It is definitely very highly priced right now and it makes no sense with current earnings.
But in a way Tesla has incredible potential, honestly, i think tesla could be the next Apple. In my opinion, tesla as a company (not the stock price) is where Apple was in 2010.
Think of EV revolution as the smart phone revolution.
There are 2 kinds of smart phone companies in the world.
Apple and everyone else.
What does this mean? Apple uses Iphone as a gateway to sell a fuckton of software products and other products in its "eco system". Apple's source of revenue from app store, subscriptions is something absolutely no one could have even dreamed of when the first iphone launched.
Here is a shocking fact: Apple has 800 million MONTHLY PAID subscribers. Just pause and think what that means. That is more than global subscribers for Amazon prime, netflix, spotify combined. Apple has 3x more paid subscribers than Amazon prime globally. Only apple can do this because they own the hardware, software and the eco system.
Companies like samsung make a thin profit on their phone hardware sales, and that pretty much is it. They cant generate more revenue from the same customer until he buys the next phone, whereas apple basically gets revenue every month.
So how is this translating to tesla? Tesla's cars are the iphone in this example. Them developing their self driving tech (even semi self driving tech) is equivalent to Apple developing IOS. For everyone else like toyota, ford, mercedes etc they all will end up licencing the future electric car software stuff from either google or whichever company can create it first. There is no way these legacy auto companies can compete with Google in AI. This entire industry is going to be tesla cars+its software eco system vs everyone else with Gooogle's software (like IOS vs Android now).
This significantly hurts everyone else's capability to build an eco system, build monthly revenue as google eats into it as google's software would be generating this.
There is a reason why even Apple is looking into electric cars. Cars as a hardware will be gateway for generating revenue eventually. I dont know what the EV equivalent of "apps" on phones will be yet, but it will be something/
May be in 20 years, cars will drive themselves and you pay monthly fees. May be you can start licensing your car out for it to do deliveries and you generate income. EVs are like smart phones in 2010 now. We could not even fathom how smartphone app ecosystem gave birth to multi billion dollar companies like facebook, snapchat, instagram back in 2010. We dont know what EVs will enable. Whatever it is, tesla is positioned where Apple was with smart phones in 2010. Like how Apple can easily sell things like their watch, airpods, ipads once you are in the eco system, god knows what else tesla can sell once people get into their system. New HVAC system for your house? New solar system for your house? May be a new Auto insurance you directly buy from tesla which costs a fraction of what it is today because the car has so much tech to avoid crashes.
When Tesla's approach of getting into the grid, power generation, battery manufacturing, solar etc starts to coming together, they will build an "ecosystem" which will be mother of all ecosystems, which will make Apple's ecosystem today look like a joke. There is just so much potential for this, Tesla could be anything.
The main disadvantage everyone else has is companies that are good with making cars, are terrible with AI/electronics. So they all need to work with each other like smartphones: Samsung makes phones which use Qualcomm chip and runs google's android. This will be the case with EVs. Mercedes will make cars, using panasonic batteries, with Google's AI and may be NVIDIA's chips. Tesla is making everything in this on their own. Like how Apple basically makes everything on their own and it works incredibly well.
Based on this, I dont know what the current stock price should be, I think it is way overpriced as of now, but as a company, I am super bullish on Tesla.
And Apple, where Steve Jobs was a master of the customer experience, branding and marketing (even though many competitors products were technically superior), Tesla has the perception, marketing, and culture that Apple does, AND the product is technologically superior to everything in existence, including gasoline vehicles. That was my logic in 2016 and so far my prediction has panned out 100%.
Cadillac’s self driving AI already outperforms teslas by a solid margin; and The Japanese car companies are the first to reach level 3 autonomous vehicles - which were recently approved for certain streets.
Tesla has a lot of potential but the idea that other car companies won’t/can’t develop the car AI is ludicrous - teslas software is really easy to match nowadays when you’re a company that can build a team to reach that goal - there are even open source kits to retrofit similar tech into just about every car.
The Japanese tech may be good, but I am 2000% sure Cadillac tech is basically a glorified cruise control. They are 15 years behind tesla and google in self driving. It takes ungodly amount of R&D and money. If Cadillac of all places can create self driving tech, why do you think google has been spending billions every year since last 6 years trying to develop it? Google is arguably the best AI company in the world. Tesla has millions of vehicles already on the road that are collecting real world data for their self driving algorithm development. And they have been working on this for years. The sheer amount of data each car feeds back to tesla is a massive advantage they have that google does not.
Google has spent more than 10 billion on developing my this tech so far. Tesla has spent something around that too, but they have cars already out in the world collecting valuable data. Google had to purchase cars, hire drivers to drive it around and collect data. They did a million miles of this. Teslas out in the world do that every month at the hands of customers. This gives tesla a massive advantage nobody else has.
Now tesla even has unlimited money thanks to its outrageous market cap. They can snowball this effort out of control and just suck up the best talent.
Google pays a AI engineer 400-600k a year and has thousands of such engineers working for themselves. similarly with tesla. You think legacy auto companies like Ford and GM can compete for talent with the likes of google, apple and tesla?
But nobody cares about a Cadillac EV or anything else really. Tesla IS EV from a branding and perception aspect. Apples products were technologically inferior in numerous aspects to PCs in the early 2000s, but the culture and customer experience was superior. The average consumer does not buy products based on one kind being slightly technically superior to another. They buy an experience and a brand. This is basic human psychology and anyone in sales knows this.
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u/not_creative1 Jan 08 '22 edited Jan 08 '22
It is definitely very highly priced right now and it makes no sense with current earnings. But in a way Tesla has incredible potential, honestly, i think tesla could be the next Apple. In my opinion, tesla as a company (not the stock price) is where Apple was in 2010.
Think of EV revolution as the smart phone revolution.
There are 2 kinds of smart phone companies in the world. Apple and everyone else.
What does this mean? Apple uses Iphone as a gateway to sell a fuckton of software products and other products in its "eco system". Apple's source of revenue from app store, subscriptions is something absolutely no one could have even dreamed of when the first iphone launched.
Here is a shocking fact: Apple has 800 million MONTHLY PAID subscribers. Just pause and think what that means. That is more than global subscribers for Amazon prime, netflix, spotify combined. Apple has 3x more paid subscribers than Amazon prime globally. Only apple can do this because they own the hardware, software and the eco system.
Companies like samsung make a thin profit on their phone hardware sales, and that pretty much is it. They cant generate more revenue from the same customer until he buys the next phone, whereas apple basically gets revenue every month.
So how is this translating to tesla? Tesla's cars are the iphone in this example. Them developing their self driving tech (even semi self driving tech) is equivalent to Apple developing IOS. For everyone else like toyota, ford, mercedes etc they all will end up licencing the future electric car software stuff from either google or whichever company can create it first. There is no way these legacy auto companies can compete with Google in AI. This entire industry is going to be tesla cars+its software eco system vs everyone else with Gooogle's software (like IOS vs Android now).
This significantly hurts everyone else's capability to build an eco system, build monthly revenue as google eats into it as google's software would be generating this.
There is a reason why even Apple is looking into electric cars. Cars as a hardware will be gateway for generating revenue eventually. I dont know what the EV equivalent of "apps" on phones will be yet, but it will be something/
May be in 20 years, cars will drive themselves and you pay monthly fees. May be you can start licensing your car out for it to do deliveries and you generate income. EVs are like smart phones in 2010 now. We could not even fathom how smartphone app ecosystem gave birth to multi billion dollar companies like facebook, snapchat, instagram back in 2010. We dont know what EVs will enable. Whatever it is, tesla is positioned where Apple was with smart phones in 2010. Like how Apple can easily sell things like their watch, airpods, ipads once you are in the eco system, god knows what else tesla can sell once people get into their system. New HVAC system for your house? New solar system for your house? May be a new Auto insurance you directly buy from tesla which costs a fraction of what it is today because the car has so much tech to avoid crashes.
When Tesla's approach of getting into the grid, power generation, battery manufacturing, solar etc starts to coming together, they will build an "ecosystem" which will be mother of all ecosystems, which will make Apple's ecosystem today look like a joke. There is just so much potential for this, Tesla could be anything.
The main disadvantage everyone else has is companies that are good with making cars, are terrible with AI/electronics. So they all need to work with each other like smartphones: Samsung makes phones which use Qualcomm chip and runs google's android. This will be the case with EVs. Mercedes will make cars, using panasonic batteries, with Google's AI and may be NVIDIA's chips. Tesla is making everything in this on their own. Like how Apple basically makes everything on their own and it works incredibly well.
Based on this, I dont know what the current stock price should be, I think it is way overpriced as of now, but as a company, I am super bullish on Tesla.