[ham_sandwich]

It seems like Tesla is at a pivotal moment.

On one hand there are hyper-bulls who claim Tesla is a $4000 stock and the future of transportation. On the other, hyper-bears claim the equity should trade around $0-$10. There seems to be no middle ground.

It seems like they are almost betting the company on FSD. I don’t think FSD is really even close to a possibility over the next 5-10yrs. I hope I’m wrong, but if I’m right, I don’t see how Tesla keeps going on like this.

[dragonwriter]

> On one hand there are hyper-bulls who claim Tesla is a $4000 stock and the future of transportation. On the other, hyper-bears claim the equity should trade around $0-$10. There seems to be no middle ground.

Well, other than actual investors.

[Traster]

>On one hand there are hyper-bulls who claim Tesla is a $4000 stock and the future of transportation. On the other, hyper-bears claim the equity should trade around $0-$10. There seems to be no middle ground.

Well the middle ground is the actual stock market where Tesla is trading around $265.

[cmsonger]

> It seems like they are almost betting the company on FSD.

IMO they don't have any choice. The more and longer they operate like a car company shipping bigger and bigger volumes, the more their financials will be undeniably trend towards those of the existing car companies and the more their existing market valuation will be hard to justify.

They need something like this to not get traded at traditional car industry multiples.

[bryanlarsen]

If you just measure based on Tesla's last two quarters, their P/E is just 28. That's high for a car company but pretty low for tech. Self-driving is not necessary to maintain that valuation, only continued growth of the electric car market in general.

[cmsonger]

> That's high for a car company but pretty low for tech.

Yes! Totally agree.

> Self-driving is not necessary to maintain that valuation, only continued growth of the electric car market in general.

Disagree. The key properties of the car business are high capital costs and high variable costs and not huge margins. The key property of the tech business is low variable cost and often low capital costs (but not always) and high margins.

There's nothing "tech" about building electric cars vs. normal cars and 10 years from now the margins and capital expenses of electric car business will be like the existing ICE car business.

So this is Tesla saying: "Yeah, our financials are starting to look like a normal car company, but we've got this thing that you should keep value us even more like a tech company than you do today."

[bryanlarsen]

The market values Tesla like a car business that is growing ~50% per annum.

> 10 years from now the margins and capital expenses of electric car business will be like the existing ICE car business.

Tesla already has margins similar to existing car companies.

> So this is Tesla saying: "Yeah, our financials are starting to look like a normal car company, but we've got this thing that you should keep value us even more like a tech company than you do today."

Yes, they're saying that, but the market is obviously not buying it.

[sytelus]

I think FSD would be cherry on the top. If they can continue slashing down the prices and improve battery life it would be revolution in itself. Even just continuing with current pace if they can produce $18K electric car with 600 miles range in next 3-5 years, you could be golden as shareholder. Their advantage, like Apple, is attention to details and awesome design that other car manufacturers have failed to replicate.