Tesla Motors (NASDAQ:TSLA) got as unsolicited words of advocacy last night from Jim Cramer, host of CNBC’s Mad Money. Cramer has never been a Tesla fan but he says he got a wake-up call on the need to tone down negativity on the firm. Cramer’s wake-up call was delivered by Jay Leno while speaking on the state of business in America.
Cramer is not particularly fond of Tesla and he seems to have a leaning towards bearish tendencies on the stock. In May, he accused Elon Musk of committing financial murder; earlier in April, he sided with the shorts on the stock. Two months ago, the same Cramer shaded the mass market Model 3 and he said he’d rather buy shares of Estee Lauder than buy the shares of the Elon Musk’s company. Hence, it is quite surprising that Cramer had reasons to sing Tesla’s praises last night.
Here’s what flipped the switch for Cramer
Jim Cramer reconsidered his stance on Tesla Motors (NASDAQ:TSLA) after hearing Jay Leno speak about the EV maker. Cramer says, “Every once in a while you get a wake-up call about how gloomy things actually are out there. They come in all shapes and sizes. Today’s came in the form of Jay Leno”. He noted that he still finds it hard to value the EV maker but he agrees that Leno raised some valid points on why investors should be more optimistic and less pessimistic about the stock.
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During his commentary, Leno noted that Elon Musk is doing the unthinkable against all odds in the same spirit as Henry Ford and Thomas Edison. Leno says “I don’t understand why people attack this car. It is made in America, by Americans. It is built local. You know we are becoming like the British — we like noble failures more than we reward success.” He also noted that Americans should celebrate the spirit of entrepreneurship in Elon Musk and the successes that his firm has recorded.
In case you are still skeptical, Cramer notes that Tesla has a secret sauce for success and it wouldn’t make much sense to stand against the bullishness of the stock. In his words, “We often forget that there is such thing as progress, and progress can create a better world. Progress is also the secret propellant of stocks”.
Chinese billionaires back Tesla rivals
The success that Tesla Motors (NASDAQ:TSLA)has recorded in the automobile market has triggered the emergence of many startups that want to build EVs. One of such startups is Atieva, and the firm has the makings of a potentially fierce rival for Elon Musk’s company. CNN reports that Atieva has set up shop very close to Tesla’s Palo Alto headquarters in Silicon Valley and that Chinese investors with very deep pockets are backing the startup.
Former Tesla and Oracle executives started Atieva and the startup has poached key talent such as its CTO, Peter Rawlinson. Atieva plans to have a premium EV sedan (think Model S) in the market by 2018. The startup also plans to unleash a pair of luxury crossovers (think Model X) by 2020 or 2021. Of course, Tesla is way ahead of its rivals but the emergence of serious-minded startups in the EV scene might erode some of Elon Musk’s market leadership.
An interesting point to note is that Chinese investors are keen on breaking the monopoly that Tesla enjoys in the EV market. For instance, the same Chinese billionaire Jia Yueting backing Atieva is also backing Faraday Future and LeEco. Atieva, Faraday Future and LeEco all have a presence in Silicon Valley where Tesla has its base of operations.