Anyone following Tesla would be aware of the controversy in valuing this company (currently around $150B), putting aside the coronavirus fears for a moment which we all hope will be temporary of course.

With bulls like Catherine Wood’s Ark Invest quoting an incredible $2.7T within four years and the bears and shorts predicting bankruptcy only a few months ago.

How can there be such discrepancy?

I honestly believe it’s due to:

1. An almost unheard of level of mischievous reporting by anti-Green energy interests and EV (electric vehicles) investor shorts. A conspiracy theory? Almost. When the news coming out is so anti something that’s clearly good for everyone except shorts and oil interests!
2. Inexplicable focus on ultra short-term rather than not-too-far-away medium-term

My main interest is as a technologist and the claims of these bears and shorts are simply outrageous and anti-scientific.

The problem is that, in my experience, the person on the street – and many traditional investment commentators – largely believes this news! In chatting to people they think Elon Musk is some sort of charlatan or joker! Nothing could be further from the truth. Elon Musk is the real deal, and we will give the evidence about that in another post later.

Tesla will, in my opinion, as a technologist, reach a multi-trillion $ valuation within 2-5 years for the following reasons.

1. EVs are ultimately undeniably greener. Even without greener fuel sources this is true because it is more efficient to burn oil in the plant and transmit it as electricity than burn it in your car. With more and more green energy sources you don’t even need that argument.
2. The world is going green whether you like it or not. Entire markets (eg much of Europe including the UK) are banning/limiting purchase of ICE vehicles post 2030-ish. That will make ICE (Internal Combustion Engine) vehicles more expensive even in other markets.
3. EVs perform & maintain better than ICEs. It’s just true. More responsive. Far fewer moving parts. No gears. Generates energy down hill. Brakes last much longer. Range now up to about 400 miles (640 km) and it’s increasing every year. Huge network of chargers almost everywhere. And charge at home for the daily commutes.
4. Tesla has a 5-10 year jump on everyone else with the best motors, batteries, charging network, electrical system, computing framework, coming ‘alien technology‘ power-train, self-driving chip, self-driving approach and self-driving data set. Almost all of it in-house.
5. Tesla has disproven all of the ‘not a real manufacturer’ claims. Production quantity and quality, sales, profit and demand are higher than ever.
6. Tesla’s solar & residential battery business could be as big as its car business. The solar tile (roof tiles with built in solar panels) is set to explode. It’s the same cost as a roof plus solar and can give a higher kW output. And who makes the battery to store the power?
7. Full Self Driving (FSD) will happen. FSD and robotaxis are just too useful to humanity (busy people, seniors, disabled, night transport etc). Robotaxis ARE point-to-point public transport. Governments, even lefty ones, are and will get behind it.
8. Tesla is well ahead on FSD. Tesla has a 14x faster camera image processing chip, billions of miles of test data and FSD is near ready for release and application for regulatory approval. It is irrelevant if approval occurs in late 2020 in one jurisdiction as Elon predicts or 2021 or 2022. It will happen.
9. Cameras & radar (Tesla) vs LIDAR (laser distance measuring) & high res maps (many other companies) is a no brainer (in favour of cameras & radar) because:
   • cameras & radar are much, much cheaper and less obtrusive than LIDAR
   • neural networks interpret the camera imagery really well, extracting distances accurately enough
   • people already use their eyes
   • LIDAR can’t see what’s on road signs
   • high res maps will never cover everywhere or keep up with changes
   • Tesla autopilot is already 6.4 times safer than not using it
   • Experts from the LIDAR camp are switching views and agreeing with Musk’s famous ‘LIDAR is a fool’s errand, mark my words’ (2019).
10. Model Y is about to come out. Early! So they’ve beaten the production hell issue. And looking to be bigger than Model 3. And the Chinese Gigafactory is spitting out Model 3s within a year of starting construction . . on the building. And the Berlin Gigafactory is back felling trees.

I haven’t done the calculations, but Ark Invest has, and even without FSD Tesla hits a near $1T cap by 2024 and with it and robotaxis the sky’s the limit.

Image credit: Steve Jurvetson | Flickr