Tesla's market cap is now 5 times(!) the combined market cap and 20 times(!) the average market cap of Porsche, Mercedes, Volkswagen, and BMW

All four German car companies have been in business for 60+ years longer than Tesla. While Tesla’s market cap clearly no longer only stems from its EV business, it does raise the question of the effectiveness of innovation strategies.

Clearly, the game has shifted. It is no longer simply about vehicles and manufacturing excellence – rather it is also about a seamless, software-powered user experience where car companies need to integrate software, AI, and data analytics as core parts of their business models. Strategic leadership that drives transformation and prioritizes agility, tech integration, and hashtag#sustainability is important as well.

Above all, strategic out-of-the-box thinking and relentless execution of actionable where-to-play and how-to-win strategies are key to success – We at SDI Management Consulting AG focus on exactly that when advising our clients to create significant shareholder value.

Clearly, Tesla’s valuation will continue to put pressure on German car manufacturers – and the “tongue-in-check question” for the new Trump administration including D.O.G.E. Elon Musk is: “Will higher tariffs actually be needed to win this game…?”