Hi, I’m a short seller

[neroden]

I'm assuming the cars we see up to 2020 will be very limited in quantity and serve mostly as compliance cars and platform tests. .... I suppose that will change in 2021 and production numbers start to explode around 2022. VW Group alone is currently retooling capacity for 350-450k cars per year in it's Zwickau plant alone, targeting late 2020 or early 2021.

So, VW's targeting the same capacity as Tesla is targeting. But at least a year later. And everyone else is doing less and slower. And nobody will have anything singificant until late 2021, three years from now.

Do you read what you write?

It's mostly things like the manufacturing prowess implied by such plants or the capability to produce various models with a lot size of 1 on the same assembly line, the existing worldwide supply and service network and the available amount of money these companies have, that makes me a Tesla bear.

Do you really read what you write? You just conceded that Tesla has a three-year head start on everyone else, assuming they all execute *perfectly*. *Including* having a head start on Nissan (which started before Tesla) and GM (which started before Tesla). That makes you a bear? You seem to be running on gut instinct and disregarding your own analysis.

 

[Big Earl]

Yas is a closet bull.

 

[YasB]

Kamenz factory(s) is full cycle Lion factory complex compactly settled in big Dresden area.
Mentioning Dresden is important. It's one of the four german cities with meaningful number of engineers and right working force.

Daimler bought Li-Tec Battery GmbH and Deutsche ACCUmotive GmbH & Co. KG in 2014. So yes Daimler has full cycle production.
They are still expanding, full current investment level will put them on the present level of Giga 1.

If by 'full cycle production' you mean they also include cell production, i think you are wrong. They have closed that down in 2015 and i'm not aware, that they have taken steps to start it again. Li-Tec Battery – Wikipedia

Imho, Kamenz I and II will produce packs only and be supplied by LG Chem. If i'm wrong i'd be gratefull for a link where i can read more about it.

 

[YasB]

So, VW's targeting the same capacity as Tesla is targeting. But at least a year later. And everyone else is doing less and slower. And nobody will have anything singificant until late 2021, three years from now.

Do you read what you write?

Yes and it's even worse than that. Sometimes i even dare to think before i write. VW is targeting that capacity in a single plant and as a first step on their way to electrification. The current plan for 2025 seems to be 2-3 million cars a year. Somehow, i'm sure you are aware of that, but chose to ignore it.

From what we know, it will take Tesla until 2022 to build and fully ramp a new factory in china. If everything goes perfect, they may be building a bit more than a million cars by then. But that is not even enough to justify their current valuation, let alone any upside. Now if we assume Tesla starts another factory next year and another one the year after that and they can produce, lets say 2 million cars in 2025, that would roughly match BMWs sales volume. If they can continue such a fast expansion for the next 6-7 years and at the same time can turn their bottom line from very red to industry leading net margins of ~10 percent (as BMW has), they are roughly at BMWs level of profitability. Yet their market cap is already the same today. We also had to assume Tesla has zero further dilution over the next 6-7 years, while they will need 20+ billions of capex and execute perfectly, without pricing in any company or macro-economic risks or discount the future cash-flow to reach a situation where they are roughly worth the same, when you apply comparable metrics. There really is a lot of growth priced in with Tesla today.

And yes, i'm aware that Teslas would probably be valued with a higher multiple, if they can pull of something that. I just don't think that is what, is going to happen. If they can really do that, i'll have to adjust accordingly and try to minimize my losses.

You just conceded that Tesla has a three-year head start on everyone else, assuming they all execute *perfectly*. *Including* having a head start on Nissan (which started before Tesla) and GM (which started before Tesla). That makes you a bear? You seem to be running on gut instinct and disregarding your own analysis.

I don't think i'm doing that. A three-year head start means not much, if you don't have the money to build on that.

 

[MXWing]

Yes and it's even worse than that. Sometimes i even dare to think before i write. VW is targeting that capacity in a single plant and as a first step on their way to electrification. The current plan for 2025 seems to be 2-3 million cars a year. Somehow, i'm sure you are aware of that, but chose to ignore it.

From what we know, it will take Tesla until 2022 to build and fully ramp a new factory in china. If everything goes perfect, they may be building a bit more than a million cars by then. But that is not even enough to justify their current valuation, let alone any upside. Now if we assume Tesla starts another factory next year and another one the year after that and they can produce, lets say 2 million cars in 2025, that would roughly match BMWs sales volume. If they can continue such a fast expansion for the next 6-7 years and at the same time can turn their bottom line from very red to industry leading net margins of ~10 percent (as BMW has), they are roughly at BMWs level of profitability. Yet their market cap is already the same today. We also had to assume Tesla has zero further dilution over the next 6-7 years, while they will need 20+ billions of capex and execute perfectly, without pricing in any company or macro-economic risks or discount the future cash-flow to reach a situation where they are roughly worth the same, when you apply comparable metrics. There really is a lot of growth priced in with Tesla today.

And yes, i'm aware that Teslas would probably be valued with a higher multiple, if they can pull of something that. I just don't think that is what, is going to happen. If they can really do that, i'll have to adjust accordingly and try to minimize my losses.



I don't think i'm doing that. A three-year head start means not much, if you don't have the money to build on that.

Tesla has a lot of future growth priced in. I’ll agree with that.

So the SP is going to just rest now and wait until Tesla hits the exact valuation before the market decides to invest more?

VW can say anything and everything they want. Do they get punished for a 2-3 million car claim if they don’t deliver? Why not 5-6 million? They can’t even report their emissions honestly.

Your entire thesis on Tesla is based on fundamentals which are based on a lot of assumptions.

Assumptions like Tesla doesn’t continue to eat bigger and bigger shares of legacy autos lunch as they get more exponential awareness from number of Model 3s on the road.

Even as a mega bull I understand that TSLA can be a risky investment because the present valuations look scary.

So I invest only what I can afford to expose to volatility due to it being pretty much the biggest battleground stock out there.

Smart money is probably avoiding TSLA. There’s a ticker symbol called VTSMX for those who are risk adverse.

Dumb money is betting against it.

What’s max downside before someone else takes over its IP? 50-75% losses?

What’s max upside if betting against them fails.

Unlimited.

 

[TheTalkingMule]

Tesla is not a car company.

 

[YasB]

So the SP is going to just rest now and wait until Tesla hits the exact valuation before the market decides to invest more?

Who said that? I outlined one example, what a very positive scenario i'm willing to consider for Tesla may look like. Then I speculated what that specific scenario could mean for the valuation, if you applied more normal valuation metrics. I also made some very generous assumptions to arrive there. I'm very aware that the current multiple for Tesla is much higher and this could go on for some time. But usually these valuations come down very fast, when growth is slowing, sentiment changes, overall markets are in trouble or other unforseen problems arise. It surely wasn't my intention to say, this is exactly what will happen.

VW can say anything and everything they want. Do they get punished for a 2-3 million car claim if they don’t deliver? Why not 5-6 million? They can’t even report their emissions honestly.

If you intend to say, that VW simply lied again or doesn't intend to actually do what they outlined, just say so. Since we are at it: Should Tesla be punished, if they produce only 600k of the 1 million cars they are still aiming for in 2020? They reiterated that goal only 5 months ago. Imho, they were knowing very well at the time, that there is no way to get there.

Anyway, you are of course free to believe whatever you want regarding VW and i do not need to convince you of anything, since it's just another example. As someone making a bet against Tesla, i don't have to care, what companies the pack of competitors consists of, as long as there is a pack emerging. It's not like i placed a bet on VW, Volvo, GM or whatever and that one company has to succeed. That part of my bet could be titled "There will be severe competition and that will put pressure on Tesla margins sooner or later.". That's why i also disagree with some of my fellow bears, when they say, that a certain model will be 'the Tesla killer' and hit sales of this or that Tesla model. It's a weak argument.

Your entire thesis on Tesla is based on fundamentals which are based on a lot of assumptions.

What's your long thesis based on, if not assumptions about Teslas future fundamentals? Also, it's an important part of my core thesis, but surely not the entire thesis.

So I invest only what I can afford to expose to volatility due to it being pretty much the biggest battleground stock out there.

So do i and i think it's worth to remember people from time to time that it's often better to be carefull.

What’s max downside before someone else takes over its IP? 50-75% losses?

What IP does Tesla have, that's worth 20 or 30 billion and couldn't be bought after the stock goes to zero? To prevent misunderstandings: I'm not waiting for that to happen, but the question remains a valid one. What's that IP? Should Tesla drop 50% or more during the next years, i'm completely fine with that and will most likely be gone.

What’s max upside if betting against them fails.

Unlimited.

You know that's not very convincing, right? Your max downside with a lottery ticket is 100%, while your potential upside is something like 100.000.000%, but what does that say about your average return? It's never only about potential upside or downside, it's also about the (perceived) chance for that scenario to become reality.

 

[TheTalkingMule]

What IP does Amazon have that's worth $300B?

 

[MXWing]

You know that's not very convincing, right? Your max downside with a lottery ticket is 100%, while your potential upside is something like 100.000.000%, but what does that say about your average return? It's never only about potential upside or downside, it's also about the (perceived) chance for that scenario to become reality.

I admit that unlimited is a bit of hubris and hard to quantify.

However looking at reality, Tesla despite all of its hammerings is only 20 percent off ATH or so.

By default we are going to disagree on the direction but I think 50 percent return at current levels is more probable than 50 percent loses if one entered right now.

If burning 9000/min hasn’t sent it to 0 I wonder what every M3 made equals every M3 sold will do over the next 2 quarters?

We shall see.

I wonder however how substantial your short position is anyway as I detect a bit of personal animus in your reply. Hope you are not that guy with 10 shares long calling for Elon to step down. LOL

I’m substantially long just by having a Model X. That’s a expensive brick if no one is there to service it in a year or two.

 

[30seconds]

Yes and it's even worse than that. Sometimes i even dare to think before i write. VW is targeting that capacity in a single plant and as a first step on their way to electrification. The current plan for 2025 seems to be 2-3 million cars a year. Somehow, i'm sure you are aware of that, but chose to ignore it.

From what we know, it will take Tesla until 2022 to build and fully ramp a new factory in china. If everything goes perfect, they may be building a bit more than a million cars by then. But that is not even enough to justify their current valuation, let alone any upside. Now if we assume Tesla starts another factory next year and another one the year after that and they can produce, lets say 2 million cars in 2025, that would roughly match BMWs sales volume. If they can continue such a fast expansion for the next 6-7 years and at the same time can turn their bottom line from very red to industry leading net margins of ~10 percent (as BMW has), they are roughly at BMWs level of profitability. Yet their market cap is already the same today. We also had to assume Tesla has zero further dilution over the next 6-7 years, while they will need 20+ billions of capex and execute perfectly, without pricing in any company or macro-economic risks or discount the future cash-flow to reach a situation where they are roughly worth the same, when you apply comparable metrics. There really is a lot of growth priced in with Tesla today.

And yes, i'm aware that Teslas would probably be valued with a higher multiple, if they can pull of something that. I just don't think that is what, is going to happen. If they can really do that, i'll have to adjust accordingly and try to minimize my losses.



I don't think i'm doing that. A three-year head start means not much, if you don't have the money to build on that.

It almost doesn’t matter what VW is targeting in 2025. What matters is total EV production vs demand at that point.

By then I believe EVs will be cheaper than ICE for similar range and performance. So most new car demand will be for EVs even if total production is still weighted towards ICE at that point.

VW will be protecting their existing sales by transitioning to EVs.

But Tesla will be still be growing market share and revenue.

 

[Zhelko Dimic]

From what we know, it will take Tesla until 2022 to build and fully ramp a new factory in china. If everything goes perfect, they may be building a bit more than a million cars by then. But that is not even enough to justify their current valuation, let alone any upside. Now if we assume Tesla starts another factory next year and another one the year after that and they can produce, lets say 2 million cars in 2025, that would roughly match BMWs sales volume. If they can continue such a fast expansion for the next 6-7 years and at the same time can turn their bottom line from very red to industry leading net margins of ~10 percent (as BMW has), they are roughly at BMWs level of profitability. Yet their market cap is already the same today. We also had to assume Tesla has zero further dilution over the next 6-7 years, while they will need 20+ billions of capex and execute perfectly, without pricing in any company or macro-economic risks or discount the future cash-flow to reach a situation where they are roughly worth the same, when you apply comparable metrics. There really is a lot of growth priced in with Tesla today.

And yes, i'm aware that Teslas would probably be valued with a higher multiple, if they can pull of something that. I just don't think that is what, is going to happen. If they can really do that, i'll have to adjust accordingly and try to minimize my losses.

I don't think i'm doing that. A three-year head start means not much, if you don't have the money to build on that.

This is good. Very useful. Reason you're my favourite bear Is there a place where smart bears gather, like TMC for bulls? I want to go there...
Agreed there is a lot of growth already priced in. so I agree 80-90% with your post. But couple of points that I see differently:

1. They don't need to execute perfectly. No way. If anything, Tesla's way is to stumble into success. They do put a lot of hard work and intelligence into the process, but they make many mistakes. They also throw a lot of ideas against the wall and see what sticks. But I strongly believe they'll reach numbers you're projecting without perfect execution. And all car companies have debt, so another $10-20B added to the balance sheet for Tesla that makes 2M+ cars/year is, I believe acceptable

2. BMW market cap is probably depressed a bit (20-50%?) because of transition to electric, and Tesla

3. I believe energy will become equal to car business in under 10 years, probably 5-8. Even if not, it will be substantial, at some point in the future. Wheels are turning, there is no stopping this change. Humans overestimates impact of the change short term, and underestimate that same impact over the long term. That's a known phenomenon.

4. Option value of holding TSLA: they'll think of something else, something new, that we can't even see today. Maybe it's semi, maybe it's transport as a service, or more likely something we can't imagine today. This is the value of Musk leading the company. There are full time paid people to manage and think about this stuff, and that's a good management team, unburdened with shackles of typical auto-company thinking. I was a fool early in 2000s to look at GOOG and AMZN and just couldn't see how they could ever become competitors to Microsoft!?! What a fool! But that thought me enough to recognize strength of position and mgmt. team and invest in FB at $24; I knew they can do it, although I didn't know how. This same belief I hold for Tesla. They've already blown our minds by building crazy good electric car, auto-pilot, starting GigaFactory and battery storage when they were very early in all those categories. There will be more of that. Some they'll screw. Some will stick on the wall.

Open to change my opinion if you can put valid arguments against? Though #4 is quite intangible...

 

[bhzmark]

Tesla has a lot of future growth priced in. I’ll agree with that.

I agree too. And that is the best potential short/bear argument.

And oddly no short seem to make that argument. The shorts all depend on Tesla not executing. The better bear argument is that even if Tesla does execute, the current valuation because it is so rich, won't be justified by the long term future cash flows. Or maybe they have done the math and just realized that there is a lot more room in the valuation relative to executing on future cash flows.

 

[MXWing]

This is good. Very useful. Reason you're my favourite bear Is there a place where smart bears gather, like TMC for bulls? I want to go there...
Agreed there is a lot of growth already priced in. so I agree 80-90% with your post. But couple of points that I see differently:

1. They don't need to execute perfectly. No way. If anything, Tesla's way is to stumble into success. They do put a lot of hard work and intelligence into the process, but they make many mistakes. They also throw a lot of ideas against the wall and see what sticks. But I strongly believe they'll reach numbers you're projecting without perfect execution. And all car companies have debt, so another $10-20B added to the balance sheet for Tesla that makes 2M+ cars/year is, I believe acceptable

2. BMW market cap is probably depressed a bit (20-50%?) because of transition to electric, and Tesla

3. I believe energy will become equal to car business in under 10 years, probably 5-8. Even if not, it will be substantial, at some point in the future. Wheels are turning, there is no stopping this change. Humans overestimates impact of the change short term, and underestimate that same impact over the long term. That's a known phenomenon.

4. Option value of holding TSLA: they'll think of something else, something new, that we can't even see today. Maybe it's semi, maybe it's transport as a service, or more likely something we can't imagine today. This is the value of Musk leading the company. There are full time paid people to manage and think about this stuff, and that's a good management team, unburdened with shackles of typical auto-company thinking. I was a fool early in 2000s to look at GOOG and AMZN and just couldn't see how they could ever become competitors to Microsoft!?! What a fool! But that thought me enough to recognize strength of position and mgmt. team and invest in FB at $24; I knew they can do it, although I didn't know how. This same belief I hold for Tesla. They've already blown our minds by building crazy good electric car, auto-pilot, starting GigaFactory and battery storage when they were very early in all those categories. There will be more of that. Some they'll screw. Some will stick on the wall.

Open to change my opinion if you can put valid arguments against? Though #4 is quite intangible...

How do you price in my next two immediate cars within next 2 years are going to be Tesla’s?

How do you price in good probability that future first timeowners will be a like minded consumer like me?

You give the bear too much credit. At least not until we know short position value. The size of the bet is more valuable than the description of why someone is betting a particular direction.

X factor is even if shorts are technically vindicated 20 years from now - can current shorts sustain until then?

You don’t short cult stocks, because the market can be irrational longer than you can stay solvent.

I don’t believe Tesla has to rely on this thesis but

“Fake it till you make it” is a tried and true survival strategy. If shorts can’t starve Tesla to death before then, there will be enough market penetration to be ubiquitous.

Once you can take home a Model 3 same day like you would a 3 Series - are you sure you want to bet on BMW?

Lastly, do people really think Elon can’t pull capital out of his ass? Seriously? No levers at all? Worst case is an actual Apple iPad stuck on a Tesla, displaying amazon ads and having baidu be the default search engine of the safari browser.

So I’m a dumb bull debating the smart bear because I’ve offered nothing but emotional arguments and have nothing on fundamentals.

I’ve lost the debate.. please short big and take my money.

 

[MXWing]

I agree too. And that is the best potential short/bear argument.

And oddly no short seem to make that argument. The shorts all depend on Tesla not executing. The better bear argument is that even if Tesla does execute, the current valuation because it is so rich, won't be justified by the long term future cash flows. Or maybe they have done the math and just realized that there is a lot more room in the valuation relative to executing on future cash flows.

I attempted to address that in an above post.

Tesla is an easy short and many agree with me if you did lemonade stand math.

Cost of people, lemons, rent and cups in total cost more than the lemonade you can sell each day - even though you made money on a per cup basis.

You also getting lemons on credit you owe interest on because you don’t even have money to buy them outright.

Even future best case lemonade production and sales makes the stand a losing venture to run.

Mom and dad is also tired of giving you $20 each day to run your money losing operation.

Especially since you seem to spend more time messing around on Twitter than trying to make your stand profitable.

Common sense short.

(Unless the market someday decides they all want lemonade in liu of other beverages and you have massive first mover and comparative advantages to anyone else who wants to open a competing stand. And if your parents don’t care they lost $20 every day for 10 years for you to finally stop taking that $20 from them.)

 

[dondy]

If by 'full cycle production' you mean they also include cell production, i think you are wrong. They have closed that down in 2015 and i'm not aware, that they have taken steps to start it again. Li-Tec Battery – Wikipedia

Imho, Kamenz I and II will produce packs only and be supplied by LG Chem. If i'm wrong i'd be gratefull for a link where i can read more about it.

they were producing components for cells and getting assemblies cells from SK chinese plants. I have no idea how it's now.
I heard about CATL being the main choice of DB, they are very aggressive in Germany and shop for an European factory still, but I am very skeptical about massive production of cells in western Europe. Anywhere.
DB wants to shop for cheapest variants apparently. For example Akasol uses Samsung cells.
Daimler has everything with the exception of environment tasking cell packaging.
Stand corrected .

 

[neroden]

Yes and it's even worse than that. Sometimes i even dare to think before i write. VW is targeting that capacity in a single plant and as a first step on their way to electrification. The current plan for 2025 seems to be 2-3 million cars a year. Somehow, i'm sure you are aware of that, but chose to ignore it.

Projections for 2025 are vaporware. How long have you been following the incumbents' plans? They've been promsing electric cars in the "near future" for over a decade. Their timelines keep getting pushed out. Maybe they'll do it, maybe they won't. I'd expect Tesla to get there before them.

Tesla's *already ahead of* GM and Nissan, *both of whom got to market ahead of Tesla*. Doesn't this make you think?

You're assuming perfect execution by VW, and we have every reason to believe they won't actually do that. Nissan had management with the right attitude, and they screwed up (battery thermal management). GM had engineers designing the right car, and management refused to mass produce it.

On top of this, does it matter? Every electric car will sell as many as they can make until the ICE car is driven out of business.

Add together *all* the planned electric cars -- I've done this more than once, and I do it regularly -- and you see that Tesla isn't actually facing competition for years to come. Maybe if literally everyone does what they say they will (they won't) then 2025, which is SEVEN YEARS from now. Until then, if anything, other EVs -- which will also have waiting lists -- will just cause more people to buy Teslas.

And we know Tesla has a lower cost structure for their EVs than any of the "competitors". Munro's teardown told us that.

From what we know, it will take Tesla until 2022 to build and fully ramp a new factory in china. If everything goes perfect, they may be building a bit more than a million cars by then. But that is not even enough to justify their current valuation, let alone any upside.

Are you somehow assuming that the Tesla Energy business, *ramping up as we speak*, is worthless?

Now if we assume Tesla starts another factory next year and another one the year after that and they can produce, lets say 2 million cars in 2025, that would roughly match BMWs sales volume. If they can continue such a fast expansion for the next 6-7 years and at the same time can turn their bottom line from very red to industry leading net margins of ~10 percent (as BMW has), they are roughly at BMWs level of profitability. Yet their market cap is already the same today.

'
That's because BMW is going to LOSE money. They'll have to write off all their engine factories and spend a massive amount on R&D and retooling, and they haven't done it yet. Traditional automakers have a "you are in big trouble" penality on their P/E ratios.

BTW, I appreciate your discussions. You're rational enough to talk with, unlike the "Tesla bankwupt" idiots who make up most of the bearish dialogue.

And maybe Tesla is fully valued and will just stagnate at this price for years, particularly if overall market P/Es collapse during a recession. I can live with that.

 

[electracity]

That's because BMW is going to LOSE money. They'll have to write off all their engine factories and spend a massive amount on R&D and retooling, and they haven't done it yet. Traditional automakers have a "you are in big trouble" penality on their P/E ratios.

Having some familiarity with an engine plant, I don't get this logic. Most of what auto makers have is useful in making EVs. Most equipment used in making engines is probably depreciated over seven years. If 50 million EV are made per year in 2025, who is going to make these car?

If the big automakers can't transition to EVs rapidly due to sunk costs then its going to be a slow motion revolution. There's no one else to build the cars.

Or is Tesla about to announce the imminent construction of 50 factories to control half of a 50 million EV market?

 

[UnknownSoldier]

Having some familiarity with an engine plant, I don't get this logic. Most of what auto makers have is useful in making EVs. Most equipment used in making engines is probably depreciated over seven years. If 50 million EV are made per year in 2025, who is going to make these car?

If the big automakers can't transition to EVs rapidly due to sunk costs then its going to be a slow motion revolution. There's no one else to build the cars.

Or is Tesla about to announce the imminent construction of 50 factories to control half of a 50 million EV market?

The Chinese will be making all the EV's. The big automakers are caught between a rock and a hard place here. The tiny upstart Tesla is rapidly becoming the Apple of EV's and will likely be able to take big margins on small volume and own a lion's share of the overall profits. The Chinese are going to be pumping out millions of very cheap EV's within 5 years and completely undercut the low-margin, high-volume markets that the big automakers rely on to maintain a steady revenue stream.

The biggest shakeout in history is coming and many of today's biggest automakers will not survive the coming Chinese EV storm, because they'll be pushed out of the volume market by the cheap Chinese vehicles where they will be completely un-competitive on costs and margins, and when they try to move up-market they'll find Tesla there vacuuming up all the sales and profits at the premium tiers.

 

[Mader Levap]

Irrelevant. But you just keep clinging to that past.

It is pretty relevant to those early Model 3 owners. Nice try, though.

The biggest shakeout in history is coming and many of today's biggest automakers will not survive the coming Chinese EV storm, because they'll be pushed out of the volume market by the cheap Chinese vehicles where they will be completely un-competitive on costs and margins, and when they try to move up-market they'll find Tesla there vacuuming up all the sales and profits at the premium tiers.

I don't think they will be THAT cheap. Chinese can get away with selling deathboxes only on their internal market. If they want to sell to Europe or USA, they will have to be compliant with regulations, and that costs money. Most likely they will make separate models for export.

 

[YasB]

This is good. Very useful. Reason you're my favourite bear Is there a place where smart bears gather, like TMC for bulls? I want to go there...
Agreed there is a lot of growth already priced in. so I agree 80-90% with your post. But couple of points that I see differently:

1. They don't need to execute perfectly. No way. If anything, Tesla's way is to stumble into success. They do put a lot of hard work and intelligence into the process, but they make many mistakes. They also throw a lot of ideas against the wall and see what sticks. But I strongly believe they'll reach numbers you're projecting without perfect execution. And all car companies have debt, so another $10-20B added to the balance sheet for Tesla that makes 2M+ cars/year is, I believe acceptable

2. BMW market cap is probably depressed a bit (20-50%?) because of transition to electric, and Tesla

3. I believe energy will become equal to car business in under 10 years, probably 5-8. Even if not, it will be substantial, at some point in the future. Wheels are turning, there is no stopping this change. Humans overestimates impact of the change short term, and underestimate that same impact over the long term. That's a known phenomenon.

4. Option value of holding TSLA: they'll think of something else, something new, that we can't even see today. Maybe it's semi, maybe it's transport as a service, or more likely something we can't imagine today. This is the value of Musk leading the company. There are full time paid people to manage and think about this stuff, and that's a good management team, unburdened with shackles of typical auto-company thinking. I was a fool early in 2000s to look at GOOG and AMZN and just couldn't see how they could ever become competitors to Microsoft!?! What a fool! But that thought me enough to recognize strength of position and mgmt. team and invest in FB at $24; I knew they can do it, although I didn't know how. This same belief I hold for Tesla. They've already blown our minds by building crazy good electric car, auto-pilot, starting GigaFactory and battery storage when they were very early in all those categories. There will be more of that. Some they'll screw. Some will stick on the wall.

Open to change my opinion if you can put valid arguments against? Though #4 is quite intangible...

Hi Zhelko and thanks for the compliment. I like talking to you too.

Unfortunatly i'm not aware of a place where more moderate bears gather. There are some over at Seeking Alpha, but not that many. Personally i like most of the stuff a guy called Diesel publishes, although most bulls would probably strongly disagree with him and as it always is, he's just plain wrong from time to time. That said, i don't think the bankruptcy bears are less smart on average, if you actually mean "smart" in the way it's commonly used. They are probably wrong, but not stupid. I would argue to death with ValueAnalyst, since i think he has Teslas future valuation completely wrong. But i wouldn't say he's less smart just because of that. Smart people get things wrong all the time. Also, most of the bears are well aware of the bullish thesis and understand what kind reasoning is behind it. They just don't believe a thing of it. I'd attribute the more stupid stuff you can read on both sides to filter bubble mechanisms, group dynamics and epeen. Regarding the points you made:

1) Somehow i'm approaching it from the opposite direction. I'm assuming every company is working hard and putting a lot of resources (intelligence, experience, R&D, capex) to use. If Tesla can do much better given the available resources, i'm wrong and will lose some money. If they are just as good as the others are, i should be fine and valuation multiples come down. That's why i'm getting on peoples nerves and challenge some assumed advantages of Tesla. What data are they actually collecting from the fleet to advance the AP? Why would they be competitive selling storage, if LG Chem can do the same and is producing the cells on it's own? Yes, Tesla may get to the numbers i mentioned earlier if they don't execute perfectly. They may also achieve a good net margin on the cars they sell. And they may be able to avoid major dilution. Imho, each of these things is achievable, but it's pretty damn hard to achieve most or all of them at once.

2) I agree that BMWs valuation is depressed, but would think it's more like around 30% or so. Most car companies seem to trade around an averaged PE of 10-11 if times are good, which they currently are. But i'd rather blame that depressed valuation mainly on the fear, that the automobil-cycle is ending, since we have been in an economic expansion for a very long time now. Another reason may be fear, that they follow VW and Daimlers lead regarding problems with their diesel engines. Lagging in the EV race may still be contributing factor.

3) I believe Tesla energy may contribute a bigger part to revenue, but next to nothing or even a loss to the bottom line. I don't see why they would have lower price or technological advantage and i don't believe in the "It will be an ecosystem like the one Apple has." theory. It's not worth fighting with adapters or different software every day, just because you pay $100 more for Apples stuff. It's different, if you can safe $10k and buy cheaper EVs, energy storage or solar arrays.

4) Hm. Maybe you have instead been very clever in the 2000s to avoid AOL, WorldCom, Lycos, Excite, Fireball, BOL, AskJeeves, Yahoo, Netscape, VA Linux systems, Mobilcom and hundreds of other companies and simply got lucky with Facebook? Of course i don't know your story and could be totally wrong here, but i thought i'll give it a try. Those were just some of the names i remember from that time and i don't even know, if all of them were public companies. Anyway, what you wrote from todays perspective about missing out on the big winners and having landed a great pick with facebook, sounds an awfull lot like something that's called "survivorship bias". I would advise anybody who plans to invest in disruptive tech companies, to be at least aware of that concept. Even if you decide that it doesn't apply here for one reason or another.

As a lesson for myself, I found it very entertaining to spend some time on old messageboards from around 1996 or 1997 and read these very convincing posts by really smart people, why Lycos has the best search engine in the world, awesome user growth and how all those aquisitions will strengthen their market position. After reading some more of that stuff, i'm convinced that i wouldn't have been able to decide if it's Lycos, Yahoo or Excite, that would win the entire search engine market during the next few years. Google? What's a Google?