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Why Tesla Motors Is the Amazon of Autos

At first glance, it seems that Tesla Motors and have little, if anything, in common. However, from an investmentpective, the luxury electric-car maker and the world’s largest online retailer couldn’t be more alike. Let me explain.

Tesla investors and Amazon investors have a lot in common these days. As Tesla’s ballooning valuation attests, the company’s shareholders are willing to sacrifice near-term profits for future profitability — much like stakeholders of Amazon’s stock. In fact, Amazon has employed a similar strategy for years now. The e-commerce giant continues to burn through cash in order to invest in new growth initiatives such as Amazon Web Services or its business-to-business venture AmazonSupply.

Revolutionizing their respective industries
Since founding the company in 1995, Jeff Bezos has proven he isn’t afraid to forgo quarter-to-quarter profit for long-term gains.An as example, Amazon doesn’t currently make money on its Prime service. However, it does entice customers to spend more (and more frequently) by offering free two-day shipping on an unlimited number of deliveries for just $79 a year.


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