[maxbond]

The market discounts future returns but it is unclear and shifting what proportion of those returns are from the operations of the company in the market it sells products in and what proportion comes from the operations of traders in financial markets. More plainly, traders discount returns from buybacks and dividends financed by the operations of the company and returns from selling their shares to "greater fools".

As long as the music is playing they will keep dancing. Musk is a master of DJing that party. We might wake up tomorrow and find that his house of cards has fallen apart, but we might wake up to learn they really have solved FSD. That ambiguity keeps the price from collapsing.

[beAbU]

What is it about FSD that results in this valuation though?

If elon builds a time machine and goes to the future to get FSD tech from 100 years from now and rolls it out to all teslas tomorrow, what will change? Will every car driver get rid of their cars and get a tesla? Will that suddenly justify the stupid valuation?

Realistically, I don't think the majority of drivers will care that much. Sure, their sales will go up, but I can't see it going up by that much.

FSD will never be "achieved" suddenly. The tech will incrementally improve every year, across all manufacturers until one day we are manual driving only 1% of the time with FSD doing the rest. Like AGI, there is no moat in FSD. This is the natural outcome of the trajectory that we are on right now, and nothing about tesla is making me believe they will offer anything that other OEMs can't.

No, I think the market is much more cynical than that. Tesla is a meme stock similar to bitcoin or GME. Investors are degenerate gamblers, hoping that it will continue to rise because that's what it does atm, and hoping they won't be the one left behind holding the bag when it crashes one day. It's little more than a voluntary ponzi scheme that most big investors openly buy into knowing full well what's at stake.

[mcv]

Exactly. It's meme stock. There's no rational explanation for this ridiculous valuation.

Tesla has been overvalued for a long time, and not by a bit either; they're worth more than the next several car makers put together, yet sell less cars than any of them. Their high valuation could still be considered defensible when they were the fastest growing car company in the world and the only one selling electric cars. But none of that is true; everybody is selling electric cars now, and BYD is selling more than Tesla, I think. And instead of growing, Tesla is now shrinking in many markets. Even their self driving is not the best.

The share price should have collapsed, yet it remains high. How? It makes no sense to me.

[beAbU]

> It makes no sense to me.

Honestly, that's the easy part. Cynical, degenerate gambling.

[salawat]

>What is it about FSD that results in this valuation though?

Are you willing to accept the ugly answer? Because the point of FSD isn't what they pitch. The replacing human drivers to save lives yada yada... That ain't it. The point is creating a handful of leverage points through which the autonomy of the populace to move wherever they want can be controlled through. Once the tech is the majority driver, people can finally be properly managed as the little work units they are. That's the dark part of the valuation. The power aspect. The ones who own the means to locomote are the ultimate rent collectors. There's simply no arguing that can be done by a populace that can be prevented from showing up to any attempt at collective protest via geofencing. Or if they do show up, can be added to a comprehensive list for participating in disruptive activities.

Capabilities, ladies and gentlemen. We have to assess these things on the ground of what they enable. Delegating transport entirely to a third party necessarily creates a vulnerability of society to manipulation by the ones running the damn thing; and the ones running the damn thing want money, and security for themselves.

[ryandvm]

Why don't all the other automakers wise up and just start promising full self driving "next year" as well?

[beAbU]

Because their stocks aren't memes, their investors are serious, nobody really GAF about self driving and fully autonomous driving isn't actually the "killer app" many think it is.

[ggggffggggg]

How killer would FSD have to be for it to count as the killer app?

I’d pay at least double for a car with FSD. More if the car’s longevity could be established. Is that killer enough? (Real question).

[xnx]

> there is no moat in FSD.

Being a really really hard problem is a moat. Many have tried and given up already: Uber, Cruise, etc.

[beAbU]

There are so, so, so many companies operating in this space right now. You list two that have given up. A quick google brings back at least a dozen operations that appear to be still ongoing.

BMW Personal Pilot, Merc Drive Pilot, and Honda Sensing Elite are Level 3 automation tech you can buy right now. Tesla is still at level 2!!

Whether Tesla is going to be the first to achieve true autonomy or not is a toss-up. And and regardless of who achieves it, the rest will be very very short on their heels.

[Kirby64]

> BMW Personal Pilot, Merc Drive Pilot, and Honda Sensing Elite are Level 3 automation tech you can buy right now. Tesla is still at level 2!!

You need to put about 10 asterisks on those. MB Drive Pilot has been discontinued due to "low demand and high cost", and those other 2 systems appear to have substantial restrictions. Meanwhile, FSD today "works" on pretty much any road or highway. I can easily see certain folks see that as far ahead of competitors, since it physically can do more in more places and operate in more conditions.

[notTooFarGone]

Really it's just pricing in musk fusing all of his business under the tesla name.

[SilverBirch]

That can't/won't happen. Musk's wealth is primarily in SpaceX now and he has a much higher ownership stake in SpaceX than Tesla. As well as that, Tesla is public so he can't just do napkin math and decide to merge them. So the question is: Does Tesla buy SpaceX? Well no, Tesla can't afford it. Ok, well can SpaceX buy Tesla? Well no, SpaceX can't afford it either. So do they announce a merger? Well that doesn't make any sense because Tesla is valued like a meme stock so it would massively dilute Musk's ownership of the overall company. So the idea that they fuse might be driving up the stock, but by driving up the stock you're actually preventing it happening. If Tesla starts to trade at realistic multiples and comes down to lets say a 200Bn company, I'd expect SpaceX to snap it up at that valuation, but it'd be crazy to do it before then.

[dh2022]

Even if they have FSD ready tomorrow the financials would not support this valuation.

Summing the sales figures in [0] we get 9M to 10M Teslas on the road. Let's say 10M and and let's say Tesla will keep selling 1.6M / year for the next 5 years [1]. This is 18M Teslas and let's assume all of them are converted into paying customers at $100 / month [2]. This works out to $21 B / year in income. $22 B / year in income cannot justify $1.5 T in market value.

Good thing they are switching to robots :)

[0] https://en.wikipedia.org/wiki/History_of_Tesla,_Inc.#Timelin... [1] - this is a huge assumption. Teslas sales are declining because of Musk's image, lack of innovation and competition from China.

[2] this is another huge assumption - I know 5 Teslas owners. They tried the $100 / month assisted driving (or whatever Tesla calls it these days). All said it was cool, but not worth it and did not sign up after the trial period. These are professionals who value their time (tech engineers and 1 banker)

[danaris]

There's zero chance that Musk will have suddenly "solved" FSD in a day, a week, or a year. He's not an engineer; he's a money man, and a grifter.

That's why people keep giving Tesla money: because Musk has fooled so many people into believing he's this amazing engineer, who could, possibly, "solve" FSD overnight—and, moreover, has gotten them to buy into it so deeply that they have tied their identity into that belief, and so in order to continue to cling to it, they reject empirical evidence of both his lack of qualifications and his outright crimes.

[maxbond]

Well he certainly wouldn't but the engineers working for Tesla might, with a probability that is very low but greater than 0. It's much higher (but still low) in 1 year, 5 years, 10 years. Tomorrow is a metanym for the future.

But to be very clear I not only don't think they will but I don't think that they think they will, or they wouldn't be shifting focus to Optimus. I'm not invested in Tesla except for my exposure through index funds.

If anyone who is a fan of Tesla can get through this article without changing their mind. Well. Bless their heart.

https://www.washingtonpost.com/technology/2025/08/29/tesla-a...

https://archive.ph/K4ckR

https://news.ycombinator.com/item?id=45062614

[Zigurd]

To be maximally reductive, FSD will never work because the sensor suite is deficient. There are other reasons but that one's enough.

Same for a rocket that's ridiculously large for orbital missions but can't go beyond orbit without 15 to 25 refueling flights of the same enormous rocket.

The reasons for both these failing are going to be manyfold and complex, but there are enough simple reasons that everyone should understand.

[ryandvm]

Wait until they announce that Optimus is only going to have ears because "bats get by just fine"...

[viraptor]

It would be actually fun to see where the limit is on echolocation with serious ML processing these days. Apparently people did quite well in 2022 https://pmc.ncbi.nlm.nih.gov/articles/PMC9655721/

[dudefeliciano]

> with a probability that is very low but greater than 0.

And it is insane that this warrants a 1.5 trillion USD valuation - for vaporware.

[throw310822]

The question of whether they will solve FSD is not very relevant if everyone ends up solving it roughly at the same time.

[TitaRusell]

Ha exactly. Do Tesla shareholders think the rest of the auto industry are in a coma?

Besides what does FSD even mean? Austin is not Amsterdam.

[ben_w]

> Do Tesla shareholders think the rest of the auto industry are in a coma?

I have no idea what institutional investors think, and they're probably the relevant group here.

From the way I've observed individuals discussing it, defending it, on HN… it pattern-matches to my understanding of what people these days call "main character syndrome", i.e. that the other companies are just a supporting cast to provide an interesting challenge for the only one that's not an NPC.

[throw310822]

Or, they're stuck in a narrative that stopped making sense only gradually. Tesla solving self-driving ten years ago would have been a triumph. Solving it today, meh. They would be ahead of others by a couple of years, max.

[alsetmusic]

> metanym

I appreciate when my vocabulary expands. I understood this by context and similarity to 'synonym'. I may have encountered it before (probably), but I didn't know it. Excellent use in a post.

Expands my horizons a bit. Hat tip.

[mapontosevenths]

> he's this amazing engineer, who could, possibly, "solve" FSD overnight

Even if thay were true many people hate Elon now. Enough that they will pass on any technology he is the only purveyor of.

After he celebrated letting children starve (USAID) by dancing on stage with a chainsaw many people decided to never buy any Musk product for any reason. Now there are the Epstein ties.

Worse, many people who dont care about politics at all won't get involved, because Musk is an unstable drug user and its not wise to entangle yourself in his business affairs.

[rowanG077]

You really thought the poster meant that Elon Musk personally went and implemented FSD? Just for your information, Musk is also not personally assembling every Tesla vehicle.

[danaris]

Have you seen the way some people talk about Musk around here?

There are clearly plenty of posters who, to all appearances, genuinely believe that he is the entirety of Tesla's R&D department.

[rowanG077]

Well if there are plenty of posters then it should be easy to give me 5 comments of different people where it's clear they believe Tesla R&D is a solo Elon Musk operation.

I'm not holding my breath though.