TSLA: What Changed?
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Re: TSLA: What Changed?
There’s nothing revolutionary about building the batteries that are in Tesla vehicles. They just managed to scale it through partnerships. No reason why VW can’t also scale.
Disrupters often get disrupted, and if solid state becomes tangible in 5-10 years, that will remove an advantage Tesla has a claim on.
You can still think what Tesla has done is very impressive, that tells us little about whether they are worth north of 10-15X the market cap of other auto companies.
Disrupters often get disrupted, and if solid state becomes tangible in 5-10 years, that will remove an advantage Tesla has a claim on.
You can still think what Tesla has done is very impressive, that tells us little about whether they are worth north of 10-15X the market cap of other auto companies.
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Re: TSLA: What Changed?
1. Those are similar arguments (and I judge weak ones) made 5-10 years ago.burritoLover wrote: ↑Mon Oct 25, 2021 11:24 pmA stock can have ever increasing valuations for a number of years before it finally gets its wake up call. And even then, it can take a few years to wash out to its bottom. I’m talking about the long-term future returns of TSLA not predicting when the nuttiness will actually end in the near term. We won’t know whose wrong until maybe 5 to 10 years from now.4nursebee wrote: ↑Mon Oct 25, 2021 10:55 pmUsing a phrase like "bottom line" in a well written clearly thought out piece like this after a day like yesterday? Well, yesterday, every negative and bearish person was proven wrong.burritoLover wrote: ↑Mon Oct 25, 2021 10:41 pmI own a model 3 performance and everything you said about it I agree with (except they do have superchargers that go out of service). And I believe that EVs are the future. That’s irrelevant - the internet was undoubtedly the future during the dot com bubble and has so vastly impacted every facet of our lives over the next 20 years - even more than anyone could have imagined. Yet a company like Cisco, poised to be the “shovel seller during a gold rush”, whose fundamentals were vastly superior then as compared to Tesla now, was a terrible investment going forward.Soysauceonrice wrote: ↑Mon Oct 25, 2021 9:50 pmIt's really simple; they aren't a traditional car company and the car isn't comparable to the traditional car most are used to. It sounds a bit cliché, but you just have to own one to understand. I was never a Tesla fanboy, but once I test drove one and now after owning a Model 3 for a year, I really can't see myself going back to a traditional internal combustion engine car. The acceleration is excellent, as is the idea of never visiting a gas station again (other than for a potty break on a long road-trips). The software in the Teslas, along with the OTA updates, are years ahead of any of the traditional car makers. Their charging infrastructure is significantly more developed, and this is key, far more reliable than competitor networks such as Electrify America. When I roll up to a supercharger, I don't have to wonder if the chargers are out of order. Every single supper charger I have stopped at was working, 100% of the time. That isn't true of the competing networks.
If you believe electric cars are the future, and I do believe that they are, then Teslas have a massive lead that the GM and Fords of the world won't easily catch up to. I attribute this to the fact that Tesla is 100% all in on electrification. That focus allows them to do what they do extremely well, whereas the legacy automakers are still focusing on traditional cars and making electric cars a side-hobby.
None of this justifies the company being worth a trillion. They're almost certainly over-valued. But to compare them to the traditional auto-makers is severely missing the point.
The comparison to Apple is misguided too. Tesla had a monopoly on EVs - key word “had”. A number of EVs have been released from other manufacturers since and Tesla is poised to get knocked off their pedestal by the likes of the 22’ Lucid Air with the first over 500 mile range EV (520 mi EPA tested) and Rivian being the first EV truck for sale - beating Tesla’s much delayed Cybertruck.
Tesla’s supercharger network also is losing its advantages - other charging competitors are moving into the space and growing rapidly and even Biden wants to subsidize a massive EV charging network across the country.
Maybe their biggest asset is their self-driving technology which they could license to others. But Tesla has over-promised and under-delivered on this feature SO many times, it has become almost laughable. And the government is also not so keen on them using their customers to effectively beta test self-driving changes - which is a potential risk.
Bottom line, it doesn’t matter how promising a company’s future is if you overpay for the privilege of owning the stock. Your returns can still be crappy even if Tesla lives up to everthing you expect.
When results are different than expected, perhaps folks should change their minds or at least just say they don't get it?
2. It seems to be a minority opinion, increasingly so.
3. Calling it nutty seems to be an emotional reaction, not an analytical one.
Perhaps you could review what some wall street pros say about the company, critique their arguments or assumptions? Cathy woods, Gary Black, Pierre Ferragu, Adam Jonas. Perhaps read of futurist Tony Seba?
I'd suggest folks read the Innovators Dilemma.
Pale Blue Dot
Re: TSLA: What Changed?
What evidence do you have on the non revolutionary nature of TSLA batteries? Did you watch their battery day presentation? Do you understand what happens in the batteries that leads to product degradation and what steps TSLA is taking to counter that?Nathan Drake wrote: ↑Tue Oct 26, 2021 1:06 am There’s nothing revolutionary about building the batteries that are in Tesla vehicles. They just managed to scale it through partnerships. No reason why VW can’t also scale.
Disrupters often get disrupted, and if solid state becomes tangible in 5-10 years, that will remove an advantage Tesla has a claim on.
You can still think what Tesla has done is very impressive, that tells us little about whether they are worth north of 10-15X the market cap of other auto companies.
Nearly everyone agrees that comparing TSLA to ICE OEMs leads to crazy mix match valuations. Many people say TSLA is so much more than a car company and it needs to be judged by other metrics. I've heard that because of this, Morgan Stanly fired most of the team assigned to TSLA and brought in people that could better value it as a tech company.
Pale Blue Dot
- burritoLover
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Re: TSLA: What Changed?
Both Rivian and Lucid have just have had their first production vehicles roll off the assembly lines so your statement is patently false.brad.clarkston wrote: ↑Tue Oct 26, 2021 12:49 amThe non-automakers in the market does not have a single vehicle in production and will not for another 5-10 years and the best ones may run out of cash next year.burritoLover wrote: ↑Mon Oct 25, 2021 9:01 pmI see other traditional automakers and new EV-only automakers rapidly catching up. Their “full self driving” is wrought with issues and set backs. Numerous quality issues. And their non-automotive business is still unimpressive. Future prospects look muted with a lot more competition crowding their space.
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Re: TSLA: What Changed?
Like Jack and Warren, Elon is a visionary and innovative individual and like Steve Jobs has an uncanny ability to identify exactly what people want from their products and services. Why wouldn't you want to be a part of that? Overvalued? Likely, but I'm just glad it finally made it to the VTI and this will allow me to participate in this revolutionary individual as he moves the ball forward in the progression of mankind, we'll see what happens...
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Re: TSLA: What Changed?
In order for Tesla to be simply meet expectations of their current valuation, they would have to have revenue beyond the largest automotive manufacturer in the world and then their non-direct automotive business would have to be many times bigger than even that. And that is just to meet the expectations the current valuation. What happens when you simply meet your lofty valuation in the long-term? You are unlikely to outperform even an S&P 500 index fund. In order for Tesla to become a great long-term investment going forward (where the "weighing machine" comes into play), they have to pull an unexpected rabbit out of a hat - a la AWS with Amazon, or they have to be so dominating, almost monopolistic in multiple industries (which are highly competitive) in the future well beyond what the market is currently pricing in. Is that impossible? No - but it seems increasingly unlikely and I've already outlined the cracks starting to form in Tesla as competition heats up which is concerning for them this early in the technological revolution.Soysauceonrice wrote: ↑Tue Oct 26, 2021 1:01 amThere are a few trains of thoughts that I think deserve to be fleshed out and made clear. 1) Based on what we know about how to value a company, Tesla is certainly overvalued. I don't think anyone will have any issues with this statement. My main beef lies in how readily detractors are willing to dismiss the company because the stock is so detached from reality. Which brings me to point 2) Tesla can be both overvalued, and revolutionary at the same time.burritoLover wrote: ↑Mon Oct 25, 2021 10:41 pmI own a model 3 performance and everything you said about it I agree with (except they do have superchargers that go out of service). And I believe that EVs are the future. That’s irrelevant - the internet was undoubtedly the future during the dot com bubble and has so vastly impacted every facet of our lives over the next 20 years - even more than anyone could have imagined. Yet a company like Cisco, poised to be the “shovel seller during a gold rush”, whose fundamentals were vastly superior then as compared to Tesla now, was a terrible investment going forward.Soysauceonrice wrote: ↑Mon Oct 25, 2021 9:50 pmIt's really simple; they aren't a traditional car company and the car isn't comparable to the traditional car most are used to. It sounds a bit cliché, but you just have to own one to understand. I was never a Tesla fanboy, but once I test drove one and now after owning a Model 3 for a year, I really can't see myself going back to a traditional internal combustion engine car. The acceleration is excellent, as is the idea of never visiting a gas station again (other than for a potty break on a long road-trips). The software in the Teslas, along with the OTA updates, are years ahead of any of the traditional car makers. Their charging infrastructure is significantly more developed, and this is key, far more reliable than competitor networks such as Electrify America. When I roll up to a supercharger, I don't have to wonder if the chargers are out of order. Every single supper charger I have stopped at was working, 100% of the time. That isn't true of the competing networks.
If you believe electric cars are the future, and I do believe that they are, then Teslas have a massive lead that the GM and Fords of the world won't easily catch up to. I attribute this to the fact that Tesla is 100% all in on electrification. That focus allows them to do what they do extremely well, whereas the legacy automakers are still focusing on traditional cars and making electric cars a side-hobby.
None of this justifies the company being worth a trillion. They're almost certainly over-valued. But to compare them to the traditional auto-makers is severely missing the point.
The comparison to Apple is misguided too. Tesla had a monopoly on EVs - key word “had”. A number of EVs have been released from other manufacturers since and Tesla is poised to get knocked off their pedestal by the likes of the 22’ Lucid Air with the first over 500 mile range EV (520 mi EPA tested) and Rivian being the first EV truck for sale - beating Tesla’s much delayed Cybertruck.
Tesla’s supercharger network also is losing its advantages - other charging competitors are moving into the space and growing rapidly and even Biden wants to subsidize a massive EV charging network across the country.
Maybe their biggest asset is their self-driving technology which they could license to others. But Tesla has over-promised and under-delivered on this feature SO many times, it has become almost laughable. And the government is also not so keen on them using their customers to effectively beta test self-driving changes - which is a potential risk.
Bottom line, it doesn’t matter how promising a company’s future is if you overpay for the privilege of owning the stock. Your returns can still be crappy even if Tesla lives up to everthing you expect.
In regards to their super-chargers going out of service, I know that they do go out of service. But the key point is that I never show up to a supper-charger to be surprised that it is out of service. Why is this ? Because the software of the Tesla tells me which supper chargers are down for service. It even tells me how busy each stop is, in real time, and allows me to make an informed decision on whether I want to stop at this charger, or skip it for a less packed charger down the road. I never roll up to a supercharger finding that it doesn't work, because if a supper charger doesn't work, my car tells me so and allows me to avoid it. If you were in a Mustang Mach-E for example, your car cannot tell you this information, because Ford does not control their charging network. There's that pesky tech advantage rearing its head again. For an example of a real world test that compares the networks, MKBHD did a great video on this. The differences in the experience is night and day. https://www.youtube.com/watch?v=vXzuFprlyrw
You haven't really explained why the comparison to apple is misguided. Tesla can be Apple, or it can be Cisco. As others have pointed out, a car isn't a phone. But comments like those have the benefit of a decade and a half of foresight. If we were honest, how many of us in 2007 prophesized the seismic shift in our daily lives that the iphone and its smartphone progeny started ? You can say a car is just a car. But a phone in 2007 was also just a phone. If you asked the me of 2006, I would have no idea how my clam-shell nokia phone would revolutionize anything. All i used it for was to call my parents and text my college buddies. And just like Tesla, the iphone had its fair share of "me-too" clones (anyone remember the Blackberry Storm ?) and yet 15 years later, the iphone is still doing fine, despite the fact that it has hefty competition and that, from a features standpoint, an android phone can do everything an iphone can.
You say that it's laughable how often Tesla has overpromised and under-delivered on their FSD promises. This is a very valid critique. But what is also just as laughable to me, is how often people trot out the mantra of "just wait until the REAL car companies do electric cars!". I've heard that mantra for years, and the Tesla "Killers" have consistently underwhelmed. Don't get me wrong, I bought my Tesla because I am worried about the environment. I *want* Ford, Rivian, Lucid, GM, etc, to succeed, but the cars are either so new we can't really judge them (the Rivian Truck and the Lucid Air) or they have been disappointing (polestar). So yes, Elon has consistently under-delivered on his FSD hype, but so have the supposed Tesla killers. All have over-promised, and under-delivered.
It needs to be said again. The stock price doesn't make any sense. It is not worth 1 trillion today. But, based on what the company is doing now, I can certainly see it being worth that valuation some day. The ironic part is, the day I think the company is worth that trillion, the market might tell me it's worth 10.
Tesla is a fantastic company - but this is a thread about Tesla's valuation not the how great Tesla is. And what you pay for a stock still matters in the long-term - you can have poor returns even with companies that are highly successful.
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Re: TSLA: What Changed?
Yes I watched the battery day event. Small tweaks to optimize production process for EV scale on components that are really nothing more than lithium ion batteries found ubiquitously in other electronic devices which has been proven for a very long time. There’s nothing stopping other EV makers from similarly scaling.4nursebee wrote: ↑Tue Oct 26, 2021 4:12 amWhat evidence do you have on the non revolutionary nature of TSLA batteries? Did you watch their battery day presentation? Do you understand what happens in the batteries that leads to product degradation and what steps TSLA is taking to counter that?Nathan Drake wrote: ↑Tue Oct 26, 2021 1:06 am There’s nothing revolutionary about building the batteries that are in Tesla vehicles. They just managed to scale it through partnerships. No reason why VW can’t also scale.
Disrupters often get disrupted, and if solid state becomes tangible in 5-10 years, that will remove an advantage Tesla has a claim on.
You can still think what Tesla has done is very impressive, that tells us little about whether they are worth north of 10-15X the market cap of other auto companies.
Nearly everyone agrees that comparing TSLA to ICE OEMs leads to crazy mix match valuations. Many people say TSLA is so much more than a car company and it needs to be judged by other metrics. I've heard that because of this, Morgan Stanly fired most of the team assigned to TSLA and brought in people that could better value it as a tech company.
By itself, the batteries do not command a huge market valuation, especially when they are at the cusp of being disrupted by rival technologies that are profoundly superior.
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Re: TSLA: What Changed?
Looks like Tesla is 4.5% awesomer today than it was yesterday after being almost 13% awesomer than the day before! I guess I technically do own some of it so I may be biased.
- burritoLover
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Re: TSLA: What Changed?
One for the history books - every one here gets to live through one the most epic stock bubble of all time or one of the greatest investment opportunities going forward - depending on who's right.
Re: TSLA: What Changed?
They did not come across as small tweaks to me. https://fortune.com/2020/09/22/tesla-ba ... ctric-car/Nathan Drake wrote: ↑Tue Oct 26, 2021 8:46 amYes I watched the battery day event. Small tweaks to optimize production process for EV scale on components that are really nothing more than lithium ion batteries found ubiquitously in other electronic devices which has been proven for a very long time. There’s nothing stopping other EV makers from similarly scaling.4nursebee wrote: ↑Tue Oct 26, 2021 4:12 amWhat evidence do you have on the non revolutionary nature of TSLA batteries? Did you watch their battery day presentation? Do you understand what happens in the batteries that leads to product degradation and what steps TSLA is taking to counter that?Nathan Drake wrote: ↑Tue Oct 26, 2021 1:06 am There’s nothing revolutionary about building the batteries that are in Tesla vehicles. They just managed to scale it through partnerships. No reason why VW can’t also scale.
Disrupters often get disrupted, and if solid state becomes tangible in 5-10 years, that will remove an advantage Tesla has a claim on.
You can still think what Tesla has done is very impressive, that tells us little about whether they are worth north of 10-15X the market cap of other auto companies.
Nearly everyone agrees that comparing TSLA to ICE OEMs leads to crazy mix match valuations. Many people say TSLA is so much more than a car company and it needs to be judged by other metrics. I've heard that because of this, Morgan Stanly fired most of the team assigned to TSLA and brought in people that could better value it as a tech company.
By itself, the batteries do not command a huge market valuation, especially when they are at the cusp of being disrupted by rival technologies that are profoundly superior.
TLDR version: https://www.youtube.com/watch?v=HK79ioBW8Mg
Pale Blue Dot
Re: TSLA: What Changed?
Pale Blue Dot
Re: TSLA: What Changed?
I think the unexpected rabbit out of a hat valuation is being underestimated. Tesla has surprised people over and over for close to a decade now. Tesla has basically the biggest and best "gas station" network for the future of the automotive industry. They have announced that they are going to open up this network to other EVs once the federal incentives kick in. They have a huge advantage in know how, technology (both hardware and software), scale, supply chain, reputation/brand, network effects, and media exposure. This advantage can be overcome... eventually... but the table is tilted heavily in Tesla's favor, and Tesla has a tremendous track record of winning against horrible odds.burritoLover wrote: ↑Tue Oct 26, 2021 6:46 am
In order for Tesla to be simply meet expectations of their current valuation, they would have to have revenue beyond the largest automotive manufacturer in the world and then their non-direct automotive business would have to be many times bigger than even that .... they have to pull an unexpected rabbit out of a hat - a la AWS with Amazon ...
I think this is being priced into their market valuation.
Having said all that I do think they are over valued, but I know nothing. I am happy to hold them via my index based ETFs and watch from the sidelines.
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Re: TSLA: What Changed?
Yeah they started doing that in Germany. I hope to God they don't do that in the U.S. - some of the superchargers I frequent are already packed a lot of time - mostly from the Model S/X freeloaders who have lifetime free supercharging and use that instead of charging from home.bligh wrote: ↑Tue Oct 26, 2021 9:54 amI think the unexpected rabbit out of a hat valuation is being underestimated. Tesla has surprised people over and over for close to a decade now. Tesla has basically the biggest and best "gas station" network for the future of the automotive industry. They have announced that they are going to open up this network to other EVs once the federal incentives kick in. They have a huge advantage in know how, technology (both hardware and software), scale, supply chain, reputation/brand, network effects, and media exposure. This advantage can be overcome... eventually... but the table is tilted heavily in Tesla's favor, and Tesla has a tremendous track record of winning against horrible odds.burritoLover wrote: ↑Tue Oct 26, 2021 6:46 am
In order for Tesla to be simply meet expectations of their current valuation, they would have to have revenue beyond the largest automotive manufacturer in the world and then their non-direct automotive business would have to be many times bigger than even that .... they have to pull an unexpected rabbit out of a hat - a la AWS with Amazon ...
I think this is being priced into their market valuation.
Having said all that I do think they are over valued, but I know nothing. I am happy to hold them via my index based ETFs and watch from the sidelines.
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Re: TSLA: What Changed?
Of course Tesla would not market it as anything but the most revolutionary thing ever.4nursebee wrote: ↑Tue Oct 26, 2021 9:44 amThey did not come across as small tweaks to me. https://fortune.com/2020/09/22/tesla-ba ... ctric-car/Nathan Drake wrote: ↑Tue Oct 26, 2021 8:46 amYes I watched the battery day event. Small tweaks to optimize production process for EV scale on components that are really nothing more than lithium ion batteries found ubiquitously in other electronic devices which has been proven for a very long time. There’s nothing stopping other EV makers from similarly scaling.4nursebee wrote: ↑Tue Oct 26, 2021 4:12 amWhat evidence do you have on the non revolutionary nature of TSLA batteries? Did you watch their battery day presentation? Do you understand what happens in the batteries that leads to product degradation and what steps TSLA is taking to counter that?Nathan Drake wrote: ↑Tue Oct 26, 2021 1:06 am There’s nothing revolutionary about building the batteries that are in Tesla vehicles. They just managed to scale it through partnerships. No reason why VW can’t also scale.
Disrupters often get disrupted, and if solid state becomes tangible in 5-10 years, that will remove an advantage Tesla has a claim on.
You can still think what Tesla has done is very impressive, that tells us little about whether they are worth north of 10-15X the market cap of other auto companies.
Nearly everyone agrees that comparing TSLA to ICE OEMs leads to crazy mix match valuations. Many people say TSLA is so much more than a car company and it needs to be judged by other metrics. I've heard that because of this, Morgan Stanly fired most of the team assigned to TSLA and brought in people that could better value it as a tech company.
By itself, the batteries do not command a huge market valuation, especially when they are at the cusp of being disrupted by rival technologies that are profoundly superior.
TLDR version: https://www.youtube.com/watch?v=HK79ioBW8Mg
Take a step back and realize it’s not, nor is it some exclusive technology that can’t be utilized in similar ways by other companies.
And again, it’s improving a very old technology - what happens if Tesla bet on the wrong horse?
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Re: TSLA: What Changed?
Tesla has not once placed an advertisement for its product in a tv ad, a print ad, a digital ad or a billboard. Think about that for a second.
Re: TSLA: What Changed?
Of my own accord I can't just take a step back. I am not well educated on the technology. So I trust what TSLA leaders say and verify with outside sources such as what Sandy Munro says. If you have superior knowledge do share. If you have battery scientists worth listening to, post links. Otherwise it is not a strong argument. And if TSLA bet on the wrong horse, I bet they pivot the moment they figure it out, the kind of thing they have done a few times already.Nathan Drake wrote: ↑Tue Oct 26, 2021 9:57 amOf course Tesla would not market it as anything but the most revolutionary thing ever.4nursebee wrote: ↑Tue Oct 26, 2021 9:44 amThey did not come across as small tweaks to me. https://fortune.com/2020/09/22/tesla-ba ... ctric-car/Nathan Drake wrote: ↑Tue Oct 26, 2021 8:46 amYes I watched the battery day event. Small tweaks to optimize production process for EV scale on components that are really nothing more than lithium ion batteries found ubiquitously in other electronic devices which has been proven for a very long time. There’s nothing stopping other EV makers from similarly scaling.4nursebee wrote: ↑Tue Oct 26, 2021 4:12 amWhat evidence do you have on the non revolutionary nature of TSLA batteries? Did you watch their battery day presentation? Do you understand what happens in the batteries that leads to product degradation and what steps TSLA is taking to counter that?Nathan Drake wrote: ↑Tue Oct 26, 2021 1:06 am There’s nothing revolutionary about building the batteries that are in Tesla vehicles. They just managed to scale it through partnerships. No reason why VW can’t also scale.
Disrupters often get disrupted, and if solid state becomes tangible in 5-10 years, that will remove an advantage Tesla has a claim on.
You can still think what Tesla has done is very impressive, that tells us little about whether they are worth north of 10-15X the market cap of other auto companies.
Nearly everyone agrees that comparing TSLA to ICE OEMs leads to crazy mix match valuations. Many people say TSLA is so much more than a car company and it needs to be judged by other metrics. I've heard that because of this, Morgan Stanly fired most of the team assigned to TSLA and brought in people that could better value it as a tech company.
By itself, the batteries do not command a huge market valuation, especially when they are at the cusp of being disrupted by rival technologies that are profoundly superior.
TLDR version: https://www.youtube.com/watch?v=HK79ioBW8Mg
Take a step back and realize it’s not, nor is it some exclusive technology that can’t be utilized in similar ways by other companies.
And again, it’s improving a very old technology - what happens if Tesla bet on the wrong horse?
Interesting horse word, I've recently heard folks refer to all these tsla cars on the road as trojan horses...
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Re: TSLA: What Changed?
Show me picks of your happy purchase then? Show me pic's of anyone's happy purchase?burritoLover wrote: ↑Tue Oct 26, 2021 6:30 amBoth Rivian and Lucid have just have had their first production vehicles roll off the assembly lines so your statement is patently false.brad.clarkston wrote: ↑Tue Oct 26, 2021 12:49 amThe non-automakers in the market does not have a single vehicle in production and will not for another 5-10 years and the best ones may run out of cash next year.burritoLover wrote: ↑Mon Oct 25, 2021 9:01 pmI see other traditional automakers and new EV-only automakers rapidly catching up. Their “full self driving” is wrought with issues and set backs. Numerous quality issues. And their non-automotive business is still unimpressive. Future prospects look muted with a lot more competition crowding their space.
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Re: TSLA: What Changed?
If you just want an echo chamber of Tesla enthusiasts then it doesn’t matter what source I give you. There were many articles written that were less than amazed by the battery day event4nursebee wrote: ↑Tue Oct 26, 2021 10:03 amOf my own accord I can't just take a step back. I am not well educated on the technology. So I trust what TSLA leaders say and verify with outside sources such as what Sandy Munro says. If you have superior knowledge do share. If you have battery scientists worth listening to, post links. Otherwise it is not a strong argument. And if TSLA bet on the wrong horse, I bet they pivot the moment they figure it out, the kind of thing they have done a few times already.Nathan Drake wrote: ↑Tue Oct 26, 2021 9:57 amOf course Tesla would not market it as anything but the most revolutionary thing ever.4nursebee wrote: ↑Tue Oct 26, 2021 9:44 amThey did not come across as small tweaks to me. https://fortune.com/2020/09/22/tesla-ba ... ctric-car/Nathan Drake wrote: ↑Tue Oct 26, 2021 8:46 amYes I watched the battery day event. Small tweaks to optimize production process for EV scale on components that are really nothing more than lithium ion batteries found ubiquitously in other electronic devices which has been proven for a very long time. There’s nothing stopping other EV makers from similarly scaling.4nursebee wrote: ↑Tue Oct 26, 2021 4:12 am
What evidence do you have on the non revolutionary nature of TSLA batteries? Did you watch their battery day presentation? Do you understand what happens in the batteries that leads to product degradation and what steps TSLA is taking to counter that?
Nearly everyone agrees that comparing TSLA to ICE OEMs leads to crazy mix match valuations. Many people say TSLA is so much more than a car company and it needs to be judged by other metrics. I've heard that because of this, Morgan Stanly fired most of the team assigned to TSLA and brought in people that could better value it as a tech company.
By itself, the batteries do not command a huge market valuation, especially when they are at the cusp of being disrupted by rival technologies that are profoundly superior.
TLDR version: https://www.youtube.com/watch?v=HK79ioBW8Mg
Take a step back and realize it’s not, nor is it some exclusive technology that can’t be utilized in similar ways by other companies.
And again, it’s improving a very old technology - what happens if Tesla bet on the wrong horse?
Interesting horse word, I've recently heard folks refer to all these tsla cars on the road as trojan horses...
You cannot suddenly pivot on decisions like battery technology or removing LIDAR; either adopt it from a third party (thus losing your internal advantage), or see your technical edge erode while you double down on an inferior technology
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- burritoLover
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Re: TSLA: What Changed?
It just happened this month - they aren't cranking out a ton of cars this early but they are production ready cars not vaporware that is 5-10 years away.brad.clarkston wrote: ↑Tue Oct 26, 2021 10:11 amShow me picks of your happy purchase then? Show me pic's of anyone's happy purchase?burritoLover wrote: ↑Tue Oct 26, 2021 6:30 amBoth Rivian and Lucid have just have had their first production vehicles roll off the assembly lines so your statement is patently false.brad.clarkston wrote: ↑Tue Oct 26, 2021 12:49 amThe non-automakers in the market does not have a single vehicle in production and will not for another 5-10 years and the best ones may run out of cash next year.burritoLover wrote: ↑Mon Oct 25, 2021 9:01 pmI see other traditional automakers and new EV-only automakers rapidly catching up. Their “full self driving” is wrought with issues and set backs. Numerous quality issues. And their non-automotive business is still unimpressive. Future prospects look muted with a lot more competition crowding their space.
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Re: TSLA: What Changed?
Here’s a rational take on Tesla. It’s a little old but still seems to apply.
https://contrarianedge.com/why-we-dont- ... not-bears/
At this stage in software, it was not at all apparent that Microsoft was going to destroy WordPerfect, Harvard Graphics, and Lotus 123. Webcrawler and then Yahoo had a big lead in search. There were 100s of car companies before consolidation.
No one knows how this will play out. You assess probabilities (nothing approaching certainty), make your bets, and then some people who benefited from luck can claim to be geniuses.
My crystal ball is cloudy. Good luck.
https://contrarianedge.com/why-we-dont- ... not-bears/
At this stage in software, it was not at all apparent that Microsoft was going to destroy WordPerfect, Harvard Graphics, and Lotus 123. Webcrawler and then Yahoo had a big lead in search. There were 100s of car companies before consolidation.
No one knows how this will play out. You assess probabilities (nothing approaching certainty), make your bets, and then some people who benefited from luck can claim to be geniuses.
My crystal ball is cloudy. Good luck.
Re: TSLA: What Changed?
As of 10/22 Rivian had made 56 R1T's. 1.47 per day. Production is hard, as Elon has commented many times.burritoLover wrote: ↑Tue Oct 26, 2021 6:30 am
Both Rivian and Lucid have just have had their first production vehicles roll off the assembly lines so your statement is patently false.
Tesla is on pace for 900k deliveries this year, and with Austin/Berlin Gigas coming on line soon likely 1.4-1.5m deliveries in 2022.
They have been growing 50% YOY, and EV adoption is expected to grow to 25% by 2025. If Tesla maintains just 25% share of the EV market, and continues to scale production as they have , they will likely see 5M deliveries in 2025. They have the highest GM of any automaker and those continue to climb.
You have a potential $8k EV credit coming, 4680 cells, L3 FSD, Cy Truck and compact in 22-23, etc...
I'm not a Telsa fan boy, I own a Porsche Taycan, but markets are forward looking, and Telsa is a growth stock. Calculate 2025 EPS and P/E and the valuation is not so crazy.
Last edited by rhoms33 on Tue Oct 26, 2021 10:49 am, edited 2 times in total.
Re: TSLA: What Changed?
Tesla is now worth over a trillion dollars, I think more than the next 9 companies in the top 10 automakers combined.
Hard to say if it is justified. Yes they have lower volumes but also commanded 70% of EVs in the US in 2020. They also have altered other company’s entire strategy of going all EV by year XXXX. They’re going to be integrating charging stations, solar panels for private and commercial usage. It’s not hard to see them become a disruptor in autonomous tech, energy, and electric vehicles if they haven’t become that already. They could probably also monetize the vehicle data that they’re collecting on all Teslas. All that sensor data that can be mapped to AI about consumer driving habits would be very valuable to companies looking to expand their franchise operations, city planning etc and it’s being collected at a much more detailed level than google maps since you have camera, radar and oem vehicle data.
Hard to say if it is justified. Yes they have lower volumes but also commanded 70% of EVs in the US in 2020. They also have altered other company’s entire strategy of going all EV by year XXXX. They’re going to be integrating charging stations, solar panels for private and commercial usage. It’s not hard to see them become a disruptor in autonomous tech, energy, and electric vehicles if they haven’t become that already. They could probably also monetize the vehicle data that they’re collecting on all Teslas. All that sensor data that can be mapped to AI about consumer driving habits would be very valuable to companies looking to expand their franchise operations, city planning etc and it’s being collected at a much more detailed level than google maps since you have camera, radar and oem vehicle data.
- burritoLover
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Re: TSLA: What Changed?
Tesla's market cap is 6th largest in the WORLD. Think about that for a second - only Apple, Microsoft, Saudi Aramco, Google, and Amazon are bigger. Tesla eclipses Facebook, Berkshire, Nvidia, Tencent, Visa, Chase, Alibaba, J&J, United Health, Walmart, Samsung, and so on. Tesla is a great company but there is a TON of expectation already built-in to that price.
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Re: TSLA: What Changed?
How do we calculate the 2025 EPS and P/E and not still reach the conclusion that it’s insanely overvalued?rhoms33 wrote: ↑Tue Oct 26, 2021 10:20 amAs of 10/22 Rivian had made 56 R1T's. 1.47 per day. Production is hard, as Elon has commented many times.burritoLover wrote: ↑Tue Oct 26, 2021 6:30 am
Both Rivian and Lucid have just have had their first production vehicles roll off the assembly lines so your statement is patently false.
Tesla is on pace for 900k deliveries this year, and with Austin/Berlin Gigas coming on line soon likely 1.4-1.5m deliveries in 2022.
They have been growing 50% YOY, and EV adoption is expected to grow to 50% by 2025. If Tesla maintains just 25% share of the EV market, and continues to scale production as they have , they will likely see 10M deliveries in 2025. They have the highest GM of any automaker and those continue to climb.
You have a potential $8k EV credit coming, 4680 cells, L3 FSD, Cy Truck and compact in 22-23, etc...
I'm not a Telsa fan boy, I own a Porsche Taycan, but markets are forward looking, and Telsa is a growth stock. Calculate 2025 EPS and P/E and the valuation is not so crazy.
20% VOO | 20% VXUS | 20% AVUV | 20% AVDV | 20% AVES
Re: TSLA: What Changed?
Tesla does plenty of advertising just not the traditional advertising. You don’t think every single reviewer paid out of pocket for a Tesla to review. You don’t think Tesla drives around the Nurburgring for fun. You don’t think shooting a Model S into space was to test the load capacity of the SpaceX rocket.chitownguy wrote: ↑Tue Oct 26, 2021 9:58 am Tesla has not once placed an advertisement for its product in a tv ad, a print ad, a digital ad or a billboard. Think about that for a second.
If I had to “think for a second” every time someone told me to “think for a second” about something Tesla does or doesn’t do I’d be thinking an awful lot…
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Re: TSLA: What Changed?
Of course they do some promotion and Musk is a great salesman and that’s why I was very clear in stating that they haven’t done any traditional advertising yet. Point being: when they do it will be a game changer (assuming you put any credence in traditional advertising).Jags4186 wrote: ↑Tue Oct 26, 2021 10:45 amTesla does plenty of advertising just not the traditional advertising. You don’t think every single reviewer paid out of pocket for a Tesla to review. You don’t think Tesla drives around the Nurburgring for fun. You don’t think shooting a Model S into space was to test the load capacity of the SpaceX rocket.chitownguy wrote: ↑Tue Oct 26, 2021 9:58 am Tesla has not once placed an advertisement for its product in a tv ad, a print ad, a digital ad or a billboard. Think about that for a second.
If I had to “think for a second” every time someone told me to “think for a second” about something Tesla does or doesn’t do I’d be thinking an awful lot…
Re: TSLA: What Changed?
This to me is the single greatest thing about Tesla. I can't stand the fact that half the other top ten holdings in VTI have business models that essentially depend on monetizing their users' attention spans. And I can't for the life of me understand why the other 3,000 companies down the list would pay a single red cent to advertise on them.chitownguy wrote: ↑Tue Oct 26, 2021 9:58 am Tesla has not once placed an advertisement for its product in a tv ad, a print ad, a digital ad or a billboard. Think about that for a second.
Re: TSLA: What Changed?
I think the consensus among TSLA fans is that by then the Boring Company Mars city powered by SolarCity panels supplied by SpaceX serviced by Tesla autonomous taxis will be fully staffed and mining asteroids.Nathan Drake wrote: ↑Tue Oct 26, 2021 10:37 amHow do we calculate the 2025 EPS and P/E and not still reach the conclusion that it’s insanely overvalued?rhoms33 wrote: ↑Tue Oct 26, 2021 10:20 amAs of 10/22 Rivian had made 56 R1T's. 1.47 per day. Production is hard, as Elon has commented many times.burritoLover wrote: ↑Tue Oct 26, 2021 6:30 am
Both Rivian and Lucid have just have had their first production vehicles roll off the assembly lines so your statement is patently false.
Tesla is on pace for 900k deliveries this year, and with Austin/Berlin Gigas coming on line soon likely 1.4-1.5m deliveries in 2022.
They have been growing 50% YOY, and EV adoption is expected to grow to 50% by 2025. If Tesla maintains just 25% share of the EV market, and continues to scale production as they have , they will likely see 10M deliveries in 2025. They have the highest GM of any automaker and those continue to climb.
You have a potential $8k EV credit coming, 4680 cells, L3 FSD, Cy Truck and compact in 22-23, etc...
I'm not a Telsa fan boy, I own a Porsche Taycan, but markets are forward looking, and Telsa is a growth stock. Calculate 2025 EPS and P/E and the valuation is not so crazy.
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- Joined: Thu Aug 05, 2021 9:39 pm
Re: TSLA: What Changed?
Tesla is overvalued. On that we agree. But saying Tesla is overvalued really is not providing anything new. People have been screaming for years about the stock's insane valuation. Based on a 2 minute google search, I found articles from as far back as 2013. https://www.forbes.com/sites/richardfin ... e4b1d129c7burritoLover wrote: ↑Tue Oct 26, 2021 6:46 amIn order for Tesla to be simply meet expectations of their current valuation, they would have to have revenue beyond the largest automotive manufacturer in the world and then their non-direct automotive business would have to be many times bigger than even that. And that is just to meet the expectations the current valuation. What happens when you simply meet your lofty valuation in the long-term? You are unlikely to outperform even an S&P 500 index fund. In order for Tesla to become a great long-term investment going forward (where the "weighing machine" comes into play), they have to pull an unexpected rabbit out of a hat - a la AWS with Amazon, or they have to be so dominating, almost monopolistic in multiple industries (which are highly competitive) in the future well beyond what the market is currently pricing in. Is that impossible? No - but it seems increasingly unlikely and I've already outlined the cracks starting to form in Tesla as competition heats up which is concerning for them this early in the technological revolution.Soysauceonrice wrote: ↑Tue Oct 26, 2021 1:01 amThere are a few trains of thoughts that I think deserve to be fleshed out and made clear. 1) Based on what we know about how to value a company, Tesla is certainly overvalued. I don't think anyone will have any issues with this statement. My main beef lies in how readily detractors are willing to dismiss the company because the stock is so detached from reality. Which brings me to point 2) Tesla can be both overvalued, and revolutionary at the same time.burritoLover wrote: ↑Mon Oct 25, 2021 10:41 pmI own a model 3 performance and everything you said about it I agree with (except they do have superchargers that go out of service). And I believe that EVs are the future. That’s irrelevant - the internet was undoubtedly the future during the dot com bubble and has so vastly impacted every facet of our lives over the next 20 years - even more than anyone could have imagined. Yet a company like Cisco, poised to be the “shovel seller during a gold rush”, whose fundamentals were vastly superior then as compared to Tesla now, was a terrible investment going forward.Soysauceonrice wrote: ↑Mon Oct 25, 2021 9:50 pmIt's really simple; they aren't a traditional car company and the car isn't comparable to the traditional car most are used to. It sounds a bit cliché, but you just have to own one to understand. I was never a Tesla fanboy, but once I test drove one and now after owning a Model 3 for a year, I really can't see myself going back to a traditional internal combustion engine car. The acceleration is excellent, as is the idea of never visiting a gas station again (other than for a potty break on a long road-trips). The software in the Teslas, along with the OTA updates, are years ahead of any of the traditional car makers. Their charging infrastructure is significantly more developed, and this is key, far more reliable than competitor networks such as Electrify America. When I roll up to a supercharger, I don't have to wonder if the chargers are out of order. Every single supper charger I have stopped at was working, 100% of the time. That isn't true of the competing networks.
If you believe electric cars are the future, and I do believe that they are, then Teslas have a massive lead that the GM and Fords of the world won't easily catch up to. I attribute this to the fact that Tesla is 100% all in on electrification. That focus allows them to do what they do extremely well, whereas the legacy automakers are still focusing on traditional cars and making electric cars a side-hobby.
None of this justifies the company being worth a trillion. They're almost certainly over-valued. But to compare them to the traditional auto-makers is severely missing the point.
The comparison to Apple is misguided too. Tesla had a monopoly on EVs - key word “had”. A number of EVs have been released from other manufacturers since and Tesla is poised to get knocked off their pedestal by the likes of the 22’ Lucid Air with the first over 500 mile range EV (520 mi EPA tested) and Rivian being the first EV truck for sale - beating Tesla’s much delayed Cybertruck.
Tesla’s supercharger network also is losing its advantages - other charging competitors are moving into the space and growing rapidly and even Biden wants to subsidize a massive EV charging network across the country.
Maybe their biggest asset is their self-driving technology which they could license to others. But Tesla has over-promised and under-delivered on this feature SO many times, it has become almost laughable. And the government is also not so keen on them using their customers to effectively beta test self-driving changes - which is a potential risk.
Bottom line, it doesn’t matter how promising a company’s future is if you overpay for the privilege of owning the stock. Your returns can still be crappy even if Tesla lives up to everthing you expect.
In regards to their super-chargers going out of service, I know that they do go out of service. But the key point is that I never show up to a supper-charger to be surprised that it is out of service. Why is this ? Because the software of the Tesla tells me which supper chargers are down for service. It even tells me how busy each stop is, in real time, and allows me to make an informed decision on whether I want to stop at this charger, or skip it for a less packed charger down the road. I never roll up to a supercharger finding that it doesn't work, because if a supper charger doesn't work, my car tells me so and allows me to avoid it. If you were in a Mustang Mach-E for example, your car cannot tell you this information, because Ford does not control their charging network. There's that pesky tech advantage rearing its head again. For an example of a real world test that compares the networks, MKBHD did a great video on this. The differences in the experience is night and day. https://www.youtube.com/watch?v=vXzuFprlyrw
You haven't really explained why the comparison to apple is misguided. Tesla can be Apple, or it can be Cisco. As others have pointed out, a car isn't a phone. But comments like those have the benefit of a decade and a half of foresight. If we were honest, how many of us in 2007 prophesized the seismic shift in our daily lives that the iphone and its smartphone progeny started ? You can say a car is just a car. But a phone in 2007 was also just a phone. If you asked the me of 2006, I would have no idea how my clam-shell nokia phone would revolutionize anything. All i used it for was to call my parents and text my college buddies. And just like Tesla, the iphone had its fair share of "me-too" clones (anyone remember the Blackberry Storm ?) and yet 15 years later, the iphone is still doing fine, despite the fact that it has hefty competition and that, from a features standpoint, an android phone can do everything an iphone can.
You say that it's laughable how often Tesla has overpromised and under-delivered on their FSD promises. This is a very valid critique. But what is also just as laughable to me, is how often people trot out the mantra of "just wait until the REAL car companies do electric cars!". I've heard that mantra for years, and the Tesla "Killers" have consistently underwhelmed. Don't get me wrong, I bought my Tesla because I am worried about the environment. I *want* Ford, Rivian, Lucid, GM, etc, to succeed, but the cars are either so new we can't really judge them (the Rivian Truck and the Lucid Air) or they have been disappointing (polestar). So yes, Elon has consistently under-delivered on his FSD hype, but so have the supposed Tesla killers. All have over-promised, and under-delivered.
It needs to be said again. The stock price doesn't make any sense. It is not worth 1 trillion today. But, based on what the company is doing now, I can certainly see it being worth that valuation some day. The ironic part is, the day I think the company is worth that trillion, the market might tell me it's worth 10.
Tesla is a fantastic company - but this is a thread about Tesla's valuation not the how great Tesla is. And what you pay for a stock still matters in the long-term - you can have poor returns even with companies that are highly successful.
Same arguments were made then as are being made now. The competitors will eat Tesla's lunch. The valuation metrics don't make sense. It's all about EV credits which will disappear, etc. So yea, the markets have known for a long time that the price doesn't make sense. So far, it doesn't seem that the market really cares.
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Re: TSLA: What Changed?
Pretty funny to read that from just two years ago and see that the hypothetical massive "escape velocity" upside was still off by a factor of 5.dharrythomas wrote: ↑Tue Oct 26, 2021 10:18 am Here’s a rational take on Tesla. It’s a little old but still seems to apply.
https://contrarianedge.com/why-we-dont- ... not-bears/
At this stage in software, it was not at all apparent that Microsoft was going to destroy WordPerfect, Harvard Graphics, and Lotus 123. Webcrawler and then Yahoo had a big lead in search. There were 100s of car companies before consolidation.
No one knows how this will play out. You assess probabilities (nothing approaching certainty), make your bets, and then some people who benefited from luck can claim to be geniuses.
My crystal ball is cloudy. Good luck.
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- Joined: Sat Mar 21, 2020 10:56 am
Re: TSLA: What Changed?
TSLA wasn't overvalued historically. 2021 EPS will be around $6/share, and $8/share in 2022. With a PE ratio of 40 which is quite conservative for a growth stock and barely above the S&P500 PE, we can easily justify $320+ per share, which TSLA only surpassed 1.5 years ago. People, like me, who thought TSLA was overvalued 3 years ago were simply wrong about EPS growth because the EPS today more than justifies the price 1.5+ years ago, even if we don't expect much future growth.Soysauceonrice wrote: ↑Tue Oct 26, 2021 3:34 pmTesla is overvalued. On that we agree. But saying Tesla is overvalued really is not providing anything new. People have been screaming for years about the stock's insane valuation. Based on a 2 minute google search, I found articles from as far back as 2013. https://www.forbes.com/sites/richardfin ... e4b1d129c7burritoLover wrote: ↑Tue Oct 26, 2021 6:46 amIn order for Tesla to be simply meet expectations of their current valuation, they would have to have revenue beyond the largest automotive manufacturer in the world and then their non-direct automotive business would have to be many times bigger than even that. And that is just to meet the expectations the current valuation. What happens when you simply meet your lofty valuation in the long-term? You are unlikely to outperform even an S&P 500 index fund. In order for Tesla to become a great long-term investment going forward (where the "weighing machine" comes into play), they have to pull an unexpected rabbit out of a hat - a la AWS with Amazon, or they have to be so dominating, almost monopolistic in multiple industries (which are highly competitive) in the future well beyond what the market is currently pricing in. Is that impossible? No - but it seems increasingly unlikely and I've already outlined the cracks starting to form in Tesla as competition heats up which is concerning for them this early in the technological revolution.Soysauceonrice wrote: ↑Tue Oct 26, 2021 1:01 amThere are a few trains of thoughts that I think deserve to be fleshed out and made clear. 1) Based on what we know about how to value a company, Tesla is certainly overvalued. I don't think anyone will have any issues with this statement. My main beef lies in how readily detractors are willing to dismiss the company because the stock is so detached from reality. Which brings me to point 2) Tesla can be both overvalued, and revolutionary at the same time.burritoLover wrote: ↑Mon Oct 25, 2021 10:41 pmI own a model 3 performance and everything you said about it I agree with (except they do have superchargers that go out of service). And I believe that EVs are the future. That’s irrelevant - the internet was undoubtedly the future during the dot com bubble and has so vastly impacted every facet of our lives over the next 20 years - even more than anyone could have imagined. Yet a company like Cisco, poised to be the “shovel seller during a gold rush”, whose fundamentals were vastly superior then as compared to Tesla now, was a terrible investment going forward.Soysauceonrice wrote: ↑Mon Oct 25, 2021 9:50 pm
It's really simple; they aren't a traditional car company and the car isn't comparable to the traditional car most are used to. It sounds a bit cliché, but you just have to own one to understand. I was never a Tesla fanboy, but once I test drove one and now after owning a Model 3 for a year, I really can't see myself going back to a traditional internal combustion engine car. The acceleration is excellent, as is the idea of never visiting a gas station again (other than for a potty break on a long road-trips). The software in the Teslas, along with the OTA updates, are years ahead of any of the traditional car makers. Their charging infrastructure is significantly more developed, and this is key, far more reliable than competitor networks such as Electrify America. When I roll up to a supercharger, I don't have to wonder if the chargers are out of order. Every single supper charger I have stopped at was working, 100% of the time. That isn't true of the competing networks.
If you believe electric cars are the future, and I do believe that they are, then Teslas have a massive lead that the GM and Fords of the world won't easily catch up to. I attribute this to the fact that Tesla is 100% all in on electrification. That focus allows them to do what they do extremely well, whereas the legacy automakers are still focusing on traditional cars and making electric cars a side-hobby.
None of this justifies the company being worth a trillion. They're almost certainly over-valued. But to compare them to the traditional auto-makers is severely missing the point.
The comparison to Apple is misguided too. Tesla had a monopoly on EVs - key word “had”. A number of EVs have been released from other manufacturers since and Tesla is poised to get knocked off their pedestal by the likes of the 22’ Lucid Air with the first over 500 mile range EV (520 mi EPA tested) and Rivian being the first EV truck for sale - beating Tesla’s much delayed Cybertruck.
Tesla’s supercharger network also is losing its advantages - other charging competitors are moving into the space and growing rapidly and even Biden wants to subsidize a massive EV charging network across the country.
Maybe their biggest asset is their self-driving technology which they could license to others. But Tesla has over-promised and under-delivered on this feature SO many times, it has become almost laughable. And the government is also not so keen on them using their customers to effectively beta test self-driving changes - which is a potential risk.
Bottom line, it doesn’t matter how promising a company’s future is if you overpay for the privilege of owning the stock. Your returns can still be crappy even if Tesla lives up to everthing you expect.
In regards to their super-chargers going out of service, I know that they do go out of service. But the key point is that I never show up to a supper-charger to be surprised that it is out of service. Why is this ? Because the software of the Tesla tells me which supper chargers are down for service. It even tells me how busy each stop is, in real time, and allows me to make an informed decision on whether I want to stop at this charger, or skip it for a less packed charger down the road. I never roll up to a supercharger finding that it doesn't work, because if a supper charger doesn't work, my car tells me so and allows me to avoid it. If you were in a Mustang Mach-E for example, your car cannot tell you this information, because Ford does not control their charging network. There's that pesky tech advantage rearing its head again. For an example of a real world test that compares the networks, MKBHD did a great video on this. The differences in the experience is night and day. https://www.youtube.com/watch?v=vXzuFprlyrw
You haven't really explained why the comparison to apple is misguided. Tesla can be Apple, or it can be Cisco. As others have pointed out, a car isn't a phone. But comments like those have the benefit of a decade and a half of foresight. If we were honest, how many of us in 2007 prophesized the seismic shift in our daily lives that the iphone and its smartphone progeny started ? You can say a car is just a car. But a phone in 2007 was also just a phone. If you asked the me of 2006, I would have no idea how my clam-shell nokia phone would revolutionize anything. All i used it for was to call my parents and text my college buddies. And just like Tesla, the iphone had its fair share of "me-too" clones (anyone remember the Blackberry Storm ?) and yet 15 years later, the iphone is still doing fine, despite the fact that it has hefty competition and that, from a features standpoint, an android phone can do everything an iphone can.
You say that it's laughable how often Tesla has overpromised and under-delivered on their FSD promises. This is a very valid critique. But what is also just as laughable to me, is how often people trot out the mantra of "just wait until the REAL car companies do electric cars!". I've heard that mantra for years, and the Tesla "Killers" have consistently underwhelmed. Don't get me wrong, I bought my Tesla because I am worried about the environment. I *want* Ford, Rivian, Lucid, GM, etc, to succeed, but the cars are either so new we can't really judge them (the Rivian Truck and the Lucid Air) or they have been disappointing (polestar). So yes, Elon has consistently under-delivered on his FSD hype, but so have the supposed Tesla killers. All have over-promised, and under-delivered.
It needs to be said again. The stock price doesn't make any sense. It is not worth 1 trillion today. But, based on what the company is doing now, I can certainly see it being worth that valuation some day. The ironic part is, the day I think the company is worth that trillion, the market might tell me it's worth 10.
Tesla is a fantastic company - but this is a thread about Tesla's valuation not the how great Tesla is. And what you pay for a stock still matters in the long-term - you can have poor returns even with companies that are highly successful.
Same arguments were made then as are being made now. The competitors will eat Tesla's lunch. The valuation metrics don't make sense. It's all about EV credits which will disappear, etc. So yea, the markets have known for a long time that the price doesn't make sense. So far, it doesn't seem that the market really cares.
Now has TSLA been overvalued for the last 1.5 years, or more specifically, is it overvalued today? I would tend to agree, but it's just a guess. The current valuation would suggest that within some reasonable time horizon TSLA will have EPS of $30+ adjusted for inflation to present dollars. Given the EPS is only $6 in 2021 and expected to be $8 in 2022, I don't see TSLA getting to $30 EPS in present dollars anytime soon. But I don't really know. Back when TSLA was losing money or when it turned its first profit, I did not see it earning $6-8 per share anytime soon, but here we are. It would be arrogant for me to claim it was overvalued 1.5+ years ago ... I was just wrong about the phenomenal EPS growth. Of course the valuation today is based on even more phenomenal EPS growth..... and that's what's questionable to me.
Re: TSLA: What Changed?
I stand by my words... "irrational exuberance."
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Re: TSLA: What Changed?
I hope you meant that to be funny.
Re: TSLA: What Changed?
Thought I had escaped the Tesla stock fanboys by joining this community. Alas, here we are.
Re: TSLA: What Changed?
People are complicated and some can hold two (sometimes more!) ideas in their minds at the same time. If more of the world understood this, we’d all be better off.
Investing isn’t a team sport, you do you, others will do them. Odds are everyone will make out just fine.
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Re: TSLA: What Changed?
Mr. Bogle said 5% of your AA in funny money is okay. If one chose to allocate 5% to B&H TSLA, that allocation has likely ballooned. In other words, they can be Tesla fanpeople and Bogleheads at the same time.
Re: TSLA: What Changed?
Marseille07 wrote: ↑Tue Oct 26, 2021 11:59 pmMr. Bogle said 5% of your AA in funny money is okay. If one chose to allocate 5% to B&H TSLA, that allocation has likely ballooned. In other words, they can be Tesla fanpeople and Bogleheads at the same time.
Fair enough. Guess I should have grumbled something more so along the lines of "irrational exuberance".mrspock wrote: ↑Tue Oct 26, 2021 11:53 pmPeople are complicated and some can hold two (sometimes more!) ideas in their minds at the same time. If more of the world understood this, we’d all be better off.
Investing isn’t a team sport, you do you, others will do them. Odds are everyone will make out just fine.
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Re: TSLA: What Changed?
90%+ of the regular readers of this Forum would never own an individual stock (other than employment related compensation).
Some because they are smart. Others because we have the advantage of hard won experience (ouch).
Tesla? Well. I think it's a bubble, entirely reminiscent of 2000 (I liked the analogy to Cisco). But it could well be another Apple. Only time will tell
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Re: TSLA: What Changed?
Actually depending on how you define "winning" and "losing" more than half of investors will underperform (due to expense ratio drag).
Certainly it is true of almost any financial trade that there is a winner and a loser to that transaction.
We can all "win" at least in theory by holding a broadly diversified portfolio of financial assets and exploit high long term real returns*. But even there, there's somebody on the other side losing. That happens to be capitalism, but of course it was also true of all the predecessor systems as well.
* long term is a killer. 10 years is almost certainly not enough. 30 years may not be enough - we have c 6x30 year independent periods in the data only by stretching the meaning of "data" and ignoring the places where things manifestly went very wrong (Russia etc).
We do know the yields on government debt back to the Middle Ages. But the issuers then were very prone to default. Longest continuous data would probably be Dutch (especially the VOC - Dutch East India Company) and British (Bank of England began to underwrite British govt gilts (bonds) in 1696). There is housing returns data back to Paris in the 1200s, and Netherlands, again, from 1628 and the Herengracht Canal in Amsterdam.
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Re: TSLA: What Changed?
There's a high correlation between someone searching for something and them buying it. So that's Google's pitch to advertisers. The internet of intention it has been called.Walkure wrote: ↑Tue Oct 26, 2021 11:33 amThis to me is the single greatest thing about Tesla. I can't stand the fact that half the other top ten holdings in VTI have business models that essentially depend on monetizing their users' attention spans. And I can't for the life of me understand why the other 3,000 companies down the list would pay a single red cent to advertise on them.chitownguy wrote: ↑Tue Oct 26, 2021 9:58 am Tesla has not once placed an advertisement for its product in a tv ad, a print ad, a digital ad or a billboard. Think about that for a second.
There's an even higher correlation between someone searching for something *on the Amazon platform* and buying it. Search is an increasing proportion of Amazon's revenues -- to the detriment of the platform, in my view, but there you are.
"Half my marketing budget is wasted. But I have no idea which half" -- attributed to a Chairman of P&G I think in the 1960s?
Turns out people trust what they are shown on Facebook, forwarded by friends, much more than what they read randomly on the web. So you see where FB gets its digital advertising traction from.
Of course Apple is a semi-closed user group. And it takes 30% of any App's revenues. So if you want people to use your product or service, you will probably wind up with an Apple app - because that's how people access many goods and services these days. In my house's case, takeaway food for example.
If you want to reach large numbers of consumers you have a problem. TV is narrowcast these days - something with a big audience like the Superbowl is very rare (and incredibly expensive ad time). The internet by contrast is tailor made for narrowcasting - if you want to reach knitters for example. Streaming further fragments target markets. And people fast forward ads.
We all know what has happened to newspapers and magazines. OK there's still The New Yorker, if you want to reach that audience of people who wished they lived in either Park Slope in Brooklyn (that's more New York magazine?) or the Upper East Side. (There is no real London equivalent, although the Financial Times How to Spend It colour supplement on Saturdays is worth the read for the laugh at the lifestyles of international cosmopolitani ).
Microsoft doesn't have significant advertising revenues, as far as I know.
Re: TSLA: What Changed?
Musk did not create or found Tesla. He's been pretty open about Tesla just being an investment towards his real vision which is SpaceX. So a more appropriate comparison to Mr. Ford and his Model T would be to Mr. Musk and his rockets.brad.clarkston wrote: ↑Tue Oct 26, 2021 12:49 amFord is catching up *if* the EV 150 delivers 100% on the construction and non-construction buyers next year.burritoLover wrote: ↑Mon Oct 25, 2021 9:01 pmI see other traditional automakers and new EV-only automakers rapidly catching up. Their “full self driving” is wrought with issues and set backs. Numerous quality issues. And their non-automotive business is still unimpressive. Future prospects look muted with a lot more competition crowding their space.
The non-automakers in the market does not have a single vehicle in production and will not for another 5-10 years and the best ones may run out of cash next year.
The only other automakers with the money and basic starter battery tech is VW and Toyota. As much as I love my Camery and Toyota's quality repair shops they bet on the wrong horse (hybrid) and are a decade behind VW.
What the blind naysayers do not understand is Tesla is exactly the disruptive company that Mr. Ford started with the Model T. Also just like Mr. Ford, Mr. Musk warts and all has a vision that started long before he created the car company.
Most people forget that the Model T was not that good of a car, it lagged behind the EV's and ICE competitors at the start but Mr. Ford did not just build a car he created several new ways of manufacturing and reusing every little part he had.
Mr. Musk on the other hand built a battery company then bought three other battery companies. Built a manufacturing plant for the batteries and designed a car that before launching Tesla. And then surprisingly talked everyone into giving him money before building each car line, I still don't get that one.
The Tesla has so many massive feature jumps (battery, breaks, info-center, one sheet of glass front to back,etc) that all anyone can call fowl on is the auto-pilot. You never hear about anything but the auto-pilot it's becoming the "but think of the children" line.
Taking care of tomorrow while enjoying today.
- burritoLover
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Re: TSLA: What Changed?
Tesla is not the first nor the last company that doesn't advertise. Costco is a larger one that comes to mind. Doesn't mean Tesla (or Costco) are great investments based on that fact alone.
Re: TSLA: What Changed?
But if someone is already searching for something, they were probably going to buy it anyway. Maybe the competitor's product instead of yours, but that's zero-sum advertising. Spending a dollar to take a sale away from the guy who only spent 50 cents to be the second link in the search results is an economic arms race, and it's a distortion of the equilibrium that would otherwise exist between products on their merits. The only advertising that "benefits" society is that which increases the aggregate addressable market for all consumption net of any substitution effects. Whether the proceeds of that advertising supports goods which would otherwise be uneconomic (journalism, free email accounts, etc.) is a second-order optimization, though the purveyors of advertising are of course happy to exploit these feel-good storylines to sell the advertising as "worth it" in the first place.Valuethinker wrote: ↑Wed Oct 27, 2021 10:13 amThere's a high correlation between someone searching for something and them buying it. So that's Google's pitch to advertisers. The internet of intention it has been called.Walkure wrote: ↑Tue Oct 26, 2021 11:33 amThis to me is the single greatest thing about Tesla. I can't stand the fact that half the other top ten holdings in VTI have business models that essentially depend on monetizing their users' attention spans. And I can't for the life of me understand why the other 3,000 companies down the list would pay a single red cent to advertise on them.chitownguy wrote: ↑Tue Oct 26, 2021 9:58 am Tesla has not once placed an advertisement for its product in a tv ad, a print ad, a digital ad or a billboard. Think about that for a second.
Re: TSLA: What Changed?
Say a 55 year old investor has 10m and another 28 year old has 100k. The one who sold TSLA is the guy with 10m about 5 years ago, and sold a 10k position to the fellow with 100k. Instead the guy with 10m puts it in an s&p 500 index fund. Or maybe he sold 3m worth to some mix of 300 young people at 10k per position (of course it doesn’t work this way… but I’m going with your personalized winners/losers framing).Valuethinker wrote: ↑Wed Oct 27, 2021 10:02 amActually depending on how you define "winning" and "losing" more than half of investors will underperform (due to expense ratio drag).
Certainly it is true of almost any financial trade that there is a winner and a loser to that transaction.
We can all "win" at least in theory by holding a broadly diversified portfolio of financial assets and exploit high long term real returns*. But even there, there's somebody on the other side losing. That happens to be capitalism, but of course it was also true of all the predecessor systems as well.
* long term is a killer. 10 years is almost certainly not enough. 30 years may not be enough - we have c 6x30 year independent periods in the data only by stretching the meaning of "data" and ignoring the places where things manifestly went very wrong (Russia etc).
We do know the yields on government debt back to the Middle Ages. But the issuers then were very prone to default. Longest continuous data would probably be Dutch (especially the VOC - Dutch East India Company) and British (Bank of England began to underwrite British govt gilts (bonds) in 1696). There is housing returns data back to Paris in the 1200s, and Netherlands, again, from 1628 and the Herengracht Canal in Amsterdam.
My point is… they all made out ok. Nobody is eating cat food here. They both made money, the guy who made less simply needed it less, and it was the right call for both. Financial decisions are more than just who ends up with the most money, it’s also about who needs to take risk for example. In the example above, the guy with $10m no longer needs to take risk… so rightly doesn’t. For those who might be young and have 100k, it’s very different calculus.
As for your historical example, you are over thinking this.
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Re: TSLA: What Changed?
TSLA's 12 month trailing PE ratio is now 338. GM's is 6.4 and bear in mind that GM plans is to aggressively switch to EV going forward. Which is the better investment for the future? I admit up front that I don't know. I have consistently been wary of TSLA for years due to valuation concerns, the same way I was with AMZN selling at astronomical PEs. Personally I believe the price action in names like TSLA and AMZN arise from a combination of two rather fickle drivers. First, MOM investors (performance chasing) which when persistent eventually leads to FOMO (fear of missing out) and draws in non-MOM investors. Second, very lofty expectations for TSLA's transformative innovation capacity which is expected to revolutionize the transportation and the energy industries and dominate them in the future. The positive price action may continue unabated in the future but both of these drivers can disappear rather quickly if considerable and adept competition arises to TSLA's business model.
My skepticism on TSLA and AMZN has not been rewarded. Instead I paid an opportunity cost for missing the TSLA boat just as I did with AMZN. My skepticism still persists for TSLA and other darlings selling at outrageous PE levels. I am comfortable at present with market weight in these darling names in TSM. TSM has a lot of exposure in blend and value to counterbalance the growth darlings in case growth falls from its lofty perches. TSM is as far as I will go with them because I still harbor bad memories from the tech collapse of 2000-3. At that time I had been a big winner for a long time in tech. My portfolio was 100% equity, no bonds, and 100% of my equity was in tech. I literally lost millions quickly which created a deep mental scar that lingers. I do not believe we're in the same kind of tech/growth bubble now that we were in in 1999. I also believe that names like TSLA carry considerable risk going forward as a concentrated investment above market weight. TSLA has a great business model and it makes great highly innovative products. That does not guarantee that it's a great stock for the future. When your PE is astronomical and competing deep pocket companies that compete in your market space are multiplying, your future may not be as happy as your past. Valuations have been lousy predictors of future returns for the last 15 years, but I suspect that this trend will not persist forever.
Garland Whizzer
My skepticism on TSLA and AMZN has not been rewarded. Instead I paid an opportunity cost for missing the TSLA boat just as I did with AMZN. My skepticism still persists for TSLA and other darlings selling at outrageous PE levels. I am comfortable at present with market weight in these darling names in TSM. TSM has a lot of exposure in blend and value to counterbalance the growth darlings in case growth falls from its lofty perches. TSM is as far as I will go with them because I still harbor bad memories from the tech collapse of 2000-3. At that time I had been a big winner for a long time in tech. My portfolio was 100% equity, no bonds, and 100% of my equity was in tech. I literally lost millions quickly which created a deep mental scar that lingers. I do not believe we're in the same kind of tech/growth bubble now that we were in in 1999. I also believe that names like TSLA carry considerable risk going forward as a concentrated investment above market weight. TSLA has a great business model and it makes great highly innovative products. That does not guarantee that it's a great stock for the future. When your PE is astronomical and competing deep pocket companies that compete in your market space are multiplying, your future may not be as happy as your past. Valuations have been lousy predictors of future returns for the last 15 years, but I suspect that this trend will not persist forever.
Garland Whizzer
- firebirdparts
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Re: TSLA: What Changed?
Hey, maybe it'll be $100 Trillion pretty soon.stocknoob4111 wrote: ↑Mon Oct 25, 2021 2:36 pm Have never seen a stock like this and they are saying this is just the beginning for this stock.
This time is the same
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Re: TSLA: What Changed?
I saw people wiped out in 2000-03. Quite badly hurt. Some never recovered (financially or mentally).mrspock wrote: ↑Wed Oct 27, 2021 11:12 amSay a 55 year old investor has 10m and another 28 year old has 100k. The one who sold TSLA is the guy with 10m about 5 years ago, and sold a 10k position to the fellow with 100k. Instead the guy with 10m puts it in an s&p 500 index fund. Or maybe he sold 3m worth to some mix of 300 young people at 10k per position (of course it doesn’t work this way… but I’m going with your personalized winners/losers framing).Valuethinker wrote: ↑Wed Oct 27, 2021 10:02 amActually depending on how you define "winning" and "losing" more than half of investors will underperform (due to expense ratio drag).
Certainly it is true of almost any financial trade that there is a winner and a loser to that transaction.
We can all "win" at least in theory by holding a broadly diversified portfolio of financial assets and exploit high long term real returns*. But even there, there's somebody on the other side losing. That happens to be capitalism, but of course it was also true of all the predecessor systems as well.
* long term is a killer. 10 years is almost certainly not enough. 30 years may not be enough - we have c 6x30 year independent periods in the data only by stretching the meaning of "data" and ignoring the places where things manifestly went very wrong (Russia etc).
We do know the yields on government debt back to the Middle Ages. But the issuers then were very prone to default. Longest continuous data would probably be Dutch (especially the VOC - Dutch East India Company) and British (Bank of England began to underwrite British govt gilts (bonds) in 1696). There is housing returns data back to Paris in the 1200s, and Netherlands, again, from 1628 and the Herengracht Canal in Amsterdam.
My point is… they all made out ok. Nobody is eating cat food here. They both made money, the guy who made less simply needed it less, and it was the right call for both. Financial decisions are more than just who ends up with the most money, it’s also about who needs to take risk for example. In the example above, the guy with $10m no longer needs to take risk… so rightly doesn’t. For those who might be young and have 100k, it’s very different calculus.
As for your historical example, you are over thinking this.
You watch. It will happen again.
The guy long Tesla and the guy short Tesla. One of them will win.
There's no point considering investing - anything about investing - without considering the long term & the supporting data. The long term is, after all, the sum of a nearly infinite number of short term punts (think Flash Traders).
Re: TSLA: What Changed?
Tesla fanboy here. Both as to vehicles and stock. But I have been consistent since 2012, looking forward to trading my Chevy pickup for Tesla pickup in a year or two. And will probably never sell stock position to avoid 7 figure capital gains tax.Callisto wrote: ↑Tue Feb 02, 2021 4:25 pm Nowadays, you've got electric cars everywhere. Its not a thing people will come and talk to you about anymore, because they are so familiar and how much more educated people are. Tesla has gone mass market, rather than being a fringe non-luxury car at luxury car price company.
I think people see where the wind's blowing.
The comments here remind me of refrain in the Peter Frampton song, “cause I can’t see which way the wind is blowing”.
I think Callisto said it right 6 months ago as to the wind direction.
Good luck.
Re: TSLA: What Changed?
Musk has repeatedly said that Tesla's long term advantage is in manufacturing. The rate that Tesla can build a factory is unparalleled. This will become very important as SpaceX expands into the space industry. Tesla will be a manufacturing partner, producing space vehicles, energy production and storage, robots to build Mars infrastructure, and who knows what else down the line.srt7 wrote: ↑Wed Oct 27, 2021 10:22 amMusk did not create or found Tesla. He's been pretty open about Tesla just being an investment towards his real vision which is SpaceX. So a more appropriate comparison to Mr. Ford and his Model T would be to Mr. Musk and his rockets.brad.clarkston wrote: ↑Tue Oct 26, 2021 12:49 amFord is catching up *if* the EV 150 delivers 100% on the construction and non-construction buyers next year.burritoLover wrote: ↑Mon Oct 25, 2021 9:01 pmI see other traditional automakers and new EV-only automakers rapidly catching up. Their “full self driving” is wrought with issues and set backs. Numerous quality issues. And their non-automotive business is still unimpressive. Future prospects look muted with a lot more competition crowding their space.
The non-automakers in the market does not have a single vehicle in production and will not for another 5-10 years and the best ones may run out of cash next year.
The only other automakers with the money and basic starter battery tech is VW and Toyota. As much as I love my Camery and Toyota's quality repair shops they bet on the wrong horse (hybrid) and are a decade behind VW.
What the blind naysayers do not understand is Tesla is exactly the disruptive company that Mr. Ford started with the Model T. Also just like Mr. Ford, Mr. Musk warts and all has a vision that started long before he created the car company.
Most people forget that the Model T was not that good of a car, it lagged behind the EV's and ICE competitors at the start but Mr. Ford did not just build a car he created several new ways of manufacturing and reusing every little part he had.
Mr. Musk on the other hand built a battery company then bought three other battery companies. Built a manufacturing plant for the batteries and designed a car that before launching Tesla. And then surprisingly talked everyone into giving him money before building each car line, I still don't get that one.
The Tesla has so many massive feature jumps (battery, breaks, info-center, one sheet of glass front to back,etc) that all anyone can call fowl on is the auto-pilot. You never hear about anything but the auto-pilot it's becoming the "but think of the children" line.
It is not a coincidence that Tesla is growing so rapidly during a time when other car manufacturers are struggling with global supply issues. Tesla is simply faster through vertical integration and software capabilities (i.e. writing software on the fly in order to use microchips from different suppliers). This is simply an example of something Ford or GM or Volkswagen cannot and will not be able to do. The top engineers in the world want to work for Tesla and SpaceX.
If you do not know much about Tesla, you may still consider them a car company. Is Amazon in the business of selling books? Does Apple simply sell phones?
I have over 50% of investments in Tesla, so obviously I do a lot of research on the company. The reality is that Tesla is hard to label as a certain type of company. In my opinion they are a leader in AI, and are gaining fast in clean energy solutions. Don't sleep on the importance of DOJO. If you do not know what this is, I would recommend watching Tesla's AI day to find out. Also, if you do not know what DOJO is, your opinion does not matter much on the subject of Tesla as an investment.
I started investing in Tesla in 2015 when I researched the battery factory they were building in Nevada. It had nothing to do with car production (pre-model 3), but more an understanding of Musk's goal to move the world into a sustainable energy future as fast as possible. In the last 6 years I have become even more bullish and excited with Tesla's future. If there was another investment opportunity with this much stability and growth opportunities, I would move my money. I have not found that investment yet, and I am becoming more comfortable every week with my investment risk factor.
1 year ago most people did not realize the world was rapidly moving towards electric vehicles. Other car companies like Toyota (world's largest car company) were saying electric cars would not take off. Now, 1 year later, it is evident that electric is the future. This happened because of Tesla and the will of Musk to usher in this new global energy economy.
So what is Tesla?
I'm not sure but with the ability to produce hardware and software at ludicrous speed, it will be tough for others to follow in whatever endeavor Tesla moves toward.