Not enough people want an EV anymore to make a difference for TSLA given its $1.3 trillion market cap and 400 PE.
Robots: See above
Some people/companies will buy Elon’s robots, but not enough to make a revenue/income difference for TSLA.
Self-driving: Yeah, Google is wasting money on Waymo, and its current capital raise at a $125B valuation is stupid. /s
Given Waymo’s valuation and its lead over the TSLA robotaxi business I would value the TSLA robotaxi portion of TSLA at around $30 billion. My guess given TSLA’s market cap is that the market values the TSLA robotaxi business around $200 or $300 billion.
What would you value the TSLA robotaxi business at?
Thinking about this some more, this could just be Google inflating the market cap of Waymo in preparation for a spinoff. Supposedly, Google put in $13 billion of the $16 billion raised, so not a whole lot of interest from other investors.
So, I’m thinking that Google is just puffing up the market cap of Waymo in preparation for a spinoff.
I don’t recall anyone saying that no one wants humanoid robots as a general matter. If there were humanoid robots that were useful at the right price, people would gobble them up.
My own take is that humanoid robots are like autonomous vehicles…in the early 2010’s. Lots of companies think they’re going to be a good business right around the corner, so companies like Tesla and Mobileye and Waymo and Cruise and Induct (and Ford and Nissan and Volvo and GM and Toyota and Mercedes) all jumped into the field. But the tech wasn’t ready. More than a decade later we’re still waiting for autonomous vehicles to be in a place where they can start returning profits on all that investment.
Humanoid robots are the same way. The brains aren’t anywhere close to being ready. We’re a decade or more from the time when they will actually be “smart” enough and flexible enough for a humanoid robot to be able to meaningfully take advantage of the humanoid form in very many situations. Oh, sure - you’ll have humanoid robots that can do modest tasks. Right now, I imagine that several of these could carry an object (albeit slowly and gingerly) from one part of a room to another. But just like a circa 2017 car wasn’t “really” able to deliver on the potential of autonomy, these robots won’t be able to deliver on the benefits of humanoid form in any meaningful way for quite a long time.
That’s a very silly thing to say. I’ve been an EV owner since 2015 and am a huge proponent of EVs, but it is self-evident they have limitations and barriers to adoption. There is no inconsistency with understanding there are both upsides and challenges at the same time.
Also very silly. Autonomous driving has enormous upside potential, but there is no benefit to lying in order to minimize challenges. Simply pronouncing that autonomy will be available to “half the population by the end of the year” and declaring victory without producing results is childish.
Waymo has already been spun off, it is an independent subsidiary. Google is mostly funding it, but using outside partners as well.
Let’s do a back of the envelope valuation of Tesla. Let’s say the autonomous driving piece is worth $125 billion, same as Waymo. Which is very generous because Waymo is years ahead of Tesla in that space.
And let’s say the car business is worth $400 billion, the same as Toyota. Which is being extremely generous because Toyota sells 10 times more vehicles than Tesla, and values the Tesla car business at 100x earnings.
Telsa’s energy business is growing rapidly, with about $5 billion profit last year. If we value it at 20X earnings-generous for an industrial company–that’s $100 billion.
Then we have Optimus. I have yet to see a video of Optimus doing any task that would replace human labor. That’s not to say it won’t or can’t, but we’re a long way from an actual product. With no market, plenty of competition, and high capital costs, I’ll place the value here at zero, but because we’re being wildly generous, I’ll put the value at $25 billion for an industrial product.
So, an extremely generous valuation of Tesla is $650 billion. Current market cap is $1.33 trillion. Invest wisely, my friends.
I disagree on both counts:
• That Waymo is “years ahead” of Tesla
• That Waymo’s valuation is the end-state valuation for the majority owner of Robotaxis.
Yes, Waymo started deployment years ahead of Tesla, but 6 cities in 5-6 years isn’t a pace that’s going to own the TAM. Relying on Chinese-made Zeekrs that have to be converted by Magna in the Arizona facility keeps prices high and slows them down. None of the Zeekrs have actually been deployed yet, but already Waymo is working with Hyundai on supplying Ioniq 5s, perhaps directly built with Waymo’s sensor suite at the factory in Georgia. And, rumor is the iPaces will be retired soon.
The market know that making cars is one of the bottleneck’s for Waymo’s expansion. NYC alone has over 100,000 vehicles for hire available, so how is Waymo going to disrupt that?
And the market knows this. Waymo’s valuation is probably on the low side, representing not just the limits on expansion inherent in Waymo’s approach, but in the abilities of competition in the space.
If by “long way,” you’re using Wall Street’s sightedness, OK. But, if you think it’s something like 2029 or later, I’ll disagree here, too.
A cynic (or a shareholder like myself) might say they bought it because the Chairman of Mobileye is the co-founder of Mentee and the stock has been punished as such.
I mean, the obvious answer is by building larger numbers of cars.
Right now, the bottleneck on robotaxi deployment probably isn’t cars. It’s all the other parts of the system: the support staff, the remote operators, the network of people to assist IRL when the cars get stuck, the folks who store and charge and clean the cars in the evening, the regulatory side, the training/adaptation of the cars to a new city, etc. To say nothing of building out the consumer-facing side of the business. They - like Tesla - are not likely to have that infrastructure in place to absorb too many more vehicles than they have today.
That’s almost certainly why Waymo is still in the “building bespoke cars” phase of robotaxi deployment. Just like Tesla is. Neither company is at the point where either of them can afford to start mass-producing robotaxi vehicles, because they don’t have room further down the pipeline to deploy 10-20K new cars per year. Tesla’s already signaled that cybercab production will be ‘agonizingly slow’ - because what would they do with a fast ramp up? The reason they only have a few dozen cars in Austin isn’t because they can’t make more than a few dozen modified Model Y’s. It’s because they don’t need them yet, because their Austin operations aren’t large enough yet to need a bunch more vehicles.
If Robotaxis become a serious thing that can eat away at the ride-for-hire market in a material way (by no means guaranteed for either Waymo or Tesla), the mass production of vehicles will quickly and easily be accomplished. That’s not the bottleneck. If Waymo were to be in a spot where they thought they would need 10K+ cars per year down the road, they can design lock their vehicle and start gearing up a production line to make those cars. I suspect they’re more than two years out from that point (they’re not going to need a fleet of 40K cars for quite a while), so they’re not losing any ground by not doing that right now. Neither is Tesla, BTW - they don’t need to start going into full production run for the cybercab any time soon, because….well, what would they do with them?
There’s no disadvantage for Waymo here. They would have been utterly hosed if Tesla had managed to make the stock HW4 Model Y suitable for robotaxi use, which would have given Tesla an enormous advantage. But they appear to have failed at that. So they seem likely to have to purpose-build robotaxis for themselves.
I don’t think Waymo is ready to “own the TAM,” but why would we project the future ramp of Waymo using a rate from 5-6 years ago to today?
Wouldn’t Waymo’s more recent ramp, say over the last 12 months, be a better forecast of its near-term rate? We could use the increase in miles per week, for example.
If we used Tesla’s ramp rate over the last 5-6 years we would project that they can deploy about 10 unsupervised in one geofence with no freeways per 5 years, about 2 taxi on city streets per year.
What revenue from in-house L4 autonomy deployed to general-public consumers on the road do we expect Tesla to achieve in 2027?
