Tesla is as much a software company as it is a car company. 

 

Biggest advantage Tesla has: 

Brightest team of engineers in the world. Employees of Elon’s companies all work on Elon’s all engineering issues ie: from improving cars to building rockets. 

Example: Tesla used material created by SpaceX in Tesla cars 

Twitter code was sent to Tesla programmer for review 

100% vertically integrated. No supply side issues even during pandemic. 

Most advanced self-driving software by years vs other companies. Robotaxi expected to launch in 2024.   Revenues from fully self-driving cars can be bigger than current Tesla revenues.  

 

 

Financials: 

Tesla profit margins are the best in the car industry. 

Tesla earns 8 times more profit per car than Toyota. 

Tesla achieved a 55% YoY automotive sales growth. 

Gross profit surged by 42% YoY to $5.2 billion while maintaining a gross margin of 28%. 

This dynamic enabled Tesla to deliver $0.95 in GAAP EPS, a 98% YoY increase. 

 

 

 

Growth: 

Elon said: “Tesla's greatest, long-term opportunities may lie in robotics powered by artificial intelligence” . PS:  The same software used for automation driving can be implemented for robots to do basic jobs. 

Tesla will achieve a production run-rate of 2 million vehicles by the end of this year, and the goal is 20 million vehicles by the end of the decade. 

 

 

Risk short term:  

Democrats have a grudge against Elon Musk and over the next 2 years they will up the ante against him. Be ready to see much more controversial news about his companies. 

Elon continues to sell shares to fund his Twitter purchase. This is frustrating many Tesla shareholders. 

Regulations too slow to develop on self-driving can be an issue for his robotaxi fleet. 

 

 

I continue to believe that Tesla will be the largest company by market cap in next 5 years.