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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 somewhat unconventional.

The company is named after Nikola Tesla, one of history's greatest engineers and geeks. From the moment it was born, 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, selling it to Compaq for $307 million in cash and $34 million in stock options in 1999. Musk then founded PayPal, which he sold to eBay for $1.5 billion in 2002. Shortly after, he founded SpaceX in 2002 and joined Tesla as a co-founder in 2003, later initiating a unique solar energy company called SolarCity. Musk's strong desire to improve human transportation is evident, 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, while 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. License 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 positive example for other automakers, demonstrating that electric vehicles can meet high-performance and 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, using Lotus's production line, and has since been discontinued after selling approximately 2,400 units. The second model is the only model currently on sale, the Model S, which targets the luxury car market above $50,000. The company plans to mass-produce the SUV model, Model X, based on the same platform as the Model S in the second half of 2014. Additionally, there is a planned mass-market model, Gen III, which Musk revealed would be launched sometime in 2016.

As seen in the image above, most car companies have designed electric vehicles primarily for daytime commuting due to technological and cost constraints. Although studies show that over 80% of daily driving distances do not exceed 100 kilometers, users are evidently not buying into this, as sales figures for most of these models are lackluster. The technical specifications of the Tesla Model S significantly outperform other electric vehicle models, and it is also competitive with similarly priced internal combustion vehicles, thanks to over 250 patents applied in the Model S, its all-aluminum body, and its low aerodynamic drag design. Therefore, the Model S's competitors are not other electric vehicles but rather luxury models in the same price range, a fact confirmed by sales data: as of May 2013, over 10,000 units had been shipped, with back orders exceeding 10,000 units. 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 above $70,000 in the first quarter of 2013.

User feedback indicates that the driving experience of the Model S is astonishing: there is no counterintuitive gear shifting, peak torque is available from a standstill, and acceleration is continuous. There is even no need for an ignition button; simply opening the door, sitting down, and pressing the accelerator allows the car to drive. Braking has become a mechanism that only needs to be triggered in emergencies, as the sophisticated regenerative braking system forces deceleration when the accelerator is released, meaning that for most of the driving time, there is no need to switch feet to operate another pedal. The driving process is as quiet as a whisper, with a responsive large touchscreen interface, always connected to the internet with Google Maps navigation, and a voice-controlled music streaming system that enhances the driving pleasure. The absence of a transmission means the vehicle floor is completely flat, allowing even the middle seat in the rear to be very comfortable. Without an engine, there is even an extra front trunk for storage. Owners can remotely monitor the car's location, check charging status, and pre-cool the car using an app on their smartphones. Additionally, some new features can be obtained through direct internet updates to the car's operating system. All these user-friendly experiences make Model S owners feel anxious when sending their cars for repairs or maintenance, as they find it hard to readjust to internal combustion vehicles, feeling that they are noisy, smelly, and sluggish, often forgetting that those 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 its 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 comment: "The Model S is not just a great electric vehicle; it is a great car." The authoritative American automotive review magazine Consumer Reports also gave the Model S a historic high score of 99 out of 100 after extensive testing, with the comment: "An almost perfect car."

To fulfill the company's vision, Tesla also 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 automotive manufacturers by completely bypassing any car dealerships. All cars are sold directly through its own stores and website (any claims of being sold through a dealership are likely scams). Musk hired former Apple sales chief George Blankenship to open Tesla's sales stores in bustling urban and shopping center locations, and the 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 what they truly want. If they walk into a Tesla store, feel our sincerity in making cars, and think about owning one of our cars someday, that is how I want the store to operate." The core of Tesla's marketing strategy is to capture people's attention with eye-catching products in malls and other high-traffic shopping areas, followed by further introductions and test drives to make people fall in love with the car. 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 globally, with plans to reach 50 by the end of the year, and the 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 appealing in court against car dealers in states where legal conflicts arise while seeking federal legislation to permanently secure the right to sell cars directly to customers. Currently, Tesla has won in New York, while the outcome in Texas 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 program 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 no less than the discounted value of a Mercedes-Benz S-Class (typically around 45%), with Musk personally guaranteeing the buyback with his entire fortune (Musk's net worth was reported at $2.8 billion on the latest Forbes wealth list).

Additionally, Tesla has business dealings providing powertrains for Daimler's A-Class, B-Class, and Smart electric vehicle models, and Toyota has 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 automotive 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, as well as individual investors like Google founders Sergey Brin and Larry Page, former eBay president Jeff Skoll, and Hyatt Hotels heir Nick Pritzker.

2) Why I Decided to Buy a Tesla Electric Vehicle#

Why I decided to buy $Tesla Electric Vehicle (TSLA)$: Last year, I held a full position in QIHU, and by the end of last year, I thought I should look for a high-growth stock for 2013... Why I decided to buy $Tesla Electric Vehicle (TSLA)$: Last year, I held a full position in QIHU, and by the end of last year, I thought I should look for a high-growth stock for 2013...

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

First, because I held a full position in QIHU last year, I thought I should look for a high-growth stock for 2013, 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. At the beginning of 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 was Tesla. At that time, not many people were paying attention to it domestically, and there weren't many discussions in the TSLA section on Snowball. The stock price was only 33 yuan. A simple review of the company's development history and Musk's entrepreneurial story opened my eyes, especially the Model S, which I fell in love with at first sight just from the pictures, and I really wanted to own such a car. I believe this is a team with dreams and should be able to build a great company.

Second, after discovering a company I really liked, I became very invested in researching and analyzing it. 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 just by using the right methods and putting in the effort. Below, I will share my research methods:

1. I spent two days reviewing the introduction and test drives of the Model S on Autohome, 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. The most unforgettable feature is 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 was heavily shorted, with around 30 million shares shorted out of approximately 110 million shares outstanding, accounting for nearly 30% of the total shares.

The main three reasons for this shorting were:

1. Concerns over electric vehicle safety and whether the batteries could explode.
2. Doubts that such an expensive car would sell and skepticism about the company's production capabilities.
3. The company had a market value of $3.5 billion and was still losing money, with the stock price severely overvalued; in the automotive industry, a 10x PE ratio is already remarkable.

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 vehicles 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 vehicles per week. However, Tesla's production capacity at the NUMMI plant, which they bought from Toyota and GM, was 400,000 vehicles, meaning that once the production chain was streamlined, the company could quickly increase capacity by 20 times at the existing factory. 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 Snowball asking if the iPhone of the automotive industry had arrived? Has Tesla disrupted the traditional automotive industry? Perhaps this is a stock with 100x potential link and bought in at $33.76 when the market opened that evening (for a more detailed analysis of Tesla, see @Teslafans and @狼狼枪枪在雪球的贴, their analyses on details are very worth studying).

2. As mentioned above, I really wanted to own such a car, so I arranged to go to Hong Kong with @余晓光 for a test drive and to place an order. The scheduled date was January 2. 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 has the power of a 4.4-liter gasoline car, and the acceleration response is much more sensitive than my 3.7-liter SUV. It is very quiet except for tire noise, and after a half-hour test drive, I took out my credit card to place an order, only to be told that the earliest delivery would be at the end of the year or around the Spring Festival next year, and the price was still not finalized in the range of 600,000 to 1 million Hong Kong dollars. They only provided vehicle explanations and test drive services, and to place an order, I had to do it directly online and pay a deposit. Although I was quite unhappy, looking at it from another angle, this business model is really great; direct sales can increase the company's profit margins, and having all deposits and vehicle payments sent to headquarters 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 product is excellent, so I have no choice but to wait a year. After returning, I posted on Snowball link that after the test drive on February 5 in Hong Kong, I believe this car will be loved by everyone, and it has the potential to be a tenfold stock, so last night I increased my position in TSLA. I believe next week's quarterly report and Q1 outlook will be good. I ordered a Tesla Motors 85KMH, RN327523, to be delivered by the end of the year. This is 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 eliminate some orders that were placed without deposits. I estimate there are about 20,000 orders. However, Tesla's cars and stocks are truly well-known and loved, and I think in two years, I will first buy his car and stock 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 rated it highly. I paid special attention to @Teslafans, @擎天柱 optimus_prime, @成涛 TaoCheng 和 @狼狼枪枪, and I noticed a characteristic: many owners also bought stocks, as they had done more research on the company's fundamentals. After gaining a deeper understanding of the company, I continued to increase my position at 38-39, but I didn't expect that after the quarterly report came out, due to Q4 performance being below expectations, the shorts took the opportunity to suppress the stock, causing it to drop 10% at the opening and subsequently adjust to around 34 yuan. I initially thought that perhaps the market would correct its misjudgment only when the company became profitable by the end of the year, but unexpectedly, Musk not only excels in product quality but also in market value management. He frequently releases 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 seems to ignore such price-influencing matters. The rest is known to everyone; the stock price surged from 37 to 110 yuan within two months.

In summary and reflection: Although I caught this big bull stock and am very optimistic about the company's fundamentals and future development, there are still areas worth reflecting on. Because I held a full position in QIHU, I only used new funds to build a position in TSLA, unwilling to sell QIHU to switch to TSLA, so my position was still mainly in QIHU. At that time, I thought that perhaps TSLA would need to reach clearer production capacity and profits by the end of the year for the market to correct its misjudgment. Additionally, I understood QIHU better and felt it had a higher margin of safety compared to TSLA, as if Tesla had a recall or something, the stock price could drop by half or more. Therefore, I considered that after QIHU rose in the second half of the year, it would be safer to use margin to increase my TSLA position. Also, regarding the combination of stocks and CALL options, I had a bad experience with warrants in Hong Kong in 2007, so I was somewhat fearful of this method, which is why I did not enable CALL trading in my U.S. stock account. However, reflecting on it, I was young and ignorant at the time, treating warrants like stocks, and many of the warrants I bought were for companies I didn't understand and had 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 to seek 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 a full position and hold them long-term, that decision itself indicates a sufficient understanding of the company, which in some ways is safer. Buffett's mentor, Fisher, once said to concentrate efforts on purchasing out-of-favor companies, allowing capital to be concentrated: there are only about 5% of outstanding companies 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 5-10x growth, I will boldly finance to buy in. High returns certainly come with high risks; if you are afraid of losing, you cannot win big. Additionally, besides 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 mentor Graham also wrote in "The Intelligent Investor" that if you have enough understanding of the company you are buying, it is also possible to leverage your investment. When QIHU's stock price was at 16 yuan, I advised @许志宏 to sell his house to increase his TSLA position.

3) The Chaos Surrounding Tesla in China#

In April 2014, on the eve of the visit of Tesla's legendary CEO Elon Musk to China, a collective "rights protection" action was initiated by 23 prospective Tesla owners from mainland China outside the Beijing and Shanghai areas, who were dissatisfied with the delivery order.

These Tesla reservation users in China claimed that Tesla did not deliver cars according to the "established order." Some users in Beijing and Shanghai who ordered later had already been notified that they could pick up their cars, while users from other regions who ordered earlier were still waiting. According to Tencent Technology, a lawyer's letter drafted by the 23 users has been sent to Tuosule Automotive 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, violating 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" 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 services before delivery," Wu stated in her email response to the "rights protection" owners.

This is not an unreasonable excuse. However, the large number of orders generated in regions outside Beijing and Shanghai without prior communication about 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 had over 5,000 orders in China, 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 the planned second experience store and service center in Shanghai.

The high psychological expectations of fans and supporters, along with the resulting large number of early orders, contrasted sharply with the inability to deliver cars due to an incomplete "service network" and slow expansion. This is not an isolated incident. In fact, it is closely related to the adjustments in Tesla's strategy for China over the past year, including the much-discussed departure of Tesla's first general manager for China, Zheng Shunjing, and the takeover of Chinese operations by global vice president Wu Bi Xuan, 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 significant hindrance to Tesla's progress in China.

PingWest recently interviewed several current and former employees of Tesla in China, as well as third-party companies that have collaborated with Tesla, in an attempt to restore the complete picture behind the chaos surrounding 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 "Sales-Only" Team of Zheng Shunjing

Zheng Shunjing, the general manager of Tesla China who announced his impending departure in early April 2014, was Tesla's first "business card" and spokesperson in China. Born in Hong Kong and a graduate of the Chinese University of Hong Kong, Zheng worked for ten years at the luxury car brand Bentley, serving as the general manager for China. The public is quite familiar with his short stature and bearded appearance, as seen in photos on his Weibo and WeChat moments with various Tesla models and with various "high-profile visitors" at Tesla's Beijing Fangcaodi experience store. Since the opening of the Tesla Fangcaodi experience store, Zheng has spent most of his time there, engaging with potential customers who visit and hosting important guests, as well as opening the store for events held by other media and third-party organizations.

However, what may not be known to the public is that Zheng was not the first employee of Tesla 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 and had their benefits managed by 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 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 Chinese 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 question facing Zheng 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 team" with Zheng and the two previous employees. Zheng was the core of this team, 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, they needed to recruit 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 that the price of the Tesla Model S in China would be set at 750,000 yuan as a "fair price," Tesla had not established a clear pricing, configuration, and after-sales policy for the vehicle in the Chinese market. Retail had already begun in practice—if someone wanted to be among the first to receive a Tesla in China, they had to pay a 250,000 yuan deposit, with the full payment adjusted accordingly.

Although Tesla had gained a large following through Elon Musk's legendary story and previous media hype, when it came to specific sales, potential buyers found it difficult to accept the many "unknown clauses" in the purchase contract. Moreover, there was still a widespread misunderstanding of electric vehicles, even among Tesla's fans and supporters. For example, 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, requiring professionals from different functions to fill these roles. However, when Zheng Shunjing's Tesla China team submitted recruitment requests for market, government relations, grid setup, and a series of other positions, they found it challenging to get approval and feedback from the U.S. headquarters. Additionally, Tesla had no marketing budget in China at that time.

The recruitment needs for sales positions were 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 just six months, 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 staff were not all from "Bentley," but rather from various different companies, such as Jaguar Land Rover, BMW, Ferrari, Lenovo, and Louis Vuitton. Besides Zheng and Shen, only one sales assistant came from Bentley.

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

During this stage, apart from strict limitations on hiring for positions other than sales, the overall attitude of the U.S. headquarters towards Tesla China was relatively hands-off. Except for 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 completion of 3C certification, 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 experience rapid growth, which occurred in October 2013.

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

The Arrival of the "Global Vice President" and "Apple People"

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 the company. Blankenship had previously worked at Apple and was deeply involved in designing Apple's retail system, also personally designing Tesla's retail model. George Blankenship had revealed to PingWest in November 2012 that Tesla would open its first experience store in Beijing Fangcaodi the following year. He was also the direct decision-maker for the location of the Fangcaodi experience store.

Because he was in charge of 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 overall 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 from George Blankenship was Jerome Guillen, Tesla's global vice president. His greatest "achievement" at Tesla was overseeing the overall project promotion of the classic Model S, making him an outstanding figure in project management and thus gaining Elon Musk's favor. He took over Tesla's global sales and service in April 2013, becoming the de facto second-in-command at Tesla.

Almost simultaneously with George Blankenship's official 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 be appointed as Tesla's global vice president and "head of China." From then on, Zheng would report to Wu, who would report directly to Jerome Guillen. Additionally, there was no further explanation.

This change meant that Zheng Shunjing's reporting relationship was now separated from Jerome Guillen, and Wu Bi Xuan replaced Zheng as Tesla's highest business leader in China. Although the title of "global vice president" is somewhat nominal, it is a badge that ensures direct reporting to the U.S. headquarters and grants more independent authority, following the usual practices of multinational companies in China.

This was not surprising. Zheng Shunjing was born in Hong Kong, educated in Hong Kong, and served as the general manager of Bentley in China, possessing rich experience in luxury car sales. However, he lacked educational and work experience in the U.S. In contrast, Wu Bi Xuan moved to the U.S. at a young age, earning a bachelor's degree in applied mathematics from Yale University and a Ph.D. in industrial engineering from the University of California, Berkeley. After returning to China, she worked for McKinsey, Motorola, and Apple, and before joining Tesla, she was the general manager of Apple's education and enterprise market in Greater China, with an impressive resume. In short, Wu Bi Xuan is the type of person that Americans like to recruit to manage China and consider trustworthy.

Trust also means resources and authority. According to sources close to Wu Bi Xuan, after she took office, she was the only one to attend each meeting with the U.S. headquarters and Jerome Guillen, while Zheng was no longer seen at these meetings.

Zheng Shunjing's sales team began reporting only to Wu Bi Xuan. From the company's structure, this was not unreasonable. Moreover, Zheng Shunjing's position within Tesla was essentially that of "China country manager"—those familiar with the internal operations of multinational companies know that this is not a position at the global executive level. If not for the series of events that followed, Zheng Shunjing's role as Tesla's sales leader in China, reporting to Wu Bi Xuan, while Wu directly managed charging networks, deliveries, services, marketing, 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 added specific personnel for charging networks, marketing, service centers, deliveries, and government relations. Positions that had previously been tightly controlled for hiring were suddenly opened up.

"Looking back, it must have been very difficult for Kingston (referring to Zheng Shunjing) to recruit at that time, and there seemed to be no budget, and the headquarters appeared to be indifferent," a source told PingWest. "Americans don't do things from 1 to 3; they can only go 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 pick up speed. However, this process also coincided with Wu Bi Xuan's "consolidation of power"—every time a new functional specialist was hired, Wu would inform Zheng Shunjing that he no longer needed to manage that area. Thus, the responsibilities that Zheng had previously "managed" with a sales team, such as 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 Bi Xuan.

During this process, "Apple people" gradually entered the company. According to PingWest, the first employee from Apple that Wu Bi Xuan brought in was Tesla's current head of administration and operations, while the original head of administration, who was part of the earliest "four-person team," was immediately sidelined. Subsequently, dozens of new employees with Apple backgrounds were gradually placed in various departments, including charging, customer service, training, deliveries, and even retail stores. Some of these employees did not directly come from Apple but had at least a significant work history there. Some positions closely related to sales were also directly occupied by new employees from Apple: for example, the employee responsible for managing orders had previously worked in Apple's education and enterprise market department.

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 Bi Xuan, had previously managed government relations for a well-known internet-listed company in China. As orders increased and delivery dates approached, the head of the delivery department, responsible for testing charging devices and customer service networks, and ultimately delivering cars to owners, was appointed by Jerome Guillen, the global vice president responsible for sales at Tesla, and nominally reported to Wu Bi Xuan but had more say in decision-making. The delivery department is also the main player in the ongoing customer disputes regarding Tesla orders in China, facing conflicts externally and strongly clashing 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 not entirely under his control.

The Conflict of Two "Sales Routes"

During Zheng Shunjing's tenure as general manager of Tesla China, the sales model in China was not much 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 vehicles, communicating with "experts" in Tesla stores—similar to Apple's Genius Bar. Additionally, service centers were established to handle parts, quality control, and after-sales repairs. In short, Tesla's retail route and complete experience were the main sales model 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 surge in orders and 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. This means that the people you recruit may not be available for your use. While recruitment for other functions was being carried out vigorously, the recruitment of the sales team slowed down.

"Each stage has different focuses, and these people did not refuse their new positions," 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—namely, the fleet sales model. This model sells Tesla vehicles not to individuals but to companies, institutions, governments, and even rental car companies. This aligns well with China's "national conditions," but it is not a mainstream sales model for Tesla. Emphasizing personalization and perfect experiences is Tesla's hallmark, while a "group purchase" model may impact the demand for personalization, complicate the charging infrastructure environment, and affect Tesla's superior brand image.

The person leading this "fleet sales" model was Wu Bi Xuan, who was in charge of sales.

In early 2014, Wu Bi Xuan recruited former Gaopeng CEO Gao Xia (who is also Wu's ex-husband) into Tesla China to oversee the new sales business. Gao's experience in group buying was quite similar to the positioning of Tesla China's planned "fleet sales." However, after Gao joined, in addition to fleet sales, he also initiated another sales approach, which involved driving Tesla cars to various locations to pitch 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—door-to-door sales typically convey a sense of cheapness.

In China, if this model were to be attempted, it should ideally only be implemented in cities where there are currently no plans for Tesla experience stores outside of Beijing and Shanghai. However, Gao's business was also promoted in Beijing and Shanghai. In these areas, where information channels and supporting facilities are more complete, users can easily communicate on-site at Tesla experience stores and place orders online. Therefore, "door-to-door sales" for users with demand would preemptively secure orders before Zheng Shunjing and Shen Qi's retail team.

This approach indeed generated some additional orders, making the overall order volume look better—especially since these orders came from outside Zheng Shunjing's team. However, it also brought problems; aside from brand image, the orders generated from door-to-door sales outside of Beijing and Shanghai lacked the support of charging facilities and service center networks, which laid 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 quite interesting:

Once, a commercial vehicle rental company ordered 100 Tesla Model S vehicles through discussions with the retail team at the Tesla Beijing 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 a vehicle could be produced. Therefore, they had to find a suitable location for the charging facilities for all 100 vehicles, and the site size had to meet specifications. Since it was a rental company, the drivers also had 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 seen 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 at that rental company, this order was being produced and delivered step by step within Tesla. "There are indeed 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" do 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: personal customers wishing to purchase more than five vehicles at once must undergo background checks before sales, processing them according to fleet sales procedures. This means that neither corporate institutions nor individuals can directly place orders for more than five Tesla vehicles from 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 through Tesla's retail channels for four vehicles per order, splitting them into several orders. According to sources close to Tesla China's fleet sales team, they believed this was an intentional attempt by the retail team to snatch large customer orders, violating the company's sales policy. However, whether this actually violated the newly announced sales policy is difficult to determine. Nonetheless, this incident only occurred once.

Tesla's new 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 was 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 Beijing 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 problem of being unable to deliver cars, which could even lead to "rights protection" conflicts.

Why can't they deliver cars?

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's limitations to sales functions, lacking coordination with other functions, and the slow progress of expanding service centers outside of Beijing.

The consequences of a purely "sales-first" approach are relatively easy to understand—although Zheng Shunjing's early team also bore the communication functions for charging and deliveries, their only performance metric was sales: receiving more orders was their starting point. Their knowledge and emphasis on charging networks and after-sales service were limited. This is also the reason why the early 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 of Beijing and Shanghai, some sales consultants suggested that customers outside of Beijing and Shanghai could change their delivery addresses to Beijing and then install charging stations to gain priority for delivery, and after delivery, they could uninstall the charging stations and take them back to their locations—this clearly reflects a sales perspective rather than a delivery department perspective.

Moreover, Wu Bi Xuan's leadership of sales outside of retail, including large rental companies' "group purchases" and door-to-door sales models, means that these orders are also more susceptible to the limitations of 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. However, the head of the delivery department, Jeffery, continues to pressure the charging team to expedite the delivery process.

Led by the American Jeffery, the delivery department 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 scheduled 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, has attractions like the free trade zone for foreign investment companies, yet it still has no sign of Tesla.

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

The reason the Shanghai service center has been repeatedly discussed, debated, and vetoed without resolution is that different functional departments within Tesla are simultaneously intervening in the site selection for the Shanghai service center. Tesla China's government relations head had strongly pushed for a certain location in Jiading, while the delivery department favored Baoqing, and the sales department promoted certain locations in Pudong. Wu Bi Xuan and her team have returned to Shanghai multiple times to view and negotiate land, but no conclusion has been reached.

"Telsa's management in China is still quite simple and crude; whenever a new urgent matter arises, different people will be called in to handle it, and you never know who is ultimately reporting 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 in China. The experience store in Beijing 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 Beijing Fangcaodi showroom has yet to become a landmark for Tesla in China, as too many potential customers and Tesla enthusiasts get lost in the process of finding it. The reason for this is the significant differences in urban development between China and the U.S.; the bustling cities in the U.S. are limited to a few, such as New York, while most other cities have dispersed buildings but concentrated commercial centers. Tesla's decision 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, located in Chaoyang District, is considered a secondary shopping center. The site selection for Tesla experience stores is not street-facing, and it has yet to become a very popular shopping area.

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

This is not a subjective desire of Wu Bi Xuan but rather influenced by Apple's approach to opening retail experience stores. Apple's store openings have historically been very slow, sometimes taking 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 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 really does not prioritize retail in China, and sales are no longer the top priority; the most important thing now is how to deliver the current orders, and achieving that would be a success," said a former Tesla employee.

Clearly, Wu Bi Xuan, who has "completely taken charge of everything," is under greater pressure, as everyone is now watching her, including those former salespeople, the "imperial envoy" from headquarters 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 can pick up their cars.

4) Tesla, It Looks Beautiful#

$Tesla Electric Vehicle (TSLA)$ Tesla, it looks beautiful!? Tesla cleverly utilizes several keywords such as cars, environmental protection, the internet, and financial miracles to attract countless eyes... $Tesla Electric Vehicle (TSLA)$ Tesla, it looks beautiful!? Tesla cleverly utilizes several keywords such as cars, environmental protection, the internet, and financial miracles to attract countless eyes...

Tesla cleverly utilizes several keywords such as cars, environmental protection, the internet, and financial miracles to attract countless eyes. I have been paying attention to Tesla for over six months, and I found that the stock price has skyrocketed 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 price of 200; however, there is not much discussion from the automotive perspective, which is a bit regrettable, so I would like to share a few thoughts in hopes of sparking further discussion.

First, regarding its electric vehicle technology, based on the various public information available, Tesla's battery range and safety seem to be far ahead of its peers. Perhaps it truly has a unique secret? I still believe it is more due to traditional car manufacturers and battery companies being reluctant to disclose technical details before their products officially launch, fearing it would impact their gasoline vehicle sales. Moreover, Tesla's batteries are developed in collaboration with partners; in today's industry context, batteries are not considered an emerging industry, and the technological barriers and gaps cannot be as significant as imagined. So why is Tesla so popular in North America? I believe it is mainly due to its accurate product positioning. From the sales ranking of electric vehicles in the first seven months in the U.S., apart from Tesla, almost all other models are positioned as economy or mid-range cars. 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, who want to showcase their environmental consciousness while maintaining their personal identity, so the sales figures are not surprising.

Next, regarding investment, why is the third-ranked Tesla so sought after, while higher-ranked Nissan, GM, 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 rather 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 profits resembles e-commerce marketing rather than automotive marketing. Many institutional and individual investors (even those who have never seen what Tesla looks like) have drawn the conclusion that this car will inevitably change the global automotive industry through pure financial technical analysis. From this perspective, one cannot help but admire the marketing strategies of Americans; from this perspective, Tesla resembles Amway, one selling protein powder like a pyramid scheme, and the other selling stocks while selling cars. Of course, investors making money in the stock market may reinvest in Tesla, buying a few cars as toys, which could very well become a new growth point for Tesla's sales. However, what is concerning is the type of investor like Duan, who sells cars to buy stocks.

Finally, returning to the automotive industry itself, let's discuss the problems Tesla has not solved. First, quality and product types. Just because there have been no accidents does not mean 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 channel. The importance of sales channels and service points in the automotive industry is almost on par with the product itself. Tesla's choice to sell online can be seen as innovative, but it is likely more out of necessity. Compared to traditional car manufacturers, its channel disadvantages are inherently insufficient. Currently, the sales and after-sales service demands in North America do not reveal channel disadvantages, but as sales surge and the strategy to expand into Europe and China unfolds, the mystery of channel development remains to be solved. Third, the barriers. Tesla began entering the European market in July, and its fate remains uncertain. However, it can be anticipated that the Nissan-Renault alliance and the German automakers 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 remains to be seen, and how European customers, who have never taken American cars seriously, 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 resembles 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... I ask Tesla, which of these hurdles have you cleared? Which approvals, announcements, directories, and certificates have you obtained? Of course, it is possible that Tesla has quietly resolved these issues, but showcasing progress on what has been accomplished is certainly more persuasive than selling from a distance. Look at Nissan, which has the best-selling electric vehicle model in the U.S. and strong support from the Minister of Industry and Information Technology; BMW has the powerful new i3 model, with comprehensive support from local governments; Mercedes-Benz has the backing of BAIC shareholders and BYD's local support. These automakers have not loudly proclaimed their electric vehicle sales in China; I ask Tesla, on what basis do you do so? By the way, Tesla probably does not know what the upcoming "three guarantees" policy for automobiles in China is. 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 truly mirror those in 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, a few days ago, the media reported that President Musk criticized China's family planning policy; regardless of its truth, one can only say that President Musk, 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 slightly 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 slightly 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 slightly 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 patterns and depth. The reason you are who you are, doing this job, and living this life is entirely a product of your own 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 painted 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 seeing the inefficiencies 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 it's using ZIP2 to compress files 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 things 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 instead of old models is a long-term educational process. If MUSK had immediately pursued his dream of leading people to colonize Mars after becoming an adult, he would likely have ended up on the streets, leading a life of poverty. MUSK breaks down the enormous picture in his mind into pieces that the public can understand, making progress each time, ensuring that every success lays the foundation for the next step.

$Tesla Electric Vehicle (TSLA)$ 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% through large equipment. Therefore, even if electric vehicles' power comes from burning fossil fuels, there is still at least a one-fold increase in energy efficiency. TESLA's innovative design in manufacturing processes is based on the "electric vehicle" model, while traditional automakers are still making "electric cars." So even if TESLA's batteries are very heavy, through optimization of the body and energy management system, it 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 for 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 outsiders 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 initiated a contest between the public and traditional monopolistic oligarchs in energy. Households that have never had bargaining power over their electricity bills can now take control of their energy expenditures for the first time through the solar energy solutions provided by SOLAR CITY. Distributed solar energy is similar to the impact of 3D printing on traditional large-scale manufacturing. Each individual is like a bee in a hive, possessing independent autonomy while collectively forming a synergy through some connection. The results produced are more effective in utilizing energy than traditional large-scale standardized solutions.

Moreover, SCTY is like a continuous cash flow pool. During the analysis of SCTY, another company's name suddenly came to mind: "GEICO." For an introduction to GEICO, please refer to the following text:

In 1951, Buffett was still a student of Graham and fervently imitated him. 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 Davidson, the chairman's assistant, who was working overtime. They talked for four hours—"the most important afternoon of my life." Subsequently, Buffett invested most of his assets—about $10,000—in GEICO. The following year, he made nearly 50% profit and sold it all. Twenty years later, the market value of those stocks had reached $1.3 million.

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

By 1976, Buffett's net worth was 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, acquiring a 33.3% stake in the company. The CEO who succeeded in 1976 ultimately turned GEICO around. By 1995, the stocks Buffett invested in GEICO had appreciated 50-fold, earning him $2.3 billion. As the company continued to repurchase shares, his ownership percentage increased to 51%. That year, Buffett 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. Based on this, 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." Buying GEICO must be one of the most important. GEICO is Buffett's "first love" and has been his lifelong "good luck charm."

Graham, Buffett's mentor, wrote that his investment in GEICO was one of the most important investments of his life. Before GEICO, Graham maintained an annual compound growth rate of around 20%, but with the emergence of GEICO, he achieved over 200 times returns on this investment. If the business model of insurance companies relies on traditional industries to generate continuous cash flow, then SCTY, in relation to MUSK, is like GEICO in relation to Buffett—a perpetual low-interest cash flow pool. SCTY's leasing business has a gross margin of 45-70%, with 40% of revenue coming from prepayments. In the future, as MUSK embarks on new investments, including a massive extraterrestrial colonization plan, SCTY will be the source of funding. [A deeper analysis of SCTY will be discussed another day.]

The third company is SPACE X, which will not go public in the short term. The exceptional aspect of SPACE X can be found in videos online. In traditional space transportation, fuel costs account for only 0.3% of the overall costs. Current space launches are essentially one-time material consumption. Recovered rocket components require a significant amount of manpower and resources for refurbishment, essentially akin 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 the ticket price should be.

SPACE X's innovation lies in its ability to guide rockets into orbit and land them back at the launch site intact (there are videos online that are eye-opening). This means that the preparation time for each launch is merely the time needed to refuel. Musk has once again identified the 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 would likely not surpass NASA's. However, Musk's ultimate goal is far beyond what NASA does, requiring a revolutionary new approach to significantly improve current operational efficiency from a higher perspective.

If TESLA's competitors are traditional private automakers, SCTY's competitors are monopolistic energy companies, then SPACE X's competition is represented by 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. can his ideals come closer to reality. If a 13-year-old child says his dream is to lead humanity to colonize Mars, you would praise him for his imagination. If a 30-year-old person says this to you, you would think he is not normal. However, this time when Musk says he 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 child watching a magician perform.

6) What is Tesla's Deepest Moat?#

Before 2016, consumer-market electric vehicles were Tesla's solo performance. 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. Personally, I believe this perspective is key to understanding Tesla and the electric vehicle industry, and even crucial for 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 them. What I want to discuss is the overall feeling of the experience store. First, it is simple; there is only one car (Model S) displayed, along with a chassis and frame with a battery. This simplicity greatly satisfies your curiosity about electric vehicles. Second, there is a touchscreen mounted on the wall, allowing you to customize your dream car. Customizable parts include: exterior, interior, tires, and sunroof. You can mix and match freely, and after customization, 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 with the Tesla logo, giving a sporty feel. Fourth, another wall displays a touchscreen showing the performance and advantages of electric vehicles (fast acceleration, quick charging, good economic use, low emissions), the status of the charging network, service features, etc.

The visual effects in front of you, combined with the media's portrayal of the car and the person (Elon Musk), overall shape Tesla into a very cool, technological, fashionable, high-end, positive, proactive, and environmentally friendly brand personality, embodying Tesla's unique brand connotation and high-end lifestyle. This brand connotation is 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 very difficult to change.

I have rambled on about branding because this element is not only Tesla's core competitiveness and moat but also because brand premium overcomes the biggest barrier of cost, achieving positive profits financially, which is key to whether the industry can enter a virtuous 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 is because 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 cars. However, due to constraints from 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, you need high energy density or more batteries. Higher energy density brings safety concerns, while more batteries increase costs. If safety is prioritized, energy density must be reduced, leading to decreased range, requiring frequent charging, making the vehicle impractical.

The contradiction between safety and range has been resolved by the remarkable Musk. His solution was not to tackle the battery directly but to use IT technology to solve it through sensors and power management systems. He connected over 8,000 18650 lithium-ion batteries in series to form an integrated power source, achieving a range of around 400 kilometers. Although each 18650 battery has high energy density, due to its small size, it carries limited energy. Even if a fire occurs, the batteries are isolated from each other, preventing significant issues.

In theory, technology is merely a "window paper," and Tesla's battery solution would soon be replicated by other companies, especially in the remarkable land of China. Indeed, theoretically, this is not particularly difficult. Every electric vehicle company has its own battery solution; it is just a matter of managing hundreds of batteries versus managing 8,000. However, while it may sound simple, the engineering challenges posed by the sheer number of batteries are significant, which is why many companies study Tesla and attempt to imitate it but still have vast differences.

From the perspective of the capital market, it seems that Tesla's cars do not have unique advantages in theory, leading to the basic assumption that other automakers can produce electric vehicles for the consumer market. If everyone has it, then Tesla loses its excitement. Boss Wang of BYD once said, "I can produce a Tesla in no time."

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

The first-mover advantage and high-end consumer market positioning are akin to climbing Mount Everest from the north slope—extremely challenging—but Musk has achieved it, creating a unique high-end brand for Tesla in the electric vehicle industry. This high-end brand locks in high-end customer groups, and a high-end brand means high premiums, which means the issue of high battery costs for electric vehicles is no longer a problem. Each vehicle sold has a gross margin that turns from negative to positive (Tesla announced a gross margin of 25% for Q4 2013). Ordinary brand electric vehicles lack brand premiums, and high battery costs inflate the overall vehicle price. If priced based on cost, consumers will be deterred, and the market cannot open; if priced to compete with gasoline vehicles, each sale results in a loss, leading to negative profits, making it impossible for any company to sustain long-term investment.

According to Tesla's investor report, the starting price for the Model S60 is $62,400, with battery costs at $60*650=$39,000, and 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 who prioritize functionality and practicality, electric vehicles are entirely unappealing in terms of price.

Moreover, 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, there will be little visibility for electric vehicles to gain popularity in the mass consumer market within the foreseeable next three years.

Reflecting on this, I am reminded of a chemistry experiment from high school, where potassium chlorate generates oxygen, requiring manganese dioxide as a catalyst; otherwise, nothing will happen. Every electric vehicle company claims they can produce electric vehicles, just like possessing "potassium chlorate," but they, except for Tesla, lack the "manganese dioxide" catalyst, so only Tesla can produce "oxygen," while other companies 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 high-end brand positioning in consumers' minds, other companies cannot obtain this "0," leaving them with only "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-targeted electric vehicles are currently 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 the "catalyst" and can only continue experimenting. So 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.

Once Tesla's electric vehicle ownership reaches a certain level, its charging network, vehicle connectivity network, and service network will further improve, and the safety and performance of the vehicles will be enhanced 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 that point, electric vehicles targeted at the middle class will be launched, and based on the vast charging and service network, batteries will become an operational business priced according to consumption time or mileage. At this point, Tesla's business will no longer just be about selling cars but will transform into an electric vehicle operator.

This could leave low-end electric vehicle manufacturers feeling anxious, as Tesla has found the "catalyst" to thrive and continuously evolve, leading to exponential growth, while they remain stuck at "1." This seems like an unsolvable equation!

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

Key definitions in this article:

1. Electric vehicles: Referring to cars powered entirely by electricity, excluding hybrid vehicles;
2. Consumer market: Referring to the market where individual consumers actively purchase for personal and