Is Tesla a good investment?

[dividendman]

Lol, I think there would have been quite the hue and cry if tesla missed earnings.

But beat estimates handily?

crickets.

I'm not sure "crickets" is right... the stock went up about 20% on the earnings results.

[mistymoney]

Lol, I think there would have been quite the hue and cry if tesla missed earnings.

But beat estimates handily?

crickets.

I'm not sure "crickets" is right... the stock went up about 20% on the earnings results.

25% if you count today too....

crickets was here - not the market.

[MustacheAndaHalf]

While I'm not much of a Tesla bull or bear, I'll try to play devil's advocate.

One week of +22% is less impressive when $TSLA performance is placed in context:
+8% YTD, versus +23% for the S&P 500
-8%/year for the past 3 years, versus +10%/year for the S&P 500.

It's a good sign that Tesla can beat expectations while competing in China.  But prior quarters and years tell a different story, so one good quarter needs to be repeated before it matters.

[ColoradoTribe]

While I'm not much of a Tesla bull or bear, I'll try to play devil's advocate.

One week of +22% is less impressive when $TSLA performance is placed in context:
+8% YTD, versus +23% for the S&P 500
-8%/year for the past 3 years, versus +10%/year for the S&P 500.

It's a good sign that Tesla can beat expectations while competing in China.  But prior quarters and years tell a different story, so one good quarter needs to be repeated before it matters.

For further context:

TSLA - 5 YR - 1,130%
S&P 500 - 5 YR - 92%

Since this is the "investor" forum, a 5-year investment timeframe seems the most appropriate to me.

Tesla is between revenue growth waves. One could get better returns in the interim, but risk missing days like we had this past week.

[Telecaster]

25% if you count today too....

crickets was here - not the market.

And the stock is where it was a month ago...

[FINate]

You haven't heard from me because I haven't logged in for a while. I do have a life outside MMM :)

They beat on margins but missed on revenue. Musk says COGS has decreased, which is great. But it's also clear that regulatory credits played a significant role in the results.

Overall, a solid quarter for Tesla which I give them props for. But let's be clear, the dominant factors here are car stuff. Tesla remains first and foremost a car company. A car company with PE in the 70s. The robotaxi reveal is pretty much what I expected, don't think there's much here in the way of future growth potential.

So while TSLA had a good quarter, this thread is asking if it's a good investment going forward. My thesis remains unchanged: There's nothing on the horizon to justify current multiples, and significant headwinds remain with competitive pressure and political/brand downsides increasing.

[NorCal]

I admittedly haven’t gone into the quarter in detail, but I did see the headline that they’re guiding to an additional 500k units for 2025.

If that’s a real number and not just a figment of Elon’s imagination, then I’ll admit to being wrong about the growth story. An extra 500k car sales would be huge, even if margins slide a bit.

Don’t forget that Tesla is a global business. Elon’s antics clearly hurt sales in CA. I’m not convinced the rest of the world cares.

[Telecaster]

I'm pretty skeptical about the 500,000 unit increase projection.   That's almost 30% increase over this year.   But Tesla still has pretty good margins for a car company.   They have room to cut prices.   

[waltworks]

If they were going to release a Model 2 type car, I could believe it. Otherwise, where is the demand going to come from? They can easily make more cars right now, they just aren't selling them fast enough.

It would take a hell of a price cut to get sales up there but maybe that's in the cards. Who knows?

Most likely it's just random Musk noise as usual.

-W

[ChpBstrd]

If they were going to release a Model 2 type car, I could believe it. Otherwise, where is the demand going to come from? They can easily make more cars right now, they just aren't selling them fast enough.

It would take a hell of a price cut to get sales up there but maybe that's in the cards. Who knows?

Most likely it's just random Musk noise as usual.

-W

I wonder why they went the direction of a fake robotaxi instead of a $20-25k bargain EV. Perhaps they (i.e. Musk) feared the damage that a down-market product would do to Tesla's image as a luxury performance brand. Hide and watch, Hyundai/Kia will beat them to it.

[Paper Chaser]

If they were going to release a Model 2 type car, I could believe it. Otherwise, where is the demand going to come from? They can easily make more cars right now, they just aren't selling them fast enough.

It would take a hell of a price cut to get sales up there but maybe that's in the cards. Who knows?

Most likely it's just random Musk noise as usual.

-W

I wonder why they went the direction of a fake robotaxi instead of a $20-25k bargain EV. Perhaps they (i.e. Musk) feared the damage that a down-market product would do to Tesla's image as a luxury performance brand. Hide and watch, Hyundai/Kia will beat them to it.

Tesla's outrageous valuation isn't based on them being a boring, normal car company. It's based on them being a tech company that's going to create answers for needs we didn't even know we had. It's been pretty clear for quite awhile that Elon really doesn't care about building a normal business. He wants to do new, exciting things that he can hype up and sell to investors as the next best thing. Iterating new models to fill in market voids is better left to Toyota et al. He's got robots, flamethrowers, tunnels, robotaxis, AI, etc, etc, etc to invest in that will totally change the course of human history.

[waltworks]

I get that but why tell everyone you’re targeting selling another half
Million cars if you don’t care about that part of the business?

-W

[Paper Chaser]

My guess is that people buying Teslas and driving more miles as unpaid beta testers for Autopilot or FSD theoretically leads to functional autonomous driving sooner. Each new Tesla purchased represents people paying you for the opportunity to do your development work for you. More people driving Teslas means more data generated to input into Autopilot or FSD software. And full autonomy seems to be Elon's Next Big Thing for consumer vehicles or for commercially owned robotaxis. So perhaps it's less about selling each vehicle, and more about getting half a million potential new data generators on the roads.

[AdrianC]

According to this:
https://electrek.co/2024/10/29/tesla-plans-to-deliver-an-extra-500000-electric-cars-next-year-heres-how/

Earlier this year, we reported that Elon Musk had canceled plans for new, cheaper Tesla vehicles built on the new ‘unboxed’ platform, often referred to as “the $25,000 Tesla.”

He has instead pushed for two new vehicle programs that incorporate some of the features of the new platform, but they are still primarily based on the Model 3/Y platform – so much so that they will be built on the same production lines.

These currently unnamed new vehicles are expected to be cheaper than Model 3/Y, which currently start at $43,000 before incentives – likely closer to $30.000-$35,000.

Cheaper cars on the 3/Y platform in early 2025. Be interesting to see how they do it...if they do it.

[waltworks]

I'm happy because this all probably means much, much cheaper used Teslas in a few years when we'll need something bigger than the Bolt for our growing kids.

The ideal scenario, really, would be as much Musk insanity as possible, coupled with making a LOT more cars that they need to slash prices to move, further cratering the used market.

-W

[GuitarStv]

I'm happy because this all probably means much, much cheaper used Teslas in a few years when we'll need something bigger than the Bolt for our growing kids.

The ideal scenario, really, would be as much Musk insanity as possible, coupled with making a LOT more cars that they need to slash prices to move, further cratering the used market.

-W

"Save the environment through overproduction and waste!"


:P

[ChpBstrd]

Be interesting to see how they do it...if they do it.

The more I think about this, the more I see why Musk dreads the idea of a $25k EV. It would be too damaging to the luxury / elite Tesla brand. They've been making performance luxury cars - not practical commuters - since the old circa 2003 Lotus conversions. The selling point was always out-accelerating Corvettes, not saving the planet or saving money.

Just imagine what happens to the brand name when Car And Driver evaluates a Kia as being a better EV than a Tesla. That's what would likely happen if Tesla decided to compete in what is now their market. From there it is a race to the bottom for margins.

Yet the downside of having no truly affordable cars in the lineup is sort of like what General Motors and Chrysler experienced in the 2008-2009 recession. Sales of their expensive luxury SUVs dried up as remaining demand shifted to lower-end cars. Revenue collapsed, and the companies were forced to bankrupty or bailouts.

Tesla has yet to endure a real recession like that as a mass producer of cars. Tesla's relatively low debt-to-equity ratio makes them less vulnerable than GM was, but the company could still face cash flow issues if the luxury market collapsed, as it sometimes does.

This is the paradox of car manufacturing. The margins are all at the high end, but the high end typically collapses in recessions. Thus they are constantly being lured into riskier and riskier markets, only to be burned. Product pivots take years. 

Tesla's outrageous valuation isn't based on them being a boring, normal car company. It's based on them being a tech company that's going to create answers for needs we didn't even know we had. It's been pretty clear for quite awhile that Elon really doesn't care about building a normal business. He wants to do new, exciting things that he can hype up and sell to investors as the next best thing. Iterating new models to fill in market voids is better left to Toyota et al. He's got robots, flamethrowers, tunnels, robotaxis, AI, etc, etc, etc to invest in that will totally change the course of human history.

These are solid points. Management's decision making has to be somewhat affected by their PE ratio of 69, compared to, for example, 6.5 for Honda and 5.6 for GM. Under no circumstances can Tesla's directors make choices that result in shares losing 90% of their value. Yet there is also risk in coasting the bleeding edge of innovation. A series of dud new tech investments could vaporize cash while nonetheless leaving the company with a manufacturer's valuation.

Hence Musk's latest comments that a $25k Tesla that a human can drive doesn't make sense - presumably from Tesla's perspective. Such a car would not offer exponential scaling like the robotaxi idea. Yet the robotaxi idea depends completely on FSD tech that Tesla has not yet been able to perfect for a decade, and which lacks regulatory approval almost everywhere.

“Basically, I think having a regular $25K model is pointless. It would be silly.” - Elon Musk

At some point the stock is the company's product.

[Scandium]

According to this:
https://electrek.co/2024/10/29/tesla-plans-to-deliver-an-extra-500000-electric-cars-next-year-heres-how/

Earlier this year, we reported that Elon Musk had canceled plans for new, cheaper Tesla vehicles built on the new ‘unboxed’ platform, often referred to as “the $25,000 Tesla.”

Cheaper cars on the 3/Y platform in early 2025. Be interesting to see how they do it...if they do it.

If I get a 3 year old/~30k miles, Ioniq 5 I can already get a $25k EV. But yes I guess if a new tesla cost that, it could hopefully drive down prices on others as well. I don't drive enough for the math to work out for me (I want less than at least 7 years for gas savings to replay cost after trade-in), but it's getting closer.

[waltworks]

Up 15% on Trump getting elected. I wonder what favors Musk will ask of our 47th president?

-W

[GuitarStv]

Up 15% on Trump getting elected. I wonder what favors Musk will ask of our 47th president?

-W

Musk is now deeply embedded in determining which organizations deserve federal funding.  He doesn't need to ask any favours, he can conflict of interest his way to victory all on his own.

[NorCal]

Up 15% on Trump getting elected. I wonder what favors Musk will ask of our 47th president?

-W

Musk is now deeply embedded in determining which organizations deserve federal funding.  He doesn't need to ask any favours, he can conflict of interest his way to victory all on his own.

Yep. I think Musk will have free rein to hire/fire anyone at the FAA, NHSTA, SEC and maybe key positions at the DOE and EPA.  Whatever “self driving” rulemaking processes are produced will be a direct result of Musk’s hires. Not to mention the minor protection residents of Boca Raton had from exploding rockets is gone.

Go refresh your memory on how Musk handled Cooley (a large law firm) after they hired a former government lawyer that had pissed Musk off. That will give you a good idea of the new regulatory environment Musk (or any major Trump campaign donor) will face for the next four years.

I think most government positions at the EPA and DOE will go to fossil fuel lobbyists over Musk picks though. Although he’ll still have some level of influence.

[ChpBstrd]

Yep. I think Musk will have free rein to hire/fire anyone at the FAA, NHSTA, SEC and maybe key positions at the DOE and EPA.  Whatever “self driving” rulemaking processes are produced will be a direct result of Musk’s hires.

Yep, I think we'll see Tesla get exclusive approval for Full Self Driving, regardless of the risks or readiness of the tech.

Car companies not named Tesla will be blocked. $100M in campaign donations bought Musk a monopoly.

That's why TSLA is a $300 stock again.

[Retire-Canada]

Elon can get FSD approved by the Gov't, but if consumers have no faith in it it won't be overly popular as a product. Especially if another company offers something that actually works well. Now if he could block all the competition in that space I suppose that would be something, but I don't see that happening. It's one thing to loosen regulations. It's another to create new ones that target only the competition.

[reeshau]

Also, NHTSA is one thing, but much of the regulation for roads, safety, and autonomy is at a state level.  Even in friendly states, he can't just wave his hand to make it happen.  Insurers will also take a cold look at what the risks are, and charge accordingly.

And, even if approved, it doesn't mean the ambulance chasers won't hit Tesla and him personally for fatalities caused for not utilizing maximum safety measures.  Particularly if he personally had a hand in permitting it, in government.

[GuitarStv]

Elon can get FSD approved by the Gov't, but if consumers have no faith in it it won't be overly popular as a product.

It's pretty popular right now even though it doesn't work all that well and is supposed to require constant user input to correct mistakes.

[ChpBstrd]

Also, NHTSA is one thing, but much of the regulation for roads, safety, and autonomy is at a state level.  Even in friendly states, he can't just wave his hand to make it happen.  Insurers will also take a cold look at what the risks are, and charge accordingly.

And, even if approved, it doesn't mean the ambulance chasers won't hit Tesla and him personally for fatalities caused for not utilizing maximum safety measures.  Particularly if he personally had a hand in permitting it, in government.

1) Insurers have been punishing people for living in Florida for years, and yet people are still flocking to the state. SUVs are more expensive to insure than sedans, and yet here we are, with most car buyers more concerned about the infotainment system than the insurance bill. Metal roofs are cheaper to insure and last longer than asphalt, but guess what gets installed. My point is the middle class has a long history of making suboptimal decisions as new things to buy are introduced. It's part of why people can't seem to make ends meet even as economic growth has been stellar.

2) They'd have to find a court circuit with no Trump appointees anywhere along the line. They might also have to get around soon-to-be-enacted immunity laws, using section 230 of the Communications Decency Act as a template.

[ColoradoTribe]

Competition

https://www.youtube.com/watch?v=TxZpVFxqguo&t=1483s

Safety

https://www.youtube.com/watch?v=PM31e5LQ27c

[reeshau]

Different take on safety, focusing on a recent study on fatalities:

From Road & Track:  Tesla Has the Highest Fatal Accident Rate of All Auto Brands, Study Finds

And another take on the same study:  Tesla Has the Highest Fatal Accident Rate of All Auto Brands, Study Finds

[GuitarStv]

It's almost like the safety features don't fully counteract the negative impact of overly rapid acceleration and distracting touch panel displays.

[ColoradoTribe]

It's almost like the safety features don't fully counteract the negative impact of overly rapid acceleration and distracting touch panel displays.

https://www.teslarati.com/tesla-least-likely-involved-fatal-accidents-study/#google_vignette

[reeshau]

It's almost like the safety features don't fully counteract the negative impact of overly rapid acceleration and distracting touch panel displays.

https://www.teslarati.com/tesla-least-likely-involved-fatal-accidents-study/#google_vignette

So, the above study is about the percentage of accidents that are fatal.  The study I posted is about the fatalities per billion miles.

So, if Tesla has more fatalities than average per billion miles, but less fatalities per accident.  Voila'! More accidents per billion miles, too.  By an even higher percentage.

I'm not trying to throw shade on Tesla.  I am trying to bring out the truth.  I am a 28-year auto industry veteran, and I take safety very seriously.

[ColoradoTribe]

It's almost like the safety features don't fully counteract the negative impact of overly rapid acceleration and distracting touch panel displays.

https://www.teslarati.com/tesla-least-likely-involved-fatal-accidents-study/#google_vignette

So, the above study is about the percentage of accidents that are fatal.  The study I posted is about the fatalities per billion miles.

So, if Tesla has more fatalities than average per billion miles, but less fatalities per accident.  Voila'! More accidents per billion miles, too.  By an even higher percentage.

I'm not trying to throw shade on Tesla.  I am trying to bring out the truth.  I am a 28-year auto industry veteran, and I take safety very seriously.

Fair enough, in the interest of truth, it should be noted that the study you cited has been called into question. Sounds like they used a low-ball estimate of the total miles driven using some very faulty assumptions and not actual miles driven data for the Tesla fleet. They got the number of cars and number of fatalities correct and from actual data, but basically made up the number of miles driven. Wrong denominator means errant results to the upside for fatalities per miles driven.

Even if the number of miles driven were accurate, the finding is meaningless in the context of "vehicle" safety. Tesla vehicles have been objectively tested in crash testing etc, by leading US and European safety agencies to be some of the safest cars on the road. Even the author(s) of the study admit the cars are intrinsically safe. It's no secret if you speed or go faster than conditions allow, no car can save you from yourself and stupid behavior.

The only real world take away is if you can't handle a fast car responsibly or keep your eyes on the road then maybe a Tesla is not the car for you. Of course, all the click bait headlines would leave you to believe there is some intrinsically unsafe about a Tesla vehicle when quite the opposite is true.

Bad data (made up number for miles driven) lead to erroneous findings, and

[reeshau]

It's no secret if you speed or go faster than conditions allow, no car can save you from yourself and stupid behavior.

I do agree with this, and I think that's a big part of the point.  In the second article I posted, they go into more detail on the other brands with high death rates.  No surprise Porsche and Corvette are leaders in that dubious category.   But why is the Model Y, the top selling model in the country, there?  Are they all speed freaks?

I think Tesla does have to take some responsibility with their aspirationally-named Autopilot and Full Self Drive, that have over and over again led to anecdotes of Darwin award-winning behavior.  Rather than speed, it is irresponsible trust in and ignorance of leading edge technology that the driver is in charge of.

There is evidence that safer cars bring about riskier driving habits.  That is a reason pedestrian injuries and deaths have become a focus for NHTSA and the European regulatory.  Pedestrians have not had a similar barrage of safety features that drivers have gotten.

[GuitarStv]

Even if the number of miles driven were accurate, the finding is meaningless in the context of "vehicle" safety. Tesla vehicles have been objectively tested in crash testing etc, by leading US and European safety agencies to be some of the safest cars on the road. Even the author(s) of the study admit the cars are intrinsically safe. It's no secret if you speed or go faster than conditions allow, no car can save you from yourself and stupid behavior.

The only real world take away is if you can't handle a fast car responsibly or keep your eyes on the road then maybe a Tesla is not the car for you.

I half agree with what you're saying here.  From a physical engineering perspective, Tesla vehicles should be pretty safe.  But that's not the whole story regarding safety, you're ignoring the HMI.

Take two cars, identical in almost every way.  One is a normal car.  One of them has a built in game controller/keypad on the steering wheel that allows the driver to write text messages and play video games on a screen in the center of the steering wheel while driving.  Based on your argument above, both cars are exactly as safe as each other.  It seems reasonable to expect that the second car is going to be less safe for most drivers and have more accidents though - because we know (from studies of finances, diet, fighting, etc.) that relying on personal responsibility for actions in the face of temptation doesn't work well with humans.

I'm not saying that Tesla is the second car.  I'm not even saying that that is the entire reason for the safety discrepency (which may or may not be real at all).  It's something to consider though, especially given the overly optimistic way Tesla sells their technology to consumers sometimes.

[StashingAway]

The only real world take away is if you can't handle a fast car responsibly or keep your eyes on the road then maybe a Tesla is not the car for you.

What's the real world takeaway from a public policy standpoint? In other words, where's the line between my safety and others' freedom? If I am an extremely safe driver but am in a Honda Fit or on a bicycle when others are allowed purchase and drive 3 ton acceleration machines under the guise that they're safer for the occupants, where does that leave me?

Keeping in mind that half of the population is below average in any given metric, why should we rely simply on their good intentions and self evaluation for public safety, rather than incentivize safer decisions en masse?

This arms race of size, acceleration, and even safety only serves to help the cars dominate our ecosystem, rather than be subservient to us. If we spent 1/10th of the resources developing better human scale transport as we do cars we'd be orders of magnitude safer than all of this nit picking about which pseudo-sentient cast aluminum monsters are better to roam our streets while we have the privilege of playing frogger through them to get bread.

[ColoradoTribe]

TSLA vs S&P 500 (difference)

6 Month - +110% vs +13.7% (96.3%)

1 Year - +57% vs 32.5% (24.5%)

5 Year - +1,572% vs +93% (1,479%)

Since IPO - +29,140% vs +600% (28,540%)

Since Start of Thread - +1,860% vs +221% (1,639%)

Thread Question - Is Tesla a good investment?
Thread Answer - Yes (as demonstrated by the only scoreboard that matters)

[ColoradoTribe]

Should have waited for the end of the trading day. Add 5% to all the TSLA gains above.

[MustacheAndaHalf]

$TSLA gained +50% since the Presidential election.  Without that, $TSLA's one year gain would be closer to +7%.

Trump has threatened 25% tariffs on imports from Mexico, which would include cars produced there.  Tesla's for the U.S. market are produced in the U.S., so tariffs don't hurt them.  But other cars costing +25% more could benefit Tesla.

Elon Musk campaigned for Trump, and Trump praises Mr Musk.  Perhaps some of the boost is from that relationship, as well.

Something else to consider: $TSLA's 3 year performance of +3%/year.  Near the end of 2021, the stock price peaked before crashing.  Near the end of 2024, Tesla's stock price has peaked again (+61% in 3 months, +49% YTD).
https://www.morningstar.com/stocks/xnas/tsla/trailing-returns

[StashingAway]

Thread Question - Is Tesla a good investment?
Thread Answer - Yes (as demonstrated by the only scoreboard that matters)

Unless, we of course, have different definitions of "good" ;)

I view EVs and Tesla in particular as a sort of Jevon's Paradox. As cars become more efficient, we will make/use more of them. And while that is certainly better than making more gas vehicles, it is a distraction from the fact that cars as daily personal transport are a bad thing from a resource management standpoint.

I hardly think that Wall Street is the epitome of the definition of "good", but I realize that I'm in the investor alley thread so it is assumed on some level as such. There are other more broad versions of investing- investing in community or future generations and the like.

[neo von retorch]

https://www.reuters.com/business/autos-transportation/trump-transition-recommends-scrapping-car-crash-reporting-requirement-opposed-by-2024-12-13/

Removing the crash-disclosure provision would particularly benefit Tesla, which has reported most of the crashes – more than 1,500 – to federal safety regulators under the program.

The recommendation to kill the crash-reporting rule came from a transition team tasked with producing a 100-day strategy for automotive policy. The group called the measure a mandate for "excessive" data collection

A Reuters analysis of the NHTSA crash data shows Tesla accounted for 40 out of 45 fatal crashes reported to NHTSA through Oct. 15.

NHTSA said in a statement that such data is crucial to evaluating the safety of emerging automated-driving technologies. Two former NHTSA employees said the crash-reporting requirements were pivotal to agency investigations into Tesla’s driver-assistance features that led to 2023 recalls.

The data has influenced 10 investigations into six companies, NHTSA said, as well as nine safety recalls involving four different companies.
In one example, NHTSA fined Cruise, the self-driving startup owned by General Motors (GM.N)
, opens new tab, $1.5 million in September for failing to report a 2023 incident in which a vehicle hit and dragged a pedestrian who had been struck by another car.

[MinorMiner]

It looks like Tesla will be releasing unsupervised Full Self Driving in the next 24 months. Check out videos of FSD 13.2.1 on Youtube for it's current state. Here's an example video.https://www.youtube.com/watch?v=iYlQjINzO_o.

The personal transportation market in the Western world + Japan is roughly $5 trillion annually (Vehicle operating costs and drivers time). Elon likes to say that the release of unsupervised FSD will be the greatest value increase in history. I tend to think that he is correct on this front. Play with valuations at 20% market penetration, 30% margin and 40X PE ratios.

Again, if you're interested in keeping informed about this, watch for videos of the newest version of FSD on Youtube. Or if you are really curious, rent one on Turo for a day (Make sure it has FSD v13+) and try it for yourself. This is the biggest consumer technology product since smartphones. Would be a shame to miss the bus on it.

[MinorMiner]

Here is another video if you are really interested in seeing where this is all going: https://www.youtube.com/watch?v=rYcJAqGvBXE.

We are essentially going to get a full retooling of the transportation system the world. Personal cars: Disrupted. Public transportation: Disrupted. Short haul air travel: Disrupted.

Will be good from an environmental view as well as this will be the deathblow for the ICE car industry.

Seems like all Mustachians would be interested in a robotaxi service to reduce their transportation costs as well...

[neo von retorch]

This is the biggest consumer technology product since smartphones. Would be a shame to miss the bus on it.

A bold claim. Presumably we're the smartest ones who will be getting in before Tesla has insanely high valuations?

Will be good from an environmental view as well as this will be the deathblow for the ICE car industry.

Seems like all Mustachians would be interested in a robotaxi service to reduce their transportation costs as well...

How soon is now? The predictions aren't new. And the timing has always been something along the lines of 2 or 5 or 10 years from now. If anyone's predictions have a history of being really off, they would be those from Musk who has been predicting "less than 2 years" for a decade.

https://old.reddit.com/r/SelfDrivingCars/comments/1n1qov/autonomous_revolution_how_robo_taxis_fleets_will/
https://www.forbes.com/sites/chunkamui/2014/08/04/5-reasons-why-automakers-should-fear-googles-driverless-car/
https://www.vox.com/2014/5/28/5758560/driverless-cars-will-mean-the-end-of-car-ownership

Having an interest in something is different from trying to make accurate predictions about the future, and risking investment money on it.

[bacchi]

It looks like Tesla will be releasing unsupervised Full Self Driving in the next 24 months. Check out videos of FSD 13.2.1 on Youtube for it's current state. Here's an example video.https://www.youtube.com/watch?v=iYlQjINzO_o.

The personal transportation market in the Western world + Japan is roughly $5 trillion annually (Vehicle operating costs and drivers time). Elon likes to say that the release of unsupervised FSD will be the greatest value increase in history. I tend to think that he is correct on this front. Play with valuations at 20% market penetration, 30% margin and 40X PE ratios.

Again, if you're interested in keeping informed about this, watch for videos of the newest version of FSD on Youtube. Or if you are really curious, rent one on Turo for a day (Make sure it has FSD v13+) and try it for yourself. This is the biggest consumer technology product since smartphones. Would be a shame to miss the bus on it.

So we should see Tesla applying for autonomous driving permits this coming year? California has the most Tesla by far in the US so I expect it'll show up here first: https://www.dmv.ca.gov/portal/vehicle-industry-services/autonomous-vehicles/autonomous-vehicle-testing-permit-holders/.

Nevada does self-certification, which is less onerous on the manufacturer (but holds them more liable?).


Re: $5T, I see $1.9T (1) in the US (and I doubt Japan is $3.1T). Including drivers' time doesn't make much sense. It's part and parcel of marketing and market penetration and doesn't directly impact the bottom line (i.e., drivers aren't paying Tesla directly for each 1/2 hour they're doom scrolling on the drive to work).

Of that $1.9T, $750B was vehicles and parts; $439B was fuels, lubricants, and fluids; $102B was insurance; and $617B was transportation services.

How would Tesla get to $380B in the US?

Tesla's worldwide revenue was $25B in Q3 and that includes non-car revenue. At $100B/year, with ~37% (?) from car sales in the US, that's only $37B in the US. Tesla would have to dramatically increase car sales and that's with Musk promoting far-right politics.

It's not going to capture much of the 2nd category, considering BEVs don't need much in the way of lubricants and fluids and fuel is a plug away for most of us (and charger revenue is in the single digit billions).

There is Tesla insurance but there are many competitors.

Transportation services? It'll get some of this but FSD won't replace most airfare. It might cut into some of the Amtrak routes though autonomous driving is still wear and tear on your car and then you have to pay for parking. Subway fare revenue? Fuggedaboutit.



(1) https://data.bts.gov/stories/s/Transportation-Economic-Trends-Transportation-Spen/gyuh-ipsr/

[MinorMiner]

In regards to the state of the technology, if you are curious to learn, go take a Tesla with the 13+ series software on it installed for a drive. This is the first version that I would recommend to people who are not into the technology for technologies sake. It is crossing over human level driving ability right now and looks set to exceed human level driving in the next few months. It is already a better driver than my mother.

In regards to regulation, this will not be an issue in the United States. Nationwide autonomous driving regulations are on the very near horizon. See the recent election. Other countries will follow suite or will be left in the dust economically.

As far as a $5t addressable market. This includes USA, Canada, Europe, Australia, NZ and Japan. I do believe that people value their time. This should be included.

As far as competition with other transportation services...
Airfare: Imagine falling asleep in Tucson and waking up the next morning in San Diego... This is in the very near future.
Personal cars: Why own a low operating cost beater to drive to work every day when you can schedule a Robotaxi to be at your door every morning for the same cost but no headache?
Public transportation: Other than in extremely urban cores, public transportation in the USA pretty much sucks. Why would I ride a dirty/dangerous bus that requires a mile of walking when I could hire a Robotaxi for the same price and have door to door service?

To really understand what is happening here, it is necessary to totally reassess how you view transportation. This is not incremental improvement. This is full scale disruption. Remember, this company is being run by the guy who caught a rocket.

[mistymoney]

In regards to the state of the technology, if you are curious to learn, go take a Tesla with the 13+ series software on it installed for a drive. This is the first version that I would recommend to people who are not into the technology for technologies sake. It is crossing over human level driving ability right now and looks set to exceed human level driving in the next few months. It is already a better driver than my mother.

haha! are we left to wonder how low that bar may be??

[mistymoney]

Thread Question - Is Tesla a good investment?
Thread Answer - Yes (as demonstrated by the only scoreboard that matters)

Unless, we of course, have different definitions of "good" ;)

I view EVs and Tesla in particular as a sort of Jevon's Paradox. As cars become more efficient, we will make/use more of them. And while that is certainly better than making more gas vehicles, it is a distraction from the fact that cars as daily personal transport are a bad thing from a resource management standpoint.

I hardly think that Wall Street is the epitome of the definition of "good", but I realize that I'm in the investor alley thread so it is assumed on some level as such. There are other more broad versions of investing- investing in community or future generations and the like.

Have you looked at what is in the sp500? I mean honestly - where is this discussion headed?

are you all going to go live on a commune and fertilize your vegetables with your own feces?

if not, let's get real here about what the purpose of this discussion is.

[MinorMiner]

In regards to the state of the technology, if you are curious to learn, go take a Tesla with the 13+ series software on it installed for a drive. This is the first version that I would recommend to people who are not into the technology for technologies sake. It is crossing over human level driving ability right now and looks set to exceed human level driving in the next few months. It is already a better driver than my mother.

haha! are we left to wonder how low that bar may be??

It's a pretty low bar! Maybe 20th percentile? However it has been surpassed. My dad (Former bush pilot, pretty good driver) says that it is equal to him driving around Ann Arbor, Michigan (A city he knows) and is superior to him in cities he doesn't know. The thing to realize here is that this is changing very quickly. Overall human driving ability is roughly static. This technology is improving everyday. It will soon be better than human drivers in aggregate, then at some point it will be better than any human driver. Never tired, never drunk, never angry, never gets old, learns from millions of other cars all around the world. This is happening right now.

Where we are:
https://imgur.com/a/r3EYrAv

[bacchi]

As far as a $5t addressable market. This includes USA, Canada, Europe, Australia, NZ and Japan. I do believe that people value their time. This should be included.

Oh, sorry, I read US+Japan.

I cited the source of $1.9T in the US but where do you get $5T from?

Personal cars: Why own a low operating cost beater to drive to work every day when you can schedule a Robotaxi to be at your door every morning for the same cost but no headache?

This is the holiday parking lot problem.

Public transportation: Other than in extremely urban cores, public transportation in the USA pretty much sucks. Why would I ride a dirty/dangerous bus that requires a mile of walking when I could hire a Robotaxi for the same price and have door to door service?

A bus/subway (a shared vehicle, which distributes its costs among its users) ticket is like $2.90 in NYC. There's no way a for-profit Robotaxi is going to take you from the Broadway Bridge to Central Park for that little.

A full scale disruption would be getting rid of cars for the majority of use cases. This is a same ol' same ol' with a small speed bump.

[MinorMiner]

As far as a $5t addressable market. This includes USA, Canada, Europe, Australia, NZ and Japan. I do believe that people value their time. This should be included.

Oh, sorry, I read US+Japan.

I cited the source of $1.9T in the US but where do you get $5T from?

Personal cars: Why own a low operating cost beater to drive to work every day when you can schedule a Robotaxi to be at your door every morning for the same cost but no headache?

This is the holiday parking lot problem.

Public transportation: Other than in extremely urban cores, public transportation in the USA pretty much sucks. Why would I ride a dirty/dangerous bus that requires a mile of walking when I could hire a Robotaxi for the same price and have door to door service?

A bus/subway (a shared vehicle, which distributes its costs among its users) ticket is like $2.90 in NYC. There's no way a for-profit Robotaxi is going to take you from the Broadway Bridge to Central Park for that little.

A full scale disruption would be getting rid of cars for the majority of use cases. This is a same ol' same ol' with a small speed bump.

As far as the TAM, $5T is a rough estimate. Maybe it's $4T maybe it's $6T. Ultimately it really doesn't matter. Here are the values I used to come up with that estimate:

| Region           | Households     | Monthly Direct Costs | Monthly Time Costs | Monthly Total | Annual Total per Household | Aggregated Annual Total   | |------------------|----------------|-----------------------|--------------------|---------------|----------------------------|---------------------------| | United States    | ~130 million   | $850                 | $450               | $1,300        | $15,600                    | $2.0 trillion            | | European Union   | ~195 million   | $500                 | $300               | $800          | $9,600                     | $1.87 trillion           | | Canada           | ~15 million    | $830                 | $375               | $1,205        | $14,460                    | $217 billion             | | Australia        | ~10 million    | $800                 | $350               | $1,150        | $13,800                    | $138 billion             | | New Zealand      | ~1.8 million   | $700                 | $300               | $1,000        | $12,000                    | $22 billion   | | Japan            | ~50 million    | $550                 | $225               | $775          | $9,300                     | $465 billion             |

As far as the "holiday parking lot problem". That's really just an issue of car utilization. Even right now, at the peak rush hour, most cars are parked. This is wasted capital. The fleet would be sized for peak demand obviously. This peak demand fleet is still smaller than the current fleet of non-autonomous vehicles.

Public transportation: I don't see this competing in New York right off the bat. I see it competing in Omaha, Los Angeles, Columbus and other cities with car centric transportation systems and bad public transit. In the long run, bus systems will only exist in the densest metros. Outside of these areas I expect to see publicly subsidized robotaxi services.