Tesla's Imminent Hyper Growth: FSD Autonomy, Energy Business, and Software Licensing Driving Long-Term Potential

Tesla's hyper growth is imminent, driven by factors such as FSD autonomy, energy business, and software licensing, and investors should prioritize long-term potential over short-term metrics

Questions to inspire discussion

• What is driving Tesla's hyper growth?

  —Tesla's hyper growth is driven by factors such as FSD autonomy, energy business, and software licensing, which will significantly contribute to their earnings.

• Will Tesla's gross margins increase?

  —Tesla's gross margins could increase if they stabilize prices, lower production costs, and potentially lower vehicle prices while still increasing margins.

• What will impact Tesla and other automakers in 2024?

  —Consumer demand for electric cars and the financial ability to purchase new cars will impact Tesla and other automakers, with Tesla receiving a higher multiple due to their first mover advantage.

• What is the future potential for Tesla's growth?

  —Tesla's future growth potential through licensing its Full Self-Driving technology to a large percentage of the global vehicle fleet could make all other aspects of its business look insignificant.

• Should investors prioritize long-term potential over short-term metrics?

  —Yes, investors should prioritize long-term potential over short-term metrics, focusing on Tesla's hyper growth potential driven by factors such as FSD autonomy, energy business, and software licensing.

Key Insights

• 🚗 The increasing intention of 2/3 of people globally to purchase an electric vehicle within the next 5 years indicates a growing shift towards electric vehicles over internal combustion engine vehicles.
• 📈 Electric vehicle sales are projected to increase by single and double-digit percentages in just about every region on Earth, reaching 80 plus% of all new vehicles sold by the end of this decade.
• 🔋 The conversation around Tesla over the long term will not be about profit margin on hardware, but about the innovation and advancements in the electric vehicle industry.
• 🤖 Robot taxis will start autonomously shuttling people from point A to point B and take a cut of every one of those fares.
• 🚗 Licensing full self-driving software could be a massive money printer for Tesla, as other companies will want to license the software, providing a form of leverage that is unlike physical vehicle production.
• 💰 The profits from FSD licensing alone could surpass all other aspects of Tesla's business, making gross Automotive margins seem like "last decade's news."
• 💰 Tesla's stunningly high automotive margins would make Ford and General Motors froth with envy.

#Tesla #Investments

Clips

• 00:00 🚀 Tesla's stock is up 107% this year, and the demand for electric vehicles is expected to increase as prices decrease and more people become aware of the benefits, with Tesla's potential for hyper growth dependent on maintaining market share and demonstrating the value of their self-driving software.
  • Tesla's stock is up 107% this year, and the demand for electric vehicles is expected to increase as prices decrease and more people become aware of the benefits.
  • Despite current delays in EV purchases due to economic uncertainty, reports of a slowdown in EV demand are false, as electric vehicle sales are expected to increase significantly in the coming years.
  • Tesla's potential for hyper growth is dependent on their ability to maintain market share, increase margins, and demonstrate the value of their self-driving software through sales numbers.
  • Consumer demand for electric cars and the financial ability to purchase new cars will be a theme in 2024, impacting Tesla and other automakers, with Tesla receiving a higher multiple due to their first mover advantage.
• 03:41 🚀 Tesla's gross margins could increase with stabilized prices and lower production costs, while FSD will become a larger part of the market when autonomy is solved.
  • The demand for electric vehicles in China is still strong, and Tesla has taken steps to squash competition and raise prices, despite a decline in gross margins.
  • Tesla's gross margins could increase if they stabilize prices, lower production costs, and potentially lower vehicle prices while still increasing margins.
  • Electric vehicles are a new technology with a lot of innovation in manufacturing, especially in terms of reducing parts and decreasing battery costs, and the long-term conversation about Tesla will not be about profit margins on hardware.
  • FSD will become a larger part of the market when autonomy is solved, with Tesla potentially licensing it to other companies and already in discussions with large automotive manufacturers.
• 06:47 🚀 Tesla's growth will be driven by FSD autonomy, energy business, and software licensing, with gross automotive margins potentially reaching 20%.
  • Tesla's gross automotive margins may permanently stay at 18-19% or reach 20%.
  • Tesla's growth will be driven by FSD autonomy, energy business, and licensing their software for other companies, which will contribute significantly to their earnings.
• 08:42 🚀 Tesla may offer FSD technology to competitors like Ford, potentially sharing profits 50/50, to prevent their bankruptcy and incentivize comparable autonomy functionality in the global vehicle fleet.
  • Tesla may offer a 50/50 split on FSD to their competition, such as Ford, to prevent them from going bankrupt and no longer being in business.
  • Tesla is incentivizing Ford and other companies to have comparable autonomy functionality and charge the same price to consumers, potentially sharing profits 50/50.
  • Tesla's future growth potential through licensing its Full Self-Driving technology to a large percentage of the global vehicle fleet could make all other aspects of its business look insignificant.
• 11:14 🚀 Tesla's hyper growth is imminent, with a focus on software, AI, robots, and global labor market opportunities, and investors should prioritize long-term potential over short-term metrics.
  • Tesla has high automotive margins comparable to traditional car companies, and in the future, people won't even remember the concerns about Tesla's margins or EV demand.
  • Tesla's hyper growth is about to begin with a focus on software, AI, robots, and global labor market opportunities, and investors should not obsess over short-term metrics but instead focus on the long-term potential.

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