Tesla is the new Apple


Has Tesla (TSLA) become the next Apple (APPL) ?

Ten years ago, the dominant phone makers were BlackBerry and Nokia. Then Apple came along with iPhone.

If memory serves, few predicted that iPhone would dethrone BlackBerry. Yet 10 years later, iPhone dominates.

 

Tesla-investing

 


iEcosystem

Apple didn’t invent the smartphone. It just figured out how to make it better, and managed to create an ecosystem.

That ecosystem includes iCloud and App Store, iMessages and Facetime.

When someone buys an iPhone, they aren’t just purchasing a phone. They are buying an iPhone, and it comes with a certain brand appeal.

 

Tesla’s Next Steps

Is Tesla doing the same thing?

Potentially. Much larger players dominate the auto industry, but Tesla has been able to grow this year, while other automakers have struggled.

Additionally, Tesla has established itself as a luxury brand that brings cutting edge technology to cars, including self-driving technology, over-the-air software updates and electric motors.

Although the Model 3, which launched this summer, is nothing revolutionary, I believe it will contribute to Tesla becoming an ecosystem.

Connected Cars

In my opinion, this will be an ecosystem that includes autonomous driving with artificial intelligence learning that helps make driving safer.

It is an ecosystem of cars communicating with one another, helping to improve GPS navigation and traffic updates with real- time features.

Is buying Tesla then like the purchase of an iPhone? Will people say, I got a new car? Or will they say I got a new Tesla?

 

Big Opportunity

That’s certainly something worth watching over the next few months as the Model 3 hits the street.

Apple created more than a better phone. It created an ecosystem that helps to keep its users engaged and loyal.

In my opinion, Tesla has the opportunity to do the same.

Disclaimer: The Mott Capital Thematic Growth portfolio on the Interactive Broker’s Asset Management platform own shares of Tesla.

 

Photo Credit: Paul Hudson via Flickr Creative Commons

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Mott Capital Management, LLC
Mott Capital Management, LLC
Mott Capital Management uses a long-term thematic growth approach to investing in equities. We search for investments that both reflect and help to shape generational and demographic shifts. Mott uses a philosophy of buying these companies for a 3- to 5-year time horizon, with the belief that a long-term holding period gives themes and our chosen companies a chance to fully develop. In our view, the long time horizon also serves to mitigate the risk associated with the short-term impact of market volatility.