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

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$0 from energy, $0 from licensing, $0 from any software other than FSD

Their Monte Carlo simulation outputs have prices going upward of $28k/share. I’m going to enjoy poking through the excel models over the weekend.

I love the fact that it’s conservative and yet their bull case is a 6x in 5 years with the expected case being a 5x.

Now just imagine 2030.
They specify ZERO CapEx in 2025, so are pricing the terminal value of the company (no future growth after 2025), priced at standard market multiples. Pretty weak-ass assumption, given the STATED Tesla growth roadmap (20m vehicles/yr by 2030).

ARK Invest is again trying to cram Tesla into their box (5-year horizon). That part is just bad accounting / valuation practice. But do they really think that TE will be worth nothing in 5 years? When TE deployments of megapack tripled in 2020, and bty costs are going down by 75% in that time frame.

Next: Tesla will NOT, EVER launch a human ride hailing service. Tesla owners who want to do that can drive for Uber or Lyft. Building that infrastruture (Call Centre, HR, Tax/Payroll, inevitable dismissals and lawsuits) is a waste of company time and effort, a distraction and and delay for what is guaranteed to be a dead end. Hey ARK: Tesla DON'T NEED THE STINKIN' $$$ or the B.S.

ARK is just plain wrong on human ride hailing, and won't give it up because it fills a perceived gap in their model so nicely (while ignoring that it doesn't fit ANYWHERE in Tesla's plans).

Finally, ARK's 5-yr Bull case gives Tesla a CAGR of 43.8% (if everthing goes well). You took a friggin' year to come up with 44%?! Try again next year... :p

Cheers!
 
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They specify they assume ZERO CapEx in 2025, and are pricing the terminal value of the company WITHOUT any future growth, at standard market multiples. Pretty weak azz assumption, given the OBVIOUS company roadmap thru 2030.

ARK Invest is again trying to cram Tesla into their box (5-year horizon). Do they really think that TE will be worth nothing in 5 years? When TE deployments of megapack tripled in 2020, and bty costs are going down by 75% in that time frame.

Last word: Tesla will NOT, EVER launch a human ride hailing service.Tesla owners that want to do that can drive for Uber or Lyft. Building that infrastruture is a waste of company time and effort in what is guaranteed to be a dead end. ARK is plain wrong on human ride hailing, and won't give it up because it fits so nice in their model (though it doesn't fit ANYWHERE in Tesla's plans).

Cheers!

As a Tesla owner with no intention to rely on it for living I would happily drive a rideshare car during daylight hours and tell people about the car if the vaccine rollout succeeds in derisking catching covid from a passenger.
 
They specify ZERO CapEx in 2025, so are pricing the terminal value of the company (no future growth after 2025), priced at standard market multiples. Pretty weak-ass assumption, given the STATED Tesla growth roadmap (20m vehicles/yr by 2030).

ARK Invest is again trying to cram Tesla into their box (5-year horizon). That part is just bad accounting / valuation practice. But do they really think that TE will be worth nothing in 5 years? When TE deployments of megapack tripled in 2020, and bty costs are going down by 75% in that time frame.

Last word: Tesla will NOT, EVER launch a human ride hailing service.Tesla owners that want to do that can drive for Uber or Lyft. Building that infrastruture is a waste of company time and effort in what is guaranteed to be a dead end. ARK is plain wrong on human ride hailing, and won't give it up because it fits a perceived gap in their model so nicely (while ignoring that it doesn't fit ANYWHERE in Tesla's plans).

Cheers!
I think the nuance was that in case robotaxi doesn’t pan out, Tesla may go the ride hailing route as back up (bear case) option. I don’t think there is anything wrong with that.

Teslas have been bought by ride hailing fleet operators. All Tesla needs to do is add an app in its car and allow owners to use the feature in lieu of revenue share with Tesla. They can price comparatively with Uber or even provide better features as integrated experience/feature (think Apple).
 
They specify they assume ZERO CapEx in 2025, and are pricing the terminal value of the company WITHOUT any future growth, at standard market multiples. Pretty weak azz assumption, given the OBVIOUS company roadmap thru 2030.

ARK Invest is again trying to cram Tesla into their box (5-year horizon). Do they really think that TE will be worth nothing in 5 years? When TE deployments of megapack tripled in 2020, and bty costs are going down by 75% in that time frame.

Last word: Tesla will NOT, EVER launch a human ride hailing service.Tesla owners that want to do that can drive for Uber or Lyft. Building that infrastruture is a waste of company time and effort in what is guaranteed to be a dead end. ARK is plain wrong on human ride hailing, and won't give it up because it fits so nice in their model (though it doesn't fit ANYWHERE in Tesla's plans).

Cheers!

I suspect they are sandbagging a more accurate forecast because nobody would believe it. Growth beyond a $4T market cap has never happened before (in modern times), let alone in only 4 years. Scaring clients with "insanity" ain't good for inflows, and ain't necessary to make the point that TSLA is a buy.

But the human ride-hailing stuff is pretty weird.

Edit: I agree human ride-hailing makes more sense as a backup option. I didn't see that stated in Tasha's blog.
 

You know Tesla has made it when shows are using autopilot as a plot device for serial killers.
LMAO what show is this even. It felt like a cleverly staged infomercial with the 30 seconds long explanation of what Autopilot was while they were busy trying not to get run off the road.

Also does Autopilot actually stop for non-moving road obstacles yet? I thought the issue with the people running into parked police cars and fire trucks and concrete highway dividers on Autopilot is that it doesn't recognize anything that isn't moving, which is one of many reasons why the driver is supposed to monitor the car?
 
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I suspect they are sandbagging a more accurate forecast because nobody would believe it. Growth beyond a $4T market cap has never happened before (in modern times), let alone in only 4 years. Scaring clients with "insanity" ain't good for inflows, and ain't necessary to make the point that TSLA is a buy.

But the human ride-hailing stuff is pretty weird.

Edit: I agree human ride-hailing makes more sense as a backup option. I didn't see that stated in Tasha's blog.
It reads as follows, note the last few words,

Tesla could launch a human-driven ride-hail network first, delivering a highly profitable recurring revenue stream and limiting the downside of a failed autonomous service.”
 
As a Tesla owner with no intention to rely on it for living I would happily drive a rideshare car during daylight hours and tell people about the car if the vaccine rollout succeeds in derisking catching covid from a passenger.
Sorry, have to play the devil's advocate here. When you're not motivated by money; you're unlikely to go out when the weather is bad, or you had a fight with your spouse, or you just don't feel like it.

Tesla DOES NOT need this business. Dealing with it siphons energy and effort away from the real goal: Robotaxi.

Better to leave it to Uber/Lyft. They'll be out of business in due course anyway, and they can deal with the 10s of thousands of their former employees/contractors.

Fleet operators have a place in a driverless future. Hopefully a machine can clean up the bodily fluids and excrement on a Saturday night, so the humans don't have to.
 
Anybody else think it's weird Arks new model includes robotaxi revenue (which they themselves think only has a 50/50 chance of even existing in 2025).... AND includes human ride hailing- a service which AFAIK Tesla has never expressed any interest in other than I think like one 2019 call someone asked Elon if it was possible and he said it might make sense ahead of robotaxis maybe.

But it doesn't include solar or energy- businesses that actually exist 100% for sure, and that bring $ in today.



I think the nuance was that in case robotaxi doesn’t pan out, Tesla may go the ride hailing route as back up (bear case) option. I don’t think there is anything wrong with that.


Uber loses like a billion dollars a quarter, while only paying their drivers like $10/hr after expenses with no benefits, and constantly being involved in legal problems with regulators all over the place.

Seems a LOT wrong with that.



Every Friday morning I think to myself “I should be calls for next Friday right before close today” and every Friday at 1:05pm I say “well damn, I forgot. well I’m sure I won’t regret it”. I feel like I might this time.


Heh, every Friday I remind myself lottery tickets usually only work out for the people running the lottery... but today I actually bought some $700 calls for next Friday specifically because I thought the ARK report was coming out today.

That's better than average luck for me, so I'm gonna look 3 ways before crossing any streets tomorrow.
 
Sorry, have to play the devil's advocate here. When you're not motivated by money; you're unlikely to go out when the weather is bad, or you had a fight with your spouse, or you just don't feel like it.

Tesla DOES NOT need this business. Dealing with it siphons energy and effort away from the real goal: Robotaxi.

Better to leave it to Uber/Lyft. They'll be out of business in due course anyway, and they can deal with the 10s of thousands of their former employees/contractors.

Fleet operators have a place in a driverless future. Hopefully a machine can clean up the bodily fluids and excrement on a Saturday night, so the humans don't have to.
I guess I should rephrase. I would be motivated to help the platform take off which will in turn help my investments. I full well intend to drive around for no reason other than to put 100 miles or so on my car a few days a week if I flyer FSD beta in hope my data helps. Tesla as a ride hail service I’m sure could work in some areas where there are a ton of Tesla’s. The Bay Area for sure has enough people who own Tesla’s that of 5% are bored out of their minds at any given time there would be enough to sustain a network to support people selected to beta the ride hailing service as passengers.
 
LMAO what show is this even. It felt like a cleverly staged infomercial with the 30 seconds long explanation of what Autopilot was while they were busy trying not to get run off the road.

Also does Autopilot actually stop for non-moving road obstacles yet? I thought the issue with the people running into parked police cars and fire trucks and concrete highway dividers on Autopilot is that it doesn't recognize anything that isn't moving, which is one of many reasons why the driver is supposed to monitor the car?

If it sees the object in motion and sees it stop it considers it an obstacle to stop for. The issue with parked fire trucks sticking out into driving lanes is it never saw it in motion so it considered it part of the terrain like overpasses and pillars along the side of the road etc.
 
Yes: 2nd part of good two part video.
First part: also very good:

James does a nice, low-key, but thorough walk trough of basic machine learning. I find that James is really good at explaining things.
The layering of simple neurons firing or not, as input to simple, but a bit more complex neurons, firing (or not), all the way up to now being able to, with great certainty declaring 'cat or 'dog'.
How yet more complex sets of knowledge is used as input to form yet more complex output: "This is not a dessert" or "this is a landscape".

I found his brief historical recap of neural networks interesting. To paraphrase:
"
At first neural networks and back propagation didn't work. And people were really disappointed 'cause it ought to, in theory.
The compute were simple too slow. But that wasn't known at the time so people came up with various excuses.
Then later on (from ~2010 and forward) it was the other way around: How could it work so well for such complex processes? It was almost unbelievable how well it worked, which was hard to believe because the basic processes were so simple.
"

Combining these two things it just clicked how much my own understanding is layered: How not only complex perceptions but also concepts like "society" or "corporation" are layered/hierarchical understanding built on (the input) of other pieces of understanding. It also explains how understanding can take a really long time, years, decades, and then suddenly, it is there: The model is finally baked and outputs some newfound 'feature' hitherto unseen.

Because the understanding was really complex, it required input from other models almost as complex, thus in aggregate taking a huge amount of compute - or, more simply put, time.
So, like money, knowledge/understanding pays huge interest: You actually, almost physically build understanding on top of other understanding. Knowledge grows, not linearly but exponentially.

Building models of higher and higher complexity is very possible, by successful layering.
In fact, it is not clear that there is a limit to the complexity and broadness of scope of the models built.
I don't see any natural stopping point. It all comes down to the design of the nets, the vastness of the data, the efficiency of the training pipeline, the experience accrued.

What is our sense of now and self, if not just the biggest, most top level neural network, using many of the other also very complex sub-networks as input to seamlessly weave our existence into being?

So, machine learning works, because we work.
So, AGI is possible, because we are possible.
We are the androids.
It occurred to me that corporate hierarchies are basically neural nets. At the bottom you have folk building cars or curing cancer. At the top, this is converted to the CEO tweeting out a cat video or predicting profits will rise.
$0 from energy, $0 from licensing, $0 from any software other than FSD

Their Monte Carlo simulation outputs have prices going upward of $28k/share. I’m going to enjoy poking through the excel models over the weekend.

I love the fact that it’s conservative and yet their bull case is a 6x in 5 years with the expected case being a 5x.

Now just imagine 2030.
You don't need to imagine:
Tesla Network / Robotaxi Business Model
Rounded down for dilution, my model says $100k/share which is conservative compared to ARK's $28k/share in 2025 figure. Similarly to ARK, my model does not include revenue from more than one part of the business - selling cars included...
I tried running Monte Carlo simulations but each time I ended up retiring in Monaco on account of all that wealth.
 
What I do like about Ark’s model is that it has a massively wide array of outcomes as I see so many variables impacting how FSD/Robotaxi plays out that I am skeptical anybody can forecast accurately, let alone how those many variables will interact with each other

FSD/RT is almost certainly going to unleash massive value, that is not so challenging to forecast, but here’s a quick list of what I find practically beyond forecasting as to who reaps how much of those rewards

-Nationalism/Protectionism (ie, potential tilting playing field for native or regional players)

-Crony Capitalism (quick example, look up Pave Campaign, its sponsors and its Communications Director... what unstated goals might this organization have)

-Gatekeeping (Robotaxi fleets may be granted utility like access to some metro areas, yielding oversight to quality of coverage offered for citizens and a large slice potentially of the value either to low costs for service users and/or licensing fees and taxes)

-Elon’s prediction that the tech for FSD will be as trivial as the NAV app on your phone by 2030 (he’s stated this publicly at least twice)

-Logistics (2 quick examples... 1) demand for fleets may be far larger during rush hour than rest of day, ie, many models out there may be overstating usage rates quite considerably for urban areas, 2) why did Elon start the boring company? currently large cities are not set up to handle existing vehicle traffic much less a shift from conventional mass transit to RTs)

-Humanity Safety (more an issue for FSD for private cars than RTs, but, if FSD is 10X safer than human driver, that is a massive consideration counter to maximizing profits in pricing of FSD. Less of a factor re RT as RT can be inexpensive and safe for consumer while still being highly profitable)

- Humanity Social Harmony/Quality of Life (RT will be just one example, but a major example re tech displacing a massive scale of jobs. Driving a vehicle is among the top few jobs globally. This was not the case with elevator operators. What solutions might we come to to bring on the tech and offer some cushion to lives disrupted re making a living?)
 
The ARK Report and share prices sounds about right:

The report needs a few tweaks however:

Document find/replace
Robotaxi -> Tesla Energy Solutions
Ride Hailing -> Tesla Energy Solutions

One would also think Tesla would be able to derive significant revenue by 2025 from

-Licensing / OEM at least some of its products or IP to other companies. Batteries, driver assist, dojo.
-Self service rentals of vehicles.
-Providing charging services for other EVs
-App revenue sharing for car based apps

and probably at least a dozen more things combined that would be far more significant than taking on Uber/Lyft.

The Bull/Bear case also needs to forecast what the treasury yield is going to be like as well..... :rolleyes: