So is Tesla tech company or an automaker? I think it's both.
Actually, I'd go one step further. Because I'd say all automakers, with exceptions, are also tech companies.
And they have to be, right? Because nearly all cars are software these days. And not just electric cars, either.
There are cars with physical engines, but you can give them more power by messing with the CPU.
In other words, you tell the brain that commands the car's engine that it now has more power, and can go faster. Simplified, but that's pretty much how it works.
So I think most automakers are also tech companies, but Tesla is valued as a tech company in the stock market because it's seen as a tech-first, forward-looking company. Or at least that's how the market sees it.
This explains why Tesla so overvalued when compared to automakers that are more profitable or shift more units, or both.
The thing is, the tech sector is one of the most dynamic and exciting ones, and so companies that aren't in this sector, they sometimes try what they can to market themselves as a tech company.
That's what Deliveroo, a food delivery app, did. And that's what WeWork does.
WeWork is a particularly good example.
It has always been marketed as a tech company, overvalued as a tech company, operated at a loss, and is marred with controversies.
WeWork got kicked out of the New York stock exchange in 2023. It was sued by landlords over and over again for failing to pay rent on their locations. The former founder, who's still a billionaire by the way, was kicked out in 2019.
It pioneered a weird business model, and the idea of a co-working space.
But it isn't a tech company.
And yet, despite of all the above, it is still around. Still operational.
I bet all of that wouldn't have been possible if they'd simply said "we're a real estate company", because that's what they are, at the core, from the get-go.
