Why Chris Umiastowski Is Betting on Tesla

Globe Investor’s Strategy Lab growth investor shares his insights into why he includes Tesla in his portfolio.

Published: 07-Jan-2014

Last week, I shared my thoughts on some growth investing trends that I think are worth paying attention to in 2014. I hope most readers understand by now that I’m a long-term investor, so these growth trends, while important in 2014, are not limited to this calendar year. I invest in trends that often require a decade or longer to play out. I briefly touched on the future of electric cars: I think it serves as a great example of long-term thinking versus short-term crowd mentality.

I talk to a lot of people about electric cars, and most people understand that a small market exists for them today. Beyond this, most consumers hold false beliefs about the technology. I hear people say electric cars are just glorified golf carts that are slow and unable to travel very far. People also worry that it will be a hassle to recharge their battery, and that after three or four years, it will die, because that’s their experience with laptop computers.

Most people don’t realize that electric cars have impressive acceleration because electric motors deliver full torque from a standstill, unlike internal combustion engines. They’re also quiet, because there is no combustion of an explosive fuel. They’re cheaper to operate: Not only is electricity much cheaper than gasoline, but electric cars have fewer complex systems to maintain. There is no ignition system, exhaust system, piston-timing system, or engine-cooling system. In subzero weather, electric vehicle owners can use smartphone apps to remotely turn on cabin heating. And forget about getting gouged at the pump before a long weekend: Just plug in at home and wake up with a fully charged battery every day.

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