“Q: Where do you see the future for Tesla, when it comes to battery tech & self driving?”
“- we need to make ~20M cars/trucks a year. You can’t really change the world without making at least 1% of the fleet on the road Limited currently by battery cell production”
Well it’s been an eventful week so I thought I’d finally go over the recent earnings and whats in store for the rest of this year and beyond! I wanted to wait for the Global sales data to drop, many thanks to EV Sales blog!
Tesla beat estimates with 2020 sales of $31.5bn, up 28% from the prior year and $721m in net income marking its first full profitable year.
Executives were unusually quiet in their production goal, although they’ve reiterated the long term 50% growth target. Several pundits have taken that to mean 750k for this year and over 1m in 2022, so those are the unspoken objectives the stock will be judged on. Doubling in two years would be no mean feat and would put Tesla among the biggest manufacturers in the world, especially considering it is a singular brand (not to mention a sizeable energy business attached).
Actually the non-automotive side seems to be most promising in the immediate future. Solar deployments ramped from 57MW to 86MW in Q4, impressive considering how time consuming training and installation is. Post-restrictions this could be one of the bright spots in the entire business. Energy storage doubled to 1.5GWh and seeing such spectacular growth invigorates Tesla’s ambition of becoming a world leader in battery storage. A slight source of worry is that the gross margin turned negative this quarter, this might be a result of pandemic-induced costs for solar but is worth keeping an eye on as the segment scales.
Current annual capacity is 1,050,000 which means even if Tesla doesn’t expand at all it could still hit its 2022 guidance. That is impressive. Of course, two Gigafactories in Berlin and Texas are under construction, and with more in the pipeline as well as Shanghai/Nevada expansion continuing this should not become a bottleneck, especially with a rather neat $19bn cash pile.
Regulatory credits were greater than net income but these should stabilise at €1.8bn ($2.2bn) euros annually for at least the next couple years as the newly merged Stellantis is still quite a laggard. By the middle of the decade when the agreement is set to run out Tesla’s profit should be substantially higher than this, and with a Biden administration likely providing sizeable new environmental incentives I see this as a relative non-issue.
The main downside currently is the continual delay of FSD. Many drivers agree that level 5 feels as distant as it ever has, and while bulls can rightly point to Tesla’s advantage in data collection, the reports that only 2% of Chinese buyers added autonomous features onto their purchase is disappointing. I have always seen this as the most significant risk in the business, especially now considering the majority of Tesla’s automotive profit is dictated by self driving take-up and advancement.
Global competition did markedly increase this year, among the best improvers were Volkswagen which went from 6th to 2nd place, Mercedes, which was not even in the top twenty last year, managed a respectable 6th. The VW Group now has an 11% market share and if all goes well there will be a true battle for first position going forward. I believe this may become evident in margin pressure for Tesla, especially as the board has consistently prioritised volume over profitability.
I’ve been trying to avoid it but I guess I should mention bitcoin. Elon seems to have decided to like it now and that probably means there is a not-insignificant chance of some of Tesla’s healthy balance sheet being converted. That seems horrifying to me but ardent supporters would probably see that as a buy signal given the world right now so I’m going to leave the discussion at that.
2021 EPS is currently forecast at 3.82, and sales at $47.7bn. The EPS expectations are in my view too aggressive, I think $2-2.50 is more realistic. As for revenue, expectations seem about right. My personal model gives me $47.5bn in sales assuming insurance continues rolling out across the States and the Semi is still delayed until the end of the year. A couple of upside surprises are possible; Plaid could boost S/X revenue by a few hundred million and remotely but not impossibly Tesla could launch its ride-hailing service which could significantly disrupt the market incumbents while they grapple with the pandemic and immediately be cash generative.
Shall we talk about valuation? This time last year Tesla’s market capitalisation was $120bn, rich by all means but not astronomical given the billions in free cash flow the carmaker was to produce and enterprise values in the industry. Today it is the seventh most valuable company in the world, with a forward PE of 207. It is ultimately up to individuals to decide whether that is an acceptable level to buy in (Amazon for example trades above 80 and is forecast to grow far slower), although one might say that even if full autonomy arrives and is statutory approved tomorrow there is probably only single digit upside left. The other side of the coin is that this is now a “safe trade” in a growing industry and in an era of the zero lower bound, so there is little reason not to invest for the long-term. Could I see it hit $1000/1T at some point matching the current high price targets? Easily. The stock could also get pummelled down as EPS expectations are dramatically reduced over the next few quarters. One thing’s for sure, this rollercoaster hasn’t finished quite yet.
Papa Elon (it’s a jokes on Reddit) was a guest on the Munro Live channel.
MEGA STONK. $TSLA.
He knows how they get painted, he knows how seats are made. He remembers how his butt felt in an early model S. His knows the lines of code (less 
)
Comments:
“One of the few interviews I have seen with Elon where the interviewer had any notion of what they were talking about. Great job!”
Mr Munro is 
Why buy VW id3??
TSLA Q2 results analysis by ARK on Yahoo Finance
Solving The Money Problem channel
“At ARK we focus on the long term” 
So Tesla recently bought $1.5B of Bitcoin and its just been revealed now
Bitcoin price surged already.
Same for argo block chain.
I markets have received the news positively
Honestly I don’t know what to do anymore other than laugh. What a time to be alive.
Edit: btw, I was kind of joking when I mentioned it before…
judging by the activity at top VCs in the Silicon wonderland, blockchain and their coins going mainstream was inevitable.
"“I am late to the party but a supporter,” he told his audience. “Bitcoin is on the verge of getting broad acceptance by traditional finance people.” Elon Musk's Tesla Has Invested $1.5 Billion Into Bitcoin - Decrypt
did ARK invest’s analyst say about 8% of Tesla’s cash is in Bitcoin?
looks like a good way to manage Fx risk ! theyve done great research on crypto and Tesla, well done ARK 
How do you go from selling regulatory green credits to other car makers to being okay with Bitcoin’s energy consumption?
Neither of those things is environmentally friendly, if it was all about the environment they wouldn’t sell their credits, as that just enables ICE car makers to carry on as before
Sure but they are not the same, one actively uses electricity, whilst the other gives ICE car makers a short-term pass to sort out their dinosaur habits. However, pretty much all ICE car makers now have EV car projects as they don’t want to really fund the competition. Bitcoin on the other hand doesn’t do that.
Hey people. First time on tesla chat. I went all in om tesla last year. I love them as a company and Elon is the cleverest man on the planet. When I saw him landing rockets backwards I was hooked. The business model is sound and even though competition from ICE makers is massive they are all way behind the 8 ball. Tesla are streaks ahead in technology and custom built infrastructure. Not retro fitting a load of factories and playing catch up.
Here is the my problem with them. They are an American company. If you look at the USD thats where my concerns are. Since 2008 the national debt has gone from $800bn to over $28tn. This is scary. Over 66% of all USD in circulation was printed in the last 11months. The GBPUSD has reached record highs today where it was 1.14 12 months ago its now is over 1.37 and moving for 1.38 v soon. So here is my dilemma. I love the company and I just don’t want the shares to be worth a lot less in GBP. If the shares climb to $1000 and the GBP is worth 2 USD then effectively the value is going to go down.
It is because of this i have been laddering out over the last few months. But this news about tesla investing in BTC makes me think Elon sees the same thing and makes me think its worth DCA and getting back into the tesla game.
I am by no means an expert but I am looking for opinions, advice and to see what the wider community is also doing
I was looking at Tesla’s climate impact report last night https://www.tesla.com/ns_videos/2019-tesla-impact-report.pdf . Surprised not to see a target date for carbon neutrality (though I may have missed it) but there are a lot of other interesting numbers.
Tesla has a “clean energy” story. Tesla says buying 1.5bn of BTC is a diversifying-the-reserves move https://ir.tesla.com/_flysystem/s3/sec/000156459021004599/tsla-10k_20201231-gen.pdf (p23). It’s also a PR-savvy move, even an Elolz move. But very environmentally unsound. 
I still struggle with Tesla’s valuation, though I probably hold etfs that hold it.
BTC mining is very energy intensive. However over 75% uses renewable energy, mostly hydro.
It’s bad, but not as bad as it could be.
Ye, the world is not black and white, theres no 100% clean X and 100% polluting Y --those wind turbines, solr panels and batteries are made of things that took lots of water and energy to produce.
Computing is expensive and even data centres you connect to daily in general consume lots of dirty power. Renewables are catchin up with dirty coal and we’ll eventually get to all clean. Tsla sells home batteries and solar.
Youcan avoid the Us market and watch the charts all day or use the opportunity to take action. Prices go up and down all the time even if they make no sense. Id recommend using a broker that allows u to hold a USd account, so u only have have to pay FX fee twice – when you convert out of and into sterling. You dont have an Fx loss/gain unless you switch into Gbp. Most international companies face Fx risk and Tsla gets a lot of their revenues from China.
Holding money in a USD account may save fees, but if you believe that the USD is falling surely it exposes you even more to currency risk?
(note: I’m not saying USD will fall vs GPB, just that if you believe that why would you want to hold cash in USD in your account?)
Yh I’m not suggesting holding usd. My issue is a company i love atm is outrunbibg inflation but u was concerned that eventually it will catch up with tesla. But when I saw that tesla had gone big on crypto I think that could be really good at insulating tesla from Inflation some what. I just don’t want to be left holding an asset that on paper is increasing in value built in reality isn’t out running the currency pair change.
Is anyone else concerned about this or am I just reading too much into it?
