I’ve been holding off on replying to a Tesla thread, given previous rules from Saul, but since this hasn’t been killed, I’m going to add to it, especially given today’s news.
First, I have to disagree that the referenced article is “great.” For instance, there has no real news on a stock repurchase since it was first proposed when the stock was around $110, and with the stock over $230 it seems unlikely that’s going to happen now.
But, there are a lot of actually good reasons why TSLA remains, IMO, a great investment.
What we have with Tesla is a mega-cap company (over $700B) that is growing top line revenue (51% 2022/2021, 70% 2021/2020) and currently exceeding their guidance for a 50% CAGR of vehicle volume deliveries for ten years starting in 2020. And this is all without considering any of the auxiliary businesses, like solar roofs, powerwalls, megapacks, robotics, FSD, etc.
Model Y was the best selling passenger car of any kind in the world in Q1. Yeah, more Model Y’s sold than Corollas (including variants).
Recently, Ford announced it is adopting the Tesla charging plug standard (known as NACS for North American Charging Standard), first with adapters that also support previous and current Ford EVs, then in 2025 natively. And just today, Mary Barra went on Twitter Spaces with Elon Musk to announce that GM is doing the same. Musk said Tesla will provide equal support for GM vehicles as they do for Tesla vehicles, but Ford and GM owners will still have to pull up to “pumps” with Tesla branding.
What this means for VW’s Electrify America, Chargepoint, or Blink is anyone’s guess. I have to believe they’re going to have to license (for free, presumably) Tesla’s charging standard patents. And on the legacy OEM side, what are Mercedes, BMW, and the VW group (including Audi & Porsche), Hyundai, and then what are the startup OEMs (Rivian, Lucid, Fisker, etc.) going to do in North America?
And yes, Cybertruck is coming this year. Right now many think its looks are too polarizing for it to sell in volume, but well over a million paid reservations say otherwise to me. The Rivian R1S and Ford F-150L have a number of good aspects between them, but Rivian can’t scale (and the short bed limits appeal to the “lifestyle pickup” market), and Ford has already announced that they need to do a second generation to improve the vehicle. The major risk for Tesla, IMO, is that they can’t produce enough 4680 cells to ramp up CyberTruck production, but rumor today is that Tesla has recently asked suppliers to plan on a 375k vehicle/year run rate, up from 250k.
A much-anticipated Model 3 refresh is apparently in the works, too, following an announcement this week that all Model 3 and Y variants now qualify for the full $7500 fed tax rebate.
And Tesla is working on a low-end, mass-market vehicle. Characteristically, Tesla already showed how they can build affordable EVs that are profitable for the company. Also characteristically - and ironically - since Tesla didn’t show a “concept car” rendering, Mr. Market didn’t believe them and sold the stock down. Other companies claim they can and will sell cheap EVs but they don’t “show their work” as to how they can do that profitably, especially since no-one except Tesla seems profitable with their EVs today. You can watch the video on the new assembly process here: