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1) The Story of Tesla#

Tesla was founded in 2003 in Palo Alto, California, located in the world-renowned Silicon Valley, which is home to the highest concentration of smart people and also the highest labor costs on the planet. It is typically a hub for internet and high-tech companies, making the establishment of an automotive company in Silicon Valley seem somewhat unconventional.

The company is named after Nikola Tesla, one of history's greatest engineers and geeks. From the moment of its inception, the company has been closely tied to another name and its fate—Elon Musk.

Musk is also an undeniable genius, born in South Africa in 1971. At the age of 12, he sold a computer game he created and moved to North America at 17. While studying at Stanford, Musk considered three fields he wanted to delve into, which he believed would profoundly impact the future of humanity: the internet, clean energy, and space. In 1995, he co-founded Zip2 with his brother and sold it to Compaq for $307 million in cash and $34 million in stock options in 1999. He then founded PayPal, which was sold to eBay for $1.5 billion in 2002. Shortly after, Musk founded SpaceX in 2002 and joined Tesla as a co-founder in 2003, later initiating a unique solar energy company called SolarCity. Musk's desire to improve human transportation is undoubtedly strong, as both SpaceX and Tesla share a common theme—transportation. SpaceX's Falcon 9 rocket is currently the most powerful and cost-effective commercial rocket, and the Dragon spacecraft is the only private spacecraft capable of docking with the International Space Station. This series of seemingly unrelated and dazzling achievements has earned him the title of a real-life Iron Man.

Musk envisions a day when people can freely drive environmentally friendly cars powered by ubiquitous free solar energy, which has become Tesla's corporate vision—to popularize electric vehicles among mainstream consumers through three main strategies:

1. Iteratively produce generations of more economical and practical electric vehicle models: starting with high-end cars, then entering the mass market, and selling them through its own showrooms and website.
2. Sell its patents and expertise in electric vehicle powertrains to other automakers, enabling them to launch electric vehicle models more quickly.
3. Act as a catalyst and a positive example for other automakers, demonstrating that electric vehicles can meet high-performance and more economical consumer demands.

After five years of development, the company officially launched its first sports car model, the Roadster, in 2008. The Roadster was produced in collaboration with Lotus and was manufactured on Lotus's production line. The contract has expired, and production has ceased, with approximately 2,400 units sold. The second model is the only model currently on sale, the Model S, which is positioned in the luxury car market above $50,000. The company plans to mass-produce the SUV model, the Model X, based on the same platform as the Model S in the second half of 2014. There is also a planned mass-market model, the Gen III, which Musk revealed would be launched sometime in 2016.

From the image above, it can be seen that most car companies, due to technological and cost constraints, have designed electric vehicles primarily for daytime commuting. Although studies show that over 80% of daily driving distances do not exceed 100 kilometers, users are evidently not buying into this. Sales data for most of these models are lackluster. The technical specifications of the Tesla Model S significantly outperform other electric vehicle models and are comparable to internal combustion vehicles in the same class, thanks to over 250 patents applied in the Model S, its all-aluminum body, and its low drag coefficient. Therefore, the Model S's competitors are not other electric vehicles but rather luxury models in the same price range, and sales data confirm this: as of May 2013, over 10,000 units had been shipped, with more than 10,000 orders on hand. It surpassed the BMW 7 Series, Mercedes-Benz S-Class, Audi A8, and Lexus LS series, ranking first in sales in the North American luxury car market priced over $70,000 in the first quarter of 2013.

User feedback indicates that the driving experience of the Model S is astonishing: there is no anti-human gear shifting setup, peak torque is available from the start, and acceleration power is continuous. There is even no need for an ignition button; simply opening the door, sitting down, and pressing the accelerator pedal allows for immediate driving. The brakes have become a mechanism that only needs to be triggered in emergencies, as the perfect regenerative braking system forces deceleration when the accelerator pedal is released, meaning that for most of the driving time, there is no need to switch feet to press another pedal. The driving process is as quiet as a whisper, with a responsive large touchscreen, always connected to the internet with Google Maps navigation, and a music streaming system that can be voice-controlled to play any song, adding more enjoyment to the driving experience. Since there is no transmission, the vehicle's floor is completely flat, allowing even the middle seat in the back row to be very comfortable. With no engine, there is even an extra front trunk for storage. The car's location can be remotely monitored via an app on a smartphone, allowing users to check the charging status and pre-cool the car's air conditioning. Additionally, some new features can be obtained by directly updating the car's operating system software via the internet. All these user-friendly experiences make Model S owners feel anxious when sending their cars for repairs or maintenance, as they find it impossible to readjust to internal combustion vehicles, feeling that they are noisy, smelly, and sluggish, often forgetting that traditional cars even need to be turned off.

The renowned magazine Motor Trend awarded the 2013 Car of the Year to the Model S with unprecedented unanimous votes from 11 editors. This was the first time in the award's 65-year history that a non-internal combustion vehicle received the honor, with their comments stating: "The Model S is not just a great electric car; it is a great car." The authoritative American automotive review magazine Consumer Reports also gave the Model S the highest score in history, 99 out of 100, stating it is "almost a perfect car."

To fulfill the company's vision, Tesla has a Supercharger network plan, which is a collaboration between Tesla and Musk's other company, SolarCity, using solar energy to power the Superchargers. The Supercharger can fully charge the Model S in under an hour, with plans to further increase charging speed. What excites consumers the most is that all of this is permanently free, meaning Tesla owners can travel freely across the United States without spending a dime in the near future.

Tesla's sales strategy has also disrupted traditional automakers by completely bypassing any car dealerships, selling all cars directly through its own stores and website (any claims of agency sales are surely scams). Musk hired former Apple sales chief George Blankenship to open Tesla's sales stores in bustling urban areas and shopping malls, and sales staff do not receive any commission. "I don't want to sell any Tesla," George said, "I want people to buy a Tesla because it is the car they truly want. If they walk into a Tesla store, feel our sincerity in car manufacturing, and think about owning one of our cars someday, that is how I want the store to operate." By capturing people's attention with eye-catching products in malls and other high-traffic shopping venues, followed by further introductions and test drives, Tesla's marketing strategy aims to make people fall in love with the cars. This stands in stark contrast to the crowded 4S dealerships of traditional car dealers, where salespeople are often overly eager to sell cars. As of April 2013, Tesla had over 30 stores worldwide, with plans to reach 50 by the end of the year, and its first store in Beijing, China, is set to open in mid-May at the Fangcaodi Center.

The American Automobile Dealers Association, after decades of lobbying, has enacted laws in some states aimed at protecting their own interests, which conflict with Tesla's direct sales policy. Tesla is simultaneously taking legal action against car dealers in states where laws conflict while seeking federal legislation to permanently secure the right to sell cars directly to customers. Currently, Tesla has achieved victory in New York, while in Texas, the outcome remains undecided after several hearings. Musk stated, "If franchise dealers truly believe what they say, that they are the best channel for selling cars, then they should do better and not be afraid of competition."

Musk's newly launched financing lease plan in early April reflects his unwavering belief in the company's success: after three years, Model S owners can sell their cars back to Tesla at a value not lower than the discounted value of a Mercedes-Benz S-Class (usually around 45%), with Musk personally guaranteeing the buyback with his entire fortune (Musk's net worth was reported at $2.8 billion in the latest Forbes wealth rankings).

Additionally, Tesla has business dealings providing powertrains for Daimler's A-Class, B-Class, and Smart electric vehicle models, and Toyota has also entrusted Tesla with the powertrain for the RAV4 EV. This revenue accounted for half of Tesla's income before the Model S went into mass production.

Tesla went public on NASDAQ on June 29, 2010, under the ticker TSLA, raising $226 million, becoming the only American car manufacturer to go public since Ford in 1956. Its major shareholders include a star-studded lineup, with institutional investors such as Daimler, Toyota, Panasonic, and Abu Dhabi Investment Authority, and individual investors including Google founders Sergey Brin and Larry Page, former eBay president Jeff Skoll, and Hyatt Hotels heir Nick Pritzker.

2) Why I Decided to Buy Tesla Electric Vehicles#

Why I decided to buy $Tesla Electric Vehicles (TSLA)$ One. Because I held QIHU in full last year, I thought about finding a high-growth stock for allocation at the end of last year... Why I decided to buy $Tesla Electric Vehicles (TSLA)$ One. Because I held QIHU in full last year, I thought about finding a high-growth stock for allocation at the end of last year...

I decided to buy $Tesla Electric Vehicles (TSLA)$

One. Because I held QIHU in full last year, I thought about finding a high-growth stock for allocation at the end of last year, focusing on the electric vehicle industry, as I believe that in the next decade, electric vehicles will become very common on the roads. After identifying the industry, I looked for targets. Initially, I was most interested in BYD, but after riding in an E6 taxi in Shenzhen, I found it average. I believe that even with government subsidies, it will be difficult to popularize the 360,000 E6 in the private car market; at least, I wouldn't buy it. In early January, I told @余晓光 that I was very optimistic about the electric vehicle industry and asked if he had researched BYD. He said that if I was optimistic about the electric vehicle industry, I should only look at one company worldwide, and that is Tesla. At that time, not many people were paying attention to it domestically, and there wasn't much discussion in the TSLA section on Xueqiu. The stock price was only 33 yuan. A simple review of the company's development history and Musk's entrepreneurial story left me impressed, especially the Model S, which I only saw in pictures but fell in love with at first sight. I really wanted to own such a car. I believed this was a team with dreams and could build a great company.

Two. After discovering a company I really liked, I invested heavily in research and analysis. I am grateful to live in this internet age, where I don't need to visit the company in person; I can obtain a lot of the latest and most accurate information to support my investment decisions by using the right methods and studying diligently. Below, I will share my research methods:

1. I spent two days reviewing the introduction and test drives of the Model S on the website of Auto Home, watching many Tesla-related videos, including National Geographic's "Super Factory" on Tesla Model S and "Model S vs BMW M5," which completely changed my previous views on electric vehicles. At $50,000, it can travel 480 kilometers on a single charge, with a 0-100 km/h acceleration time of 4.2 seconds. What impressed me the most was the 17-inch touchscreen, which can also install apps for control. I think such a car is not only something I want to own, but anyone with the means would want to own it, as it truly exceeds our expectations of a car. At that time, Tesla's stock market was highly polarized, with about 110 million shares shorted, nearly 30% of the total shares sold short, ranking first in NASDAQ's short interest list. The main three reasons for this short interest were:

2. Safety concerns regarding electric vehicles and whether the batteries might explode.

3. The belief that such an expensive car would not sell, along with doubts about the company's production capacity.

4. The company had a market value of $3.5 billion and was still losing money, with the stock price severely overvalued, and in the automotive industry, a 10x PE ratio is already impressive.

To be honest, I was also worried about these three issues, but after careful analysis, I found that Tesla's cars use nearly 7,000 18650 lithium-ion batteries to form the battery pack, reducing the risk of explosion. Musk estimated that they could deliver 20,000 cars that year and would gradually launch the Model X and the $30,000 Gen III. At that time, global orders had exceeded 20,000, and weekly production capacity had increased to 400 units per week. However, Tesla had a production capacity of 400,000 vehicles at the NUMMI plant, a joint venture with Toyota and General Motors, meaning that once the production chain was established, the company could rapidly increase capacity, with 20 times the potential for improvement in existing factories. After Apple disrupted the smartphone industry, achieving a market value of $650 billion, I thought Tesla could achieve at least half of that in the much larger automotive industry, which would mean a market value of over $300 billion. Therefore, on January 10, I posted on Xueqiu, "Is Tesla the iPhone of the automotive industry? Has Tesla disrupted the traditional automotive industry? Perhaps this is a 100-fold growth stock" link and bought in at $33.76 when the market opened that evening (for a more detailed analysis of Tesla, please refer to @Teslafans and @狼狼枪枪在雪球的贴, their analyses of the details are worth studying).

2. As mentioned above, I really wanted to own such a car, so I arranged to test drive with @余晓光 in Hong Kong and make a reservation, with the scheduled date being the 2.5th. Unfortunately, Xiaoguang couldn't join due to a flight to Vietnam. After test driving in Hong Kong with two other friends, I found that I absolutely loved the car. It had the power equivalent to a 4.4-liter gasoline car, and the acceleration response was much more sensitive than my 3.7-liter SUV. It was very quiet except for tire noise, and after a half-hour test drive, I took out my credit card to make a reservation, only to be told that the earliest delivery would be at the end of the year or around the next Spring Festival, and the price was still undecided in the range of 600,000 to 1 million Hong Kong dollars. They only provided vehicle explanations and test drive services, and to reserve a car, I had to place an order online and pay a deposit myself. Although I was quite unhappy, looking at it from another angle, this business model is actually great. Direct sales can increase the company's profit margins, and all deposits and car payments go to the headquarters, which is beneficial for cash flow management, allowing for material production to be organized in advance based on orders. Isn't this similar to Xiaomi's futures model? I really don't know who learned from whom, but their products are well-made, and I have no choice but to wait a year to place an order. After returning, I posted on Xueqiu link that after test driving in Hong Kong on February 5, I believe this car will be loved by everyone, and it has the potential to be a tenfold growth stock, so last night I increased my position in TSLA. I believe next week's quarterly report and Q1 outlook will be good, and I ordered a Tesla Motors 85KMH, RN327523, to be delivered by the end of the year. It was 2,000 more than @Teslafans RN325512, which translates to an average of about 85 orders per day recently. If calculated this way, there would be about 30,000 orders this year, but we need to account for some orders that were placed without deposits, estimating around 20,000. However, Tesla's cars and stocks are truly well-known and loved, and I think in two years, I will first buy their cars and stocks to explore the path.

3. A few days after the test drive, I focused on checking everything about Tesla or the Model S on Weibo. I found that some Chinese owners who received their cars in North America or their colleagues and friends who purchased the car all had high praise for it. I paid special attention to @Teslafans, @擎天柱 optimus_prime, [@成涛 TaoCheng 和](https://xueqiu.com/n/%E6%88%90%E6%B6%9B TaoCheng%E5%92%8C) @狼狼枪枪, and I noticed a characteristic: many car owners also bought stocks, as they had researched the company's fundamentals extensively. After gaining a deeper understanding of the company, I continued to increase my position at 38-39, but unexpectedly, after the quarterly report came out, the Q4 performance was below expectations, leading to a 10% drop in the stock price at the opening, which gradually adjusted to around 34 yuan. I initially thought the company might need to show profitability by the end of the year for the market to correct its misjudgment, but I didn't expect Musk not only to produce first-class products but also to manage market value excellently. He frequently released positive news about the company on Twitter, such as early profitability and increased production capacity, which is strange since the U.S. Securities and Exchange Commission does not seem to regulate such price-influencing matters. The subsequent events are well-known; the stock price surged from 37 to 110 yuan within two months.

In summary and reflection: Although I captured this growth stock and am very optimistic about the company's fundamentals and future development, there are still areas worth reflecting on. Because I held QIHU in full, I only used new funds to build a position in TSLA, unwilling to sell QIHU to switch to TSLA, so my position remained primarily in QIHU. At that time, I thought TSLA might need to clarify its production capacity and profits by the end of the year for the market to correct its misjudgment. Additionally, I was more familiar with QIHU relative to TSLA, and the margin of safety for holding QIHU was higher, as any recall or similar issue with Tesla could lead to a significant drop in stock price. Therefore, I considered it safer to increase my TSLA position using margin after QIHU rose in the second half of the year. Furthermore, regarding the combination of stocks and CALL options, I had experienced significant gains and losses with Hong Kong stock warrants in 2007, so I was somewhat fearful of this approach. Thus, I did not open CALL trading permissions in my U.S. stock account. However, reflecting on my past naivety, I treated warrants like stocks and bought many warrants without understanding the companies and with short time limits. The TSLA operation could be improved by combining stocks with medium to long-term CALL options, allowing for greater leverage without using margin, thus seeking larger returns.

Regarding single-stock holdings: Many famous investors or books remind investors not to put all their eggs in one basket, but I believe that if you dare to buy one or two stocks with full allocation and hold them long-term, this decision itself shows sufficient understanding of the stocks. To some extent, it is safer. Buffett's mentor, Fisher, once said to concentrate efforts on purchasing undervalued companies, allowing funds to be concentrated: only about 5% of outstanding companies exist in any market, and finding those with undervalued stock prices is a rare opportunity. When the opportunity arises, one should buy heavily, even with all available funds.

Regarding financing: Buffett advises investors never to borrow money to buy stocks, but I personally understand this is not a hard rule. The key is whether you have enough understanding and confidence in the company you are buying. When I started my company, I once mortgaged my house, and I also borrowed money when investing in real estate. Therefore, once I find an excellent company with a potential for 5-10 times growth, I would boldly finance to buy in. High returns certainly come with high risks, and without daring to take risks, one cannot achieve significant wins. Additionally, aside from stocks, I also have real estate and company equity, so even if I lose all my stocks, I won't be left with nothing, which is my confidence.

Buffett's teacher Graham also wrote in "The Intelligent Investor" that if you have enough understanding of the company you are buying, it is also possible to use leverage to buy in. When QIHU's stock price was at 16 yuan, I advised @许志宏 to sell his house to increase his position.

3) The Chaos of Tesla in China#

In April 2014, on the eve of the visit of the legendary electric vehicle manufacturer Tesla's CEO Elon Musk to China, a collective "rights protection" action was initiated by 23 Tesla "prospective owners" from mainland China outside Beijing and Shanghai due to dissatisfaction with the delivery order, which escalated.

These Tesla reservation users in China claimed that Tesla did not deliver cars according to the "established order," as some later-order users in Beijing and Shanghai had already been notified to pick up their cars, while earlier-order users from other regions were still waiting. According to Tencent Technology, a lawyer's letter drafted by the 23 users has been sent to Tuosule Automobile Sales (Beijing) Co., Ltd. (Tesla's sales entity in China) and Tesla's CFO Deepak Ahuja. The letter accused Tesla of unilaterally changing the delivery order without informing customers, failing to fulfill delivery obligations, constituting "false promises," and allegedly defrauding consumers.

Tesla's global vice president and head of China, Veronica Wu, responded to the "rights protection" car owners via phone and email, stating that some regions outside Beijing and Shanghai could not deliver cars early due to the lack of established after-sales service centers and charging stations, as the absence of after-sales and supporting facilities would affect user experience. "In China, Tesla insists on ensuring that every customer has suitable charging facilities and can enjoy our timely service before delivery," Wu stated in her email response to the "rights protection" car owners.

This is not an unreasonable excuse. However, the large number of orders generated in regions outside Beijing and Shanghai without prior communication of delivery conditions, along with Tesla's failure to establish charging facilities and service centers outside Beijing, have exposed many issues Tesla faced in China over the past year: by the end of 2013, Tesla's orders in China had exceeded 5,000, and the experience store and service center in Beijing had already been completed and opened in mid-2013. Yet, a year later, Tesla had still not established its planned second experience store and service center in Shanghai.

The high psychological expectations of fans and supporters, along with the subsequent large number of orders, contrasted sharply with the inability to produce and deliver cars due to an incomplete "service network" and slow expansion. This is not an isolated incident but is closely related to Tesla's strategic adjustments from its U.S. headquarters over the past year, including the much-discussed departure of Tesla's first China general manager, Zheng Shunjing, and the leadership of Tesla's global vice president Veronica Wu in China, as well as the conflicts of interest and personnel struggles that have spread from the U.S. headquarters to China. In short, the "human factor" has been a bottleneck in Tesla's series of processes in China.

PingWest recently interviewed several current and former employees of Tesla who have worked in China, as well as third-party companies that have collaborated with Tesla, in an attempt to restore the complete picture behind the chaos of Tesla in China. As of the publication of this article, PingWest has not been able to contact any official Tesla representatives for comments on these specific phenomena and events.

Exploration Phase: The Team of Zheng Shunjing, "Only Able to Sell"

Zheng Shunjing, the general manager of Tesla China, who announced his impending departure in early April 2014, was Tesla's first "business card" and image spokesperson in China. Born in Hong Kong, he graduated from the Chinese University of Hong Kong and worked for luxury car brand Bentley for ten years as the general manager for China before joining Tesla. The public is quite familiar with his short stature and bearded appearance, as seen in photos with various Tesla models on his Weibo and WeChat moments, as well as his interactions with important guests at Tesla's experience store in Beijing's Fangcaodi.

However, what may not be known to the public is that Zheng was not Tesla's first employee in China.

Before Zheng Shunjing went to Silicon Valley for an interview with Elon Musk in early 2013, Tesla already had two "employees" in China. They did not sign formal contracts with Tesla but were paid through a personnel agency of a foreign company in China. One was responsible for administration and internal affairs in China, while the other handled legal and procedural matters for Tesla's entry into China, such as license applications and network access.

When Zheng Shunjing took office as the general manager of China in March 2013, the previous two had already completed Tesla's vehicle certification, 3C certification, and customs import procedures. Tesla's trading company, Tuosule, had been registered, and all preparatory work ensured that Tesla would not be constrained by basic legal issues.

Thus, the most important issue facing Zheng Shunjing was how to quickly establish a real Tesla China team and how to expand into a vast but unknown electric vehicle market from scratch.

In May 2013, Zheng's former Bentley colleague, Shen Qi, joined the Tesla China team, forming the earliest "four-person group" with Zheng and the previous two. Zheng was the core of this four-person group, with the other three reporting to him. Zheng reported to George Blankenship, Tesla's global vice president, who was responsible for sales and had brought Apple's retail store design and experience to Tesla, creating Tesla's global experience store network.

Next came the recruitment of more people. However, Zheng quickly discovered that the team authorized by the U.S. headquarters to be formed was actually just Tesla's sales team in China.

Before the end of 2013, the Tesla Model S was only sold in North America. Before the official announcement of the "fair price" of 750,000 yuan for the Tesla Model S in China, Tesla had not established a clear pricing, configuration, and after-sales policy for the vehicle in the Chinese market. In fact, retail had already begun—if one wanted to be among the first batch of Tesla owners in China, they had to pay a deposit of 250,000 yuan, with the full payment adjusted accordingly.

Although Tesla had gained a large number of fans through Elon Musk's legendary story and previous media hype, it was still difficult for potential buyers to accept an order contract with too many "unknown clauses." Moreover, there was still a widespread fundamental misunderstanding of electric vehicles, even among Tesla's fans and supporters. For instance, concerns about insufficient range and battery safety were common.

Addressing these issues could not rely solely on sales. Like most companies launching a product, pre-sales, after-sales service, marketing, government relations, business development, quality control, and product delivery all serve the purpose of sales and require professionals from different functions to fill these positions. However, when Zheng Shunjing's Tesla China team submitted recruitment needs for market, government relations, grid setup, and other positions, they found it difficult to receive approval and feedback from the U.S. headquarters. Additionally, Tesla had no marketing budget in China at that time.

However, the demand for recruiting sales positions was not significantly hindered. This means that Zheng Shunjing and his team were limited to the role of "Tesla China Sales Department" at that time.

From May to November 2013, in half a year, Tesla established a sales team of over ten people in China, responsible for retail, after-sales guidance, after-sales service centers, as well as finance and insurance matters related to sales. Among them, Zheng Shunjing and Shen Qi were the two "core personnel" from Bentley—but contrary to public speculation, the other sales personnel were not from the so-called "Bentley system," but from various different companies, such as Jaguar Land Rover, BMW, Ferrari, Lenovo, and Louis Vuitton. Apart from Zheng and Shen, there was only one sales assistant from Bentley.

However, this "sales department" also had to handle government relations, charging station construction, and market promotion. During this phase, Zheng Shunjing effectively served as Tesla China's image spokesperson, sharing basic knowledge about Tesla at various forums and events. After the experience store in Beijing's Fangcaodi was completed and began accepting orders from China, Zheng also began to participate in some "cross-border" activities, such as small salon gatherings at Geek Park and sharing events at Cheyun.com, establishing direct contact channels outside the automotive circle. These practices played a role in gathering fans early on and converting them into orders through strengthened connections.

During this phase, apart from strict limitations on recruiting for positions other than sales, the U.S. overall took a hands-off approach to Tesla China. Apart from being prohibited from accepting formal media interviews, Tesla employees and Zheng Shunjing himself were not restricted from participating in various public activities in China aimed at sales and "understanding Tesla." After the 3C certification, the completion of the first experience store and service center, and the resolution of the trademark dispute with Chinese businessman Zhan Baosheng in August, Tesla's orders in China began to enter a rapid growth period, which occurred in October 2013.

Tesla began to generate direct and rapid growth in orders in China, and thus changes came.

"The Global Vice President" and "Apple People" Arrived

This "change" was not merely a matter occurring in China; in fact, it originated from Tesla's headquarters in Silicon Valley.

On November 21, 2013, The Wall Street Journal reported that George Blankenship, Tesla's global vice president responsible for sales and after-sales experience, had left Tesla. Blankenship had worked at Apple and was deeply involved in designing Apple's retail system, also personally designing Tesla's retail model. In November 2012, Blankenship revealed to PingWest that Tesla would open its first experience store in Beijing's Fangcaodi the following year. He was also the direct decision-maker for the location of the Fangcaodi experience store.

Because he was responsible for sales, especially retail, George Blankenship was Zheng Shunjing's direct reporting line within Tesla. In fact, according to PingWest's understanding, shortly after Zheng Shunjing joined Tesla, Blankenship's responsibilities were reduced from managing global sales and after-sales service to only overseeing retail operations. Subsequently, his authority was further diminished until he was completely marginalized and left the company.

Taking over global sales management from George Blankenship was Jerome Guillen, the global vice president of Tesla. His greatest "achievement" at Tesla was overseeing the overall project promotion of the Model S, making him an outstanding project manager and thus highly favored by Elon Musk. He took over global sales and service at Tesla in April 2013, becoming the de facto number two person within Tesla.

Due to personnel changes at the U.S. headquarters, Zheng Shunjing's reporting line shifted from George Blankenship to Jerome Guillen after he had been with the company for some time.

Almost simultaneously with George Blankenship's formal departure, during a regular meeting with the U.S. headquarters in November 2013, Zheng Shunjing was informed by his new boss Jerome Guillen that a woman named Veronica Wu would soon take over as Tesla's global vice president and head of China, meaning Zheng would report to Wu, while Wu would report directly to Jerome Guillen. Additionally, there were no further explanations.

This change meant that Zheng Shunjing would now report to Wu, creating a layer of separation from Jerome Guillen, and it indicated that Wu had replaced Zheng as the highest business leader for Tesla in China—though the title of "global vice president" held no practical significance, it was a badge ensuring direct reporting to the U.S. headquarters and granting more independent authority, as is customary in multinational companies operating in China.

This was not surprising. Zheng Shunjing was born in Hong Kong, educated in Hong Kong, and served as the general manager for Bentley in China, possessing rich experience in luxury car sales. However, he lacked educational and work experience in the U.S. In contrast, Veronica Wu moved to the U.S. at a young age, earning a bachelor's degree in applied mathematics from Yale and a Ph.D. in industrial engineering from the University of California, Berkeley. She then returned to China, working for McKinsey, Motorola, and Apple, and before joining Tesla, she was the general manager for education and enterprise markets at Apple Greater China, boasting an impressive resume. In short, Wu was the type of person Americans prefer to hire to manage China, someone they consider trustworthy.

Trust also implies resources and authority. According to sources close to Wu, after she took office, she was the only one attending regular meetings with the U.S. headquarters and Jerome Guillen, while Zheng was no longer present at these meetings.

Zheng Shunjing's sales team began reporting only to Wu. From the company's structural perspective, this was not unreasonable. Moreover, Zheng Shunjing's internal position at Tesla was essentially "China country manager"—those familiar with the internal workings of multinational companies know this is not a global executive-level position. If not for the series of events that followed, Zheng Shunjing's role as Tesla's sales head in China, reporting to Wu, while Wu directly oversaw charging networks, deliveries, services, public relations, and government relations, could have continued.

Tesla then entered a period of rapid expansion in China. PingWest learned that from December 2013 to April 2014, Tesla's workforce in China surged from over ten to more than 100 employees. They also increased staffing for charging networks, marketing, service centers, deliveries, and government relations. Positions that had previously been tightly controlled for recruitment were suddenly opened up.

"Looking back, it must have been difficult for Kingston (referring to Zheng Shunjing) to recruit back then, as there was no budget, and the headquarters seemed to be indifferent. At that time, the U.S. headquarters and Elon Musk were unsure about the Chinese market," a source told PingWest. "Americans don't work from 1 to 3; they only work from 1 to 2. At that time, trademark and network access issues had not been resolved, so they wouldn't suddenly come up with a long-term plan."

Tesla's market expansion in China began to accelerate. The process of this expansion also coincided with Wu's "consolidation of power"—every time a new functional role was filled, Wu would inform Zheng Shunjing that he no longer needed to manage that matter. Thus, the various responsibilities that Zheng had previously "managed" with a sales team, including charging, deliveries, marketing, customer service, government relations, and administrative operations, were quickly handed over to newly appointed colleagues, with the heads of these functions reporting directly to Wu.

During this process, "Apple people" began to join Tesla in large numbers. According to PingWest, the first employee from Apple that Wu brought in was Tesla's current head of administration and operations, while the original head of administration, a member of the earliest "four-person group," was immediately sidelined. Subsequently, dozens of new employees with Apple backgrounds gradually filled various departments, including charging, customer service, training, and retail stores. Some of these employees were not directly from Apple but had at least spent a significant amount of time working there. Some positions closely related to sales were also directly occupied by new employees from Apple, such as those responsible for managing orders who had previously worked in Apple's education and enterprise market department in Greater China.

However, there were some exceptions: the newly appointed head of marketing had previously worked at Audi and had also been responsible for marketing at Bentley. The government relations head, directly recruited by Wu, had previously been responsible for government relations at a well-known internet-listed company in China. As orders increased and delivery dates approached, the head of the department responsible for testing charging devices and customer service networks, ultimately responsible for delivering cars to owners, was appointed by Jerome Guillen, the global vice president responsible for sales at Tesla, and nominally reported to Wu but had more decision-making power. The delivery department also became a key player in the ongoing disputes between Tesla and its customers in China, directly facing conflicts externally and strongly conflicting internally with sales and charging departments.

As "Apple people" flooded into Tesla China, Zheng Shunjing remained the head of the sales team, with decision-making authority over sales matters and recruitment. However, he soon realized that sales were no longer entirely under his control.

The Conflict of Two "Sales Routes"

During Zheng Shunjing's tenure as Tesla's general manager in China, Tesla's sales model in China was not significantly different from that of the U.S. headquarters. It centered on "store experience + online ordering." Customers were encouraged and guided to place orders online, experiencing Tesla's exquisite online ordering process, while the offline experience store attracted potential customers to linger and directly experience the cars, communicating with Tesla store "experts"—similar to Apple's Genius Bar. Additionally, service centers were set up to handle parts, quality control, and after-sales maintenance. In short, Tesla's retail model and complete experience were the primary sales strategies globally and in China.

This was also the area where Zheng Shunjing's team excelled—most luxury cars follow a retail route, and "opening stores" is an important component. Although Wu Bi Xuan joined Tesla China at the end of 2013, the previously surging order numbers and any subsequent retail orders generated through stores and non-store channels would still count as Zheng and his team's performance.

Zheng Shunjing and Tesla's China business director Shen Qi continued to recruit the sales team. However, the recruitment of the sales team seemed to become less important within Tesla. Some salespeople recruited into Tesla China were actually assigned to other teams after joining. In other words, the people you recruit may not be available for your use. While recruitment for other functions was proceeding rapidly, the recruitment of the sales team slowed down.

"Each stage has different focuses, and these people did not refuse their new roles," some Tesla employees explained to PingWest.

Soon, Tesla China began to promote another sales model that was not highly valued at the U.S. headquarters—fleet sales. This model involved selling Tesla vehicles not to individuals but to companies, institutions, governments, and even rental car companies. This approach somewhat aligns with China's "national conditions," but it was not a mainstream sales model for Tesla. Emphasizing personalization and a perfect experience is Tesla's hallmark, while a "group purchase" model could negatively impact the demand for personalization, complicate the charging infrastructure, and affect Tesla's superior brand image.

The person leading this "fleet sales" model was Veronica Wu, Tesla's global vice president and head of China, who was in charge of sales.

In early 2014, Wu recruited former GaoXia CEO GaoXia (who is also Wu's ex-husband) to Tesla China to oversee the new sales business. GaoXia's experience in group purchasing was quite similar to the positioning of Tesla China's planned "fleet sales." However, after GaoXia joined, he initiated another sales approach: driving Tesla cars to various locations to sell to potential customers. This sales model was not highly regarded at the U.S. headquarters—it was primarily a business conducted in areas without Tesla experience stores, and it did not help Tesla's brand image, as door-to-door sales often carry a sense of cheapness.

In China, if this model were to be attempted, it should have only been implemented in cities outside Beijing and Shanghai that currently lacked Tesla experience store plans. However, GaoXia's business was also promoted in Beijing and Shanghai. In these areas, with more complete information channels and supporting facilities, customers could easily communicate on-site at Tesla experience stores and place orders online. However, "door-to-door sales" for interested customers would preemptively secure orders before Zheng Shunjing and Shen Qi's retail team could act.

This approach indeed generated some additional orders, making the overall order numbers look better—especially since these orders came from outside Zheng Shunjing's team. However, it also created problems; aside from brand image issues, the orders generated from door-to-door sales outside Beijing and Shanghai lacked the supporting charging infrastructure and service center networks, laying the groundwork for future "delivery difficulties."

In March 2014, another former senior sales manager from Apple joined Tesla, taking charge of the fleet sales team and also overseeing after-sales financial services. According to PingWest, the internal conflict between the retail and fleet sales teams at Tesla China during this period was also quite interesting:

Once, a commercial vehicle rental company ordered 100 Tesla Model S vehicles through negotiations with the retail team at Tesla's Fangcaodi experience store. However, this order faced significant resistance during execution: the charging team first insisted that according to Tesla's production terms, a charging station must be installed before producing a vehicle. This required identifying suitable locations for the charging facilities for all 100 vehicles, and the site size had to meet specifications. Since it was a rental company, drivers also needed to undergo professional training from Tesla... After passing through numerous hurdles, as of a month ago, the charging locations provided by the company had only a minimal number of charging devices installed by Tesla's third-party charging facility installation service provider.

Strictly enforcing production terms and service standards is understandable. However, in stark contrast, another commercial rental company from Shanghai placed a "group purchase" order for 50 Tesla Model S vehicles through the fleet sales team. According to internal sources from that rental company, this order was being produced and delivered step by step within Tesla. "There are some requirements for charging stations and locations, but it's not that complicated," said an insider from that rental company. It seems that the "production terms" did not apply to the fleet sales team.

To standardize processes and protect the interests of fleet sales, Tesla China introduced a new sales policy in March 2014: individual customers purchasing more than five vehicles at once must undergo background checks before sales, processed according to fleet sales procedures. This meant that neither corporate institutions nor individuals could place direct orders for more than five Tesla vehicles through Tesla experience stores and retail channels.

This does not mean that the retail team willingly gave up "bulk" orders. Shortly after this policy was announced, there were reports of customers placing orders for four vehicles each through Tesla's retail channels, splitting them into several orders. According to sources close to Tesla China's fleet sales team, they believed this was a deliberate attempt by retail personnel to snatch large customer orders, violating the company's sales policy. However, it was also difficult to determine whether this behavior actually violated the newly announced sales policy. Nevertheless, this incident only occurred once.

Tesla's newly added orders increasingly came from large customer sales. Zheng Shunjing's authority was reduced from overseeing sales to only managing retail, and gradually, some retail business responsibilities were taken over by another sales team's "door-to-door sales." It is reported that before his departure, Zheng's role was roughly equivalent to that of the store manager at the Fangcaodi experience store, while business director Shen Qi's whereabouts became unclear.

The decline of retail business is a unique phenomenon for Tesla in China. To be precise, Tesla in China has become unable to focus on sales. A large number of customer orders lack the support of charging facilities and service centers, facing the issue of being unable to deliver cars, which has even led to "rights protection" conflicts.

Why are deliveries impossible?

The core reason for Tesla's "delivery difficulties" in China is that the speed of expanding the charging network, experience stores, and service centers cannot keep pace with the continuously growing number of orders. The underlying issues can be attributed to two main factors: the early team was limited to sales functions, lacking coordination with other functions, and the slow progress of expanding service centers outside Beijing.

The consequences of solely focusing on "sales" are relatively easy to understand—although Zheng Shunjing's team also handled communication functions related to charging and deliveries early on, their only performance metric was sales: receiving more orders was their starting point. Their knowledge and emphasis on charging networks and after-sales services were limited. This is also the reason why the sales consultants' verbal promises of delivering cars "in order of orders" were not allowed in actual operational procedures. In the recent "rights protection" incident involving users outside Beijing and Shanghai, a sales consultant suggested that customers outside these regions could change their delivery address to Beijing and install charging stations to gain priority for delivery, and then uninstall the charging stations after delivery—this clearly reflects a sales perspective rather than that of the delivery department.

Moreover, Wu Bi Xuan's leadership of sales outside the retail stores, including large rental company "group purchases" and door-to-door sales models, meant that these orders were also more likely to be subject to the limitations of the charging and service center networks, affecting the final delivery experience.

The construction of the charging network is also an issue. Currently, Tesla has installed over 150 public charging stations in China. The installation process for charging stations in China generally involves coordination and communication with users' property management and local governments, which is time-consuming and labor-intensive. Under these circumstances, the progress can be considered efficient, but the head of the delivery department, Jeffery, continues to pressure the charging team to expedite the delivery process.

The delivery department, led by Jeffery, an American, has become the most powerful department in Tesla China at this stage. The most significant dissatisfaction from the delivery department is not with charging but with the slow construction of service centers.

According to plans, after the Tesla experience store and service center in Beijing officially opened in August 2013, all matters related to the Shanghai experience store and service center were to be prioritized. However, the Shanghai service center, originally planned to be completed in the first quarter of 2014, has yet to even sign a land contract. Shanghai, with its inherent advantages as a financial center, boasts attractions like the free trade zone for foreign investment companies, yet it still lacks any sign of Tesla.

According to PingWest, since last year, Tesla China's senior executives, including Zheng Shunjing and Wu Bi Xuan, have inspected dozens of sites in Shanghai's Jiading, Pudong, and Jinqiao areas, with several sites being repeatedly discussed, debated, and rejected internally.

The reason for the continuous discussions, debates, and rejections regarding the Shanghai service center is that different functional departments within Tesla are simultaneously intervening in the site selection process. The head of Tesla China's government relations department has strongly advocated for a certain location in Jiading, while the delivery department prefers Baogong, and the sales department promotes certain areas in Pudong. Wu Bi Xuan and her team have returned to Shanghai multiple times to review and negotiate land, but no conclusions have been reached.

"Tesla's management in China is still very simple and crude. Whenever a new urgent matter arises, different people will be called to handle it, and you never know who will report to whom, often having to guess each other's intentions," a Tesla employee told PingWest.

This means that Tesla China's team has not yet been able to independently conduct site selection work in China. The experience store in Beijing's Fangcaodi was selected by the now-departed global sales vice president George Blankenship.

Tesla's retail model, derived from Apple, chooses to open stores in commercial centers rather than traditional car sales locations. However, the Fangcaodi showroom in Beijing has yet to become a landmark for Tesla in China, as many potential customers and Tesla enthusiasts still get lost trying to find it. The reason for this is that there are significant differences in urban development between China and the U.S. While the U.S. has only a few bustling cities like New York, most other cities have dispersed buildings but concentrated commercial centers. Tesla's choice to open stores in central shopping districts in some cities is wise. However, in cities like Beijing and Shanghai, there are too many commercial centers, and the Qiaofu Fangcaodi shopping center in Chaoyang District is considered a secondary shopping center. The location of the Tesla experience store itself is not street-facing and has yet to become a very popular shopping area.

The U.S. headquarters cannot make reliable site selection decisions in China, and Wu Bi Xuan's team is struggling to secure land in Shanghai. She hopes to delegate related tasks to trusted individuals, but these individuals lack experience in quickly selecting store locations.

This is not merely Wu Bi Xuan's subjective desire but is more influenced by Apple's approach to opening retail experience stores. Apple's store openings were once very slow, taking even 2-3 years to open a new store in a country or region, and to this day, Apple has fewer than ten stores in China. However, this clearly does not align with Tesla's expected pace of expansion in China. At Tesla's headquarters, executives and employees with Apple backgrounds can bring more experience in design, retail, and user experience, while in China, what is needed is concrete execution and sales, not so much "Apple."

"Now Tesla in China really does not prioritize retail, and sales are no longer the top priority. The most important thing now is how to deliver the current orders; achieving that is already a success," said a former Tesla employee.

Clearly, Wu Bi Xuan, who has "taken full responsibility for everything," faces greater pressure, as everyone is now watching her, including those former salespeople, the headquarters' "envoy" responsible for China's delivery business, her boss Jerome Guillen, "Iron Man" Elon Musk, and those who have paid deposits but are uncertain when they will receive their cars.

4) Tesla, It Looks Beautiful#

$Tesla Electric Vehicles (TSLA)$ Tesla, it looks beautiful!? Tesla cleverly utilizes keywords like automotive, environmental protection, internet, and financial miracles to attract countless eyes... $Tesla Electric Vehicles (TSLA)$ Tesla, it looks beautiful!? Tesla cleverly utilizes keywords like automotive, environmental protection, internet, and financial miracles to attract countless eyes...

Tesla cleverly utilizes keywords like automotive, environmental protection, internet, and financial miracles to attract countless eyes. I have been paying attention to Tesla for over half a year, and I found the stock price skyrocketing towards 150. After watching many discussions about this stock, I feel that most of them are from a financial or internet perspective, confidently predicting a target of 200; however, there is relatively little discussion from the automotive perspective, which is somewhat regrettable. I would like to share a few thoughts in hopes of sparking further discussion.

First, regarding its electric vehicle technology, based on currently available public information, Tesla's battery range and safety seem to be far ahead of its peers. Perhaps it truly has a unique secret? I tend to believe that traditional automakers and battery manufacturers are reluctant to disclose technical details before their products are officially launched due to concerns about impacting their own gasoline vehicle sales. Moreover, Tesla's batteries are developed in collaboration with partners, and in today's industry context, batteries are not considered an emerging industry; the technological barriers and gaps may not be as significant as imagined. So why is Tesla so popular in North America? I believe it is primarily due to its accurate product positioning. Looking at the sales rankings of electric vehicles in the U.S. for the first seven months, apart from Tesla, almost all other models are positioned as economy or mid-range vehicles. Only Tesla openly states that its competitors are luxury brands like Mercedes-Benz and BMW, and its pricing aligns with the values of the American elite, showcasing environmental consciousness without sacrificing personal identity. Therefore, its sales figures are not surprising.

Next, regarding investment, why is the third-ranked Tesla so sought after, while higher-ranked Nissan, General Motors, or more models from Toyota and Ford remain stagnant? Because it is new! The company is new, the concept is new, the sales method is new, and most importantly, the promotional model is new. This promotional model does not refer to the product but to the stock. Using an internet sales model, it immediately aligns with the current e-commerce trend; excessive promotion of massive cash flow and zero subsidies makes it resemble e-commerce marketing rather than automotive marketing. Numerous institutions and individual investors (even those who have never seen a Tesla) have concluded through financial technical analysis that this car will inevitably change the global automotive industry. From this perspective, one cannot help but admire the marketing strategies of Americans; in this sense, Tesla resembles Amway, one selling protein powder like a pyramid scheme, the other selling stocks while promoting cars. Of course, investors who make money from the stock market may reinvest in Tesla, buying a few cars as toys, which could likely become a new growth point for Tesla's sales. However, what is concerning is that investors like Duan Zong sell their cars to buy stocks.

Finally, returning to the automotive industry itself, let's discuss the unresolved issues for Tesla. First, quality and product types. The absence of accidents does not guarantee there won't be any in the future. A single product type faces significant quality risks; once a catastrophic accident occurs, it could deal a fatal blow to the product's reputation. Second, the sales channels. The importance of sales channels and service points in the automotive industry can almost rival that of the product itself. Tesla's choice of internet sales can be seen as innovative, but it is likely more out of necessity. Compared to traditional automakers, its channel disadvantage is inherently insufficient. Currently, in North America, the sales and after-sales service demand does not reveal the channel disadvantage, but as sales surge and the strategy to expand into Europe and China unfolds, the mystery of channel development remains to be solved. Third, barriers. Tesla began its foray into the European market in July, and its fate remains uncertain. However, it can be anticipated that Japanese (French) companies represented by Nissan and Renault, as well as German companies represented by Mercedes-Benz, BMW, and Volkswagen, will launch fierce counterattacks against it. Whether Tesla's battery technology can gain recognition from the technical standards of many European countries is still unknown, and how European customers, who have never regarded American cars highly, will accept Tesla's luxury positioning is also a significant question. As for China, although Tesla has recently begun accepting orders from Chinese customers, if the European market is a treacherous mountain, the Chinese market is more like a reef-filled sea. The National Development and Reform Commission, the Ministry of Industry and Information Technology, the General Administration of Customs, the General Administration of Quality Supervision, Inspection and Quarantine, the Ministry of Public Security, the Vehicle Management Office, and the State Administration of Taxation... One must ask Tesla, which of these hurdles have been cleared, and which approvals, announcements, directories, and certificates have been obtained? Of course, it is possible that Tesla has quietly resolved these issues, but showcasing progress on what has been accomplished is always more persuasive than selling from a distance. Look at Nissan, which has the best-selling electric vehicle in the U.S. and strong support from the Minister of Industry and Information Technology; BMW has the powerful new model i3, with comprehensive support from local governments; and Mercedes-Benz has the backing of BAIC shareholders and BYD's local support. These automakers have not loudly proclaimed their electric vehicles in China; one must ask Tesla, on what basis? By the way, Tesla probably does not know what the upcoming "three guarantees" policy for cars in China entails. Even if all these issues are resolved, the final question remains: how will Tesla position its products in China? According to Tesla's CEO, the prices in China will be the same as in North America; so is that before or after customs duties? If the prices are indeed comparable to North America, the domestic price of 600,000 to 700,000 yuan feels awkward. According to the environmental protection concept, this price is not economical, and according to the luxury car positioning, this price is not luxurious enough. Of course, the media recently reported that President Musk criticized China's family planning policy. Regardless of its truth, it can only be said that Mr. President, China is not as simple as you imagine.

5) MUSK Says He Wants to Colonize Mars, I Believe It!#

MUSK says he wants to lead us to colonize Mars, and this time I believe it! If a person is only a little better than you, you will be jealous of him. If he is much better than you, you will envy him; if he surpasses everyone, you can only admire him! The biggest difference between people... If a person is only a little better than you, you will be jealous of him. If he is much better than you, you will envy him; if he surpasses everyone, you can only admire him!

The biggest difference between people is the difference in thinking methods and depth. The reason you are yourself, doing your current job, and living your current life is entirely a product of your thinking ability. Today, on the weekend, I watched a TED interview with MUSK, where he systematically discussed the value provided by his three companies: TESLA, SOLAR CITY, and SPACE X. He sketched a larger world in his mind with three completely different companies. (This video is available online; I recommend everyone to find it and watch it.)

MUSK's exceptional ability lies in identifying areas of inefficiency in current society and finding ways to change these inefficient models in ways he can achieve. Starting with ZIP2, an online content publishing software developed for news organizations. In 1999, Compaq acquired ZIP2 for $307 million in cash and $34 million in stock options. PAYPAL improved the efficiency of financial circulation through online means. Many people have been enjoying the services provided by MUSK for over a decade, whether compressing files with ZIP2 or shopping on eBay through PAYPAL. This is especially true for me, as I still have funds in my PAYPAL account from eight years ago when I sold something on eBay in the UK.

Great inventors are first and foremost educators. Creating a product is just the beginning; how to get the public accustomed to using advanced methods to replace old models is a long-term educational process. If MUSK had immediately pursued his dream of leading everyone to colonize Mars after becoming an adult, he would likely have ended up on the streets, leading a life of homelessness. MUSK breaks down the enormous picture in his mind into pieces that the public can understand, making incremental progress in both technical feasibility and public acceptance, allowing each success to lay the foundation for the next step.

$Tesla Electric Vehicles (TSLA)$ TESLA cars are also MUSK's another strike against inefficient products. Traditional gasoline engines have a combustion efficiency of only 20%, while diesel engines are only 30%. Many people say that electric vehicle charging also comes from burning fossil fuels, but large power plants can achieve a utilization rate of 60% for fossil fuels through large equipment. Therefore, even if the electricity for electric vehicles comes from burning fossil fuels, there is still at least a doubling of energy efficiency. Moreover, TESLA's innovative design in manufacturing processes is based on the "electric vehicle" model, while traditional automakers are still manufacturing "electric cars." Thus, even if TESLA's batteries are very heavy, through optimization of the body and energy management systems, they can still achieve high energy utilization efficiency. The 85KW model is designed for a range of 480 kilometers, and some TESLA owners have tested it to achieve a maximum distance of 670 kilometers. Of course, this is similar to a fuel-saving competition, but it still shows us the significant difference in efficiency between electronic products and traditional physical combustion.

MUSK's other company, $SolarCity (SCTY)$, is seen by the outside world as a solar energy service provider, but from a broader perspective, SCTY is a financial-like new energy platform provider. SCTY's competitors are traditional monopolistic public utility service companies. It has sparked a contest between the public and traditional monopolistic oligarchs over energy. Households that have never had bargaining power over their electricity bills now have the autonomy over their energy expenditures for the first time through the solar energy solutions provided by SOLAR CITY. Distributed solar energy is akin to the impact of 3D printing on traditional mass manufacturing. Individual entities resemble bees in a hive, possessing independent autonomy while ultimately forming a collective through some connection. The results produced are more effective in utilizing energy than traditional large-scale standardized solutions.

Additionally, SCTY resembles a continuous cash flow pool. During the analysis of SCTY, another company's name suddenly popped into my mind: "GEICO." For an introduction to GEICO, please refer to the following text:

In 1951, when Buffett was still a student of Graham, he fervently imitated Graham. He invested in stocks held by Graham's company and even found out from the "Dictionary of Famous People" that Graham was the chairman of GEICO. So, one Saturday, Buffett visited GEICO's headquarters and happened to meet the chairman's assistant Davidson, engaging in a four-hour conversation—"the most important afternoon of my life." Subsequently, Buffett invested most of his assets—about $10,000—into GEICO. The following year, he made nearly 50% profit and sold all his shares. Twenty years later, the market value of those stocks reached $1.3 million.

"This taught me a great lesson: never sell the stock of an obviously outstanding company," Buffett said.

By 1976, Buffett had a net worth of over $100 million. However, GEICO's management made a series of errors in assessing insurance claims costs, nearly leading to bankruptcy. Buffett decisively stepped in, investing a total of only $45.7 million by the end of 1980 to acquire a 33.3% stake in the company. The CEO who succeeded in 1976, Byron, ultimately turned GEICO around. By 1995, the stocks Buffett invested in GEICO had appreciated 50 times, earning him $2.3 billion. Additionally, due to the company's continuous stock buybacks, his ownership percentage increased to 51%. That year, Buffett also paid $2.3 billion to acquire the remaining shares of GEICO, making it a wholly-owned subsidiary.

It can be said that GEICO allowed Buffett to uncover the secrets of the insurance industry. On this basis, Buffett built his insurance empire and entered the reinsurance field. The insurance industry not only became his "profit cow" but also provided him with a massive float.

Buffett once said, "In my 40-year career, only 12 investment decisions have made me who I am today." Therefore, buying GEICO should be one of the most important ones. GEICO is Buffett's "first love" and his lifelong "good luck."

Graham, Buffett's teacher, wrote that investing in GEICO was one of the most important investments of his life. Before GEICO, Graham's annual compound growth rate was around 20%, but with GEICO, he achieved over 200 times returns on this investment. If the business model of insurance companies is to rely on traditional industries to generate continuous cash flow, then SCTY's future relative to MUSK is akin to GEICO's relationship to Buffett—a perpetual low-interest cash flow pool. SCTY's leasing business boasts a gross margin of 45-70%, with 40% of revenue coming from advance payments. In the future, as MUSK embarks on new investments, including a massive extraterrestrial colonization plan, SCTY will serve as the funding provider. [A more in-depth analysis of SCTY will be discussed another day.]

The third company is SPACE X, which is unlikely to go public in the short term. The remarkable aspect of SPACE X can be found in videos online. In traditional space transportation, fuel costs account for only 0.3% of the total cost. Current space launches are essentially one-time material consumption. Recovered rocket components require substantial manpower and resources for refurbishment, essentially equivalent to manufacturing a new rocket. It's like saying, "If every time you flew from Shenzhen to Beijing, the airline had to scrap the plane upon landing and buy a new one, then spread the costs across each ticket." Those interested can calculate what price a ticket should be sold at. SPACE X's innovation lies in its ability to guide rockets into orbit accurately, allowing them to land back at the launch site intact (there are videos online that are eye-opening). This means that each launch only requires the time to refuel again. MUSK once again identified inefficiencies in traditional industries and completely reversed the previous energy utilization methods. All these seemingly disruptive innovations are actually paving the way for longer-term plans. If MUSK's goal were merely to send satellites into orbit, his methods might not be much better than NASA's. However, MUSK's ultimate goal extends far beyond what NASA does, approaching the problem from a higher perspective, necessitating a revolutionary new approach to significantly enhance current operational efficiency.

If TESLA's competitors are traditional private automakers, SCTY's competitors are monopolistic energy companies, then SPACE X's competition is represented by national entities like NASA. MUSK has aspired to immigrate from South Africa to the U.S. since childhood, realizing early on that only in a free-market country like the U.S. could his ideals come closer to reality. If a 13-year-old child expresses a dream of leading humanity to colonize Mars, you would praise his imagination. If a 30-year-old person says the same to you, you would likely think he is not normal. This time, when MUSK says he ultimately wants to lead humanity to colonize other planets, I wholeheartedly cast my vote of trust, eagerly anticipating what surprises MUSK's box will bring us next, just like a 13-year-old watching a magician perform.

6) What is Tesla's Deepest Moat?#

Before 2016, consumer-market electric vehicles were Tesla's solo act. A few days ago, I visited the Tesla experience store in Phoenix, USA, and this on-site experience gave me a new perspective on the company. I personally believe this perspective is key to understanding Tesla and the electric vehicle industry, and even crucial to the future development and competitive landscape of the electric vehicle industry.

Cars are undoubtedly cool, as the media has repeatedly reported, and high-end audiences have accepted this. What I want to discuss is the overall feeling of the experience store. First, it is simple; there is only one car (Model S) on display, along with a car chassis and frame with a battery. This simplicity greatly satisfies your curiosity about electric vehicles. Second, there is a touchscreen mounted on the wall that allows you to customize your dream car, including options for appearance, interior, tires, and sunroof. You can mix and match freely, and once customized, your car model is generated on the screen, and you can place an order immediately. This greatly satisfies your initiative and control. Third, there are golf T-shirts and water bottles printed with the Tesla logo nearby, giving a sporty feel. Fourth, another wall displays a touchscreen showing the performance and advantages of electric vehicles (fast acceleration, quick charging, good economic efficiency, low emissions), the status of the charging network, service features, etc.

The visual effects before me, combined with the media's portrayal of the cars and the person (Elon Musk), collectively shape Tesla into a brand personality that is cool, technological, fashionable, high-end, positive, proactive, highly controllable, and environmentally friendly, carrying Tesla's unique brand connotation and high-end lifestyle. This brand connotation has become popular among high-end individuals, and through media packaging and hype, rapid viral marketing via the internet and word of mouth has established a solid positioning for Tesla electric vehicles in the minds of high-end consumers. This consumer positioning is difficult to change.

I have rambled on about branding because this element is not only Tesla's core competitive advantage and moat but also because brand premium overcomes the greatest barrier of cost, achieving positive profits financially, which is key to whether the industry can enter a virtuous development cycle.

Many analysts and investors who do not have a deep understanding of business operations are still entangled in whether Tesla's cars are safe and whether they will be caught up by competitors. This shows they do not understand the characteristics of this industry and do not realize that, at this stage, the premium brought by high-end brands is key to opening up the market and achieving positive profits.

Industry insiders know that electric vehicles are not a new product; their history is even longer than that of gasoline vehicles. However, due to the constraints of range, safety, and cost—three interlocking factors—electric vehicles have struggled to develop. These three factors are like an "iron triangle," tightly constraining the development of electric vehicles. To have good range, one must have high energy density or more batteries. Higher energy density brings safety concerns, while more batteries lead to high costs. If safety is prioritized, energy density must be reduced, resulting in decreased range and the need to find charging locations, making such cars impractical.

The contradiction between safety and range has been resolved by the remarkable Musk, who did not approach the problem from the battery side but instead used IT technology to solve it through sensors and power management systems. He connected over 8,000 18650 lithium-ion batteries in series to form a complete power source, achieving a range of around 400 kilometers. Although each 18650 battery has high energy density, its small size limits the amount of energy it can carry; even if it catches fire, the isolation between batteries prevents major issues.

In theory, technology is merely a "window paper." Tesla's battery solution should have been quickly replicated by other companies, especially in the remarkable land of China. Indeed, theoretically, there is nothing difficult about it. Every electric vehicle company has its own battery solution; it is merely a matter of managing hundreds of batteries versus managing 8,000. However, while this may be said, the engineering challenges arising from the sheer number of batteries present a significant difficulty, which is why many companies study Tesla and attempt to imitate it but still exhibit vast differences.

From the perspective of the capital market, it seems that Tesla's cars are theoretically not unique, leading to the basic assumption that other automakers can produce electric vehicles for the consumer market. If everyone has it, Tesla loses its excitement. Boss Wang of BYD once said, "I can produce a Tesla in a minute."

I believe Boss Wang's words. However, Tesla's first-mover advantage and different development path create a distinction between "life" and "death." What unique competitive advantages do these first-mover advantages and development paths create, leading to the distinction between "life" and "death"?

The first-mover advantage and high-end consumer market positioning are akin to climbing the north slope of Mount Everest—extremely challenging, yet Musk has succeeded, establishing Tesla as a unique high-end brand in the electric vehicle industry. This high-end brand locks in a high-end customer base, and a high-end brand means high premiums, which in turn means that the high battery costs of electric vehicles are no longer an issue. Each car sold has a gross margin that turns positive (Tesla announced a gross margin of 25% for Q4 2013). Ordinary brand electric vehicles lack brand premiums, and their high battery costs inflate the overall vehicle price. If priced based on costs, consumers would be deterred, and the market would not open up; if priced competitively with gasoline vehicles, the losses would be unsustainable, and no company can invest long-term.

According to Tesla's investor report, the starting price for the Model S60 is $62,400, with battery costs of $39,000 (60*650). The S60 has a range of 360 kilometers. This means that producing an electric vehicle incurs battery costs of $40,000, and when combined with other components, the rigid costs of electric vehicles are significantly higher than those of gasoline vehicles. For mid-range consumers seeking functionality and practicality, electric vehicles are entirely unappealing in terms of pricing.

What is even more critical is that the cost of battery packs does not follow the IT industry's Moore's Law. According to Roland Berger's research, the cost per kWh was $650 in 2010, and it is projected to be around $345 per kWh by 2020, with an average annual price drop of only 6.5%. At this rate, in the foreseeable three years, there will be little to no visibility for electric vehicles to become popular in the mass consumer market.

Reflecting on this, I am reminded of a chemistry experiment from high school, specifically the experiment of potassium chlorate generating oxygen, which requires manganese dioxide as a catalyst; otherwise, nothing will happen. Every electric vehicle company claims they can produce electric vehicles, akin to possessing "potassium chlorate," but they, apart from Tesla, lack the "manganese dioxide" catalyst, so only Tesla can produce "oxygen," while other automakers cannot.

To put it in imprecise numerical terms: if electric vehicles are the foundation, represented by "1," then most automakers possess this "1." However, Tesla, through its first-mover advantage and brand operations, adds a "0" behind this "1," transforming it into "10." Due to Tesla's exclusive high-end brand positioning in consumers' minds, other companies cannot obtain this "0," remaining as "1." If the product cost is "5," then Tesla captures a value of "5," while other automakers receive a value of "-4." This simple mathematical equation determines that low-end players in this industry cannot continue to compete. In other words, at this stage, consumer-facing electric vehicles are only suitable for the high-end market.

Tesla has caused a "chemical reaction" in the electric vehicle market through its high-end brand image, while other automakers, under the current technological routes and cost curves, find it nearly impossible to locate a "catalyst" and can only continue experimenting. How will this market evolve in the future? Will electric vehicles transition from being "toys" for the wealthy to "tools" for the middle class? Here, I will make a prediction.

As Tesla's electric vehicle ownership reaches a certain level, its charging network, vehicle connectivity network, and service network will further improve. The safety and performance of the cars will continue to enhance through practical experience. The rental model currently being introduced will become increasingly accepted, and the battery recycling business will further reduce consumers' lifecycle usage costs. At this point, electric vehicles targeting the middle class will be launched, and based on a vast charging and service network, batteries will become an operational business priced according to consumption duration or mileage. At this time, Tesla's business will not just be about selling cars but will transform into an electric vehicle operator.

This could leave low-end electric vehicle manufacturers anxious, as Tesla has found the "catalyst" to thrive and continuously evolve, leading to exponential growth, while they remain stagnant, unable to find their own "catalyst." This seems like an unsolvable equation!

If Tesla becomes a battery operator with a charging network, how much is it worth? This is worth imagining!

Key definitions in this article:

1. Electric vehicles: Refers to cars powered entirely by electricity, excluding hybrid vehicles;
2. Consumer market: Refers to the market