I have a 6% position in Tesla and I wanted to comment on a few things:
Elon Musk gets it done - I don’t want to start a debate on Elon Musk personally so please don’t reply on this point, but I just finished reading his new bio by Walter Isaacson. Elon has his weaknesses, including difficulty reading other’s emotions, being impulsive, childish, even mean at times, etc. However, at the end of the day, he is extremely smart, hardworking and dedicated to achieving his goals including putting us on the path to sustainable energy. Most important to me, the mission is what drives him.
AI breakthrough Last month Tesla made a huge breakthrough in FSD V12 as Elon did a test drive with no heuristics, ie rules, or code. The FSD via the neural net is able to run end-to-end on what it has learned from watching millions and millions of videos. This is similar to how humans learn, by observing and learning. I believe it is likely also a huge breakthrough in general intelligence AI and has huge implications for Optimus. Full FSD might only be a few years away.
Tesla’s Robotaxis Are About To Awaken (DO NOT IGNORE!) - YouTube
- UAW strike could really hurt legacy Auto, most of whom are likely to be bankrupt by the end of the Decade, anyway. The unions are asking for a 36% raise and 4-day workweek at a time when Legacy Auto are way behind on EV’s and their future looks very dark. This will only speed up Tesla’s dominance.
Check out this clip from the All-In Podcast at approx.1:25:30
E146: Did the Fed break the VC model? Plus IPOs, M&A, revaluing unicorns & more - YouTube
a) The new UAW contract will only solidify Tesla’s labor advantage - Tesla’s Advantage in Labor Costs Grows as UAW Strike Continues (claytoncountyregister.com)
b) The ongoing strike will help shrink EV inventory, which is to Tesla’s advantage
c) The Strike highlights Tesla’s first mover and structural advantage - Tesla has no legacy production assets. It does not have to contract out its battery production. Tesla owns and operates all the plants needed to make all the components for its product lines. This solves dependency on outside suppliers and gives it much greater control over logistics and its supply chain.
Of all present and known future Tesla projects I believe that the Optimist robot has the greatest potential. Human labor gets more expensive every day, specially when standards of living rise. Optimist is physically much simpler/cheaper than EVs yet it does much more costly jobs. It should yield profits more like software than hardware.
The thing that automatons will do better than any other investment is to de-burden human based production:
Office (safety guy, HR, supv, shift lead, Area lead, manager, possibly director, benefits, compliance, audit…)
Walk ways (PPE)
parking lots (PPE)
FICA (.gov will find a way to subsidize lost human production, I’m sure)
Health care subsidies
I’m sure I’m missing a few. it’s A LOT.
Having said that, nothing about that FUTURE POTENTIAL is going to weigh in on any TSLA results anytime in the near future. (5+ year time horizon - for results, not release or demonstration)
So, structural changes in performance for TSLA must necessarily come from only from near term auto production efficiency and scale.
I’m not sure about the timeline on Optimus actually creating revenue but yes, Musk has stated the company will eventually have its majority of sales coming from Optimus or next-gen robots.
Tesla recently showed Optimus sorting building blocks according to their colors, stretching, doing Yoga, etc.
“Tesla robot performs this task or any other task independently using its vision without a line of code pre-programmed into its brain just like Tesla Full Self-Driving (FSD). Optimus however uses the same neural net that provides vision to Tesla cars for FSD.”
Full Article on Progress Optimus has made in the last year:
Tesla shares Optimus robot’s AI progress, Elon Musk pledges to make it safer with convenient switch-off mechanisms - Tesla Oracle
That depends on your investing time horizon. Vive la difference!
I have recently started DCA’ing into TESLA. I did not really look into them for a long time because I was turned off by Musk and I was scared off by the FUD that is always in the news about the company. However, there is no denying that Musk is one of the greatest corporate leaders of all time, and I have started looking into them more and am becoming convinced.
This may be old news to many of you who follow the company, but the recent news about the Giga-Press advancements was one of the things that drew me in more - reducing hundreds of parts into a single part coming out of the press. Pretty amazing. Link to a video about it below.
Cost cutting and process improvement is one of Musk’s key principles, which is a great thing for shareholders! He expects his Engineers to follow “The Algorithm.”
From the new Walter Isaacson Bio:
- Question every requirement. Each should come with the name of the person who made it. You should never accept that a requirement came from a department, such as from “the legal department” or “the safety department.” You need to know the name of the real person who made that requirement. Then you should question it, no matter how smart that person is. Requirements from smart people are the most dangerous, because people are less likely to question them. Always do so, even if the requirement came from me. Then make the requirements less dumb.
- Delete any part or process you can. You may have to add them back later. In fact, if you do not end up adding back at least 10% of them, then you didn’t delete enough.
- Simplify and optimize. This should come after step two. common mistake is to simplify and optimize a part or a process that should not exist.
- Accelerate cycle time. Every process can be speeded up. But only do this after you have followed the first three steps. In the Tesla factory, I mistakenly spent a lot of time accelerating processes that I later realized should have been deleted.
- Automate. That comes last. The big mistake in Nevada and at Fremont was that I began by trying to automate every step. We should have waited until all the requirements had been questioned, parts and processes deleted, and the bugs were shaken out.
-Musk actually got the inspiration for Giga Press after looking at the body of a Toy car. He looks at Toys a lot for design ideas, precision, and simplification.