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Our PM recently invited Tesla to set up a factory in Malaysia, but before we get ahead of ourselves, Tesla will run into problems, the same problem that Netflix is running into now: 👇👇
Streaming against the Current:
Back in 2013, Netflix started producing its own content instead of just distributing, it was a big risk, but it paid off. Subscriber growth took off.
But this pissed their suppliers off, Netflix went from working with other studios to becoming in competition with them. Now, major studios have pulled out their content from Netflix and have started their own streaming services (ie. Disney+, HBOMax etc). Netflix’s subscriber growth is now in decline, losing 200,000 subs this quarter. They can blame password sharing all they want, but the real problem is competition, and Tesla would be facing the same.
Driving against Traffic:
Now, Tesla is still leading the world in sales at a whopping 118x PE ratio, but competitors are rapidly gaining speed. Volkswagen Group is pumping out EVs (Audi, Porshe), hitting Tesla’s luxury segment in Europe. Ford and GE are doing the same in America. Meanwhile, China is already the biggest EV market with its own brands (BYD, SAIC, etc). In terms of growth rate, Tesla is gonna be swamped.
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