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URLhttps://www.forbes.com/sites/jonmarkman/2018/05/24/dear-elon-musk-sexy-cars-are-not-enough/
Last Crawled2026-02-15 17:42:51 (2 months ago)
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Meta TitleDear Elon Musk, Sexy Cars Are Not Enough
Meta DescriptionTesla stories are never really about amazing engineering. One way or another, sadly, they become stories about unfulfilled promises.
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It’s time to talk about Tesla, and why I have turned a cold shoulder to the shares. Earlier this month in Utah, a Model S traveling 60 mph  slammed into  the back of a parked firetruck. Elon Musk, Tesla’s cofounder, was thrilled the driver escaped with only a broken ankle. It is a perfect Tesla story, and part of the reason investors should avoid the stock. AUSTIN, TX - MARCH 11: Elon Musk speaks onstage at Elon Musk Answers Your Questions! during SXSW at ACL Live on March 11, 2018 in Austin, Texas. (Photo by Diego Donamaria/Getty Images for SXSW) To be fair to Musk, the fact that the driver survived is amazing. And normally, that would be the story. However, Tesla stories are never really about amazing engineering. One way or another, sadly, they become stories about unfulfilled promises. If you are a shareholder, you never want to be part of that kind of narrative. I will give Musk credit. He is a gifted storyteller. For a long time, he’s been talking about a Tesla  master plan . It’s clever. It begins with a high-profile roadster, worthy of effusive praise from the rich and famous. The slick two-seater introduced the brand. More than that, it proved electric cars didn’t have to be boring, underpowered sewing machines. The next chapters involved more utilitarian vehicles. There is the flagship Model S — a large, sexy sedan with a 17-inch iPad-like device in the center console. Then came the X, a state-of-the-art sport utility vehicle. The “Back to the Future”-esque gullwing doors were a nice touch. All these vehicles were supposed to be a prelude to the Model 3 — a “get the groceries, pick up the kids from soccer” kind of car that would sell for $35,000. It was supposed to be the first mass-market Tesla. It was supposed to make the company profitable. Musk wanted to call the smaller sedan the Model E, for obvious dumb humor reasons , but Ford Motor threatened to sue because the name sounded too similar to its iconic Model T.  It would have also been a prelude to the forthcoming electric crossover that’s expected to be named the Model Y. I have no problem with Tesla not being profitable, honestly. It takes time, and a lot of money, to start a car company from scratch. That is especially true when every aspect of the process is being radically reimagined. In 2016, Musk said he had an epiphany. He realized that it was possible to build a machine that builds the machines. That’s deep. He was talking about a cutting-edge, robotic factory he called Alien Dreadnaught that could produce Teslas unencumbered by human frailties. Immediately, analysts went back to their models. If Dreadnaught worked, it would completely change Tesla’s cost structure, and revolutionize manufacturing. There was just one problem . It didn’t really live up to Musk’s claims. A month ago, under pressure to meet Model 3 production goals, Musk admitted that Tesla’s Fremont, Calif., factory had been  over-automated . The dream of a factory where raw materials entered one end, and finished goods exited the other, was unrealistic. And that brings me full circle to the Utah accident … Although the driver admits she was looking at her phone as her Model S crashed, the media is focusing on her recollection that the vehicle’s Autopilot system was engaged. Autopilot, despite its poorly chosen name, is not a self-driving vehicle system. Musk is blaming the media for focusing on the wrong storyline. But he is at fault for evangelizing the  autonomous capabilities  of Autopilot. Unfulfilled promises are a recurring theme at Tesla … Its original Roadster shared a foundation and stylistic influences with the Lotus Elise. The Model S and X were riddled with production and quality control delays. And most variants of the Model 3 are $15,000 more expensive than the promised mass-market entry point. None of these reasons, nor  analyst angst  about cash flow burn rates, are reason to be bearish for Tesla shares. If Musk can get production issues ironed out, financial metrics will turn very quickly. And his ability to tell a compelling story is without equal. That prospect, coupled with  historic  short-seller interest, could be rocket fuel for the stock price. Some  smart investors  are betting that dynamic will play out. I have been telling my members to simply stand aside. There are more attractive ways to play the transition to self-driving vehicles. Microsoft, for example, is building relationships with automakers right now that give it a formidable head start in the race to  connected cars . The prospect of vehicles communicating with each other would also eliminate car crashes caused by drivers looking at their phones. And the technology is coming much sooner than most investors believe. The Redmond, Wash., software powerhouse has another leg up on Tesla. Managers are not given to hyperbole about the business. They fulfill promises. I understand Elon Musk is selling sex appeal. It works. Flip the “3,” and the names of the Tesla models even spell sex. But that should not be enough for most investors. It is certainly not enough for me.
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Forbes Staff will review your concern shortly.>) - [Privacy](https://www.forbes.com/fdc/privacy.html) - [Do Not Sell My Personal Information](https://www.forbes.com/consent/editprivacy/?consent_do_not_sell=true) - [Terms](https://www.forbes.com/terms/) - [AdChoices](https://youradchoices.com/control) - [Reprints & Permissions](https://www.parsintl.com/publication/forbes/) [Money](https://www.forbes.com/money/) [Investing](https://www.forbes.com/investing/) # Dear Elon Musk, Sexy Cars Are Not Enough By[Jon Markman](https://www.forbes.com/sites/fast-forward-investing/ "https://www.forbes.com/sites/fast-forward-investing/"), Contributor. Forbes contributors publish independent expert analyses and insights. Analyzing tech stocks through the prism of cultural change. Follow Author May 24, 2018, 10:25am EDT May 29, 2018, 11:52am EDT This article is more than 7 years old. It’s time to talk about Tesla, and why I have turned a cold shoulder to the shares. Earlier this month in Utah, a Model S traveling 60 mph [slammed into](https://www.theguardian.com/technology/2018/may/14/tesla-crash-utah-driver-autopilot-mode-elon-musk) the back of a parked firetruck. Elon Musk, Tesla’s cofounder, was thrilled the driver escaped with only a broken ankle. It is a perfect Tesla story, and part of the reason investors should avoid the stock. ![AUSTIN, TX - MARCH 11: Elon Musk speaks onstage at Elon Musk Answers Your Questions! during SXSW at... \[+\] ACL Live on March 11, 2018 in Austin, Texas. (Photo by Diego Donamaria/Getty Images for SXSW)](https://specials-images.forbesimg.com/dam/imageserve/930534188/960x0.jpg?fit=scale) AUSTIN, TX - MARCH 11: Elon Musk speaks onstage at Elon Musk Answers Your Questions! during SXSW at ACL Live on March 11, 2018 in Austin, Texas. (Photo by Diego Donamaria/Getty Images for SXSW) To be fair to Musk, the fact that the driver survived is amazing. And normally, that would be the story. However, [Tesla stories are never really about amazing engineering. One way or another, sadly, they become stories about unfulfilled promises.](https://twitter.com/intent/tweet?url=http%3A%2F%2Fwww.forbes.com%2Fsites%2Fjonmarkman%2F2018%2F05%2F24%2Fdear-elon-musk-sexy-cars-are-not-enough%2F&text=Tesla%20stories%20are%20never%20really%20about%20amazing%20engineering.%20Sadly%2C%20they%20become%20stories%20about%20unfulfilled%20promises.) If you are a shareholder, you never want to be part of that kind of narrative. I will give Musk credit. He is a gifted storyteller. For a long time, he’s been talking about a Tesla [master plan](https://www.tesla.com/en_CA/blog/secret-tesla-motors-master-plan-just-between-you-and-me). It’s clever. It begins with a high-profile roadster, worthy of effusive praise from the rich and famous. The slick two-seater introduced the brand. More than that, it proved electric cars didn’t have to be boring, underpowered sewing machines. The next chapters involved more utilitarian vehicles. There is the flagship Model S — a large, sexy sedan with a 17-inch iPad-like device in the center console. Then came the X, a state-of-the-art sport utility vehicle. The “Back to the Future”-esque gullwing doors were a nice touch. All these vehicles were supposed to be a prelude to the Model 3 — a “get the groceries, pick up the kids from soccer” kind of car that would sell for \$35,000. It was supposed to be the first mass-market Tesla. It was supposed to make the company profitable. Musk wanted to call the smaller sedan the Model E, for obvious [dumb humor reasons](https://www.usatoday.com/story/tech/talkingtech/2017/03/24/tesla-angled-s-e-x-model-line-up/99587238/), but Ford Motor threatened to sue because the name sounded too similar to its iconic Model T. It would have also been a prelude to the forthcoming electric crossover that’s expected to be named the Model Y. [I have no problem with Tesla not being profitable, honestly. It takes time, and a lot of money, to start a car company from scratch.](https://twitter.com/intent/tweet?url=http%3A%2F%2Fwww.forbes.com%2Fsites%2Fjonmarkman%2F2018%2F05%2F24%2Fdear-elon-musk-sexy-cars-are-not-enough%2F&text=I%20have%20no%20problem%20with%20Tesla%20losing%2C%20honestly.%C2%A0It%20takes%20time%2C%20and%20a%20lot%20of%20money%2C%20to%20start%20a%20car%20company%20from%20scratch.) That is especially true when every aspect of the process is being radically reimagined. In 2016, Musk said he had an epiphany. He realized that it was possible to build a machine that builds the machines. That’s deep. He was talking about a cutting-edge, robotic factory he called Alien Dreadnaught that could produce Teslas unencumbered by human frailties. Immediately, analysts went back to their models. If Dreadnaught worked, it would completely change Tesla’s cost structure, and revolutionize manufacturing. **There was just one problem**. It didn’t really live up to Musk’s claims. A month ago, under pressure to meet Model 3 production goals, Musk admitted that Tesla’s Fremont, Calif., factory had been [over-automated](https://qz.com/1261214/how-exactly-tesla-shot-itself-in-the-foot-by-trying-to-hyper-automate-its-factory/). The dream of a factory where raw materials entered one end, and finished goods exited the other, was unrealistic. And that brings me full circle to the Utah accident … Although the driver admits she was looking at her phone as her Model S crashed, the media is focusing on her recollection that the vehicle’s Autopilot system was engaged. Autopilot, despite its poorly chosen name, is not a self-driving vehicle system. Musk is blaming the media for focusing on the wrong storyline. But he is at fault for evangelizing the [autonomous capabilities](https://www.tesla.com/videos/autopilot-self-driving-hardware-neighborhood-long) of Autopilot. **Unfulfilled promises are a recurring theme at Tesla** … - Its original Roadster shared a foundation and stylistic influences with the Lotus Elise. - The Model S and X were riddled with production and quality control delays. - And most variants of the Model 3 are \$15,000 more expensive than the promised mass-market entry point. None of these reasons, nor [analyst angst](https://www.bloomberg.com/graphics/2018-tesla-burns-cash/) about cash flow burn rates, are reason to be bearish for Tesla shares. If Musk can get production issues ironed out, financial metrics will turn very quickly. And his ability to tell a compelling story is without equal. That prospect, coupled with [historic](https://www.cnbc.com/2018/04/11/tesla-is-the-biggest-short-in-the-us-stock-market.html) short-seller interest, could be rocket fuel for the stock price. Some [smart investors](https://www.cnbc.com/video/2018/05/14/ron-baron-were-going-to-make-20-times-our-money-on-tesla.html) are betting that dynamic will play out. I have been telling my members to simply stand aside. There are more attractive ways to play the transition to self-driving vehicles. Microsoft, for example, is building relationships with automakers right now that give it a formidable head start in the race to [connected cars](http://fortune.com/2017/03/22/microsoft-connected-car-ip/). The prospect of vehicles communicating with each other would also eliminate car crashes caused by drivers looking at their phones. And the technology is coming much sooner than most investors believe. The Redmond, Wash., software powerhouse has another leg up on Tesla. Managers are not given to hyperbole about the business. They fulfill promises. I understand Elon Musk is selling sex appeal. It works. Flip the “3,” and the names of the Tesla models even spell sex. But that should not be enough for most investors. It is certainly not enough for me. [Editorial Standards](https://www.forbes.com/sites/forbesstaff/article/forbes-editorial-values-and-standards/)[Reprints & Permissions](https://www.parsintl.com/publications/forbes/) LOADING VIDEO PLAYER... FORBES’ FEATURED Video © 2026 Forbes Media LLC. 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It’s time to talk about Tesla, and why I have turned a cold shoulder to the shares. Earlier this month in Utah, a Model S traveling 60 mph [slammed into](https://www.theguardian.com/technology/2018/may/14/tesla-crash-utah-driver-autopilot-mode-elon-musk) the back of a parked firetruck. Elon Musk, Tesla’s cofounder, was thrilled the driver escaped with only a broken ankle. It is a perfect Tesla story, and part of the reason investors should avoid the stock. ![AUSTIN, TX - MARCH 11: Elon Musk speaks onstage at Elon Musk Answers Your Questions! during SXSW at... \[+\] ACL Live on March 11, 2018 in Austin, Texas. (Photo by Diego Donamaria/Getty Images for SXSW)](https://specials-images.forbesimg.com/dam/imageserve/930534188/960x0.jpg?fit=scale) AUSTIN, TX - MARCH 11: Elon Musk speaks onstage at Elon Musk Answers Your Questions! during SXSW at ACL Live on March 11, 2018 in Austin, Texas. (Photo by Diego Donamaria/Getty Images for SXSW) To be fair to Musk, the fact that the driver survived is amazing. And normally, that would be the story. However, [Tesla stories are never really about amazing engineering. One way or another, sadly, they become stories about unfulfilled promises.](https://twitter.com/intent/tweet?url=http%3A%2F%2Fwww.forbes.com%2Fsites%2Fjonmarkman%2F2018%2F05%2F24%2Fdear-elon-musk-sexy-cars-are-not-enough%2F&text=Tesla%20stories%20are%20never%20really%20about%20amazing%20engineering.%20Sadly%2C%20they%20become%20stories%20about%20unfulfilled%20promises.) If you are a shareholder, you never want to be part of that kind of narrative. I will give Musk credit. He is a gifted storyteller. For a long time, he’s been talking about a Tesla [master plan](https://www.tesla.com/en_CA/blog/secret-tesla-motors-master-plan-just-between-you-and-me). It’s clever. It begins with a high-profile roadster, worthy of effusive praise from the rich and famous. The slick two-seater introduced the brand. More than that, it proved electric cars didn’t have to be boring, underpowered sewing machines. The next chapters involved more utilitarian vehicles. There is the flagship Model S — a large, sexy sedan with a 17-inch iPad-like device in the center console. Then came the X, a state-of-the-art sport utility vehicle. The “Back to the Future”-esque gullwing doors were a nice touch. All these vehicles were supposed to be a prelude to the Model 3 — a “get the groceries, pick up the kids from soccer” kind of car that would sell for \$35,000. It was supposed to be the first mass-market Tesla. It was supposed to make the company profitable. Musk wanted to call the smaller sedan the Model E, for obvious [dumb humor reasons](https://www.usatoday.com/story/tech/talkingtech/2017/03/24/tesla-angled-s-e-x-model-line-up/99587238/), but Ford Motor threatened to sue because the name sounded too similar to its iconic Model T. It would have also been a prelude to the forthcoming electric crossover that’s expected to be named the Model Y. [I have no problem with Tesla not being profitable, honestly. It takes time, and a lot of money, to start a car company from scratch.](https://twitter.com/intent/tweet?url=http%3A%2F%2Fwww.forbes.com%2Fsites%2Fjonmarkman%2F2018%2F05%2F24%2Fdear-elon-musk-sexy-cars-are-not-enough%2F&text=I%20have%20no%20problem%20with%20Tesla%20losing%2C%20honestly.%C2%A0It%20takes%20time%2C%20and%20a%20lot%20of%20money%2C%20to%20start%20a%20car%20company%20from%20scratch.) That is especially true when every aspect of the process is being radically reimagined. In 2016, Musk said he had an epiphany. He realized that it was possible to build a machine that builds the machines. That’s deep. He was talking about a cutting-edge, robotic factory he called Alien Dreadnaught that could produce Teslas unencumbered by human frailties. Immediately, analysts went back to their models. If Dreadnaught worked, it would completely change Tesla’s cost structure, and revolutionize manufacturing. **There was just one problem**. It didn’t really live up to Musk’s claims. A month ago, under pressure to meet Model 3 production goals, Musk admitted that Tesla’s Fremont, Calif., factory had been [over-automated](https://qz.com/1261214/how-exactly-tesla-shot-itself-in-the-foot-by-trying-to-hyper-automate-its-factory/). The dream of a factory where raw materials entered one end, and finished goods exited the other, was unrealistic. And that brings me full circle to the Utah accident … Although the driver admits she was looking at her phone as her Model S crashed, the media is focusing on her recollection that the vehicle’s Autopilot system was engaged. Autopilot, despite its poorly chosen name, is not a self-driving vehicle system. Musk is blaming the media for focusing on the wrong storyline. But he is at fault for evangelizing the [autonomous capabilities](https://www.tesla.com/videos/autopilot-self-driving-hardware-neighborhood-long) of Autopilot. **Unfulfilled promises are a recurring theme at Tesla** … - Its original Roadster shared a foundation and stylistic influences with the Lotus Elise. - The Model S and X were riddled with production and quality control delays. - And most variants of the Model 3 are \$15,000 more expensive than the promised mass-market entry point. None of these reasons, nor [analyst angst](https://www.bloomberg.com/graphics/2018-tesla-burns-cash/) about cash flow burn rates, are reason to be bearish for Tesla shares. If Musk can get production issues ironed out, financial metrics will turn very quickly. And his ability to tell a compelling story is without equal. That prospect, coupled with [historic](https://www.cnbc.com/2018/04/11/tesla-is-the-biggest-short-in-the-us-stock-market.html) short-seller interest, could be rocket fuel for the stock price. Some [smart investors](https://www.cnbc.com/video/2018/05/14/ron-baron-were-going-to-make-20-times-our-money-on-tesla.html) are betting that dynamic will play out. I have been telling my members to simply stand aside. There are more attractive ways to play the transition to self-driving vehicles. Microsoft, for example, is building relationships with automakers right now that give it a formidable head start in the race to [connected cars](http://fortune.com/2017/03/22/microsoft-connected-car-ip/). The prospect of vehicles communicating with each other would also eliminate car crashes caused by drivers looking at their phones. And the technology is coming much sooner than most investors believe. The Redmond, Wash., software powerhouse has another leg up on Tesla. Managers are not given to hyperbole about the business. They fulfill promises. I understand Elon Musk is selling sex appeal. It works. Flip the “3,” and the names of the Tesla models even spell sex. But that should not be enough for most investors. It is certainly not enough for me.
Shard156 (laksa)
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