Musk’s space prowess should be an indicator of what to expect from the Model 3

Photo credit: Steven Straiton

Bloomberg reports that SpaceX has just made a successful launch of another reused rocket.

When Musk first talked about building reusable rockets, the whole industry laughed. Now, they are, probably, not laughing. The economics of the whole problem are on Musk’s side, reusable rockets have a marginal travel cost equal to the cost of fuel (plus maintenance and other operating costs).

The competitors that usually bid for space transportation missions are now at huge cost disadvantage. While Musk was sorting the engineering problems of re-usability, others were spending time laughing. They now must play catch-up.

This is the kind of tricks that Musk is capable of. And you can extrapolate that to the EV playground. Once he understands where the problem lies, his teams will focus in solving the engineering part of that equation. And he has proven, time and again, that it’s not a question of if, it is a question of when. After all he is known for missing schedules, not for missing accomplishments.

Investors should be afraid of the short term, but shouldn’t fear the long run. Once things start to settle down at the Model 3 production line (and the Gigafactory) it’s not hard to guess what will happen to the stock.

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