Tesla will never become a "profit machine" like Apple and Microsoft because it has no chance of establishing an undisputed monopoly in the automobile industry, according to prestigious economist Paul Krugman . The Nobel laureate says Tesla vehicles are unlikely to ever benefit from the network effect , which has helped products like Apple's iPhone and Microsoft's personal computers establish dominant market share. The network effect occurs when people purchase a product because they believe that others obtain exclusive benefits from using it. "It's not the kind of company where you can expect a pioneer, as Tesla clearly has been, to establish an unchallenged monopoly position," Krugman tells Yahoo Finance . " Tesla is not going to be Microsoft, even if everything goes as it should . It is not going to be Apple either," he adds. "These are not network externalities, where basically people use something because everyone else uses it, and it's very.
Difficult to get out of it, so you get decades of very high benefits." Tesla's stock price has plummeted 65% in the last year . Rising interest rates have weighed on all tech stocks, but some Tesla shareholders point out that CEO Elon Musk 's Twitter antics have also fueled the sell-off . Musk closed a chaotic $44 billion acquisition of Twitter , laid off more than half his staff and last year asked his followers to vote Republican. He also repeatedly expressed support for right-wing conspiracy theories , including calling for the arrest of President Joe Biden's top medical adviser, Anthony Fauci. The signs that confirm that a person is manipulating you Bill Miller is another of the most prominent voices in the market who has raised the alarm about Tesla's dwindling market share. The legendary value investor has stated that he was short-selling Musk's company because he believes he is starting to lose ground to other major automakers that are.
Pivoting toward electric vehicles. Krugman claims that Musk's behavior has shown that he is nothing like Apple's co-founder and former CEO, Steve Jobs , famous for his high level of discipline and focus on Apple products. "Jobs had a vision. And also, let me say that, at least at some point, it mattered that Steve Jobs was perceived as a really cool guy, like the guy in the black turtleneck and jeans with an awesome device in his hand, that was something that people wanted to buy, which helped establish their position," Krugman says. "I don't think that even if Musk had been as disciplined as Steve Jobs, Tesla would ever be a sustained profit machine like Apple has been," he adds. "It's not their fault. It's just not that kind of industry.