Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable

[9837264723849]

From EVs, to AWS for AI and all 15-20 or so industries in between. In this regard you can think of Tesla as 15-20 companies, all which can end up leading their fields. 550B might seem like a lot now, but really it's just 20 companies undervalued at 30B each. Some of those startups perhaps could be valued at 550B alone... most notably FSD.

It has been on my todo list to attempt sizing up these markets and assigning a large percentage of them to Tesla.

We'd better stop talking about Tesla this way if we don't want governments to start breaking up Tesla as a monopoly (cf. Standard Oil Co. of New Jersey v. United States). I'm surprised Musk didn't think of the risk earlier.

 

[bestfind]

Anyone else wondering how short and longer term demand will hold up with just two very similar models responsible for all growth?

For Europe I first thought that everything was sold out this quarter as they moved delivery in the design center to February. Now it seems that the inventory list has been flooded with all types of configurations in transit. In addition I have received a few emails advertising this suggesting that they are trying to push sales. Still a month left in the quarter so I guess they could sell out.

By next year they will likely produce twice the number of cars still with mostly 3/Y. If they keep the prices at these levels with no discounts and only minor changes for the 2022 model I wonder if they will be able to sell 400,000 cars. Cybertruck to the rescue I guess?

 

[Mikeb]

Move Etsy and add Amazon for MAGENTA.

or. NAMETAG

 

[hobbes]

Tesla mentioned 31 times at Volkswagen call a week ago:
Bloomberg - Are you a robot?

 

[StealthP3D]

Yeah, kind of makes all the people saying "Who cares about the S&P? They need Tesla way more than Tesla needs them." look pretty dumb.

That's funny. Because S&P snubbed Tesla by not including them when they were clearly eligible, then they realized they were in a pickle that was getting worse with each passing profitable quarter. Better late than never, but they basically proved they needed Tesla more than Tesla needed them. Elon has made it clear that he doesn't hold these types in very high regard.

It's quite clear that TSLA is better off (i.e. higher) now than before the S&P index committee admitted that Tesla exists.

You are mistaking TSLA for Tesla. People said the S&P needed TSLA more than Tesla needed the S&P. One is a company, the other is the ticker symbol used to buy/sell company shares. While S&P 500 inclusion is creating increased demand for their shares following this announcement, no one on this forum said it wouldn't. But it only matters if you are planning to sell. By delaying inclusion, S&P has done a disservice to all the funds that track the S&P 500 Index who's index funds have missed out on the same gains the index missed out on by not including Tesla when they were clearly eligible. Meanwhile, Tesla (the company) continues to soldier on making the best EV's on the planet.

 

[StealthP3D]

Wouldn't that help competitors who are building FSD?

No. They don't have the necessary data. This is Tesla's most valuable asset in the race to FSD.

 

[Artful Dodger]

Nope. The revenue from capturing 100% of the NN training market even if it was 10x the size now would not be that much. Tesla built a very good neural chip and Dojo has the potential to be great, but others are doing well in this space too. Tesla will not get anything more then 50% of the NN trading market. Most neural network training can be done on available equipment and does not need Dojo.

I would think Tesla’s Dojo , battery and network building experience will make Tesla robotics a much bigger deal then Dojo alone.

You're joking, right? Dojo will see things you wouldn't believe. Attack ships on fire off the shoulder of Orion. Watch C-beams glitter in the dark near the Tannhäuser Gate. All those moments will be etched in time, like lightning in the rain. Time to live.

Ask me again in 500 years. Then we'll see how valuable Dojo was.

Cheers!

 

[EVMeister]

I didn't know people donated to support this site.

Indeed they do. You can press the "Support TMC" button in the footer to find out more. You get a neat ltitle badge under your name to show for it. I have one, too. I didn't do it for the badge, I did it because I use this site daily and it provides unique insights and information. I first gave support back on December 23rd 2019, right around the time the stock price finally broke above $400 for the first time. Or a split-adjusted $80. Since then I've continued to benefit from the information provided here. There are a lot of people sitting here getting rich, so I'm personally quite surprised by how few of them give something back in support of the site that helped them get there. This service is provided for free and I think too many people here take it for granted.

 

[LiveLong&Profit]

Would be funnier if we put Netflix back in:
FAATMAN

These letter-games will be disrupted also. There are only relevant and interesting as long as these stocks are actually in the same league.
That will likely change in the next decade.
If Tesla executes on their battery day expansion-plan and moves upstream into the mining industries and keep relentlessly force cost down, the sky is the limit.

Given ~20 million cars produced per year by Tesla from 2030 and onwards, and robo-taxi pseudo-monopoly then the revenue per year and subsequently the valuation of TSLA becomes HUGE bordering on obscene - likely an order of magnitude above other 'mortal' stocks, prompting the following dialogue:
Q: "So what are your holdings?
A: "BigT - off course! Oh, I also have some low-innovation, ordinary penny stocks... "

(Sure, other robo-taxi-networks will compete, but as 'Tesla' is already in the minds of many synonynomous with an electric car so will 'robo-taxi' become synonymous with a Tesla-robotaxi, such that Tesla is the brand-leader with a proven track-record and accumulated miles and consumer trust, and first-mover advantage, and the other networks become the fall-back option: "Argh! - I couldn't get a Robotaxi - so I got a Waymo/Nio/<whatever> - Yeah, I know, kinda lame")

 

[UkNorthampton]

Agreed. Among other points, the above point is even overlooked by a lot of Tesla bulls. In below tweet, Cobra Kai is referring to Dojo. I remember in other Dojo related Elon tweets, when someone asked if Dojo will be available to other people for NN training, Elon said Yes. That mean Tesla intend to open Dojo to public to become AI of AWS. Keep in mind that around 57% of Amazon's operating income came from AWS in Q3 2020. The potential of Dojo is beyond FSD and could be huge.

View attachment 612437

I agree and where the AI is, the data, compute and websites will follow. Dojo>data>compute>websites could be bigger $$$ than AWS. Plug that into your exponential s-curve spreadsheets - go on - I dare you!

 

[UkNorthampton]

Wouldn't that help competitors who are building FSD?

At a price. True AI goes beyond cars, could include all transport, customer service interactions, physical work (farming, lawns, personal care). The Total Addressable Market is big (everything, almost?).

 

[Green Pete]

So, the only thing that makes me think it will actually succeed is the fact JB is on the board. I don't think there's actually enough information public at this point for anyone to actually make a judgement one way or the other - I am probably wrong about that tho. So, now that kensington capital is quantumscape, I feel like there should be SOME discussion as to how that might effect Teslas share of the energy business. The answer could well be zero, or "a little but the market is the entire world's energy storage needs so at this point it's not a growth competition to tesla" but I think it should be considered in how it could effect the next 10 years.

I'm still a huge bull, but I feel like it's healthy to cast the stone of "what about..." Now and then so we don't become blind to reality like teslaq

 

[LiveLong&Profit]

I always considered myself a super bull on Tesla, but the stock has gone up considerably faster than myself and pretty much everyone else imagined. I have several thoughts around this topic, but my general idea is that we have a massive conservative bias with our Tesla predictions.

Take a look back at some of the old super-bull predictions, which now seem like bear predictions: Super Bulls Only

Or take a look at ARKs 7000EV (1400) by 2024 target... starting to look kind of low, especially with FSD looking much closer now than people thought.

I think the reason for having a conservative bias is:
* Unconscious absorption of FUD
* Expecting the past flat period from 200-300SP to repeat, instead of realising we are on an S curve of ramping
* Struggling to imagine the scale of Tesla/EVs/renewables
* Struggling to imagine the new tech, and the changes they bring
* Underestimating FSD and more specifically the effectiveness of computation scale on AI (May 2020 news & 'On GPT-3' · Gwern.net)
* Not wanting to sound crazy

I think the most accurate predictions of Tesla will be top down based on total addressable market, across all the markets they are touching, with massive margins, growth and market share. From EVs, to AWS for AI and all 15-20 or so industries in between. In this regard you can think of Tesla as 15-20 companies, all which can end up leading their fields. 550B might seem like a lot now, but really it's just 20 companies undervalued at 30B each. Some of those startups perhaps could be valued at 550B alone... most notably FSD.

It has been on my todo list to attempt sizing up these markets and assigning a large percentage of them to Tesla. For now though, I can say the potential upside is so much higher than I see anyone putting numbers to.

I would like to see an analysis where:
* Tesla gets to FSD in next 2 years with high probability and has 5 years with no competition in FSD
* Tesla batteries/energy/EVs grows 20% faster than predicted at battery day
* Solar scales at similarly rapid rates
* Tesla's DoJo supercomputer and NN training farm has a bigger value than Amazon's AWS
* Decade long predictions take into account acceleration change: Accelerating change - Wikipedia
* And comprehensive valuation of all the other startup components like insurance, chip design, seats, etc.

Taking all this into account, I can see a case for a current SP of 2000-3000. I may sound crazy now, but check back in 5-10 years and see whether I was crazy, or perhaps even bearish in my outlook. Perhaps even 1-2 years will prove me right. I should say I am not 100% confident on any of these super-bull predictions, they are complete guesses and I haven't done the top down analysis which I think is needed to most accurately predict the 10 year stock price. It's not really necessary for a buy and hold investor like me.

However, I did want to point out a historical collective bearish shortcoming in predicting Tesla and TSLA.

Great post!
I jokingly call myself Raging Bull, but these days ... perhaps raging is the new normal?

Re. Dojo and training farm: All Tesla self-driving tech is to my belief the corner-stone of what will separate Tesla from other 'mortal' companies. Since we haven't yet seen the full effect of Dojo yet it is difficult to put a value on (unless Tesla for once is sand-bagging)

My back-of-the envelope 2030 valuation:

1. Tesla mass EV vehicle production expertise: 1-10 billion USD
2. Tesla FSD tech leading to robotaxi pseudo-monopoly for personal transportation: 30 trillion USD
3. Rest of Tesla ecosystem: Energy, Insurance, Supercharging, Solar: 2 trillion
4. Semi FSD: Unknown. Probably very big but maybe robo-taxi for persons is the bigger opportunity until Tesla can scale batteries by 100X. I hope I am wrong, but Tesla has been very quit re. semis lately.

1) Has a very broad range. The reason is, that at some point in time within the next 1-5 years it will become obvious that self-driving can be done and will be done. Henceforth, a ginormous scramble will ensue where traditional automakers, big tech players will enter the game of self-driving and taxi-networks - for *real* this time. And yes, as Elon himself has addressed, the FSD tech will over time become more 'reachable' and perhaps over 10 years become trivial, due to Moore's law and advances in ML/AI.
However having cheaper and more available tech will not fully solve the "We need X billion verified miles to qualify for and obtain a robotaxi license"-problem. The FSD-technology stack is just the necessary starting point. Now, you need millions and more millions of miles and customers. And your product is still inferior to Tesla robo-taxi, 'cause they have the most miles - and the gap increases daily.

Now, when a lot of competitors have fairly adequate tech with a lot of miles, this is the point were Tesla high-volume manufacturing of quality EVs become a key advantage.
What should the tech-players do? They have no high-volume manufacturing expertise? What should traditional auto-makers do? They have no FSD-tech worth considering.
(If you say 'merger' then I invite you to ruminate on how fast-moving fail-forward sillicon valley thinking will align with slow-moving traditional automakers. I think take-over or buying the production capacity of traditional automakers is more likely)

So even if competitors at some point get FSD sufficiently solved, then Tesla can flood the market with cheaper and better cars, and either enjoy eye-watering high profits or out-compete new entrants based on much lower cost - or some middle way, where Tesla gets a big share of robo-taxi revenues and profit, and gracefully allow a few competitors to carve out a small slice of the robo-taxi market. This middle way will simultaneously align with Teslas mission - and it will also not provide a big price-umbrella for competitors. It is also an excellent anti-monopoly-legislation-avoidance-strategy: "See, your honor - we have lots of competitors!"

The more I think and write about the future robotaxi-scenarios the less clear it becomes how even strong tech players will be able to compete well with Tesla.
Survive as market actors in the new robo-taxi market? Sure. If and only if you have deep pockets. Truly compete with Tesla?... not really.

 

[LiveLong&Profit]

Who gets to clean up the poop, the pee, and the puke after the ride?

Revenue and profit from EV robot-taxis are so astoundingly huge that the cost of setting up and running service and cleaning centers and routing robotaxis to be cleaned either periodically - and/or based on negative reviews will be trivial.

 

[Todesbuckler]

New video from Giga Shanghai with first Model Y doing the test track:

Yason Yang:
"I have seen Tesla Model Y for testing in GF3 many times, which means that GF3 will soon be able to mass produce model Y, just waiting for the production license and sales license."

 

[Criscmt]

@Everyone
@Artful Dodger @FrankSG @StealthP3D
1. Is there a case for Tesla to not let TSLA from going too far? If yes, at what SP do you think Tesla should start getting concerned about too high a rise in SP. One reason perhaps is not letting big swings in SP impact employee morale.
2. Do you think a SP equilibrium gets reached without special steps happening, like the company having to issue new shares as a step to stop front runners from totally driving the SP to "unhealthy" levels, level where a huge drop is likely?
3. Do you think Tesla very likely raises more capital at $700 or $800?
4. What surprises are plausible from S&P that could lead to a drop in the SP. Is spreading the weightage across several quarters likely?

 

[Criscmt]

Volumes low, none of the big players are purchasing yet apparently. Are they waiting for the S&P announcement on Monday, Nov-30?
I am going by the point made by many here that big players are yet to start purchasing the shares.
Could it be that they prefer to wait for the S&P announcement before buying, just in case S&P throws surprises on Monday?

 

[JBRR]

Herbert Diess: "The change will take place in ten years - with or without Volkswagen"

„In rund zehn Jahren werden wir autonom fahren können“

Google Translate

How we transform Volkswagen

 

[LiveLong&Profit]

Nope. The revenue from capturing 100% of the NN training market even if it was 10x the size now would not be that much. Tesla built a very good neural chip and Dojo has the potential to be great, but others are doing well in this space too. Tesla will not get anything more then 50% of the NN trading market. Most neural network training can be done on available equipment and does not need Dojo.

I would think Tesla’s Dojo , battery and network building experience will make Tesla robotics a much bigger deal then Dojo alone.

hm... Dojo is fascinating to think about.
Yes, other companies are doing great re. having their own custom ML chips. But AFAIK most current ML application are done processing and optimizing internal workflows and guessing customer behavior and optimizing for ad revenues and such. Teslas FSD chip is optimized for low watt-usage as well as raw FSD compute power.
I am not sure you can equate being very good at ML and having custom ML hardware with being good at robotics. Given that FSD cars are truly robots with wheels not feet, Tesla might have a real advantage here.
Even so, the business opportunity of FSD and robotaxi seems so huge that Tesla should go all-in. When that is pretty much locked in they could offer Dojo as a cloud service. If there is even a chance that a competitor could shave off some months or years using Dojo maybe that is not Tesla duty to enable. On the other hand, Elon is very fair-minded and may actually allow this to happen. Perhaps he rightfully trusts Teslas speed of innovation to be able to counter any competitor.
Also, as StealthP3D points out in another post, using Dojo does not solve the data problem: Any competitor must have date to supply to Dojo before using Dojo makes sense. That work Tesla will not absolve competitors from.

The more I think about this, allowing competitors to use Dojo even early on is a very Elon move:

• It de-fangs any future anti-monopoly government regulation attempts: "But your honor, all our competitors can access our bleeding-edge FSD-tech-stack at low cost. Why, given such benevolence, should we be punished by their lack of effort or competence?"
• It add revenue and profit to Dojo, and Tesla - and thereby drives cost down.
• It aligns with the mission
• It enables and furthers other forms of robotics which can used also by Tesla: Delivery androids in near human shape, for Tesla Semi, and/or Tesla Robotaxi. (Think future robo-cars having a locked trunk, and a humanoid-robot of some shape or form, which can do deliveries. The humanoid robot rides along with robo-taxi passengers. How is that for a future SOME-post: "Riding Robo-taxi - met a nice person/entity!" #RoboBuddy)

 

[UkNorthampton]

New video from Giga Shanghai with first Model Y doing the test track:

Yason Yang:
"I have seen Tesla Model Y for testing in GF3 many times, which means that GF3 will soon be able to mass produce model Y, just waiting for the production license and sales license."

I'm not up to speed.

They have a model 3 line. I thought they had a separate Model Y line. Now new deep/strong foundations for more stamping/gigapress. More buildings being built nearby (assuming Tesla). Are they going for Semi, China-designed (but can be built/sold anywhere) small car? Shanghai production of 1 million 3/Y/2 in 2022?

Tesla Giga 3 Shanghai Plans To Boost Capacity By 73% In Bid To Expand Localized Parts Production

Possibly body stamping workshop - I'm probably wrong. I need a lie down.... I'm having a case of the vapours