After decades of exciting but oft delayed promise, after years of even more exciting run-up, after a precipitous fall in price and a logarithmic rise in demand, it can now be said: the era of the electric car is here. Its arrival should be celebrated by all people, and will be celebrated by all people other than climate change deniers. Major kudos must be given to Tesla (TSLA) and its CEO Elon Musk, they who pushed forward through every remaining impasse (some of which were quite daunting) in order to bring us to this point.
The first deliveries of the Tesla Model III, the working man’s electric car, are scheduled for July 28. Those who said Tesla, the company, would never pull this off were dead wrong. And yet, those who have recently bet against TSLA, the stock, may profit anyway. Why is that? Because a company destined to change the future is valued in a way that has little to do with money. The formula is, I speculate, something like this: (value to humanity of change) x (% of humanity that believe change will come).
But what about once the world is changed? Well, then you have to use a very different formula. For succeeding in making a dream into a reality, Tesla may ultimately pay a high price. It isn’t that TSLA shareholders have no chance: if the company hits its targets for 2017 sales and continues to grow its sales by 50% or more annually, it may very well be worth its current market cap of $54 billion. If, on the other hand, it hits those targets then grows at a merely moderate rate, its value will probably fall to about half of that.
No need to talk about what will happen if it misses its current targets, right?