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

[CaliBear1]

I saw that article on Seekingalpha, but I feel it goes too far in the opposite direction of Ark.

Tesla will probably do very well with RT's, making excellent revenues and profits which will result in TSLA going up. And seeing how close FSD is today and how fast its progressing now, plus Austin slated to start RT production next year, Tesla RTs are likely to be deployed in the next couple of years. So shorting it per the SA article would be ridiculous and very unwise IMHO.

That said, this ain't happening overnight nor quickly. Its going to take time to play out, the RT fleet will grow slowly, production of the RTs will ramp slowly with the new unboxed method, this has never been done before so the idea Tesla will be an $8 trillion company five years from now (per ARK) seems ludicrous to me. Eventually, sure, its probably going to happen, anyone who's done RT valuation models can see how ridiculously lucrative its going to be. It will just likely take much longer than Ark predicts, like 10-15 years longer.

So I feel the truth is somewhere between Ark and Seekingalpha, leaning towards a huge valuation for Tesla but over the very long term, and nowhere near as fast as Ark says it will. IMHO.

You may be right Mengy, but I think we often fall into the trap of linear thinking with regard to problem solving. I don't know if that is how you view FSD and RT development, but if the improvement goes into a dramatic, AI-driven exponential growth phase, we could all be caught off guard by the speed of the transition. And if the problem is solved, EVERY SINGLE VEHICLE deployed will have a mandatory chip installed that enables communication with every other vehicle, rendering accidents exceptionally rare and almost entirely eliminating the need for insurance. I think heady days are around the corner and suspect this will happen much faster than most realize.

 

[ItsNotAboutTheMoney]

You may be right Mengy, but I think we often fall into the trap of linear thinking with regard to problem solving. I don't know if that is how you view FSD and RT development, but if the improvement goes into a dramatic, AI-driven exponential growth phase, we could all be caught off guard by the speed of the transition. And if the problem is solved, EVERY SINGLE VEHICLE deployed will have a mandatory chip installed that enables communication with every other vehicle, rendering accidents exceptionally rare and almost entirely eliminating the need for insurance. I think heady days are around the corner and suspect this will happen much faster than most realize.

No. Privacy issues, and it's also a risk because of external dependency.

 

[Discoducky]

Anyone else watch Ark Invest talking about Robotaxi valuations for Tesla over the next five years?

I generally agree with their outlook in the long term, but I feel their timeline is way too optimistic. Its going to take time for the RT fleet to be built, deploy, and take hold. Not to mention FSD needs to be solved yet for RT's to even work. Ark seems to hinge a lot of their valuation on a large percentage of current Tesla owners instantly joining the RT fleet in the next year or two, and I think that is highly unlikely. I still feel a minority of Tesla owners will even put their cars into the RT fleet. I also think RT profits will be smaller and with lower margins than Ark predicts.

$2600 / share is something I could see happening someday for TSLA with both RTs and Optimus being sold, but I think that's like 10-20 years out, not 5 years from now.

Obviously, first, we need to have an FSD build capable of completing RT rides. That's the long pole. Assuming that happens one day, I expect all existing owners of vehicles capable of running that build will get messages like the below examples on their app or in the car.

In car message with updated build:

• Release notes
  • Robotaxi - Supervised.
    • Go to the Robotaxi tab in Settings to enable your vehicle to give paid rides to passengers.
      • Click "Yes" to allow Tesla to use vehicle location history data to compile predicted expected earnings based on your driving history and current state of charge.
        • Once enabled, a map view indicates what locations you normally drive are likely to have rideshare requests.
      • Click "Enter RT Fleet" to enable Tesla to add your vehicle to the real-time request queue
        • Accept Terms and Conditions - like Uber
        • Once your vehicle is in the real-time queue, you have the ability to accept and decline rideshare requests.
          • You can view your payout metrics on the app at anytime

Expected app notifications:

• Maximize your payouts!
  • Set a regular schedule, beginning charge and service area
    • Go to Settings to learn more
• Expected high demand near you.
  • Turn on rideshare for the next hour.
  • Predicted payout >$100 using 32 miles of range.
• Earn free supercharging after 10 rides!
  • Once completed, credits will be added to your account for 1000 kWhs!
  • These credits allow free supercharging during non-peak times
    • Check the timeline as each supercharger can have different times
• Earn free detailing at your local Tesla service center and 3rd party partners
  • Minimum of 5 rides daily for a week earns a hand car wash and interior detailing
• 25 rides back to back unlocks higher payout percentages
  • Once completed, check the app to track updates

 

[JupiterMan]

Ark seems to hinge a lot of their valuation on a large percentage of current Tesla owners instantly joining the RT fleet in the next year or two, and I think that is highly unlikely. I still feel a minority of Tesla owners will even put their cars into the RT fleet.

I agree that many owners today would not put their Tesla in the RoboTaxi fleet, likely myself included. However that ignores people who could specifically purchase a Tesla specifically for this purpose. You could see people buying cars solely for it to be a RoboTaxi and a source of income. For example current uber drivers, who could then earn on the vehicle 24/7 whilst they do something else, or put in the RoboTaxi fleet in the downtime when they are not working for uber.

Taxi companies too could also look to supplement their taxi fleets with RoboTaxis.

So there it is possible that there will be much privately owned fleet that will be added to the Tesla Robotaxi network.

If this holds, then you could see Tesla demand (in particular the second hand market as you dont need a "new" car) going crazy, as demand for Tesla's to add to the fleet increases.

Even for those not looking to add their car to the fleet, existing owners could benefit from much improved resale/residual values on their Tesla's, potentially dropping finance and lease costs for new purchasers also.

 

[GOVA]

It's the software.

https://www.reuters.com/business/autos-transportation/cloaked-audis-covert-ceo-meeting-how-vws-5-bln-rivian-bet-transpired-2024-06-27/

There is nothing worse than fixing bad software. Next, WV has zero integration AFAIK amongst their components which the software will have to encompass. This must have been the main cause why their software has been terrible from the start.

Now, normally I'd rewrite all from scratch but it might not be possible due to the fact that it has grown too much already and/or due to lack of already said integration, bad software is 'only' a result/outcome of this bad integration.

IMHO, Rivian has got themselves in a bottomless pit of pain. VW is in debt, so is Rivian. I don't think it will help anyone involved in this 'deal'

 

[CaliBear1]

No. Privacy issues, and it's also a risk because of external dependency.

Tell that to the Chinese. And when accidents and injuries plummet there as a result of this shift, enormous pressure will build to follow suit in other countries. Just watch. And Privacy rights are not absolute, even with the US Constitution. They are subject to a strict scrutiny test, the highest level of constitutional review. But I believe laws imposed to protect and preserve lives will pass constitutional muster and overcome any rights to privacy associated with operating a vehicle. And furthermore, I think operating a vehicle is considered a privilege rather than a privacy right protected under the Constitution and Amendments.

 

[Mengy]

You may be right Mengy, but I think we often fall into the trap of linear thinking with regard to problem solving. I don't know if that is how you view FSD and RT development, but if the improvement goes into a dramatic, AI-driven exponential growth phase, we could all be caught off guard by the speed of the transition.

No, once FSD is solved and RT production is underway with a year or so of ramping in the tank, at that point I think the RT fleet and revenues will start increasing in a very non-linear fashion. And I do think we'll see that inflection point within the next five years, but probably later rather than sooner. Like late 2027 to EoY 2028 timeframe, in my opinion. Since I think that will be the start of the RT S ramp, I don't see how the stock can jump up 13X ($2600) between now and 2029 realistically. Maybe if our PE goes utterly bananas again like it did in 2021, which is a possibility of course. I just don't think its likely for a company of Tesla's size going forward, I think the valuation increase will happen much more gradually. Still happen in a very large way, just over a very long timeframe.

IMHO, I could of course be completely wrong, it is only a prediction.

 

[SOULPEDL]

It's the software.

https://www.reuters.com/business/autos-transportation/cloaked-audis-covert-ceo-meeting-how-vws-5-bln-rivian-bet-transpired-2024-06-27/

Yes, it is the software. Like many, it was a VW roadblock but they may have taken the wrong detour (vs what Ford is likely doing with Tesla).

My assumption is that Ford is planning to license FSD from Tesla (good evidence, I already covered this). If that's the case, they'd be redoing all the electronics and subsystems really - essentially the same as what Rivian did to the secret Audi's project last year that lead to their new partnership with VW.

Even so, it's now on to the "hard parts.". The effort needed to align a final design, plus suppliers, will be another few years at least. It will be too late for VW by then and the wrong platform IMO, again.

Meanwhile FSD is the King Pin that dictates the Hardware 3, 4, 5 series, and is the mothership of the car's software. Subsystems could change, but likely at the cost of energy efficiency. Literally, who could possibly beat the Octovalve heat exchanger design for example? And would their windshield wipers really work when needed?

Consider the fact that Tesla masterfully leveraged their own vehicle hardware (and vision software) for Optimus. Therefore, I would bet hard that Ford is doing the same. IMO, Licensed FSD starts with HW4 and a whole lot of makeover on subsystems. It's looking like a 3-yr conversion for Ford in total.

 

[Kenypowa]

I look at this forum and I see posts talking about Twitter? Might as well talk about SpaceX too.

https://www.cnbc.com/2024/06/26/spacex-wins-nasa-contract-for-iss-reentry-destruction.html

Now I understand why some people hate Elon. It's not enough for him to destroy free speech, now his other company is hellbent in destroying the International Space Station?

/s

 

[sunwarriors]

anyone who's done RT valuation models can see how ridiculously lucrative its going to be. It will just likely take much longer than Ark predicts, like 10-15 years longer.

I've not spent a lot of time reading RT valuations, but can any market be "ridiculously lucrative" as folks claim if there are competitors in the space? Look at NVDA with a monopoly on AI chips, lucrative, 80%+ market share. When Tesla sold $68k MY and had no inventory, with really zero other EV options, lucrative. SpaceX sending rockets with 0 competitors, lucrative. See the pattern?

I don't believe that RT will be as lucrative (don't even need to read reports) as others believe because Waymo is already in existence and there are also known things like Uber/Lyft drivers. Verge is coming from a manufacturer that's not bankrupt, already has contracts with like 14 cities, profits, top tier product (Nevera), completely from the ground up pure taxi platform, Mobileye is out there, Wayve is out there, every other manufacturer has autonomy driving divisions (Ford, GM), etc. Full self / autonomous driving has been a "known" quantity for well over a decade really and discussed/mainstream/in public since as long as I can remember and has been researched for extremely long. This wasn't true for AI (outside of industry workers). It's not like a "new" bet.

I feel there will simply be a race to the bottom IMO unless you truly believe Waymo (funded by trillion valued market cap google) will just concede (as well as every other company going after this space) this whole market to Tesla. Similar to Elon being able to fund X forever, Google can fund Waymo for a long long while.

Like the price war for EVs, companies WILL compete on price making those profits (as we see in EVs) not as high. Uber/Lyft drivers with also poor skills, bad job prospects will also compete on price. Sure, if Optimus comes out very soon and it can replace the adult industry in that segment, it'll be very lucrative, but that's probably so far off.

Things don't develop in a vacuum and this space is I feel, so very crowded already. Like even Tesla bulls, I don't buy people are going to let others use their cars for random strangers who will throw up in it, dirty it, and god knows, do whatever else in their personal cars. If you buy that belief, Tesla better have a good reveal on 8/8 because competitors are already having fully self driving taxis right now.

Another vid from AZ Waymo. It's already here, working in some cities.

 

[unk45]

You seem to have a reading comprehension problem. I did not say “they didn’t look at cost savings at all.” What I said was that instead of focusing on cost savings (R1 isn’t making them money) they got an infusion of cash, which will make them less likely to drive for cost reduction with the intensity that Tesla did. You can claim tons of cost reductions with future vehicles, but the reality is that those are future vehicles not in production yet. One cannot rest on laurels that don’t yet exist. Surviving the auto startup stage, which Rivian is still very much entrenched in, is a game of pennies. I don’t see Rivian playing that game well enough with the R1, and my whole point is that more cash available means there’s less urgency to cut costs.


Glad to have you quote what precisely I said that you believe was incorrect.

Yep. Why? Because rather than focusing on driving down costs on their first vehicle to make a profit, they started working on other vehicles and building other factories. I believe this was a fiscal management mistake. History is littered with auto startups that couldn’t even get their first vehicle profitable, and Rivian went in to steps 2, 3, and 4 without proving success with step 1.

You are welcome to disagree with what I said, which is an opinion.

With regard to valuation which you like to bring up, you seem to completely disregard Tesla’s multiple other current (energy, charging) and future (robotaxi, FSD licensing, Optimus) revenue streams. You simply compare delivery numbers and seem to think a company that delivers x times the number of cars should have x times the valuation.

Rookie mistake.

One less commonly mentioned major factor for startup survival is not reported profitability.
It is operating expense vs operating income. Were they to sell a vehicle (or any product) for less than it costs to make and distribute, they cannot survive without regular cash infusions.

If they can produce and distribute such a vehicle with more income than their expenses to do that, they might survive indefinitely, even though thriving would require coverage of capex also.

Rivian has not yet proven it is capable of selling for more than the marginal cost to produce.

It is probably true that having deep pocketed and mildly questioning major shareholders has contributed to poor attention to cost control. After all they've lots of reserves and they grow from VAG. Will that induce them to greater efficiency? Of course not!

 

[sunwarriors]

I agree that many owners today would not put their Tesla in the RoboTaxi fleet, likely myself included. However that ignores people who could specifically purchase a Tesla specifically for this purpose. You could see people buying cars solely for it to be a RoboTaxi and a source of income. For example current uber drivers, who could then earn on the vehicle 24/7 whilst they do something else, or put in the RoboTaxi fleet in the downtime when they are not working for uber.

Taxi companies too could also look to supplement their taxi fleets with RoboTaxis.

So there it is possible that there will be much privately owned fleet that will be added to the Tesla Robotaxi network.

If this holds, then you could see Tesla demand (in particular the second hand market as you dont need a "new" car) going crazy, as demand for Tesla's to add to the fleet increases.

Even for those not looking to add their car to the fleet, existing owners could benefit from much improved resale/residual values on their Tesla's, potentially dropping finance and lease costs for new purchasers also.

I disagree with this assessment, train of thought because I'd guess, people who do this are not the well off people who can afford their car to loan out regularly. Look at your typical ride share worker, not the highest income bracket folks who has $$ to just throw to let others use their main mode of transport.

It's like someone "investing" $50k in solar, but their power bills are only $0.10 kWh. There is ZERO ROI to dump good $$ like this to "try" to build a business model. Would you do this as a race to the bottom on ride share pricing competing with all the other small amount of random Tesla owners who will do this? I'd bet 1 throw up in your personal car (or vandalism) and you will never put up your car for a RT service ever again simply because it's not worth the hassle/headache.

You also have the big elephant in the room, namely Tesla who can crush any independent business fleet operator. Remember Hertz? You can't get repairs done without Tesla and Tesla has a lower cost to support this. It's a bad use of capital to compete with Tesla directly and I'd say, simply impossible other than hope that people will make substantial or lucrative profits from this.

 

[scaesare]

Etherlopp is great, much better than can from bandwidth perspective.
In house controllers are awesome , software defined vehicle ftw ... BUT


Seeing the video I was thinking how much effort would it be for Ford to "just license fsd" for a future fortd car.

Tesla is on a hole different hardware and abstraction layer than the hole industry - which is awesome, but does this mean fsd is exclusive as of dependencies?

Explains a bit why cybertruck fsdb was late, the architecture is vastly different than the can based cars before ....

Just food for thought

It's possible that FSD that Tesla licenses to others would include an abstraction layer that would allow for different hardware.

Today, FSD is available for Model S, which is CANBUS based (I think it has 6 or so), Model 3/Y which also has CANBUS, but may have have proprietary controllers(?), and Cybertruck, which appears to have (some?) Etherloop... So FSD ostensibly already is capable of both...

 

[hobbes]

Just installed Autopark in the EU on my 2023 no USS Model Y - software updates set to Advanced. Out of the blue!
View attachment 1060067

Good background article: Tesla Launches New Vision-based Autopark in Europe - Requirements and Features

IHMO notateslaapp has become one of the best news sources, quite unbiased fact based reporting, also outside firmware updates now.

 

[sunwarriors]

that Ford is planning to license FSD from Tesla (good evidence, I already covered this).

Where was this evidence listed? Farley, the CEO of Ford has came out and said they are seeing good progress on their own developments so it sounds like they are NOT using anything from Tesla. Not to mention, they don't use the same cameras/vision.

 

[Knightshade]

It's possible that FSD that Tesla licenses to others would include an abstraction layer that would allow for different hardware.

Today, FSD is available for Model S, which is CANBUS based (I think it has 6 or so), Model 3/Y which also has CANBUS, but may have have proprietary controllers(?), and Cybertruck, which appears to have (some?) Etherloop... So FSD ostensibly already is capable of both...

FSD is not actually available on the Cybertruck though.

I mean, you can pay for the FSD option if you want, but it doesn't actually exist on the vehicle right now-- Not even basic Autopilot does. So no, it's NOT currently capable of both,


Last word from Elon was this would come with 12.5, which would itself come late June, but it's looking pretty strongly (given internal testing only just began on another 12.4 branch, and no 12.4 has gone wide at all) that this date will be missed.

Where was this evidence listed? Farley, the CEO of Ford has came out and said they are seeing good progress on their own developments so it sounds like they are NOT using anything from Tesla. Not to mention, they don't use the same cameras/vision.

There's no such evidence- when I pointed this out- with direct quotes from Farley, the guy claiming it said he'd block my posts-- he seems deeply disinterested in fact-based discussion vs wild speculation.

 

[AndrewZ]

I've not spent a lot of time reading RT valuations, but can any market be "ridiculously lucrative" as folks claim if there are competitors in the space? Look at NVDA with a monopoly on AI chips, lucrative, 80%+ market share. When Tesla sold $68k MY and had no inventory, with really zero other EV options, lucrative. SpaceX sending rockets with 0 competitors, lucrative. See the pattern?

I don't believe that RT will be as lucrative (don't even need to read reports) as others believe because Waymo is already in existence and there are also known things like Uber/Lyft drivers. Verge is coming from a manufacturer that's not bankrupt, already has contracts with like 14 cities, profits, top tier product (Nevera), completely from the ground up pure taxi platform, Mobileye is out there, Wayve is out there, every other manufacturer has autonomy driving divisions (Ford, GM), etc. Full self / autonomous driving has been a "known" quantity for well over a decade really and discussed/mainstream/in public since as long as I can remember and has been researched for extremely long. This wasn't true for AI (outside of industry workers). It's not like a "new" bet.

I feel there will simply be a race to the bottom IMO unless you truly believe Waymo (funded by trillion valued market cap google) will just concede (as well as every other company going after this space) this whole market to Tesla. Similar to Elon being able to fund X forever, Google can fund Waymo for a long long while.

Like the price war for EVs, companies WILL compete on price making those profits (as we see in EVs) not as high. Uber/Lyft drivers with also poor skills, bad job prospects will also compete on price. Sure, if Optimus comes out very soon and it can replace the adult industry in that segment, it'll be very lucrative, but that's probably so far off.

Things don't develop in a vacuum and this space is I feel, so very crowded already. Like even Tesla bulls, I don't buy people are going to let others use their cars for random strangers who will throw up in it, dirty it, and god knows, do whatever else in their personal cars. If you buy that belief, Tesla better have a good reveal on 8/8 because competitors are already having fully self driving taxis right now.

Another vid from AZ Waymo. It's already here, working in some cities.

Moat would be something to consider in this and assign some value to in terms of how much Tesla could have in the autonomy space. Most would probably say NVIDIA has a lot of moat in the AI space in that it’s difficult for others to catch up and compete on the same level because of the complexity in design and manufacturing of their chips etc etc, but even those people may be wrong. Nothing lasts forever, everything is cyclical.

And most importantly, things that are extremely lucrative will attract competition who want their slice of the action and the profits and that pushes everyone forward — capitalism in a nutshell.

There are a lot of autonomy-related things that haven’t (yet) panned out though, I don’t know why there aren’t robots doing Amazon deliveries already and it seems like that would be quite a bit simpler than full blown robotaxis.

 

[cliff harris]

When it comes to cars and privacy, its not as clear cut as you think.
Think about numberplates. They serve no purpose but to identify you to the authorities. Its like walking around with a barcode on your face, but its considered absolutely essential for motor vehicles, and virtually nobody objects to them. Its also mandatory to have insurance, and you even need a special license issued by the government to operate one. madness!

Some reporting by bloomberg on Tesla starting to test FSD in shanghai. Could be nothing, could be huge.

Bloomberg - Are you a robot?

 

[cliff harris]

Re: robotaxi, its obvious that everyone who currently drives an uber or lyft will want to do this. The cost of a car purchase is so much, that all those people spend any spare time they have driving people around to earn some cash with this pricey asset they needed.
With robotaxi, they could earn some of that money (likely a lower rate), without having to actually do any work. Or if money is tight, they could work in a bar while their car also worked for them. Perfect.

 

[scaesare]

FSD is not actually available on the Cybertruck though.

I mean, you can pay for the FSD option if you want, but it doesn't actually exist on the vehicle right now-- Not even basic Autopilot does. So no, it's NOT currently capable of both,


Last word from Elon was this would come with 12.5, which would itself come late June, but it's looking pretty strongly (given internal testing only just began on another 12.4 branch, and no 12.4 has gone wide at all) that this date will be missed.






There's no such evidence- when I pointed this out- with direct quotes from Farley, the guy claiming it said he'd block my posts-- he seems deeply disinterested in fact-based discussion vs wild speculation.

I'm sure they have development versions running in house... and regardless they will have it for CT, so by the time it's ready for license to others, it will already have to have hardware agnosticism to some extent.