Tesla Is Both Going To Be The Greatest Firm In The World Or Collapse In Subsequent Few Years

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So, Tesla held its massive annual shareholder assembly yesterday, and that included a vote to (once more) give Elon Musk by far the most important CEO compensation bundle in historical past. However the greatest story at Tesla is identical because it was final quarter, final yr, and within the years to come back. The corporate is attempting to shift into an AI and robotics firm. Whereas its income and income are nearly totally from producing and promoting automobiles proper now, Elon Musk and the corporate have been very clear currently — in the event you don’t consider in Tesla’s AI and robotics work and plans, you shouldn’t be invested in Tesla. Once more, that is what was emphasised within the annual Tesla shareholder assembly.

Tesla Chair Robyn Denholm famous that Tesla is exclusive in how giant its retail shareholder base is. The very fact is: institutional traders are much less inclined to consider that one thing will occur that’s by no means occurred earlier than, that one thing can be created that hasn’t been created earlier than. Retail shareholders are extra inclined to consider in desires. A decade in the past, the dream was mass-produced, high-volume, inexpensive electrical automobiles. Those that believed have been rewarded when Tesla manufacturing and gross sales exploded. Those that didn’t consider and have been ridiculed by critics for years obtained the final giggle. Right now, the dream is one thing very completely different. Tesla gross sales have stagnated and even dropped after their lengthy climb, however the focus is now on AI, true full self driving, and a brand new era of robots which might be extra like people and able to doing quite a lot of duties.

Tesla’s previous success doesn’t predict what is going to occur sooner or later. It might be that Tesla once more achieves what most suppose it can not, or it might be that Tesla can’t succeed on this very completely different enterprise. The brand new targets usually are not as “easy” as scaling up mass manufacturing of electrical automobiles. They contain going the place no firm has gone earlier than in advancing synthetic intelligence with a purpose to allow widespread use of robotaxis by hundreds of thousands of individuals and synthetic intelligence plus robotics with a purpose to allow human-like robots that may carry out all kinds of duties.

However how about some quotes from Tesla now? To kick off, from the recorded intro video for the assembly, Elon Musk states, “My prediction is {that a} majority of Tesla’s long run worth can be Optimus.” He additionally states, “Relating to FSD model 12, it’s profound. The speed of enchancment is speedy. It may be the most important asset worth appreciation in historical past when you are able to do unsupervised full self-driving.”

However, once more, simply because Tesla achieved what it did prior to now doesn’t imply it should obtain these targets. It’s a complete completely different recreation. Once more, you don’t need to take my phrase for it. Right here’s what Elon Musk acknowledged at yesterday’s assembly: “I feel we’re not simply opening a brand new chapter for Tesla. We’re beginning a brand new ebook.”

I don’t suppose anybody is aware of for certain what is going to occur, however for sure, Elon Musk and Tesla shareholders consider within the story of this new ebook. If the whole lot works, Tesla would be the solely firm on the planet with broadly out there unsupervised full self-driving functionality in hundreds of thousands of shopper automobiles. It is going to even be bringing a brand new product — a brand new dwelling and office robotic — to who is aware of what number of patrons? If this stuff work, potential progress and income are inconceivable to think about. And the way lengthy it will take different corporations to catch up can also be utterly unpredictable, notably because of Tesla’s distinctive information supply and head begin.

If this stuff don’t work, nonetheless, Tesla will proceed to compete towards tons of of different automakers promoting increasingly more, and higher and higher, electrical automobiles. If it fails on these massive makes an attempt, that can be a tarnish on the corporate and it’s going to be very troublesome to develop at anyplace near the speed it has beforehand grown at. In the meantime, actually, if it continues to pour cash into FSD and robots and so they don’t bear fruit, particularly financially, then Tesla might be pouring cash down a drain and massively disappointing shareholders with billions of {dollars} of inventory on the road. One might even say that if it fails on FSD and robotics, the corporate might collapse on itself — particularly if it has overbuilt its factories, shops, and repair facilities. What occurs in the event you plan for, and construct for, 50% progress a yr however then find yourself with 0% progress a yr?

Being utterly sincere and frank, I don’t have a robust, clear opinion on what is going to occur. It’s onerous to know what Tesla can and may’t obtain with its method to FSD, robotaxis, and superior robots. I’ve learn numerous feedback for and towards the corporate. Some appear convincing on one aspect, and a few appear convincing on the opposite aspect. However none can definitively inform us if Tesla’s method will work in the long run. And we are able to’t blindly consider Elon Musk, who stated there could be a full self-driving demonstration from San Francisco to New York Metropolis about 7 years in the past, and has misjudged the progress and way forward for the expertise for a number of years. We can also’t blindly consider skilled critics who say Tesla gained’t obtain this stuff as a result of they haven’t been accomplished earlier than and Tesla doesn’t have the precise technological method, as a result of we heard that about SpaceX’s reusable rockets (and different issues), we heard that in regards to the Tesla Mannequin S, the Tesla Mannequin X, the Tesla Mannequin 3, and the Cybertruck. There are at all times some specialists who’re hyper-skeptical, have restricted imaginative and prescient, and find yourself being unsuitable. I’ve seen it far an excessive amount of, particularly within the case of Tesla, to blindly consider specialists.

In the intervening time, for me, it’s a stalemate. I see causes to consider and causes to not consider. The loopy factor is simply how a lot is on the road on this case. It’s not a selection between a burger or a burrito. It’s about whether or not Tesla will develop into the most important firm on the planet or stagnate and collapse. Maybe we’ll have higher perception into the place issues are headed by the tip of the yr, or even perhaps by the tip of the summer time. We’ll see. Within the meantime, please do share in depth, detailed arguments that make the case for both aspect. I’m at all times on the lookout for new clues!