When and how can Tesla become worth more than Apple and Saudi Aramco's existing valuation? I discuss Elon Musk's comments through my presumptions and share napkin math and when and how it can be possible.
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This is a great example of how to do back of the napkin math… so let’s all get our own napkins out and see what we think it would take to make Elon’s statement possible. This is also a great example for anyone who wants to better understand the HOW so you can answer to they WHY if your conviction is ever questioned by yourself or others.
Thanks for your take Dave. Elon did allude to new products to achieve the $4.5T, which won’t solely be related to vehicles (Robotaxi, Semi, etc.). Energy is still ramping up and Services (high profit margin) will certainly start to be a bigger chunk of revenue. I also expect that at some point certain aspects of Tesla’s technology will be licensed to others – this opportunity is not talked about much. Looking forward to the future for TSLA!
They will teach Optimus how to drive. . . No technology licensing required. . . But it will be a hoot when they show up at the DMV to get their photos taken for the Drivers Licence😊
@Dewiz Agree, this will not happen with cars alone, otherwise Elon could have come up with this figure before. This needs to include the energy business, most importantly. Also, this will include FSD subscriptions, and other new products, like buying food from your car’s screen at the Mc Donald’s drive-through and Tesla taking a cut for the payment.
There could be a lot of additional revenue streams from supporting truck businesses.
Hey Dave, for 10M vehicles that would mean a total of $70B of FSD revenue by 2027. That’s going to be tough! Elon must also be thinking of reducing the $20k cost per vehicle, maybe cutting it by 25-50% by then. At the end of the day, keeping track of FSD revenue and cost per vehicle becomes paramount in tracking progress towards this goal. Thanks for your great work
Thx Dave. As always love the work you do.
Thanks again, Dave, for your honest take! You represent the clear-headed investor!!
It’s amazing to see how widely Tesla shares are held -by common folks from every corner of the planet -not just by the elite few. It’s how Tesla is redistributing wealth to humanity. Something I’m sure no-one even expected. In addition, it’s such a delight to see that one man can indeed change the world.
Good point, Drew.
Hi Dave, great napkin calculations, but I think you should also add the energy division which should be scaling up in the next few years and bring in significant revenues, as Elon said, Tesla Energy will dwarf Tesla EVs revenues.
You should factor energy in too. Eventually, it’s going to be significant for Tesla. Great video!
Right? Like how can tesla just calmly say they have reached a run rate of 6,500 powerwalls every single week and nobody reacts. 😀
For reference that means they can now in 1 year of production make more powerwalls than have been sold&installed since 2016. 👍🏻
The megapack facility in lathrope is already up&ramping as well with a stated goal of 40+gwhs in just megapacks to end 2023.
And the solar roofs are supposedly now aiming for new construction only and at a steady 100+roofs a week run rate. 🤔
Love this breakdown. Thanks as always Dave!
Thanks Dave, really useful to see your napkin math. I guess energy storage and generation can contribute more to the bottom line as Tesla become less battery constraint.
One note….. as tesla and other EVs and renewable energy comes online , it could lower the revenue and evaluation of oil companies like Saudi Aramco, so over time this could become easier and easier to accomplish as more and more EVs are sold worldwide
I like how this napkin math totally ignored their Energy division 😅 With 4680 cells production growing at a rate (>50%) faster than their delivery growth rate, there will be a time in the future where Tesla will produce more cells than the automotive division can consume. The excess cells will then be used for battery storage. When Tesla got its 4680 fully ramped in the coming few years, their energy division will grow exponentially too
I love napkin math. It’s the best kind of math – straight to the point and no complications.
I love the napkin math exercises, that’s always a good place to start to try to wrap our minds around TSLA’s unbelievably exciting growth.
Thanks Dave, good stuff 👍🏼. I was under the impression that Tesla’s value would 3-4x once FSD was solved. I guess that’s not the way it works, I guess an actual path to that valuation is needed 🤷♂️ Looks like Elon just mapped out that path, can’t wait to hear it. Probably in master plan part 3.
Dave,
What’s exciting is that you are only describing a $4.5T market capitulation based on AUTO sales. There is also energy, Optimus, and future products (not including Burnt Hair).
So I see TSLA getting there much sooner. Exciting times to be long.
Michael McKinney
Another way to look at it is through share price. Hopefully, everybody on this channel has a model that ultimately determines earnings for each year, and from that, you can derive EPS projections and share price. You need to assume PE. For a 4.5T valuation, share price would be $1,442 (that is, market cap of $4.5T divided by outstanding shares of 3.12 billion). My model shows that occurring around 2026. Who knows? But it seems reasonable
Thanks, Dave – I am using the current stock buying opportunity to the best I can – hovever, my experience tells me that these assumptions need an awful lot of stuff to work out. This is a tough call.
Great video Dave, in one way I think it will happen within “5” years. Reason, Elon predicted Falcon would land on its own in 2010 – Then happened in 2015. In 2015 he predicted TSLA will be worth more than 700 Billion – Then it happened in 2020. Sounds crazy, but I have a good feeling about it.
I frankly found it somewhat childish, that Musk claimed Tesla could become more valuable than Apple and Aramco combined, because I was convinced that he just hinted at the pure size of the two biggest companies in the world. However, after thinking about it, it became clear to me that he named these two, because Tesla will change cars in a way Apple changed mobile phones to smart phones and continues to expand its energy business, while Saudi Armco’s oil business will slowly decrease over time. Once I understood that, I got REALLY excited!