[On :freetrade:] Tesla (TSLA) 🚗🔌

Wait, what? I don’t think Tesla was even first to do that but they certainly aren’t the only one, loads have done it - they are just less impactful on ICE cars. I don’t know why you would think this is non-trivial - literally billions of devices get over the air updates every month.

When I look at all of the incredible technical achievements that companies have developed in recent years the financial advantages only last as long as it takes the competitors to catch up.

3D NAND is truly an incredible technology, miles ahead of anything else, everyone knew demand was going to go through the roof - surely a recipe for a game changing company to achieve massive capitalisation? Well, no because markets react in the same way they always do: competition. Now you have half a dozen companies churning it out and it’s treated like a commodity.

I think we will see the same thing happen with most EV technologies (e.g. batteries), commoditization. Producing the same interchangeable goods with increasing capacity and decreasing price. You said it yourself:

…and just like NAND this is the death of margins.

There’s only one moat that I think you could argue Tesla has and that’s around self driving (data). I actually think this is the only technology that warrants a premium price, because it’s really the only one that presents a significant technical challenge for competitors. That said it’s a gamble because Autopilot is still very basic at this point, every trip in a Tesla seems to show just how nascent Autopilot is. Yes it’s clear to see how much better it’s got over the past few years, every month feels like a step forward, but even now almost every journey will have some event that shows the cracks in the facade making it feel primitive.

If feels like Waymo is in a much better space for self-driving in general but time will tell. I can easily see a future were car driving software is licensed, it seems more likely than every auto manufacturer creating a separate implementation.

Ok maybe you are right and maybe no other manufacturers will be able to succeed with the seemingly simple engineering challenges Tesla has solved, despite having significantly more resources at their disposal. I don’t buy it though.

To me it feels like everyone is acting like Tesla has a 200m wide moat around it when it looks to me more like a small stream with some stepping stones and a crowd of people halfway across. Show me how many years it’s going to take them to get across and I’ll be convinced.

IMO the advantages Tesla have for the coming decade are manifold:

  • They take software seriously - other companies still think they are hardware shops and treat software as ancillary or buy it in
  • They have no ICE cars - this is a huge advantage versus all their competitors, who will have to completely retool and reorient their sales force. Competitors know at this point EV is the future but still haven’t done this and will take a decade to do so
  • They have a lot of real driver data and are expanding this all the time - really important for attracting talent and improving their ML software
  • They have taken self-driving seriously and will be able to tweak both hardware and software in pursuit of it
  • They’re focussed on cost and scale for self-driving - this is why they will beat competitors like waymo
  • They have taken battery tech seriously and are starting to make their own - we need orders of magnitude more battery production and advances in battery tech
  • They believe in full automation (though they have been premature on that in the end this will drive profits up)
  • They are also looking at energy storage (both consumer and supply) - this is going to be very popular and again requires batteries at scale - might be able to recycle old car batteries for this. Powerwall and those peak storage plants are going to make a lot of money and are complimentary.
  • They have Elon Musk, who will drive his employees to excel or burn out trying (bad for most employees, good for shareholders) and aggressively collect cash and drive for scale - this will let them compete with incumbents who have a lot of revenue but thin profits

So no moat but huge advantages in attitude and aptitude over incumbents which should translate to a decent share of the EV market, which will be 90% of the high-end new car market within a decade IMO.

But I still think the price today is too high, it is priced as if they’ve already overcome these challenges :slight_smile:

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I think there’s a lot of truth in BOTH of the last two posts - for Tesla by @kenny and against by @Cameron!

I’d very much like to own a Tesla vehicle, I’m not so sure I’d like to own Tesla shares that’s why I’m sitting this company out and watching from the sidelines (whilst being glued to Fully Charged and other EV news/tech sites because I like geeking out on the EV/battery/hydrogen/renewable energy revolutions).

<<michael_jackson_eating_popcorn.gif>>

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My strategy for TSLA is…

(shoutout to any crypto fans on the forum)

HODL :rocket:

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its back again, 7% up on pre market :innocent:

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Yeah I’m a massive fan of Tesla as a company and its products. I think they have already changed the world and they are going to be incredibly successful even when other manufacturers do start building decent EVs. If I drove more than 3,000 miles a year I’d be very likely to get 3 or perhaps wait for a Y the cars are great.

Unfortunately all that optimism doesn’t justify the price, so it’s unlikely I’ll be a shareholder any time soon.

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What a nail biter this stock is.

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No shortage of drama on this stock!

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Well done to all who held on during the big sell off last week starting to get rewarded.

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Casual flex

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The reason why I was originally skeptical about Tesla is because I thought that electric cars are not that hard to build and to an extend I still think that (anecdotally, I have an engineer friend who built one in his garage, good luck building a good petrol engine in your garage). However my perspective on Tesla leadership, ability to innovate, autopilot, ride hailing etc and more importantly batteries(!) massively changed. And with those other things in mind I think it’s easily a trillion dollar company once they get enough cars on the roads.

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You can build an engine in your garage. I’ve had engines apart and changed cam shafts, cylinder heads, bearings etc.

OK That’s not designing and building my own engine from scratch, but I bet your friend didn’t wind his own electric motor either

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It’s certainly possible though -) https://www.youtube.com/watch?v=ziWUmIUcR2k

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I actually quite like the idea of converting a classic to electric. I’d probably try and find one that needed an engine or needed engine work in the first place, rather than take a good running engine out

This Tesla Powered Ferrari is cool, if a little out of my price range (at least until Freetrade IPOs :rofl: )

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Any chance of the 2x Tesla ETP (TSL2) or -1x Tesla ETP (TSLS) being added to the platform soon? :raising_hand_man: