I have tremendous trouble imagining TSLA being smaller 5 to 10 years from now as EV adoption increases worldwide. They may only sell vehicles, but their charging stations are standard and their streamlined production is top quality including inhouse tech development for batteries and engineering. I have no idea if ARK's price target is correct, I just know that in 5 to 10 years if Tesla isn't much higher in value they have either really screwed up their business somehow or the macro environment has collapsed which means we'll have a lot of stocks on sale.
As always, love your videos - truly some of the best analysis on RU-vid. Thank you! I've spent a lot of timing traveling and living in Asia. Rove the Chinese menu approach and subtle corumn A and corumn B - that made my entire day. :)
I spend a good deal of my time living, studying, and roaming in Asia as well and find many of the cultures to be incredibly endearing. I rove Asia too! ;) Glad to find a fellow aficionado. Be sure to check our Engrish.com if you haven't. Many classics there. And thank you for the kind words of praise about our channel. Joe P.
Thanks for the analysis Joe. So all in ARK's evaluation is depending on Tesla solving Full Self Driving. Which is what I believe isn't possible with their vision-only approach. Remember L5 (SAE) autonomous driving means everywhere and anytime, in any condition. Right now, Tesla FSD is shutting itself off in heavy fog, my guess is it will do the same in heavy snow storms where in both cases cameras won't be enough. They need Lidar/Radar as combination ideally as both sensors have their strengths and weaknesses. So Tesla's future value will be dependent on Musk changing his approach on FSD and acknowledge that vision-only isn't enough for L5. Even then we haven't talked about the inference constraints that HW3 has that is build into almost all Tesla models sold so far. Whilst the idea of submitting the Tesla to the fleet is nice on paper, it succeeds or fails with the ability to run a vision-only based model on HW3. If that's not enough (both from a vision-only based approach as I pointed out or from the HW3 inference constraints) then Tesla's future EPS is far away from ARK's target. Simple as that. No need to dive further into the sourcecode as you have shown that yourself in your video already what 0 revenue from Robotaxi or ride-hailing service would do. Certainly not lead to a share price of $2,600. Thanks for the hard work in your channel, it's appreciated.
Thank YOU for taking the time to share some insightful thoughts. People should learn as much from the comments (community) as they learn from the videos. I think they do, provided we keep policing these comment sections and people like you are kind enough to contribute to the convo. Yep, we need to look past Musk's bullish tweets and take a pragmatic approach to the appeal of autonomy. Let's see what the Chinese manage to do as they're more likely (I think) to get cars plying the roads without so many regulatory hurdles. That's provided, of course, that the CCP fully supports winning the "AI race" and showing the world they can succeed in AI despite the hardware limitations imposed by sanctions. Joe P.
@@Nanalyze Yes, Baidu is actively showing how autonomous Robotaxis can be run commercially (though not all of their Robotaxis are without a human driver). Same as Waymo in the US. Mobileye is enabling OEM’s more and more with autonomy and no one should underestimate NVIDIA with their Drive Pilot System. Then there’s Huawei with a similar approach. So yes, we can’t avoid looking at China’s market when it comes to the deployment of commercial Robotaxis and Xi Xinping certainly drives the agenda forward to prove to the world that China is superior to anyone else. That’s why I think the rest of the world has no chance, I am witnessing what an autocratic government can do not too far away from you, when basically everyone runs in the same direction, no opposition or NGO’s are “in the way” to stop the project like you could see in Grünheide’s expansion process.
@@AndreasWest great writing! I was warning about this camera focus FSD problem couple of times but most people are not listening to this risk. FSD is not about having a car with a steering wheel but building a car that does not require a steering wheel anymore. If I have a Tesla with FSD and I need to escape from a wildfire (happened to me twice in the US), I want my car to do the FSD if I don‘t have a steering wheel anymore. Fog and snow are other examples. I would feel much more comfortable if Tesla would have Lidar, even though it does not require it in 99,9% of the situations.
Each Megapack battery factory has close to 10,000 batteries sold a year…$20 billion in revenue . They will have two factories by end of year. $40 billion total revenue in 2025 with 20% margins. What’s that worth stand alone?
Gotta love the question mark at the end like it’s a question and not a statement……. “ you can’t blame me for your life savings….. SEE THAT QUESTION MARK ⁉️
That could be interesting! Yes, let me mull that over. The fat lady hasn't sung yet, but we could certainly look at what variables (inputs) to that model would justify such a high price target. Autonomy has a lot more potential than virtual meetings it seems. Joe P.
We don't do the trading thing here because if 95% of professional money managers can't beat a benchmark, Joe Retail sitting around in his underwear consulting some astrology for men charts isn't going to generate alpha in the long term. It's about time in the market, not timing the market.
@@Nanalyze I'm a long term investor, doing really well. Especially after I dumped Tsla. It's a great company but inflated stock price. Even if they solve autonomy today it will take years for regulators to approve it. I know that the market is forward looking but there's a limit for how long it can hold its breath.. So planing on averaging down with big money (for the 4th time 🤪💰). Maybe I'll hold this time I don't know.
Good to hear you are a long term investor! That means you would be doing well :) Tesla is a very risky beast because all that inflated value hedges - as you correctly pointed out - on something that might take years to get regulatory approval for (especially given Musk's relationship with current admin, though that's bound to change in November it seems).
I too was a long holder. Sold last July. Didn't regret it. Bought Nivida,got a 10-1 split. Bought a Cadillac then a house in cash. Still have 10k shares in Nivida. I will buy Tesla in and out. I don't trust Elon. Wouldn't doubt his brother and Elon . Start to sell shares this week. But, definitely after the earnings call.
@@ILoveTinfoilHats Who and what are you criticizing? So, this is your second comment that adds no value. Either contribute to the convo or please go elsewhere.
Same story when the PCs arrived, the iPhone arrived and Amazon "It's a bookstore online! No it's a tech company!!" LOL. History truly RHYMES!!!!! Question I have WHY DO NOT ANALYSTS LEARN FROM HISTORY?????
Thanks for the great video. I definitely learned something here, today. Tesla flooding Central Asia with EV's? Who'd have thought it? Good to see ARK's methodology being explored in more detail than is usual, despite her having such a high media profile. So the bull model appears to depend on FSD reaching full regulatory approval, and cyber-taxi rollout happening not later than Q4 2023 and to the maximum extent permitted by 80% production capacity growth? I'm not clear on which territories that this is expected to take place, but I presume that this would be expected to take place proportionally and worldwide unless otherwise stated, right? Leaving aside the often repeated reality that Elon Musk is almost always... err... "enthusiastically optimistic" on project delivery timescales, regulatory change isn't ever going to happen outside the US at reliable rates, so unless they've really done their homework on how approval timescales are likely to differ internationally on a territory-by-territory basis and made the appropriate adjustments, then I can't see the basis for placing any confidence in this model. The UK and Europe will take forever to do it, if at all; for example, in the place I call home, Uber are forbidden from operating across multiple local jurisdictions, leaving Tesla without an "in" to supply such service operators with autonomous taxis, regardless of the status of FSD approval. You can bet that this hurdle is widely more common in the rest of the world than it is in the US, due to more commonplace existence of unionised state operators. In China, all of their business will remain dependent on both geopolitics, and the practical requirement that Tesla can provide a product and service to the state that that CCP can't replicate internally. The moment it can, there's a historical risk that Musk and Tesla will come under increasing internal political pressure with the to the benefit of domestic competition - particularly if US tariffs on Chinese EV's remain in place. Could it happen by 2027? I'm sure BYD et al will be working to make that a reality. As for the rest of Tesla's business providing any similar growth value, it'll have to do so largely without the first mover/quasi-monopolistic advantage that it enjoys within the US EV market, whilst all the while being subject to Musk's irresistible penchant for diverting resources towards providing answers to questions that nobody has asked. Robots for all, and Hyperloop, anyone? At least for the sake of Tesla's stakeholders, he's keeping bases on Mars under the SpaceX umbrella. I actually like Elon Musk, but cheap-shots aside, surely he's both Tesla's greatest opportunity and their greatest risk? I just don't think that even the most sophisticated and well-researched models can factor out such uncertainties, and this will always create the suspicion that Momma Cathie isn't doing a whole lot more than citing best-case outcomes to exploit the associated PR. With all due respect, she'll always get criticism for the fact that ARK's financial risk management demonstrably hasn't been on point, although I note she's just trimmed ARK's Tesla position prior to earnings - so maybe there's hope for her yet...!
You're most welcome. Thank you for your very thoughtful comment. Great question on geographical concentration for FSD rollout. Seems like it's a battle with regulators at that point which will determine the speed at which the solution achieves penetration. You make some great points on how difficult this will be, something that's currently being underestimated by, well, everyone it seems. You are spot on. Musk is Tesla's greatest asset and biggest risk, yes. As you said, trying to model all this complexity is darn tough. Great comment! We learn as much from people like you as people learn from us. Joe P.
Never put all your chips on one number. A proper asset class allocation can all but guarantee wealth provided enough time passes. Knowing when to sell is way more difficult than knowing when to buy. Set and forget with quality companies usually works quite well. Glad you enjoyed the video!
I love this channel! From someone that has two different portfolios, one strictly for hyper growth stocks and a DGI portfolio, I appreciate that he covers both types of investments. $TSLA is my biggest individual holding on my growth portfolio following the core position QQQ
Thank you for the kind words! We're likely to try and keep that split - half on disruptive growth and half on dividend growth. While the majority of our assets are in our DGI strategy, Quantigence, just 15% or less are in disruptive growth because it's a very risky space. Joe P.
$2,600.00 BUT NO BOT-revenues at all, DESPITE that Elon many times has said, something like: "The Tesla bot revenues will dwarf all other revenues Tesla has and will have!"
I don’t think valuations are necessarily off, BUT CUSTOMER SERVICE FAILURE is destroying the shine of Tesla as it is Google, Microsoft, Facebook and as I noted Adobe as a host of others. This customer service failure spreads over all of Musk’s companies. The other issue is “ownership” vs. service fee. ADA lawsuits will entangle these companies because they fail to fully meet ADA accommodation requirements. IF TESLA EMBRACES FIXING CUSTOMER SERVICE AND ADA IT HAS TOOLS TO DI IT WELL.
You have a point. Customer service is so bad at Meta that attorneys general across the country have been inundated with requests from frustrated customers. Engadget wrote about this recently. In fact, I'm leaving next week to go meet with an AG about our own problem. Vietnamese hackers raced up $1,500 in fraudulent ads on our account and Meta has done nothing. Garbage. Google is as bad I've heard. I don't know about Tesla, but I'm a happy Starlink customer. (Puts on sales hat) Here at Nanalyze our customer service is a competitive advantage. We pride ourselves in being accessible and creating delight. I'm the founder, and there's nothing I'd rather be doing than pleasing our customers. Okay, I can think of a dozen things I'd rather be doing, but that's not the point. The point is that just having decent customer service is considered some sort of grand exception these days. It's sad really. Joe P.
@@Nanalyze I look at Apple that drops the ball occasionally and on many repair issues is poor, but I’ve had good service. AI driven customer service is abysmal and telling about what work needs to be done. I hear some mixed reviews on Starlink, but will say no more. They’ll likely be buying our optical/hybrid chips soon enough from one of the foundries.
Been away for a couple of weeks. Really enjoying catching up on all your analysis. Lots of stories now about Musk funding the Republicans and pandering to Trump online. Maybe he's doing it with a specific purpose in mind? Like you said he needs sweeping and disruptive regulatory changes for autonomy.
Musk should know better than to dabble in politics. It's a very bad idea, but it's clear he doesn't really care much about that. Regardless, he will face huge regulatory challenges with autonomy in any jurisdiction across this globe, especially in his home country where the political party will either help or harm for four years until there's a change of guard.
@@Nanalyze Yeah, 100% agreed. For me Musk is both Tesla's biggest asset and it's biggest risk! As an investor I worry he's going to flippantly tweet something universally stupid and offensive, taking us all down with him. But when he keeps his head down and focuses all his enthusiasm on the tech, there is nobody as inspiring.
I worry Elons political involvement could hurt tesla if he's not careful. Yet I've seen the opposite so far, other factors are helping telsa they are a powerful company. but unless they are different from other companies, that all tend to fall when becoming increasingly political. We should see a reversion back to the mean.
I wonder what surveys and projections have been done to get a sense of what percentage of Tesla owners would likely join the ride-hail service program. Some of the concerns people have mentioned include wear and tear, cleanliness and damage issues, depreciation due to high mileage, higher maintenance costs, insurance liability, etc.. What happens when a vehicle needs to be charged during service? Will the vehicles return to their owner's home or driven to a designated area where someone will charge the vehicles. Perhaps, the charging stations need to be automated, so that no humans are needed to charge the vehicles. Maybe in the future Tesla batteries will be able to be swapped out like that of some Chinese auto makers. It's too early to say if the hail-ride program will be successful or not, but there are certainly a lot of potential issues that need to be ironed out.
You raise some great points here, thank you! Observing Musk and you get the feeling he's just going to address these problems out as they come up. Whether or not the model works still needs to be proven.
@@Nanalyze One segment an autonomous vehicle fleet company can target are patients who need to be taken to the doctor's office or medical facilities for exams and treatments. According to some articles, the non-emergency vehicle transportation (NEMT) market is expected to reach about $10 billion by 2028 and $22 billion by 2032. Some large operators make $20 million per year in revenues. Because of the aging population and more people deciding not to have children (and must depend on others to drive them to the hospitals and clinics), this is a growing industry.
@@user-ll9qk2el4d That's interesting. So a lower priority ambulance of sorts. Uber ought to just package their current offering a bit differently and capture all that.
Yeh but…the largest market in the world for cars 30 million per year is China and China want robo taxis!!! Regulations in China will be supportive and not an obstacle as in the USA.
How a world full of Luddites expect to grasp the ARKs, let alone expect them to take some linear ramp is amusing to me. These are the same people that think Palantir is a fancy, magical spreadsheet 😂😂😂 Admittedly, I wasn't paying Disruptive Technology ANY attention then my cousin and his wife bought a TESLA and we discussed it in 2018. Then I went home and watched the annual "TESLA AUTONOMY" presentation and was impressed. That's how I happened across Cathie Wood giving a presentation in Australia in which she described Moore's Law v. Wright's Law and the convergence of technologies. Not long after I started suggesting to friends that they try to spend the next 5 years buying $5,ooo worth of ARK and took my own advice.
Thank you for the comment! Palantir and Tesla are the two most talked about companies out there. Alpha generation isn't a popularity contest. There are loads of instant analysts spending every waking hour analyzing PLTR/TSLA press releases (mainly for the clout), yet they're hopelessly lost when it comes to predictable wealth creation strategies which never involve finding the next NVDA/MSFT/TSLA/etc.
Precisely. You'll see a lot of instant analysts pointing to their "astrology for men" predictions about Tesla's share price as if volatility doesn't go both ways. This share price yo-yos all over the place and will continue to. Volatility is risk, and Tesla shares are loaded with it.
I stopped buying TSLA shares when Elon chose to deprioritize Tesla and spend his time, his efforts and a lot of money on a private company. I'm just holding and watching. His personal life and political leanings do nothing good for Tesla
To be fair, "deprioritized" Tesla is looking pretty good. Company leaders should never get into politics. The "side" which he leans towards is entirely irrelevant. His personal life is just that - his personal life.
A lot of people have a hard time being honest with themselves about just how incredibly successful Musk has been. He is probably the pinnacle of American innovation during this century, yet half of America now hates him because the media told them to. Objectively, this man is a entrepreneurial legend. His maverick style is also a double-edged sword, no doubt about it.
I don['t like it when a bloated egotistical "loose canon" is running a company.Swtiching gears, could you revisit another Cathi stock ZOOM? You did a review 2 years ago -time for an update? thanks!
@@tofukid204 ;) Just messing with you man. You're right, the presenter doesn't know what he's taking about half the time. Fortunately, the decks do contain some interesting bits.
Tesla are nowhere near offering a Robotaxi service, their Full Self Driving-Supervised is a level 2 system and they don't yet compete in the Robotaxi market, and when they do, they will be at least two years behind Waymo, Cruise and Baidu. As for private vehicles being added ad-hoc to the Tesla RoboTaxi fleet, has anyone considered what an administrative burden that would be? If it were a responsible service, each vehicle before being added to the fleet would have to be checked to ensure that it was charged, clean, safe and road worthy. Who would pay for that, Tesla or the Customer? While vehicles were adopted within the Robotaxi fleet, control of the vehicle would have to be transferred to Tesla for the duration, and when returned to the owner, vehicles would have to go through a post-service check, with any damage recorded and repaired, once again who pays for the post-service check? Then there is the whole priority issue, when there is a ride, does it go to first to Tesla's own RoboTaxi fleet or the customer fleet? With pre and post checks, Tesla owners have the potential to lose money. If Tesla's future is dependent on their Full Self Driving generating income, even Waymo, who have been offering a Robotaxi service for five years have yet to turn a profit, and GM and VW have already come to the conclusion that it isn't a profitable business model. Cathy Wood has no technical knowledge about the service she is so bullish about, her projection is pure fantasy. It is shocking that Nanalyze, who are normally very conservative in their valuations, even gives it the time of day.
Thank you for the comment! Some good points. It isn't a profitable business model early on for the providers that are plying the roads, but it has the potential to be. We covered that in a piece yesterday (www.nanalyze.com/2024/07/when-will-robotaxis-rule-the-road/). As for Cathie Wood's projection being pure fantasy, there may be some "there there." It remains to be seen, and she's not the only Tesla bull out there. Thousands of instant analysts parrot the same pitch. You can just zero out a few variables in ARK's Tesla model and it still proves useful. Are we going to continue to cover probably one of the most notorious thematic managers out there who covers the same disruptive technologies we do? Yes. There's a lot to learn from the money they're spending on research which is then made available to the public.
@@Nanalyze Waymo Cruise and Baidu do not have a scalable solution. How much do the cars cost? How long would i take them to get millions of cars on the road. How much would it cost tesla to get millions on the road (already done). Try to use a first principles line of thinking-hard for many people.
@@gregoire2411 First principles thinking for Tesla people is like the sacred ontology is for Palantir people ;) Yes, Tesla's data is said to be their biggest competitive advantage which comes from all their cars on the road.
@@Nanalyze Your "When will Robotaxis rule the road" is an interesting summary, and is probably doing Tesla a favour by stating that that "Tesla Bringing Up the Rear", when the reality is that they haven't yet entered the race. If Uber taxis were free, would people still own their own car? Hard to see that they wouldn't, which has to question how big a market will RoboTaxi be and would it sustain multiple services? Driving for many people is just not the chore some disrupters think it is. Robotaxi might be like 3D TV, they cracked it, but no one wanted it. Ark seems to have struck lucky in 2020 and effectively a one trick pony, someone with a five year investment in Ark would have suffered a '-4.98% loss. "Thousands of instant analysts parrot the same pitch." doesn't make it right - Granted, Tesla's current share price would only seem justified if it is going to be more than just a car manufacture, but it is only its car manufacturing where it is a market leader, Robotics, AI, Self-Driving, Battery design its a follower. Boston Dynamics are years ahead of Tesla, their robots could actually do what Tesla could only represent with a man dancing in a gimp suit. Hard to say who is the market leader in battery design, but easy to say it is not Tesla. Mobileye is among the market leaders and their system that can be licensed to anyone and used on any vehicle. Tesla share price may reach $2600 just like bitcoin could soar past $1 million, I would suggest both predictions are very unlikely and not realistic.
Tesla's data is worth something and it's not unreasonable to consider it a competitive advantage in the robotaxi conversation. Letting others get all the mistakes out of the way is often a clever way to let all the negative "robot car bad" publicity target someone else. Yes, ARK has performed poorly and we covered that just days ago (ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-QCGW4HOKqq8.html). Agree that people will not be giving up driving anytime soon. Uber is really an indicator of the potential here, and their margins could really improve with autonomy (drivers being 30% of costs or so). Will a much cheaper ride make more people take Ubers? Probably not, so perhaps the opportunity isn't that big. But then when you extend it to delivery and shipping things get interesting. That's another vertical worth watching - trucking autonomy, and we covered that most recently here (www.nanalyze.com/2022/07/self-driving-trucks-stocks/). Boston Dynamics needs to start addressing something other than niche bomb retrieval use cases and phenomenal "do you love me" dance routines. Broader use cases - like deployments measured in the thousands in an industry vertical - would be great to see. Tesla's share price will only rise to those astronomical levels if all the stars align. The answer is somewhere in between and we'll see how it goes. Oh, and instant analysts are not a good thing, just to be clear ;)
