Last Updated on: 16th July 2025, 01:12 am

Earlier today, I wrote an article that I’d been thinking to write for months. Tesla’s market cap is insanely high, way beyond what seems logical. Even if Tesla sales were rising, the market cap is wild, but with sales dropping for the past year and a half — normally against CEO Elon Musk’s predictions — the whole thesis of Tesla being a hypergrowth company is shattered. Tesla shareholders hold out faith that some miracles are just around the corner that will shoot Tesla sales and profits up again, but all recent results (and by recent, I mean from the past two years or so) are really not good. As a result, over time, I’ve concluded that the Tesla market cap is jacked up to insane levels for two key reasons: 1) greed (people want to assume the stock will go “to the moon” again and make them richer, and people are afraid to sell Tesla stock that did very well and thus have to pay taxes on it), and 2) fantasy (dreams of home humanoid robots, factory humanoid robots, Tesla robotaxis all over the place, etc.).

In response to that article, there were many brilliant comments, but I especially wanted to pull out a few that I thought were pointed and fitting for a followup article. Here they are:

Larry Evans wrote:

“I think ‘greed’ might be oversimplifying the motivation for many. I think many of people came into this with good intentions and ended up with conceptual fixedness around assumptions built on promises that turned out to be false or misleading. For illustration, a quote from Mark Twain’s ‘What Is Man?’

“‘We are always hearing of people who are around seeking after Truth. I have never seen a (permanent) specimen. I think he has never lived. But I have seen several entirely sincere people who thought they were (permanent) Seekers after Truth. They sought diligently, persistently, carefully, cautiously, profoundly, with perfect honesty and nicely adjusted judgment—until they believed that without doubt or question they had found the Truth. That was the end of the search. The man spent the rest of his life hunting up shingles wherewith to protect his Truth from the weather.’

“Many people saw Tesla as their ‘Truth.’ The savior of technology, business and the environment. They continue to assume that their business is more profitable than anyone else and still growing, when that is not the case. They assume that they must be ahead in every technology. They assume that they really are focused on trying to stop climate change and protect the environment, despite all the evidence to the contrary. Some still refuse to believe that Elon is far-right and think that he must be playing some kind of 14D Canasta (or some other delusion).

“Now, they will continue to defend their position. When evidence is presented to the contrary, they double down. And greedy people are playing off of that delusion.

“People need to re-examine their ‘Truths.’ Tesla does not embody their overstated promises. Other companies outperform on product, technology, business and environmental metrics. But it will be hard for people to turn from a belief that they have so strongly defended.

“To put it another way, in another quote attributed to Twain (although there is only shaky evidence that he actually said it):
‘Its easier to fool people than to convince them that they have been fooled’”

Yerch wrote:

“What Tesla had that made it valuable was a seemingly insurmountable lead in technology in the electric vehicle market which looked poised to completely overtake the internal combustion model. Whether electric vehicles still hold such promise in today’s political climate (which Musk essentially created) is unclear.

“What is clear is that Tesla’s lead has vanished. BYD fulfilled Tesla’s former promise of making cost-competitive electric cars with enough range for owners to forget about range anxiety. Even American automakers are now making *some* quality electric vehicles with more on the way. Tesla was supposed to have used the years in which other automakers were spending billions of dollars retooling their factories and figuring out how to build an electric vehicle with 300 miles of range to corner the market with affordable, long-range EVs. Instead it built an expensive boondoggle that Elon failed to realize in his ketamine-fueled reveries was a design he’d seen in the old Apple II “Car Builder” game. The window for Tesla to meet that promise has closed. They may yet turn things around and become a moderately successful automaker (and I hope they do.) But they’ll never be the utterly dominant and virtually unchallenged global force their investors envisioned.”

And fsc wrote:

“TSLA is priced more as a crypto coin than a corporate stock: a treadable asset with limited availability and very limited new supply with little underlying value.

“That is the definition of a currency.

“My two cents.”

There were several other excellent comments, so shoot over to the comments on that original article for more along these lines.