Will Tesla go Bankrupt? History says "yes."

Danial Jiwani, the author of Take Stock In This, is a writer who has been read by some f the leading investment professionals, including Howard Marks and Bill Ackman. 

His latest book Take Stock In This makes a bold statement: “Walmart is at risk of bankruptcy. Actually, almost every company in the S&P 500 is because most big companies don’t last very long.”

It turns out that most large companies–including Telsa, Walmart, and Amazon–are at risk of bankruptcy over the long term.

Why Most Big Copmanies (Including Tesla) Are At Risk of Bankruptcy

In 1994, Jim Collins wrote a book called Built to Last. It had a list of 18 companies that he believed would stand the test of time. 

Those 18 companies were the Amazons and Apples of the 1990s. They were the best of the best companies within the major index funds. 

Everyone expected these companies to perform well. But here’s the interesting thing. Half of his 18 companies performed terribly: 

1. 3M – Has lagged the S&P 500 by more than 600% between the time Collin’s book was published and now. 

2. Citicorp – Has been the second-worst performing stock in the S&P 500 Index over the past 25 years as of April [2023],” according to Investopedia.

3. Ford – Hasn’t gone up one penny in the 30 years since Built To Last came out.

4. General Electric – Produced virtually no share gains between 1994 and 2018 due to internal company struggles.

5. Hewlett-Packard – Has underperformed the S&P 500 by about 400% from 1994 to 2024

6. IBM – Has underperformed the S&P 500 by about 600% from 1990 to 2024.

7. Motorola – Was down 20 years after Built To Last was published, where the market was up several hundred percent. 

8. Nordstrom – Fell 70% over the past 9 years. 

9. Sony – Has earned only 4% returns since 1994, massively underperforming the broader market. 

These were the “Amazons and Apples of the 90s.” But none of these companies are successful today. 

This illustrates an important truth about the business world.

Even the very best fall. If history repeats itself, many companies that are market leaders today won’t be market leaders tomorrow. That could include companies like Tesla. 

Have you ever thought about that?

Most people think that big companies are safe companies. They assume that Tesla is a safe company because it’s a automotive phone company. But if history repeats itself, it’s bound to go under eventually.

Jeff Bezos once said “If you look at large companies, their life spans tend to be 30-plus years, not a hundred-plus years… I predict one day Amazon will fail. Amazon will go bankrupt.”

That same logic can be applied to nay company, including Telsa. “Eventually, the only outcome that’s certain is that Tesla will go bankrupt,” says Jiwani. “It might not happen tomorrow, but it may happen in 30 years.”

How To Invest in a World Where Big Companies Aren’t Safe Investments

There is only onoe way to cope with the fact that most big companies aren’t safe companies: learn to differenate between the companies that will stand the test of time and those that won’t. 

There are some companies that have stood the test of time: 

• Coca-Cola has survived more than 130 years.

• McDonald’s has survived more than 80 years.

• Wells Fargo has survived more than 170 years

What all these companies have in common is that they are “so good that no one else can compete against them.”

Coca-Cola is still a around because it’s so good that it succeeds no matter what moves Pepsi makes. McDonald’s is still around because it’s so good that it succeeds no matter what moves Burger King makes. Wells Fargo is still around because it’s so good that it succeeds no matter what moves JPMorgan makes.

“When you find a company that succeeds no matter what, it’s your golden ticket to finding a company that will stand the test of time,” Jiwani said.

Investors should be asking themselves one simple question: is Tesla so good that no one else can compete against it?” If it is, then it’s probably worth investing in. If it isn’t, then it’s prone to go bankrupt and become like one of Jim Collins’ companies.

Challenges Tesla is Facing

Tesla is facing various challenges. 

Forbes reported that Tesla’s “core business is declining.” In 2024, Tesla posted it’s first annual decline in sales since it became a public company. That trend is accelerating in 2025.”

Furthermore, Elon’s affiliation with the Trump adiminstration may be putting the company at risk. Tesla’s core customer base is composed of democrats who believe in the importance of the environment. “Musk is effectively alienating Tesla’s core customer base by siding with Trump,” Jiwani says.

The tariffs also don’t help Tesla. The company has to import countless tons of electronics and raw materials from foreign countries. Tesla will now be paying elevated prices for all those electronics and raw materials. “The tariffs are only going to Tesla,” Jiwani says.