Photo-voltaic induced excitation.
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Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable
- Thread starter AudubonB
- Start date
Photo-voltaic induced excitation.
While I don't know how high Tesla's valuation goes by 2025, I don't see how anyone can think it will be less than 2 trillion if you believe in Tesla's growth runway for the next 4 years on the Automotive side, Energy becoming a bigger part of the industry, and FSD subscriptions does what we all think it will do to the bottom line/profit line. I'm not talking Robotaxi's, just simply the recurring 90% profit revenue that Tesla will make through the FSD sub model.
If you believe in Tesla's automotive growth 4 year runway of 70% this year, 80-100% next year, and 50% growth in 2023, 2024, and 2025, then the Automotive side alone of Tesla will be worth at least 1-1.2 trillion. That's doesn't require speculating. Simply take the margins and operational leverage Tesla has been realizing as their production expands, and it's clear to see they will leave operational margin of even the highest volume auto maker in the dust by the time they reach 1 million annual deliveries and start to approach Apple's margins across the board when they start nearing 5 million annual production. There's a lot of upside here because as we've all seen, each new factory does more production out of the same factory while doing it more efficient through new manufacturing methods. I wouldn't be surprised if by 2025, we start seeing Tesla building Gigafactories that are eerily close to Alien Dreadnought with Tesla leveraging their Vision software inside the factory
Then take Energy, which is a big wild card, but once battery supply limitations are solved, you'll see a large expansion of the Energy side and it should easily be worth 150-200 million at minimum.
Then add in the recurring revenue of the FSD subscription model at a bare minimum 25-35% take rate(very conservative) on 5 million vehicles which is 90% profit and you can plug in the numbers which make FSD subscription model at least worth 600 million.....and that's very conservative.
So 2 trillion to me is a baseline for the value of Tesla by end of 2025 and I think there's significant upside to that, possibly even up to 3.5-4 trillion if FSD take rate skyrockets to 60-70% or higher......or Robotaxi's are realized by 2025.
If you believe in Tesla's automotive growth 4 year runway of 70% this year, 80-100% next year, and 50% growth in 2023, 2024, and 2025, then the Automotive side alone of Tesla will be worth at least 1-1.2 trillion. That's doesn't require speculating. Simply take the margins and operational leverage Tesla has been realizing as their production expands, and it's clear to see they will leave operational margin of even the highest volume auto maker in the dust by the time they reach 1 million annual deliveries and start to approach Apple's margins across the board when they start nearing 5 million annual production. There's a lot of upside here because as we've all seen, each new factory does more production out of the same factory while doing it more efficient through new manufacturing methods. I wouldn't be surprised if by 2025, we start seeing Tesla building Gigafactories that are eerily close to Alien Dreadnought with Tesla leveraging their Vision software inside the factory
Then take Energy, which is a big wild card, but once battery supply limitations are solved, you'll see a large expansion of the Energy side and it should easily be worth 150-200 million at minimum.
Then add in the recurring revenue of the FSD subscription model at a bare minimum 25-35% take rate(very conservative) on 5 million vehicles which is 90% profit and you can plug in the numbers which make FSD subscription model at least worth 600 million.....and that's very conservative.
So 2 trillion to me is a baseline for the value of Tesla by end of 2025 and I think there's significant upside to that, possibly even up to 3.5-4 trillion if FSD take rate skyrockets to 60-70% or higher......or Robotaxi's are realized by 2025.
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Or wrap the casting area around the top...
With the current construction yard this would actually be the better prepared ground, than the refilled detention pond.
Maybe they'll just add office space and utilities at both ends and repurpose their locations throughout the factory.
Most east China factories are built to withstand typhoon, as it happens almost every year in different places.
Worst case would be a few days of down time if workers couldn’t get to the factory. But GF3 has some worker dorms very close by, so even that might not be an issue.
Material and components should be fine, they should have stock piled some since the start of typhoon season.
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Because the share price likely won't grow linearly with revenues. The PE ratio is high now and that will come down as Tesla grows larger, thus the share price won't increase in step with the financials. I wish it would, but I don't think it will, and I doubt Wall Street will allow it to happen.
Tesla's mission is not to create the most profits, it is to accelerate the transition to green energy. Even if that means lowering profit margins to bring prices lower to increase adoption as manufacturing capacity allows. I know most people think we'll be keeping current Tesla profit margins but my gut feeling is Tesla will lower them as production outpaces demand down the road. And that will lower revenues, making the share price increase slower than we might predict today.
Just my gut feeling, I could be wrong.
Back in 2019, did you expect that the share price would be as high as it is now 2 years later?
Instead of guessing at future share price, one could look at @The Accountant 's model of future share prices.
teslamotorsclub.com
Tesla Valuation Based on 5 Year Outlook
I am going to break up my valuation work into 6 posts. Please refrain from responding until I have completed the 6 posts so as to keep a continuous string. Edit - Done posting - feel free to comment
teslamotorsclub.com
I like that guy…Instead of guessing at future share price, one could look at @The Accountant 's model of future share prices.
Tesla Valuation Based on 5 Year Outlook
I am going to break up my valuation work into 6 posts. Please refrain from responding until I have completed the 6 posts so as to keep a continuous string. Edit - Done posting - feel free to comment
“With this I get a fair value of $1,200 by the end of this year and $4,500 by 2026.” - The Accountant
Instead of guessing at future share price, one could look at @The Accountant 's model of future share prices.
Tesla Valuation Based on 5 Year Outlook
I am going to break up my valuation work into 6 posts. Please refrain from responding until I have completed the 6 posts so as to keep a continuous string. Edit - Done posting - feel free to comment
Yep, his model and predictions are great and roughly match my own in many ways, EXCEPT if you look at his profit margins going forward he predicts they will actually increase over the next five years. That's where I feel people are being too optimistic, as I think Tesla will purposefully lower margins to bring prices lower and keep demand high as production ramps into overdrive.
If the Model Y stays priced as high as it is today it will never sell as numerously as the Toyota Corolla does today, I really think Tesla will lower prices and margins over time. It's just what I'm expecting to see, doesn't mean I'm right.
That is interesting and informative insight, and to me - an admitted irrittee* of the whole cryptocurrency fracas - a compelling reason to have kept that wolf far thence**. At this stage of its corporate life, Tesla does not need asterisks in its explanations either of its income statements or its balance sheet.
* Doncha just love the English language? You know I do.
** As a demonstrated cognoscente of The Wasteland, Mr Musk, at least, ought get this reference.
I feel like you're very misinformed here
- Why would the Model Y need to sell like the Corolla when Tesla has the upcoming Model 2? You're comparing a vehicle that's not even remotely in the same class as the Model Y.
- Why are you not assuming Tesla can continue to drop the cost of the car to coincide with lower entry models or price reductions? Tesla has been doing this for years yet you somehow think they're going to stop? They've shown clear ability to get more out of each new Gigafactory than the one before with the same or lower costs to produce.
- Why are you not accounting for the cost reductions in battery costs thanks to the 4680 Cells?
- Accountant's model isn't factoring in Robotaxi/FSD which will exponentially add more profits than what any price reductions could take away.
Edit: Sorry not to say you're misinformed. Just that it seems like your views on lower prices/margins and then how the software side will add to profits/margins doesn't line up with what Tesla has proven out multiple times.
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Over time they may lower margins on vehicles (hardware) but that will likely be offset by high margin software (one-time and subscription). Think fsd subscription, robotaxi, dojo as a service, fsd for other oems, etc.
Absolutely not. The rule is MR=MC (Marginal Revenue, Marginal Cost) Always. It is fiduciary duty to Tesla and shareholders to charge as much as they can for as any units as they can, for as long as they can.
Rather than take my word for it (and also any Economist).. just look at Tesla's strategy for the 3 and Y releases. And then Cybertrucks.
It's also absurd then to dilute shareholders and carry on debt were there be a need to fund raise because they wanted to lower margins.
Third point. If there are federal subsidies, Tesla will raise the prices to maintain MR=MC. They will not leave money on the table.
I expect profit margins to increase as Tesla develops ever more efficient manufacturing processes - including batteries. This is a focus of Ark invest , who often refer to Wright’s law “… it states that for every cumulative doubling of units produced, costs will fall by a constant percentage.”
What Is Wright's Law | Learning Curve of Innovation
Wright’s Law aims to provide a reliable research framework for forecasting cost declines as a function of cumulative production.
ark-invest.com
Tesla is just getting started with mass production. With a combination of Wrights law, vertical integration, cross pollination with Spacex engineering, and Elon Musk’s vision of massive manufacturing automation, I think Tesla’s margins will grow to scandalous values by 2025. Consumers will get great deals on awesome products and Tesla will be flooded with revenue. Well, it’s my dream anyhow.
I doubt Tesla will significantly lower prices on exiting models - sales growth will come with the introduction of new models - compact and subcompact city cars, vans, etc
I don't know Ed, but when I read this tweet, I'm like "that sure is a special company!"
ZachF
Active Member
Elon has said Tesla cars are too expensive so he wants to lower the price so that more people can afford to buy them to replace ICE cars to save the planet. He also said the self driving car will be an appreciating asset.
“The cars currently being produced…are capable of full self-driving,” said Musk in April 2019. “Buying a car today is an investment into the future. I think the most profound thing is that if you buy a Tesla today, I believe you are buying an appreciating asset - not a depreciating asset.”
As we see some delivery dates in the U.S. slips to November, and 3-year-old Model 3s receiving a trade-in price from Tesla that is only $400 less than the 2018 purchasing price, his prediction might come true when delivery is scheduled a year away and the trade-in price becomes HIGHER than the original price. I believe "appreciating asset" will come when FSD city-driving is released and people will want a Tesla now, even a used Tesla, just to get FSD.
FSD will result in Tesla's profit margin starts to step up incrementally based on FSD purchase and subscriptions while the cars themselves continue to be sold at the same margin and a lower price based on increased efficient use of capital and lower material cost due to partial insourcing of the battery and volume contract for suppliers.
The biggest drop in price and in margin will come eventually when the $25,000 car is released.
Yes - a few months back in Berlin.
In both cases not built locally but used to calibrate production lines etc.
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