.

There is a long history of people mistaking short-term setbacks and delays at Tesla for defeats. The opposite is actually true, and will be true for the Model 3 / Model Y chassis line of vehicles in the long run too. Sorry you keep getting caught in the same cycle of underestimating Tesla that has been repeating:

1) Whine endlessly about short term delays
2) Ignore it when Tesla succeeds anyways despite delays.
3) Find the next thing to fixate on and never admit everything that was whined about turned out to be a non-issue in the long run.

Tesla was surprised by the demand for the TM3 and then pushed there production dates and volume by up a lot.

It’s there vision, leadership, engineering, workforce, customers.

It’s the data data data

Having a 3.5 Billion Dollar Cash Cow on your hands, is a lot of Tesla BoEVine Teats to keep flowing, and keep from backing up. 😂

It’s rabid fan base.

You have confused cause and effect,

It’s the data stupid

After the brand, I think the charging network is their number 1 asset. If Tesla ever needs an additional revenue stream they have the charging network to fall back on.

The Supercharger network was never intended to be a profit maker for Tesla; it wasn’t designed or built to be one. It gets pretty tiresome seeing suggestions that it should be turned into one.

Tesla isn’t even set up for monthly billing. Any Supercharger fees are added onto a customer’s charges for his next visit to a Tesla service center.

It’s the data

As a potential buyer, then I’d agree – no 1 single asset is the Supercharger network.

There are various reasons to go for an electric car – the biggest point which may put me off is range anxiety. I’d envisage most charging done at home, but it’s the occasional longer trip that would concern me. I’d feel that far less of a concern due to the Supercharger network than any other brand (at the moment)

Well, the biggest asset is their car designs & factories.

Their biggest competitive advantage is the supercharger network. No one else can really compete with Tesla since Tesla is the ONLY company that provides a reliable way to drive long distances with reasonable DC-fast charging.

It’s the data data data

Tesla’s biggest advantage is their sheer number and wide variety of advantages. The sum of Tesla’s advantages is greater than any single advantage alone.

But that isn’t accidental. Tesla has specifically set out to solve the entire problem of transitioning transportation from ICE to electric. That means solving for long distance, for charging, for the perception of EV’s, for battery and solar production, etc.

Elon musk.

It’s the data data data