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What Tesla and Google Share

Stocks in this article: GOOG TM TSLA T

NEW YORK ( TheStreet) -- Tesla Motors (TSLA) shares something important with Google (GOOG), which may be driving its latest stock mania. Tesla shares jumped almost $20 in one day yesterday, and are up 18% in just the last week, to more than $153.

Its focus is in taking people out of the creation of value.

Machines scale better than people. You can cut unit costs almost infinitely with machines. People, on the other hand, want to get paid.

Just as Google focuses on scaling digital infrastructure, constantly driving down the cost of delivering Internet search or content, Tesla focuses on completely automated manufacturing.

Neither company makes a secret of this.

Tesla blogs about its robotic factory regularly. The heavy use of robotics is more important toward understanding the company than the fact it makes electric cars. You can scale a robotic advantage. Whatever your price you can become the low-cost producer.

A chart of Tesla's quarterly earnings looks bizarre. In the June quarter of 2012 Tesla was losing twice as much money as it was taking in. Now its gross profit is nearly $1 for every $4 of revenue. A conventional car company, like Toyota (TM) has huge sales but a gross profit of just $1 in every $5.

Excluding one-time items Tesla made $26.3 million for its last quarter, 20 cents a share, while analysts were expecting a loss of $18.9 million, 19 cents a share.

Suddenly the light bulbs went on all over Wall Street. Tesla is not only profitable, but its profits are replicable. Tesla's build-from-scratch, fully-automated production process scales and succeeds. Tesla is Google, while Toyota looks more like AT&T (T).

Now there remains a bearish case. Tesla has yet to prove it can deliver a car at popular prices, and make money at it. Tesla has yet to build out its line of charging stations so its customers are truly untethered. Tesla just builds electric cars. Tesla is still building just 500 cars a week, while Toyota is making closer to 195,000.

But suddenly analysts can see Tesla's future. It's profitable, and it scales.

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