Nobel Prize-winning economist Paul Krugman: Tesla will never be as profitable as Apple!

Business Insider reports that Nobel laureate economist Paul Krugman has said that electric car company Tesla will never generate the same profits as what Apple and Microsoft have done without building an independent mechanism. inviolability in the automotive industry.

Specifically, expert Krugman said that Tesla will never benefit from the network effect, when the number of buyers will increase the value of the product because customers tend to buy in the crowd. Customers will go crazy buying products when they feel others benefit from using them.

This effect has been applied very well by Apple and Microsoft when they have a certain monopoly in their businesses, thereby keeping a stable source of large income.

“Tesla is not the type of company that can monopolize the market by being at the forefront of electric vehicles. Nor is it possible, like Microsoft or Apple, to keep the copyright to a certain technology inviolable. The company also failed to create a network effect when people bought the product in a crowd. Tesla’s electric car is also not a product that is as difficult to break as the iPhone to be profitable for decades,” said expert Paul Krugman.

Even expert Krugman assessed that Elon Musk has nothing like Apple’s founder Steve Jobs, who is famous for his high discipline and always focuses on developing core products for the apple house.

“Steve Jobs was a visionary leader…I think that even if Elon Musk had the discipline like Steve Jobs, Tesla would never have generated the huge profit stream Apple did. This is not Elon Musk’s fault, but simply the industry is like that. However, I must also admit that I have not seen anyone destroy their self-image in such a short time as Elon Musk, “said expert Krugman.

Krugman’s comments come in the context of investors being very worried about Tesla. Shares of the electric car maker have fallen 65% in the past year. Although part of the reason comes from the US raising interest rates, many shareholders believe that Elon Musk’s distraction for Twitter in the context of a series of new players entering the market is the main reason.

The fact that Elon Musk borrowed billions of dollars to buy Twitter, thereby incurring a loan interest of up to $ 1 billion a year, so that this social network has not yet been profitable, if not only reduced the reputation of the company. the founder and the Tesla brand.

Agreeing with Krugman, many famous Wall Street investors like Bill Miller have also said that Tesla is losing the market to new competitors as more and more traditional car manufacturers make electric cars. While a series of corporations have launched new models, Tesla has barely released any significant new products.

The fact that Elon Musk is busy saving Twitter, developing SpaceX and countless political activities recently made shareholders unhappy because this is the time when this billionaire should have focused on Tesla.

*Source: BI