Tesla, Inc. (TSLA -6.63%) is one of the most controversial companies in the public market today. Bulls point out that the electric-vehicle leader is poised for massive revenue and profit growth as the world gradually weans itself off fossil fuels. Bears point out that the company is still burning through capital, and that its stock is insanely overvalued using any traditional valuation metric.
While both points of view have their merits, I personally decided to become a shareholder in 2013, after Fool co-founder David Gardner made the company a “core stock” in his Rule Breakers service. That proved to be a savvy move, as I’m currently up more than 600% on my initial investment.
Despite the incredible gains, I’m still wildly bullish on this company’s future. Here’s a look at 10 reasons I could easily see myself hanging on to my shares indefinitely.
1. Low-cost marketing
For better or worse, Tesla has a knack for making headlines. Every move Tesla makes is covered in extreme detail by the media, which provides the company with an unbelievable amount of free advertising. It also doesn’t hurt that CEO Elon Musk has a cult-like following and boasts more than 14.4 million Twitter followers. All this attention makes it incredibly easy for the company to quickly get the word out when new products become available and drum up huge amounts of demand for its products (witness the 400,000 pre-orders for the Model 3). That’s quite impressive for a company that spent less than $50 million on marketing, promotional and advertising costs last year.
By contrast, traditional auto manufacturers like General Motors, Ford, and Toyota still have to spend billions each year on advertising to get the word out and create demand for their products. I think that gives Tesla an enormously powerful and underappreciated advantage.
2. Ridiculously loyal consumers
Tesla’s customer engagement and loyalty numbers are truly off the charts.
Consider a recent survey by Consumer Reports that ranked Tesla first among all automakers in terms of owner satisfaction. CR‘s data showed that a stunning 91% of Tesla owners surveyed said they would purchase the same vehicle if they had it to do all over again.. That result was 7 percentage points ahead of its next closest competitor.
Or how about the company’s Net Promoter Score? According to indexnps.com, Tesla comes in first among auto brands with a net promoter score of 96. This number, which represents how often consumers would recommend a brand to others, is excellent in absolute terms and it ranks a full 12 points ahead of its closest competitor.
3. Complete control over the consumer experience
Most people I know hate the car-buying process. Being forced to haggle with a car salesman is a huge turnoff for many consumers (including me), yet plenty of car buyers begrudgingly go through the process every few years in order to get a great deal.
By owning its own stores and service centers, Tesla has complete control over the entire consumer experience. That’s a benefit no other rival automaker can match.
4. A beloved brand
Tesla hasn’t even been selling products for a full decade yet (the Roadster launched in 2008), but the company has already managed to get onto Interbrand’s list of top 100 global brands in 2016 (at number 100). As of last year, Interbrand estimated that the name “Tesla” is already worth $4 billion. For context, that’s roughly the same value assigned to BMW‘s MINI brand.
5. Access to SpaceX engineers
SpaceX is another remarkable company headed up by CEO Elon Musk. The rocket maker knows a thing or two about engineering, manufacturing, and materials science. Elon Musk has admitted that he has taken techniques that were learned at SpaceX and applied them to the car business.