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It was a demo of what the potential could be. I always expected that it was programmed. It's not a big deal at all. The car did do the drive on its own, it probably just needed lots of tries to pull it off. If someone was in the backseat steering, then it would be concerning on faking it. But it was programmed to do the route. Now Tesla is easily able to do the drive on its own, and it took a while to get there, but FSD is now being delivered and it's improving rapidly.
I don't think it's necessary, but it could make things even better. That said, the fact that I haven't heard Tesla talk about it at all makes me think it might not even be an improvement. Everyone thought LIDAR was necessary for FSD as well, and now it turns out it's actually a negative unless you're fully relying on LIDAR instead of cameras.
Appreciate the open-mindedness. My projections are a lot more simplistic, so I'm not sure you could compare them one-to-one. It'd be interesting to see what Damodaran's model would project with my estimated numbers. As for my model, I'm simply using: * Cars sold per year * Times ASP * Times operating margin * Detracting taxes to get to net income * Times estimated PE multiple to get Market cap On top of that I'm estimating FSD software revenues by using: * The total amount of Teslas sold by 2030 * Detracting a write-off of cars taken out of commission to get total Teslas on the road * Estimating cost of FSD subscription (currently $200 p/m) * Estimating FSD take rate * Estimating appstore sales per month per car * Multiplying FSD subscription price times take rate, adding software sales per month, multiplying all that by amount of cars on the road * Multiplying this times operating margin for their software business * Detracting taxes to again get to net income * Multiplying this by estimated PE multiple to get to market cap For simplicity sake I'm using the same PE for both car and software business, and just looking at what I expect to be a reasonable PE value for the entire company in 2030. In my base case (15.6M cars sold per year in 2030, ASP of $40K, Operating Margin of 18%, 57M cars on road, $400 FSD subscription price, 40% take rate, $20 app sales p/m, 90% operating margin for FSD, 40 PE multiple for the entire company) I'm getting to a market cap of $6.6T, consisting of $3.6T from automotive and $3.3T from FSD sales. On top of that I'm estimating a fair amount of value to come from their supercharging network and solar/energy storage/insurance/AI training/etc., but this is pure guesswork at this point. My ball park figure here is around $2.8T for a total valuation of $9.7T. Now obviously a lot of this depends on FSD, which is still a big question mark. If you want to be conservative and discount it entirely you get to a valuation of $6.4T.
I did take dealerships into consideration if you read my posts on this thread. It's an advantage for Tesla but I'm not sure how much. As for FSD margins, the hardware costs Tesla probably $1000 or a bit more. They charge 10 times that. Even the basic autopilot package will result in significantly higher margins than they average. Why that is relevant is that obviously if you are trying to build a 25,000 car and appeal to budget consumers, you may lose out on those premium packages where you derive your highest margins as budget oriented consumers are less likely to upgrade to that trim level. Look at Ford again. They make a lot of money off selling premium trim packages for their high end trucks. They never made any money off selling premium trim packages for the Ford focus. Because those looking at their budget offerings aren't as likely to want to upgrade the trim packages.
So Ford have one car that is comparable to a Tesla and it's still a very low volume production. That goes to show that being a traditional car maker doesn't mean you will be able to retool all your factories to produce EVs fast. Every review of the Mach-E talks about how it's a good car, but not as comfortable to drive as a Model Y and not as performant because it can only hit full power for about 5 seconds. On rooftop solar, American politicians have no clue so China will take over this market. Either way, in the future there will be cheap solar panels even if they aren't American. I'm not talking about application software, I'm talking about embedded software. Software that runs the car. Tesla's is just that much better. And by user experience I mean things like being able to turn on the cooling or heating in your parked car with your phone while you're still in the office, so it's comfortable by the time you get to it. On FSD, quite the opposite. The other competitors will take 5 years to get to where Tesla is now and by then Tesla will be 10 more years ahead with Dojo. Not only do the others not have the AI routines to this level yet, they also don't have efficient enough embedded computers to run it. The demos they do for reporters involve two powerful gaming computers worth of hardware in the trunk. You won't get much range if you have 2000W going to your FSD computer. This is the reality of engineering. You can keep saying "The others will catch up by throwing money at it". That's not how engineering works.
> Their moat is vertical, end-to-end integration. In house battery research is the biggest thing (no, others can't catch up just by throwing more money at it, batteries are hard) Right now the Y and the Mach E are separated by a couple dozen miles of real world range. Tesla might have an advantage in future products but not a big one now. >I'm not even counting their future integration plans for powerwalls Rooftop solar is not a market I feel confident in. California is about to enact legislation that will effectively kill new development in that state. Many other states already have enacted such legislation. Utility companies don't like it. >Traditional automakers have always been hostile to software because it's not "real engineering". I don't think the software, like the games and slow web browser are a big deal. Everybody has a phone they can get on while charging. They don't really need that stuff. The auto driving is still better in a Tesla and I think that matters for now. But it could matter a lot less in a year or two. >FSD is years away for Tesla and a decade away for anyone else Yeah it seems reasonable that Tesla is at the point where improvements will get much harder to come by while other automakers are able to catch up more quickly with less investment. You are already seeing that with supercruise and bluecruise.
No, FSD is not a moat. Despite Elon's enthusiasm, real FSD is years away for Tesla and a decade away for anyone else. AI is hard. There are very few elite AI programmers in the world and Tesla have hired most of them. Good luck to any company trying to poach Tesla employees; their RSU plans are so generous (similar to big tech companies) even assembly line techs, while not rich, are getting well set up for retirement. Their moat is vertical, end-to-end integration. In house battery research is the biggest thing (no, others can't catch up just by throwing more money at it, batteries are hard). Then they have the material supply chain already locked in. Tesla super charger network is way ahead of Electrify America (Marcus Brownlee's team tried a 1000 mile road trip with the two cars and the Mach-E finished 5 hours behind the Tesla, due to lack of charging stations and the ones available being broken). Software is another moat; the user experience is so much better for Tesla's, it's basically an iPhone with wheels. Traditional automakers have always been hostile to software because it's not "real engineering". I'm not even counting their future integration plans for powerwalls with their smart grid units and other power systems related stuff they are working on.
That's the issue though. No one is even remotely trying to compete with Tesla on this. How soon will it be before a BMW can drive you to Costco? My Tesla can do that already. I am guessing it's a good 3 years before anyone has anything close to what Tesla currently offers with FSD. I am guessing that if you wanted to add a waymo system to your car it would cost at least $50-75k. Most likely consumers won't even get that as an option though.
Tesla's Gross Margin is 30%, compared to Ford's 11%. That's based on per unit production cost, which is what's important for manufacturing. Even at this tiny scale, their factory efficiency is already way above the traditional car makers. Operating margin considers R&D as a cost. Tesla spend a ton of money on R&D (like any tech company should) and hence the operating margin is only 11%. However, that money is spent on research into new battery technology, AI for FSD, and other growth areas. It doesn't mean that for every car sold they have to train a whole new neural network. It's money they're spending on getting even further ahead of the competition. Meanwhile Ford only has an operating margin of 5%. Traditional car companies spend very little on R&D, so when they ramp that up to catch up to Tesla that margin's going to reduce even more.
> What’s missing in his analysis is a deeper study of Tesla’s disruptive technology and pace of innovation. The problem is that no valuation model can take that into account. Maybe FSD will never overcome that crucial hump, and Tesla becomes just another car company with a neat traffic aware cruise control system. Or maybe they do figure it out and change society as we know it. It's like Amazon; no valuation model from the early 2000's could have factored in that an online bookstore would create the world's leading cloud computing platform, especially since back then cloud computing wasn't even a thing. This is why I think valuations and fair market value is bullshit for growth stocks. The market is pricing in the potential for a breakthrough, whereas valuation models are based on where the company is currently, then projecting where it could be based on its current business.
Completely agree and I've watched his videos about company valuations. The one I did more so agree with was Uber. He believed it had a fair value of only $40, and look where it's trading now. Also for his TSLA analysis, you're completely right. His model considers very basic traditional car manufacturing stats like "number of cars sold". How about FSD, premium data connectivity subscriptions, their solar business? I could go on and on. And times are changing. There very clearly is a premium for "cult-like companies" or ones with massive brand loyalty. AAPL, TSLA, NVDA. He doesn't include that either. So many people think fundamental valuation is some fancy concept and learning it will make you a good investor. It's just basic maths and it's not very good at explanaining a lot of stock movement.
Well, 9 years ago, when batteries were still $650/KWh, it would be a pretty reasonable assumption to think EVs would be a luxury item. In fact, they still are today. If you think about it, the Nissan Leaf should be the best selling economy car in America. It's 60 KWh, 230 mile EV that's less than $25,000 after the tax credit. The operating costs of a Nissan leaf are significantly lower than any ICE car, but no one, including poor people, buys them. You need to own a house to install a charger that costs thousands of dollars, and you should probably have a second car anyways in case you need to go a long distance. A Chevy Bolt or Nissan Leaf is too impractical for the tranche of consumers the brand is marketed to, and to austere for the people who can actually use it. Infrastructure in most of the country isn't sufficient to make an EV practical, hence they tend to be a neat toy for the top 30% of Americans. I digress. As an extreme Tesla bull myself, I take every word out of Elon's mouth as gospel. That's Why I think I'll take my 2019 Tesla Roadster with feature-complete since 2018 FSD to my local Fidelity office to collect my $420 per share tomorrow.
You called their FSD a SAAS, which by definition is licensing software. The reason SAAS companies are valued so highly is because it is much easier to grow - capex is way lower for them and COGS is basically zero. There are also no supply chain considerations for software. For FSD neither of those is true - there are significant hardware and engineering requirements for other automakers to use FSD, making it is not nearly as scalable as other software. Therefore I don't see it becoming nearly as significant of a revenue stream as their vehicles.
>Look for Tesla’s EV dominance to wane over the next few years as the legacy companies all go EV. This is an issue for the legacy automakers, not Tesla. Ford and GM currently have like 2% of their revenues from EV sales. They need to drastically increase that without impacting their current revenue streams and also ensuring that there is not excess inventory, in order to make any meaningful dent into Tesla's market share. In addition to that, Tesla isn't sitting around doing nothing. Their battery tech, which is already miles ahead of the competition, is getting better every day. They have more data than anyone else which is the single most important thing for AI and FSD. Also, they actually have a proven product with market dominant sales. So if I were to bet, it would be Tesla. The others showed up too late in the game.
They are still relying on selling vehicles to generate their revenue, no matter what sort of fancy tech is included with them. Maybe that tech could improve their ASP or reduce expenses, improving their gross margins, but at the end of the day it's the same valuation model with maybe slightly different inputs to traditional auto makers. Even a FSD subscription would require owning a vehicle with Tesla hardware. Saying it's SAAS is disingenuous - it's not like Toyota could get a license and suddenly all their vehicles have access to FSD tech. Because there is a significant hardware and engineering cost associated with FSD, they will not be able to achieve comparable growth to other SAAS companies like Salesforce or Zoom. You also can't retroactively apply it to vehicles already manufactured without significant retrofitting costs. For FSD licensing to become a thing, there would need to be an industry standard hardware that gets installed on every vehicle manufactured that is compatible with FSD. Otherwise the market for FSD will be limited to Tesla vehicles. And of course this is assuming that Tesla will be the first to solve Level 4/5 autonomy to even be in a position to license their software.
Tesla isn't a typical auto company though... Yes, they "make automobiles" but these are different than the traditional vehicles that we have grown to expect in the auto industry. Tesla vehicles seem to be on the forefront of tech. They are always updating the features in their vehicles which is new to the industry on the level they are at. They're consistently making changes and improvements to their vehicles and are able to implement something in a matter of weeks, days or even hours as opposed to legacy auto makers taking years to push design changes through. Tesla is literally changing the manufacturing techniques used in the industry and others can't keep up and can't change fast enough. It's not a typical auto maker like you're inferring. Not to mention the other arms of the company that haven't even begun to mature... Solar and energy storage has a lot of potential as the world shifts away from non-renewable energy. Tesla doesn't even need to have a big chunk of this industry for it to match its auto revenues. SaaS is already beginning for them with subscription models tied to their FSD beta. If they are able to solve the FSD problem this will be huge. Other companies are sort of trying this but their approach has been different and I don't think reliance on HD maps is the answer. Tesla insurance could be another revenue stream that traditional auto makers haven't ever used. They have Tesla bot aspirations but I personally don't see that becoming a reality any time soon, if ever. Regardless of all of this, it's hard for me to take anyone seriously when they are comparing a company that's changing not only the auto industry, but manufacturing, power among other things to companies who has just been making ICE vehicles and staying in their comfort zone for decades upon decades.
Join r/selfdrivingcars. It will give you real information rather than the Musk fan boy crap. AutoPilot is a reasonable L2 system. Not at all industry leading but middle of the pack for L2. Their FSD is hampered by being an all camera system. The state of cameras today simply is not good enough for L4 or L5. Period end of sentence. A simple video google search will show you all sorts of Teslas crashing, turning onto RR tracks rather than roads or making right turns way too wide, darned near like it is a British system. Will they catch up? Likely not until they add some non camera sensors to the system or camera technology gets NASA level improvements.
Hey TeohdenHS, thanks for the awesome reply. Honestly, I'm not sure that Tesla would ever trade below a 30 P/E.. It's simply an unreal, one-of-a-kind company with a huge following and incredibly loyal fan base. I do suspect that one day they'll be selling monthly subscriptions for FSD (even if it's not perfect), and I also suspect Tesla solar roofs and powerwalls to be included with new houses (and I didn't even consider the potential earnings from that!). I also expect the unexpected (which I know Tesla bears will hate 😛) I haven't heard of Professor Damodoran.. I will google! thanks again for the reply
I’d encourage you to go on YouTube and search “FSD Beta 10.8” to watch clips of random people with access to Tesla’s beta version of their self-driving software. I haven’t found anybody with a better solution that’s also highly scalable. In my opinion this is simply icing on the cake in the way that Apple generates high margin software/service revenues on top of their successful hardware business.
IMO, I don't think stepping down matters much. He wasn't the founder. He was the executive head. The founder of Waymo is doing way cooler stuff now. My case for Tesla over Waymo: 1. Tesla's FSD is incremental and receives real world data faster, leading them to develop in the right direction. 2. Tesla has way more experimental power with their fleet. 3. Tesla has an orders of magnitude more data than Waymo. 4. This is especially bullish for the light truck, where the problem is simpler and you don't need additional sensors. Case for Waymo over Tesla: 1. Waymo may be able to achieve functional robo taxi faster because city driving is hard and Waymo invests in better sensors (LIDAR). City streets are complex but driving speeds are slow. So you don't need as fast as a reaction time as a camera sensor. 2. Tesla is optimizing for the longer term. Musk's argument is that relying on Sensors will make companies like Waymo get stuck in a local optimum. But that local optimum may be commercializable as a robo taxi service sooner than Tesla's FSD. For these reasons, I'm more bullish on Waymo winning the robo taxi race first, but doesn't diminish the commercialization power of Tesla's FSD with a driver behind the wheel.
No. Obviously not… 10 million cars takes the share price to 3-4k. Another that much for FSD. 3 trillion plus all the other revenue from batteries, Car itself etc…. Its a tuff pull but surely he has enough rabbits to pull from his hat.
TSLA first 2 weeks of 2022: - FSD beta enrollments permanently frozen - Cybertruck canceled - Semi and roadster removed - Berlin has to crush all illegally built cars - Zero structural 4680 packs produced - Elon under audit and FBI investigation - Elon banned from China Just keep waiting for the bad news to pile up
Not only do they need to scale auto at lightning speed, they need to do it fast enough to gain significant market share while others catch up. They need to build out their SC network faster than competitors. Their solar and energy businesses need to become very profitable. They need better FSD and regulatory approval so they can have fully driverless autonomy. All of this and they need to remain the hottest place to work if you’re a talented AI/ML engineer. If they do all this in the next 5 years they’re a $2-3T company. My personal take is that Tesla isn’t going anywhere and will eventually be a $3T company but there’s still lots of risk getting there, and at some point along the way they need to be valued realistically. Apple brings a lot of questions from investors lately as to how they can keep growing from here? Tesla will very quickly get the same questions. Employees looking to work there can’t expect the share and compensation growth of the past, it’s just not mathematically possible, so they’ll need to create more shares to hand out to offset this, further diluting. I own shares but they have become a smaller and smaller part of my portfolio as a percentage, not because I don’t believe in them but because they upside doesn’t warrant the risk.
TDOC, TSLA (If they smash their deliveries target again + 2 factories ramp up quickly + some advancement in FSD beta), IBM (if their AI/Cloud business grow by double digits - as they have completed their spinoff).
I find this daily in my thread. Keep this short Legacy companies - Deal with ICE car sales decreasing and must sell more EV cars to compensate losing ICE cars sales, including dealing with debts/legacy infrastructure of ICE cars Telsa - Only EV car focus + many other area's they are looking besides just producing cars. Telsa profit margins are really healthy for a car company. They are talking about increasing their profit margins. ​ Bull case is Tesla with their increased capacity plants for EV cars + technology/experience will continue to grow in market control. This is the same case with Apple and their smartphone. Where is Apple today? 3 trillion dollar company..selling iphones/ipads, this is what Apple is known for. But we know Apple has a ton of other money making departments. Which is what Telsa is recreating Apple App store - Telsa App store (for car entertainment) Apple patent accessories (mifi cables) - Telsa supercharger (opening to EV cars for sales) + FSD subscription Apple finance plan - Tesla has their own insurance/finance plan List goes on and on.... Telsa isn't just focused on making a car, unlike Legacy car companies who are buried with old employee mentality and legacy ICE on going expenses...
Even if they achieve FSD, they aren't nearly as dominant in that field as people make them ("years ahead" blabla). Lot of car brand are very far in FSD tech like Mercedes, Honda, GM, and Waymo can and will just push their tech to everything.
Lots to go through there, but here's a short, sharp summary: All of the companies are global companies, and while the US market is big, Europe doesn't trail far behind, and China outstrips them both by a mile. GM have no European operations any more, and their presence in China at the moment is limited. Ford do a better in China and Europe, and have a solid US sales base as well. Any level is significant autonomy is (SAE level 4) still ***years*** away - it'll be the mid 2030s before it's widespread on all public roads. There is absolutely no guarantee that hardware (and software) in cars now will be capable of Level 4 autonomy when the framework is sorted out for it. The framework for Level 3 was only fixed at the end of 2020. L4 is still under discussion, and will be for the foreseeable future. Ford have been behind the curve a little with both their EV and autonomy until the last year or so. They've had issues with costs that needed bringing under control first, which they have successfully done, which is part of the reason why the share price increased by 140% or so last year. Tesla don't have enough vehicles in market yet to make a big difference in autonomy, and are facing significant resource pressure to increase capacity, revise models and get vehicles into market. The earlier vehicles that were fitted with FSD and it's variations will likely be coming towards the end of their lives by the time L4 is ready for wide spread adoption. They do however have a solid grounding in China, which will help them a lot for that market. They are currently at risk of losing a large share of the North American market due to competitors increasing in market quicker than demand is increasing. The upshot is that pricing by autonomous strategy is a risky thing to do at the moment. The hype is easy, but engineering the systems and regulating them is both slow and difficult.
I meant Ford's total cars produced not EV. What do you think Tesla survives off of rn? Profit? They make all these promises and don't deliver and just tick up the prices for their products. Once people realize that other cars with LiDAR can actually perform autonomous driving, Tesla's main selling case for FSD will be looked as a stepping stone for all other car companies to actually deliver on it. I'm not saying Ford will get it down first, but Tesla's autonomous driving will not be completed first for sure.
I own a Tesla. Customer service is ass Most of their other services aren’t owned by Tesla, but just Tesla branded Elon constantly delivers promises to Tesla owners and misses or doesn’t deliver I will be looking to get a different EV in the future There’s going to be a ton of regulatory issues FSD is nowhere near the level it needs to be. Being in the car and using their lane assist you can tell. Add in idiot drivers and it’s not the best recipe. I think using Tesla as a trading mechanism is fine, but I find most people who talk about Tesla do not have direct experience with the company. Many of the people online are just spouting projections and parroting other people because they want what they say to be true. A lot of the times I go to Tesla, CCP, or Woods threads, I always expect the replies with the most downvotes to have some of the most realistic replies. Meta is similar in that way too, couple months ago everyone hated FB and now majority of people think Meta is the wave of the future. I don’t change my opinion unless someone offers a good counter point. Tesla Stan’s predicting a higher market cap than Apple are nuts. Add on top I think their leadership is sort of shit the last couple of years. Elon did horrible during COVID and is doing way more harm than good. The CFO and him chose to buy BtC rather than to do stock buybacks, which would have been way more beneficial for shareholders. But the fans will always praise them and defended them, just like content creators, influencers, and celebs.
Lol you sure switched "re******" to "okay". It's okay kiddo, you're just forgetting that for them to do better in numbers and actually have FSD they're going to need the stock to stay up which by you're words, the stock will not. Stay safe kid.
Years ahead in what? Not having an autonomous car? FSD doesn't even work in a safe manner and there is no one out there using it. I remember Elon saying in 2018 that "in a year from now, people won't have to pay attention while driving". They are years ahead in fraud if anything.
I actually called her out in Twitter with regard to regulatory approval of FSD and her TSLA target based on that. She replied and I had like 200 comments. It was pretty funny. So far I’ve been correct. Tesla FSD still heavily in beta, no regulatory approval in sight.
Sure! For automotive I'm projecting: * Ramp-up up to 15M cars sold annually (5M lower than Tesla's target) in 2030 * Including a cheaper $25K model (which I expect will be more like $30K after last year's inflation), I'm expecting ASPs of $40K * An operating margin of 18%, which is about 4% higher than today due to their trend in margins, the fact that many of their current cars are not made using single-piece casting yet and the Cybertruck will have even better margins than Model 3/Y, but also adjusting for lower margins on the cheaper model. * This adds up to an operating income of ~$113B per year in 2030, or a net income of around $90B. * At a P/E of 40 that's worth about $3.6B in market cap For energy/solar: * I expect solar and especially their energy business to ramp up through the decade and for Tesla to start earning high margin revenue from their Autobidder software (this kind of software will be absolutely crucial for the electricity grid). Revenues and margins are difficult to predict here, but I've rough balled it at around $2,5B in market cap (below Tesla's estimates of being roughly comparable to their automotive business). If you want to be extra conservative you could scale this down to about $1T in market cap. Then I'm expecting Tesla to solve full autonomy somewhere this decade, so by 2030 that should be generating revenue: * Subscription prices are currently at $200 a month. When FSD is fully operational this will be significantly higher. Upfront cost is expected to go from $12,000 today to around $100,000 eventually. For the subscription I've been conservative and taken a $400 price (keep in mind that at this point anyone can earn money with FSD, so while $400 sounds like a lot, it's not too bad if your car can earn $1000-$2000 a month. * At this point I expect lots of companies to operate robotaxi fleets. For simplicity sake I've ignored any potential Tesla-operated fleets or revenues made from fees on ride hailing by third parties. As such, I expect takerate (upfront purchases and subscriptions combined) at 40%, for a monthly revenue of $160 per car in the fleet. * On top of this, I expect Tesla's app store will be making revenue at this point, selling apps, games, etc. I estimated an average of $20 a month (slightly more as the average iPhone user today, considering they'll be selling $60 games as well as apps). * This combines to a revenue of $180 per month per car, $10B per month in total or $120B per year in higher margin revenue. * At an estimated 90% margin, this gives us another $111B in operating income, or $89B in net income * Again using a PE of 40, that leads us to another $3.5B in market cap Finally I've got an estimated $300B in market cap from opening up the supercharging network. Together this brings us to $9.951T in market cap, but it's worth noting I've left a few opportunities out of this projection. For example, I've used $0 in revenue from their AI training software, HVAC systems for homes (expect that to come this decade), Tesla bot, or anything else they might release this decade.
I’m the other way on this debate. Companies can only flash new bells and whistles for so long. At some point they have to prove it. Ford isn’t going to be able to produce quality EV’s for a while. Ford has massive debit and they are far more likely to cut costs on battery and software so they can attempt to make good on 200k EV delivery numbers to promised investors. Cyber Truck could be delayed but it won’t impact Tesla as much as people think. FSD and new batteries tech is risk for Tesla. If they fuck up there then they are in trouble. Again I wish I would have dumped 25k into Ford a year ago instead of NIO. Will be kicking myself for that one for while. However, I still believe Ford is going to run into massive supply chain issues, cut costs on battery and software to pump out a far more inferior EV which will spell trouble for this year and into 23’. That said I’m not counting them out. I do plan in snatching up Ford stock but am waiting for the next correction to do so.
Porsche sells more Taycans then Tesla sells model X and Model S combined. The minute someone introduces a quality sub 30k EV, the case for the model 3 evaporates. But I guess there's always not-at-all autonomous FSD addons to keep tesla afloat.
Tesla is perfectly fine. It is so much more than a car company. EVs are where it starts, but in 5 years it will have diversity within its offerings (FSD software, Clean Energy, Battery Tech, Chip development?) and that’s just what we know about. Elon is always concocting the next big thing with his engineers, so looking at current state on just the auto sales is a fallacy in thinking.
I think your logic is a little poor here. Musk has done a good job with TSLA but he is not infallible ("totally hands-off FSD by 2018") nor can he predict the future. He might be right about SSBs being a dead-end but a lot of other smart people (including Toyota) are going the other way on that. (I have no positions in any of these for what it's worth.)
1) the shift is already going and its going fast. Look at the statistics. 2) In a decade? That sounds really bearish. Do you think that tesla stops growing? Apparently the opposite is the case, tesla is currently growing faster than ford. In a decade tesla will sell >20 Mill. cars. and has a Lvl5 working FSD system ready by then.
Cathie likes to apply a multiple to Tesla's valuation based on the potential of their future autonomous taxi. A service that the company won't even openly commit to a time frame for on a product road map. Meanwhile, competitors like Waymo (Google), Argo (Ford), and Cruise (GM) are already piloting the program in major cities. Elon's only Tweets regarding Tesla lately are all FSD related. They blew their autonomous lead and competitors are quickly catching them, and it's driving him nuts. She can say legacy OEM's are behind on EV adoption, which is true, but they've caught up in one of the other domains that she herself calls the true value multiplier behind Tesla.
Ford does lack charging their customer $12K for "FSD". Tesla's operating margin is higher than Ford, but 9.5% op margin is not exactly huge. 2030? The market is still trying to figure out interest rates for 2022. Who knows how much competition there will be in EV by then? We can guess, but it's only a guess in 2022. Valuation, which all of the sudden has matters to the market (ask Cathie): Tesla, price-to-owner earnings 285, price-to-FCF 470, EV-to-EBIT 228. (At a fwd P/E of 145, they better grow quickly.) Ford, price-to-owner earnings 9, price-to-FCF 8, EV-to-EBIT 18 (fwd P/E of 11)
Also to add hiw advanced they are, check out their videos on how their cars tackle driving on a "no lane" (lane shared by 2 way traffic). Teslas will think of it as a one lane road and drive in middle of a road, whereas mobileye will identify it as a shared road and drive on the edge of a road. I am receiving my Tesla this month, but i don't trust they can/will be able to solve small details ever. So not wasting my 12k on FSD gimmick
Yes and no. I'm saying that the data isn't in itself the primary challenge. The algorithmic challenge is. For example many are criticizing Tesla for not using lidar. Perhaps they won't be able to solve FSD even with a monstrous amount of data. Of course everyone agree that data is needed as a component of the solution.
People here comparing how cool and advanced tesla is in FSD, should watch mobileye videos. They are driving in most crowded downtowns with 0 disengagement (unlike tesla that disengages 100 times in 30 minute ride in downtown). I believe only waymo and mobileye will be able to crack L4/L5 fastest to the market
Agree, thats why i dont see Tesla Bot bringing in any meaningful impact on the bottom line for at least the next decade. FSD om the other hand has a clear way to fruition. Honestly i wouldnt be surprised if a large part of the Tesla Bot compute is handled in the cloud like Siri/Alexa because of the bot formfactor.
You said "The Majority of Tesla's valuation is based on FSD which is the worst in the autonomous vehicle industry" there is so much wrong with that statement... So you're saying that Institutions are dumb asses that spend all their waking moments trolling Tiktok and Youtubers to form their bull thesis on one of the biggest companies in the world? On top of that, their FSD is worse than... Who? They are 5 years ahead of their closest competitor and yet are the worst? Gordon Johnson is that you?
SuperCruise would like a word once it stops swerving within it's own lane... What is conjecture? The state at which Tesla's FSD currently sits is beyond what other companies have managed too eek out and is continually advancing. There is no contest and the rate of implementation and full utilization will only be stymied by regulatory bodies which have proven to have an agenda against the company.
>the majority of Tesla's valuation is based on FSD ​ Show me the data which lends credence to your claim. ​ >on FSD which is the worst in the autonomous vehicle industry ​ Which car company is at a more advanced stage of FSD? None. There are some with varying degrees of "driver assist" which amounts to correcting a lane, slowing, or perhaps a controlled parking situation. ​ >And the CEO has been selling his shares, too ​ The CEO exercised options and in fact now owns more shares than he previously did. However he did sell shares in order to pay taxes on the options which were expiring anyway. ​ You can dislike the company, the CEO, or even the cars but when it comes to the claims you've made you demonstrated you don't know what you're talking about.
True. But the majority of Tesla's valuation is based on FSD which is the worst in the autonomous vehicle industry. And the CEO has been selling his shares, too. The entire S&P 500 is holding the bag on that one thinking it's a solid gold investment.
What most people don't get about Tesla is actually really simple in my opinion. When Tesla sells a car, it's not the same as Ford or GM selling a car (whether that is ICE or an EV). So when you say Ford sells 5,000,000 cars and Tesla only sells 900,000 how can it be worth 10x more? Actually pretty simple. Tesla makes a hell of a lot more profit than Ford when they sell a car. You only need to look at the most recent financial statement to see this being true. Ford has an operating margin of 3.76% vs Tesla which has 14.56%. Wait till Q4 it's only going up. For Tesla, they haven't even managed to benefit from true economies of scale like the other OEMs have. See when Tesla sells more and more cars, they not only make more revenue, they will actually make more contributing margin as well. All the while eating into the other competitor's 'car' market share. This is a zero sum game. That's the key difference. So ask yourself what happens when Tesla sells 5,000,000 cars? Heck, 20,000,000 cars is what they are going for. Then you might think that Ford and all the others will be able to catch up and suppress the operating margin. Well, not so quick. Is Ford going to stop marketing and advertising costs, like Tesla? Are they going to be deeply vertically integrated, like Tesla? Will they be able to sell just online and not through dealerships? Do they plan on building out the same charging infrastructure and charging other brands for using it as well? Do they plan on selling $12k software? How do they get the battery cost advantage? https://twitter.com/p_ferragu/status/1395756307081203719/photo/1 All these things add up into an Apple iPhone moment. Where although Tesla market share might get hampered (like the iPhone) they will retain the vast majority of the profits. Tesla is the next Apple, except instead of selling $1000 products, they are selling $50,000 products and instead of Apple Music etc. It's FSD. This is not financial advice.
That is a statement my friend with no argument behind it. For example, I could say “I am the best at solving computer vision”. That’s a statement. Not an argument. So… Why is tesla the best at solving real world AI and do you have any evidence? FSD Beta videos are not great and their progress isn’t either.
And they are many years deep in development for FSD. I’m sure Teslas end goal is a Tesla Bot that has some form of AGI, literally the holy grail of artificial intelligence. That’s also the only way it’s going to have any meaningful impact on the bottom line. If they market the Bot as something orgs need to program in large part themselves, like Spot from Boston Dynamics, the volume for that product is going to be tiny compared to the volumes it would sell if there was some sort of AGI at play.
And for everyone reading the above comment, this guy is obviously not realistic at all. Just have a look at all the emotional language used in the articles he's linked. None of those are objective journalism at all (except perhaps NYT, can't judge that because I can't open it). > 19 former Tesla engineers disclosed to New York Times that Tesla’s autopilot video was staged from the time they were working on it. Looked through all the articles you linked, but nowhere are sources shared so we cannot verify if this is even true in the first place. You're just assuming that. > The model S they used for the video did not utilize autopilot/FSD software. Instead they pre-mapped the route they were going to take with 3D scanning tech and programmed that to the car, which is not what is sold to consumers when you buy either software package. In fact during the making of this film the car was damaged when it drove into a barrier and had to be repaired prior to resuming filming. > This was showcasing tech that is not actually offered by Tesla to customers and at no point is disclosed in the video, in fact it opens with the tag line that the car is driving itself. This is no different from what Nikola did by rolling a truck downhill. Nowhere did Tesla say that what was shown in that video was the exact same software you'd be buying, just as how the original iPhone reveal was completely faked. Everyone with some common sense knows that you can't wait to reveal a product as challenging as a smartphone or FSD till it's done, so somewhere you're gonna have to cut some corners to demonstrate what it WILL BE, not what it is. The key here is that you don't lie about what you currently have, as Nikola has repeatedly done, but Tesla didn't (nor did Apple) do this.
I don’t think they have an AI advantage at all. They have a business model advantage combined with Elon’s marketing prowess. Don’t get me wrong, Elon is an engineer who knows his stuff, but FSD Beta can’t do anything special. So there’s no rush to solve FSD using pure vision anytime soon. They can solve it in 10 years - 5 years after competitors. Doesn’t matter - they can push the software OTA and charge their fleet of cars for the subscription.
For everyone reading the above comment this guy either can’t read or is lying to detract from what Tesla did. 19 former Tesla engineers disclosed to New York Times that Tesla’s autopilot video was staged from the time they were working on it. The model S they used for the video did not utilize autopilot/FSD software. Instead they pre-mapped the route they were going to take with 3D scanning tech and programmed that to the car, which is not what is sold to consumers when you buy either software package. In fact during the making of this film the car was damaged when it drove into a barrier and had to be repaired prior to resuming filming. This was showcasing tech that is not actually offered by Tesla to customers and at no point is disclosed in the video, in fact it opens with the tag line that the car is driving itself. This is no different from what Nikola did by rolling a truck downhill.
> So what are you thoughts on their FSD program, the recognized revenue, the price raise, All seems fair to me. FSD is the hardest issue humanity has tried to overcome so far, more difficult than the moon landings. They've definitely overpromised or at least given too optimistic estimations, but I'm pretty sure everyone knew this was gonna take years to get right. I'm personally not a big fan of the recognized revenue system. I think they should've just recognized everything at once. If people want to pay $10k today for a system that's not fully operational yet for the chance that it will be in the future and they got to experience it earlier and for a lower price, then that full $10k should go straight to Tesla's earnings imo. That said, it's definitely commendable that they don't want to recognize revenues they feel they haven't earned yet. > their lease accounting practices, the jacking up of account as payable/receivable and the securitization against this the leases? None of these seemed out of the ordinary to me, but feel free to share why you disagree.
Wait, those articles are just saying the route was premapped. That's all? How is that comparable to Nikola literally stating that the car was function when Tesla nowhere mentioned that it wasn't premapped and was just giving a glimpse of what FSD was going to be like? They even mentioned it wouldn't be available until they had logged millions of miles of data... -.-'
Lol why would i wait for a car with ssb? They will make all the cars around the same range as each other. The only difference will be cost of production. Even if other manufacturers start using SSB it won't be until 2026 or later and the cost of 4680s will still be very competitive. It's not like Tesla has halted all r&d on batteries. Tesla will also still keep moving forward in battery tech as well. The car I want is the one that can drive itself. Tesla will have the first and best stage 5 FSD.
Reminder of what? Never said Tesla was going to tank or anything. Just that the valuation is bs. Remember Elon telling people FSD would be widespread by 2017? I wonder how many rubes all in'd on that lie pumping the stock higher and then by the time it comes around they forgot about the old lie and he has a new promise he won't fulfill lol. Unfortunately he has allot of people in this cult of Elon where they think he will save the world etc... And as long as people keep believing it Tesla and his other companies will do very well on the stock market.