Maintaining a High Valuation through Strategic Innovation

In comparing Tesla and VW, the focus is on Tesla's high valuation, which is largely driven by maintaining a significant equity premium. This premium is sustained by rebranding Tesla as an AI company focused on autonomous driving, rather than just a traditional carmaker. Without this narrative and innovation strategy, Tesla's stock value could plummet by 75%, highlighting the importance of constantly creating new narratives to justify the high price to earnings ratio that Tesla enjoys over VW.