In March, Tencent (00700) bought a 5 percent stake in Tesla, creating a buzz in the technology sector. Why did Tencent founder Pony Ma Huateng not buy shares in Chinese electric car maker BYD (01211) instead?
Let me share what I think of Tesla.
Since the American electric car manufacturer put forth in 2013 the Gigafactory idea, paving the way for mass the production of the standard version of the Model 3, Tesla has prepared itself to be an integrated power firm.
Last year, Tesla acquired SolarCity amid controversy. This is not simply an act for Tesla to help out its sister firm. SolarCity in fact serves as an indispensable part of the entire business chain of Tesla.
The solar power network of SolarCity produces clean electricity. The popularity of electric cars made by Tesla directly contributes to the demand for solar power. In 2013, Musk proposed Hyperloop, a passenger and freight transport at high speed between Los Angeles and San Francisco. The project also depends on solar power for operation.
Musk was responsible for the draft of the project. However, those involved in Hyperloop are all close Musk allies including Josh Giegel of SpaceX and the PayPal group.
Power of the Musk force
The true value of Tesla lies in Musk’s superb execution ability, his network in Silicon Valley and his fundraising capacity.
Every time Tesla did a share placing, the market always saw a promising response.
Apart from Tesla and SolarCity, Musk still has privately run projects including space rocket manufacturer SpaceX, high speed excavator The Boring Company (which would be critical to Hyperloop’s success), and Open AI, as well as Neuralink, which studies the connection between human brains and computers.
Investors are always curious about the next world-changing idea from this legendary innovator.
Another tech giant
There was an electric aircraft researcher who wanted to share his ideas with Musk about technology and seek support.
You might think this guy would have to pull a lot strings. What happened is he was able to set up a meeting with Mush with just an email.
When Musk visited to Hong Kong in January last year, he spent an hour to meet this researcher.
Steve Jobs, who once told students to “Stay hungry. Stay foolish”, lives on in Musk.
The author is an SFC-licensed person whose clients owns shares of Tencent and Tesla.
This article appeared in the Hong Kong Economic Journal on Apr. 1
Translation by Jonathan Chong
[Chinese version 中文版]
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