Tesla Doesn't Want Its Shareholders to Know
Over the weekend, Elon Musk fired off one of the loudest tweets of his entire tweeting career.
Simple, to the point, and accompanied by a photo, it appeared in over 103 million twitter feeds:
The effect was twofold.
First and foremost, it was a typically brash and characteristic self-congratulation, but the second function of the message was perhaps a bit more discreet...
After spending weeks mocking the production numbers of his two most visible, albeit substantially younger, EV-only competitors, Amazon- and Ford-backed Rivian Automotive (NASDAQ: RIVN) and Saudi-backed Lucid Group (NASDAQ: LCID), the eye-popping figure quoted above sent a clear message: You guys are nowhere close.
Three million units moved, as of last weekend, over 14 years.
By comparison, Rivian hopes to produce 25,000 by the end of this year — which few analysts are confident the company will be able to do — while Lucid just recently downgraded its 2022 production targets to between 6,000 and 7,000.
Those numbers are hard to argue with, especially when coming from a guy who, despite being known for his prodigious usage of hyperbole, has a long-established habit of making good on promises.
Now, some people watching this might see a third message buried in there: Musk is congratulating a Chinese-based gigafactory for putting out the actual 3 millionth unit.
That's a brave move, considering that Musk's biggest actual competitor in the EV space, BYD Company (OTC: BYDDF), which is also one of the world's biggest lithium-ion battery producers, is based in Shenzhen, about 1,000 miles south of the Tesla gigafactory pictured in the tweeted photo.
Brave? Arrogant? Foolhardy? All of these words would be fitting when describing Musk's self-crafted public profile, and most of his investors love him for it.
What they don't know, however, and what Musk never talks about publicly, might be what kills them.
Tesla's Hidden Design Defect
It's not politics or arrogance but something purely technical that's at work here, and every high-level engineer at the company is well aware of it.
The problem plaguing the entire Tesla line is an issue with the motors themselves.
Current Tesla models are powered by either two or three motors, each producing between 250 and 470 horsepower.
This is a lot of power coming from something the size of a five-gallon water jug, but it's inside of each of these cylindrical beasts that the problem lies.
You see, Tesla's motors, for all their power and fame, are nothing more than updated versions of the very first electrical motor prototype — a device that goes back 200 years. We have you covered! Sign up for Tech Investing Daily's FREE newsletter, Wealth Daily, today and gain first access to actionable stock market commentary, regular IPO updates, and weekly technical analysis. Plus, if you sign up right now, we'll immediately send you our free report: "Seven Strategies For Tech Investing."
We have you covered! Sign up for Tech Investing Daily's FREE newsletter, Wealth Daily, today and gain first access to actionable stock market commentary, regular IPO updates, and weekly technical analysis. Plus, if you sign up right now, we'll immediately send you our free report: "Seven Strategies For Tech Investing."
They're bigger, produce far more torque, and are constructed of modern materials, but all of the essential components are the same. There is a copper coil wound around a spool, housed inside of a metallic casing, surrounded by magnets.
Put a charge through that coil and the spool spins.
This is the way it worked when Michael Faraday first invented the device in the 1820s, and it's unchanged today. The same holds true for the smallest electric motors (like the kind that vibrate your smartphone) all the way up to the largest in the world (like the kind that power today's biggest cargo and cruise ships).
The problem is that these motors only function at optimal efficiency at one set speed. Go faster or slower and power and efficiency begin to drop off. When efficiency drops off, resistance goes up. That leads to a buildup of heat, wear and tear, and everything else that shortens the life span of any mechanism.
The End of the Status Quo
Up until now, this is a problem that everyone simply lived with. There were no alternatives on the market, so the playing field was level.
But now, all that is changing.
Quite recently, a small Canadian tech company applied artificial intelligence to the process of charge management. Instead of blindly shooting electrons into the copper coil, this company now applies power with precision and constantly moderates it based on motor speed.
The result is a dramatic increase in power across the entire performance spectrum. This added efficiency also means less wear and tear, fewer breakdowns, a longer service life.
All told, this new generation of motors — the first true evolution of the device since the first prototype — can produce as much as 8% more power from the same charge.
Coupled with the improvements to reliability, it's a quantum leap for the technology.
It's also a potentially deadly problem for every electric carmaker that's invested billions in the old technology.
And Tesla, Elon Musk's most valuable asset, is the biggest one there is.
In Stores Now
To be clear, this isn't just an experiment. The company behind this innovation isn't just researching this solution. It's not just developing a prototype.
Machines equipped with this technology have already hit the commercial market.
It started with electric bikes and electric boats, and in short order, licensed applications of this technology will start finding their way into high-speed trains, wind turbines, and a laundry list of other consumer and industrial products.
That leaves Elon Musk with a decision... adapt or die.
Or maybe he'll just take those huge bonuses and leave Tesla altogether to focus on some of his other projects.
Only time will tell where he goes. What is certain, however, is that the company that owns the patents to this AI technology will disrupt a dozen industries in the next few years.
You've probably never heard of it, but here's the biggest surprise of them all is: Its stock is already public, trading for less than a dollar, and available for purchase.
Fortune favors the bold, Alex Koyfman His flagship service, Microcap Insider, provides market-beating insights into some of the fastest moving, highest profit-potential companies available for public trading on the U.S. and Canadian exchanges. With more than 5 years of track record to back it up, Microcap Insider is the choice for the growth-minded investor. Alex contributes his thoughts and insights regularly to Wealth Daily. To learn more about Alex, click here.
Fortune favors the bold,
His flagship service, Microcap Insider, provides market-beating insights into some of the fastest moving, highest profit-potential companies available for public trading on the U.S. and Canadian exchanges. With more than 5 years of track record to back it up, Microcap Insider is the choice for the growth-minded investor. Alex contributes his thoughts and insights regularly to Wealth Daily. To learn more about Alex, click here.
The Best Free Investment You'll Ever Make
After getting your report, you’ll begin receiving the Wealth Daily e-Letter, delivered to your inbox daily.