Genius is a funny thing — we often don’t recognize nor appreciate it until it’s gone. Case in point is Nikola Tesla. The innovative scientist — from whom Tesla Motors Inc (NASDAQ:TSLA) gets its name — was on a path toward inventing a free global power generator when he discovered the “Tesla coil.”
This system was the first one where electricity could be transmitted wirelessly. Although Tesla never achieved his dream of providing free energy, his groundbreaking work set the stage for today’s technologies.
Indeed, while Wall Street has clamored over Tesla stock in recent years, many would be surprised to learn that TSLA did not invent the electric vehicle. In fact, the very first EV was developed well before TSLA CEO Elon Musk — or even his parents — were born. The first crude prototypes were introduced during the early nineteenth century. However, it wasn’t until the 1890s that the EV entered its original heyday.
The Backdrop of Tesla stock
In 1893, electric-powered cars were exhibited in Chicago. Four years later, electric taxis were ferrying people around busy New York City streets. By the dawn of the twentieth century, EVs were actually on the verge of automotive domination. In 1900, a whopping 28% of automobiles were powered by electricity. A year earlier, Thomas Edison of General Electric Company (NYSE:GE) fame began a massive investment into EV battery technologies.
Of course, it was Henry Ford and the eventual Ford Motor Company (NYSE:F) that killed the EV’s momentum. Mass production of the iconic Model T offered the public practical transportation at a substantial discount to its electric counterparts. As further advancements made gasoline-powered cars increasingly convenient, the EV platform was quickly abandoned, and not to be revisited seriously until TSLA entered the scene.
The eventual success of Tesla stock resulted from a primary vulnerability of fossil-fueled autos — dependence on crude oil. That not only drew the ire of price-gouged drivers, it also directly shed human blood. World wars have been fought over oil. And it’s absolutely no conspiracy to say that much of our foreign policy is centered on “black gold.”
I’m not suggesting that Tesla stock is some kind of philanthropic investment. Rather, TSLA is an investment in the future that has been a long-time coming. Anybody that’s anybody — Alphabet Inc (NASDAQ:GOOG, GOOGL), Microsoft Corporation (NASDAQ:MSFT), Amazon.com, Inc. (NASDAQ:AMZN) — are all gearing up aggressively for digitization and “next-gen” computing. To assume that our transportation mechanisms will continue to be tethered to archaic fossil fuels is to believe in the flat earth.
I would go so far as to say that the bear case for Tesla stock should only be limited to a clearly defined framework. Otherwise, TSLA is one of the few investments I confidently trust.