To be clear, I am not a Tesla bull, I’m also not a Tesla bear. I LITERALLY don’t ever think about Tesla. I just don’t care about it.
BUT
As the article suggests, I am hoping someone here can explain to me, leaving out all politics or personal opinions, how so many big money investors and strategists just KEEP giving Tesla a pass and betting on Musk?
I am serious here, I’m trying to see if there is something I’m missing.
The BIGGEST two factors I keep hearing from Tesla bulls are:
1: Autonomous driving and Robo-taxi
And Tesla is failing repeatedly…stubbornly sticking with camera only tech which, in my opinion, will never happen in my lifetime.
2: Robotics- these people keep saying that Tesla is dominating robotics and are the only name in the game…
Except from my research there are SOOOOO many companies in this space. Both in humanoid robotics and non-bipedal robotics. SOOOO many doing it better and for longer.
And with Tesla’s poor production quality and poor track record of delivering on promises…..
How are these people just not either lying to us, or to themselves, or both.
Don’t wanna be political, strictly from an analysis and investing standpoint
Lease explain to me (ELI5-ish) the apparent bull thesis around Tesla
byu/BanditoBoom ininvesting
Posted by BanditoBoom
21 Comments
The stock price isn’t really about current fundamentals anymore, it’s basically become a bet on whether Musk can pull off another moonshot like he did with EVs and SpaceX
Most Tesla bulls I know are essentially gambling that even if FSD and robotics are overhyped, Tesla only needs to hit on one of their side bets to justify the current valuation
For the facts you mentioned above, particularly there’s already literally dozens of robot manufacturers already in Asia and NVDA makes an autonomous stack for every car company, I have no earthly idea why people think TSLA is worth 100’s of times earnings. When they did EV they were truly the only or main game in town, none of these other moonshots, if successful, won’t be met with serious competition.
Robotaxi – Tesla is way out front here except for in a few cities. If you haven’t ride in a Tesla with FSD then get try out one from the local Tesla dealership. It has driven people across the country at this point. We are not squabbling about individual preferences at this point.
Robotics- Tesla is much further along then most of the competition. To mass deploy robots you need to be able to do several things at scale including: building components like motors and gears at scale (the only one that can do this), having chips for the brain at scale (the only one that can do this); have extremely advanced AI at scale that is cheaply deployed (has this through Xai), has the ability and flexibility to manufacture and hem at scale (again the only one that can do this) and finally has the ability to do long term real use case work (not the only player here). So yes almost everyone else fails this.
Energy- Teslas sneaky capability is its battery building capability for the energy sector. It will be larger than the auto business.
Crime pays for the next 3 years, end of thesis
I think it’s cute that you think stocks are a reflection of investor sentiment and not liquidity pools easily manipulated via the options market.
Crime. Any expectation of Tesla is just that Musk will go to his on and off again girlfriend Donald and raid the US.
FSD 14.2.2.2 is amazing and works incredibly well.
You’re in luck, the explanation only works if you’re 5: “Elon Musk rules! Total genius! Mars!”
I am become meme, literally.
Tesla is several call options on futuristic technologies covered with a trench coat. Then, awkwardly, car sales, energy storage, charging network. These low p/e sub-businesses contribute probably $100 max to the share price. The rest of the share price can be attributed expected future profits, although the probability of success is highly contested.
If Tesla can figure out vison only self-driving, they’ll have 4 million self-driving cars in the next year, dwarfing the competition and hoovering up money.
The rest of the moonshots I think are crap. They don’t have more humanoid robot manufacturing capacity than competition nor any meaningful leadership in the space.
“I LITERALLY never think about tesla” “here is my analysis on tesla!” I stopped reading at this contradiction.
My buddy is a huge TSLA fan. He can’t stop talking about it and he’s been yapping about it for at least 5 years now.
Every time I see him, his bull thesis is always different. Years ago, it was FSD driving coast to coast and Teslas making money while their owners slept. Then it was the 4680 battery. Then, it was Elon talking about building capacity to make 20M Teslas a year. Then, it was the huge CyberTruck preorders. Then it was Gigacasting. Then, it was xAI (even though it’s a separate company). It’s always something different. Lately, he’s yapping non-stop about FSD and robotaxis again, and how the $1T pay package will push Elon to do incredible things to make TSLA worth $8.5T….
I don’t own TSLA and I don’t hate it. Personally, I think the stock is powered by stories.
A lot of fanboys really want to believe and they will buy the stock on the next big bull story. Investors, sensing that the fanboys will do so, also jump on it to play along. Then it corrects, and the next story will come to push it up again in a self-fulfilling validation “Look, I told you so”. Rinse and repeat.
Stocks are usually connected to their economic fundamentals but **there is no natural law that says they must**.
Ultimately, buyers and sellers act on their beliefs about the future and the stock prices will reflect the wisdom of the crowd. Sometimes, stock can deviate from fundamentals for a very long time (deep value stocks as well as overvalued stocks) because the prevailing beliefs don’t change…
Elon Musk has a history of basically taking the proceeds from his successful businesses and betting big on a few moonshot ideas (and himself).
Right now I think the bull case is:
1. The charging network
2. Robotaxis and FSD
3. Chinese EVs can’t be sold in US. So Tesla still has a bit of a moat there against BYD.
4. The humanoid robots
So there are a few things there that, if they come off will give Tesla a massive advantage in the future. Most of those won’t, but if even one does then Tesla is in a good position.
I’m not arguing whether this is true or not, just stating the bull case for Tesla bulls.
I won’t talk about risks sense you can just read every other comment. I’m explaining the bull THESIS and not saying what I personally think, the bull thesis revolves around scalability.
If you make a $500,000 or $2m robot, of course it will perform better than a $30K robot. Teslas goal is to make robots that are good enough and with a scalable business model. Your market and use case for a very expensive piece of machinery is very different than an affordable one.
Autonomous driving- the theory is that camera only is cheaper to build, meaning a bigger market and/or higher margins than competitors. Tesla is also supposedly FOR THE THESIS on track to be the first to crack real world driving, meaning it won’t need a map. Their AI is, supposedly, going to be capable of driving under real world conditions faster than competitors. The scalability comes from also being able to lease that software out with less cost by having other OEM’s just add some cameras and upgrade their computer.
The THESIS is that robots will become a household staple or replace people in labor roles. The THESIS is that autonomous driving will be such a huge lifestyle and technology change that they’ll get huge amounts of the markets.
Semi & charging: the power grid simply isn’t built for electric semi trucks. Tesla is building its own infrastructure. Couple that with autonomous driving, and if successful you just revolutionized the land shipping world. Electric storage is a high margins than product for Tesla and the thought is their scalability is going to outpace competitors.
The entire thesis revolves around scalability and accessibility to the technology. The thesis is that they will be years ahead in entering the general markets in all of these categories and get a head start advantage.
The credibility people feel is that Tesla basically successfully made EV’s mainstream in western markets (love for hate it) when everybody was saying it wasn’t possible in 2015. Charging networks, mass produced EV’s- all of these things were viewed as 10-20 years out in 2015 but Tesla did it way sooner. Tesla has yet to fail at generating insane market value for their stock, so for investors it’s a high risk high reward investment.
Edit: forgot the most important point: Elon. Love or hate the guy he’s a visionary. He looks 20 years out when others look 5. He’s successfully been CEO of 2 major companies as they went from startups to trillion (or almost trillion) dollar businesses. Is that bad or good for business? Who knows but Tesla stock shows how investors feel about the guy.
Not as an investor, but as a relatively new Tesla customer for the past year and half, I find the model Y to be very nice. The FSD technology, while not perfect yet, is quite amazing. It literally drives me from home to destination and back, seldomly needing any intervention. The future looks brite for that product. Then there is the other products coming, the robots, etc.
Aside from all the hype and pro/against news and social media, big picture look at what Tesla has delivered so far. I mean valuations are maybe a bit crazy when comparing to “big auto” but they are not a “car company” but a technology company.
All tech is a bit crazy these days in valuations.
> explain to me (ELI5-ish) the apparent bull thesis around Tesla
People are dumb.
1. Tesla is 1 step away from launching robotaxi without observers. They have at least 7 vehicles now driving in Austin without an observer but no paying passenger. Anyone can buy or test drive a Tesla to see if self driving with cameras work. Can’t it will never happen, because is it currently happening.
2. robotics. There are a couple of companies testing humanoid robots but that is all. Maybe can count Amazon, but they don’t have hands. They can only move things around. Tesla is currently working on their Optimus production line, something most every other robot maker don’t have, they build them by hand.
3. Energy growth, auto sales, superchargers, services, lithium refining, battery production, semi production….
Elon has been to optimistic on timelines and the only thing Tesla has failed on has been solar roofs. But that happens with most companies when they are working on something very hard to do.
Here is the advantage Tesla has over everyone else in robotaxi or robots. $42 billion in cash and no debt making $2 billion FCF a quarter. Everyone else has to spend a lot of time promoting their product, making promo videos to raise money and limit how fast they can spend money.
You may not find much for bullish thesis around Tesla on reddit, you will find many haters here, try searching for videos on youtube and honestly consider what Tesla bulls are saying. Bulls spend a lot more time researching Tesla then bears do.
Preface – i will hand it to Elon, he was a great hype man & did a great job recognizing the need for a charging network in the US.
I think people are equating Elon’s ancillary businesses with TSLA. TSLA has been overpriced for years, and I strictly sell TSLA options to gather up that IV.
TSLA’s cars are Sh*t. The more I travel around the world, the fewer TSLAs I see.. compared to BYD, EU makers. Especially BYD. I recently rode in one, and I would say its quality is easily 5x greater than TSLA. They’ve also addressed Automotive Battery’s performance in cold temps.. like the Nordic countries.
I think it’s a matter of time before the rest of the everyone figures out that TSLAs are crap & market share will dive
It’s very simple really.
The car and energy business is worth max $100 a share, maybe less.
People are betting that FSD and robotaxi will work and be huge and be hard to copy, almost all the current value is in that.
The current system is really close. Now it may be that it’s missing fundamental architectural pieces to get to a high enough safety standard to really roll out. However the “they’ve been promising it since 2017 and not delivered” narrative, while true, is misleading. V14 is light years ahead of where it was a couple of years ago and if progress continues at that rate then it’ll soon be released widely.
And people think that if optimus works then Tesla will have a manufacturing advantage. The fleet of robots may well have network effect, as in each robot you train is training all the others so whoever has the most robots has the smartest best trained robots which then creates more sales.
I’d also say don’t downvote me if you think this won’t happen, loads of people think this won’t happen and that’s fine. I’m just answering OPs question, that’s what the bulls think and why the shareprice is so stubbornly high based on falling car sales and weak margins.
This post is like chum to all the people sneeding about Tesla! The bull case is the Bogdanoffs press the pump it button for Tesla to harvest pink Wojaks!
The bull thesis is that everyone who has shorted Tesla has lost big so there aren’t many bears left willing to short it and shareholders have high conviction so going short on Tesla is risky regardless of the company’s performance and future.