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Today, weāre going to move offchain and talk about a stock. š
You might be wondering: ācrypto is ripping to ATHs, why would we talk about stonks??? Aaahhhhhā š”
And the answer is š opportunity.
There is a stock that I believe could outperform the major crypto assets this cycle (and no, Iām not talking about NVIDIA).
It has the potential to grow 10ā20x this cycle from its current price (yes, Iām referring to the same cycles as crypto).
Itās currently still 50% off its highs (meaning the risk/reward is massive). š
And, wellā¦ Iām just going to come right out and say itā¦
I believe that Tesla will become the most valuable company in the world in the next 3 years.
I think that similar to crypto, Tesla is extremely misunderstood by investors. Itās also a very polarizing stock that attracts a lot of emotional haters (like crypto for that matter).
As Iāve mentioned many times, misunderstood and hated assets are often the best investments (crypto in early 2023, Solana in Q3 2023, Ethereum in January 2024).
In todayās PRO report Iām going to explain what many are getting wrong about Tesla and why this company is very likely to change the world just like Apple did in the last 20 years and cement itself as the most valuable company in the world.
Many of you have heard me discuss the āexponential ageā before, something that blockchain technology is part of.
The theory is that we are entering a time where 10+ new technologies are all being adopted and improving exponentially at the same time.
Even more so, the advancement of one tends to advance the others in tandem, making its growth even more exponential.
Well, Tesla is the best representation of the entire exponential age, all in one company.
Tesla isnāt another car company, even though thatās how the market sees it.
Tesla isnāt even a next-gen car company (EV + self-driving cars) like some Tesla bulls see it.
Tesla is a self-driving, green energy, supercomputing, big data, AI, robotics, Internet of Things and augmented reality company all wrapped into one.
Tesla isnāt just changing the way cars are made. Itās changing the way everything in the world is made.
Take a second with me to move out of crypto and look into the futureā¦
Whether you love or hate Tesla cars or love or hate Elon, put all of that aside for a second and keep an open mind. The opportunity in doing so is massive.
Why Tesla is Undervalued and Misunderstood š¶
First of all, letās start with understanding why Tesla is 50% from ATHsā¦
There are two main reasons:
1. Many People Hate Elon Musk and Tesla
People let their emotions block themselves from seeing what Elon and Tesla are doing. I love this.
2. Tesla is being valued like a car company
Yes, its market cap is double the second largest car company, sitting at about $660 billion today.
However, itās valued as a next-gen EV and self-driving car company, when itās actually so much more.
Every other large tech company right now is smashing ATHs, yet Tesla is still 50% from its high.
The main reason for the lag in Teslaās price is that interest rates are high. When interest rates are high, people have less money to spend on buying new cars or taking out loans to buy a car.
Thus, in every rate cycle, car companies (just like real estate), tend to sell off. Once rates drop, both car companies and real estate will start their bull cycle. These assets generally lag assets like tech stocks and crypto.
But hereās the thing. Tesla isnāt just a car company, it's a tech company and I think thatās where itās mainly being mispriced.
Before I get into the futuristic things that Tesla is doing that I believe will change the world, letās pretend for a second that Tesla is just a car company.
Even if that were true, itās already by far the best and is building a massive monopoly around the transportation industry (cars, EV, self-driving, ride-hailing services, road hauling and more).
Tesla is Already THE Car Company of the Future š®
To get started, letās look at a few charts to understand where Tesla currently stands in the car world.
Check out the growth rate in Tesla cars delivered on a yearly basis. This chart is unbelievableā¦.
In terms of EVs, Tesla dominates in the USA, the 3rd largest EV market in the world.
And it dominates globally too, with large growth plans coming for China, the largest EV Market currentlyā¦
One thing to note here is that almost 100% of Tesla sales are by specific customers because Tesla is its own dealer, whereas every other automotive company sells to dealers who then potentially sell to the public.
This means Tesla's numbers are even better than they appear.
In 2023, electric cars represented just 18% of all global car sales, yet the Tesla Model Y emerged as the top-selling vehicle worldwide, across all categories.
Tesla also manages to rank 14th in terms of top automakers in the world by car sales. Just look at Tesla's growth rate year over year, no other car manufacturer comes close to thisā¦
Tesla is single-handedly pushing the average consumer to move from gas-powered cars to EVs.
Studies show that 90% of all Tesla owners say they will never go back to gas-powered cars after driving a Tesla.
These numbers are insane and look similar to the raving reviews Apple users gave in the early days of the iPhone.
But whatās incredible about Tesla is that its cars continue to get better and better, while also getting cheaper!
Tesla is on pace to have the highest performant, safest and cheapest cars on the planet.
Here are Tesla's average miles driven per accident, comparing a normal Tesla vs. a Tesla using autopilot vs. the US average (more on the self-driving part of Tesla later..).
But the reason Tesla can keep creating better cars while also getting cheaper is because almost all of the components of their cars are designed by Tesla, from first principles.
They are manufactured in their own factories and they hold all the patents to them. Every other automaker has a complex and diverse supply chain for their cars, which forces them to rely on other companies for their components.
Tesla also designs and manufactures the best battery tech in the world (the most important part of an EV) and can produce these batteries at more scale than any other EV battery manufacturer in the world (...by a long shot).
Not to mention, Tesla has the most advanced manufacturing plants in the world, which are improving at a significant rate.
Just to give you an idea of how innovative and far ahead Tesla is as a car company, hereās a few tidbits from the launch of their new Cybertruck. š»
Tesla took a completely new approach to designing a truck, going back to the basics. This approach resulted in the Cybertruck, which operates at an impressive 800 volts.
Its low-voltage systems have achieved something truly remarkable. For the first time in 70 years, Tesla has successfully moved from the traditional 12v systems to more efficient 48v systems.
This means the Cybertruck needs 70% less copper than other electric vehicles. This reduction not only makes the truck cheaper to produce but also significantly lighter than anything previously available.
Not to mention they invented an entirely new steel - HFS (Hard Fucking Steel) - which is used for the exterior of the truck to make it significantly lighter and far stronger than any car, ever.
Oh, and using a Supercharger, you can now charge the truck from 15% to 85% in just 18 minutes!
Regardless of what you think of this truck, itās completely revolutionary, and this is just the tip of the iceberg of the innovations that exist inside the new Cybertruck.
From an EV standpoint and a car standpoint, there is no company remotely close to innovating and executing like Tesla does.
But let's move onto the self-driving car aspect of Tesla, which is even more superior to its competition than anything I mentioned above.
Tesla is One Of The Best AI Companies In The World š½
Whether you like the Tesla cars or not, it doesn't matter. Tesla is going to be the first company to achieve self-driving cars and the race isnāt even close.
For years, if not decades, car companies (including Tesla) have been trying to crack the code to self-driving cars.
But, they always have limitations due to the constant changes in the roads and external factors to driving all around the world (not to mention all the ugly and bulky tech you need to strap onto your car).
Every car company has built self driving tech using bulky camera systems combined with complex and detailed code, which essentially gives the car a set of rules on how to drive based on certain external factors occurring.
The problem here is that there are an endless amount of external factors, so itās near impossible to perfect this.
A few years ago, Tesla recognized the potential to transform the industry by leveraging the technology behind Large Language Models (LLMs), similar to ChatGPT.
They applied this concept of embedding human knowledge into neural networks to video technology.
Instead of programming every rule for a self-driving car, Tesla gave the car a neural network, essentially its own brain, enabling it to learn driving through cameras without manually coding rules.
This approach marks a pivotal advancement in autonomous driving technology, paving the way for truly self-driving vehicles.
But hereās the thing, in order for LLMs to be useful you need a LOT of data and a lot of compute to process that data.
This is where Tesla winsā¦
First, Tesla has the fastest supercomputer in the world to train their AI, called Dojo. No other car company comes remotely close to having this.
Second, Tesla has more data than any other car company because as explained above, it delivers more cars with more cameras and self-driving tech in it than any other car company!
Every new Tesla that is put on the road is accumulating more and more data for Teslaās LLMs to learn how to drive. Here are the cumulative autonomous miles that Tesla has driven vs. its top competitors (Cruise and Google's Waymo).
This is data from June 2023. Just 8 months later and Tesla has already reached more than 1 billion cumulative autonomous miles driven. The comparisons are not even closeā¦
Third, Tesla makes its own chips.
Iām not sure if youāve noticed but we have a massive shortage in chips to process AI data right now globally.
NVIDIA is on its way to becoming the most valuable company in the world because itās one of the only providers of the chips that basically every technology company in the world needs right now.
There is a massive supply shortage in chips and yet Tesla goes unaffected.
In terms of AI and self-driving cars, Tesla is so far ahead of the competitors it's not even close.
Self-driving cars are already possible with Tesla, but we are just a couple of years out from this becoming more acceptable and mainstream.
In fact, Tesla is already building designs for cars without steering wheels or pedals, thatās how real this is.
Soon, you will buy a car that will drive you to work and then while you spend 8 hours at the office, your car will go to work for you as an āUberā until you need to be picked up.
Though, itās probably more likely that you will never have to buy a car again, as self-driving taxis that donāt require gas (or a human) will push the costs down for an āUber-like-serviceā to near $0!
Tesla is not just disrupting car companies, but also ride-sharing and delivery companies too.
Speaking of delivery, I guess this is a good time to mention Tesla's new semi-truck that will completely disrupt road haulage?
Many donāt know this, but Tesla has also designed and manufactured a new, electric, self-driving semi-truck.
Almost every product in the world requires semi-trucks to haul it from one place to another, this cost is factored into everything we buy and consume.
With the new Tesla semi-truck, you no longer have gas costs or the costs of a human driver. Human drivers can also only work a certain amount of hours per day, whereas the Tesla semi-truck can drive 24/7/365.
This is going to completely disrupt the millions and millions of truck drivers and semi-trucks on the road today.
Tesla is already doing pilot projects with their semi-trucks with companies like Pepsi, driving across specific states in the US.
FYI this will also drive down the cost of almost every product in the world today (what sticky inflation?). š
Tesla is turning the transportation industry upside down by enabling autonomous robots on wheels to replace the work that humans do.
Speaking of robotsā¦
Tesla is the Best Robotics Company š¤
If cars and trucks werenāt enough to be bullish on Tesla, letās move on to one of the most exciting and scarier things that Tesla is doing right now.
This is going to change the world more than self-driving cars and once again, Tesla is at the forefront of this innovation too.
Robots. Specifically, humanoid robots.
Tesla is very far along with their design and manufacturing of Optimus, a humanoid robot that will replace humans for just about anything physical related.
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Optimus will be used in factories, in homes, in stores and so much more.
A robot that can function 24/7/365 and do just about anything a human can do from moving boxes, to folding clothes or cooking dinner.
But once again, hereās what separates Tesla in the humanoid robot race vs. any other competitor.
For a robot to function, it needs incredible amounts of data for AI to compute, similar to the self-driving cars.
But this time, the AI needs video data (to move around the world) and also text/human knowledge (to understand the world and interact with humans).
Tesla of course has the video data from its Teslas + the supercomputer and its own chips to process the data, so it's far ahead on this front already.
But it also has the human knowledge data from X (which Elon also owns).
Tesla's Optimus robot will incorporate AI that learns from the vast daily interactions of millions of people on Twitter and the driving data from millions of Tesla vehicles.
Once the Optimus robot begins delivering, it will also learn from the many Optimus robots out in the world everyday too.
There is no other company in the world close to having this much data and the resources to actually process and utilize that data. Tesla is in a class of its own.
Letās put this all together on what Tesla is building:
First up, Tesla is on pace to own a large market share of the world's transportation and hauling vehicles and services.
Secondly, Tesla has the potential to own a large market share of the world's manufacturing and labor, replacing humans with Optimus in every factory, home, store, etc.
Thirdly, what I haven't yet highlighted is Tesla's rapid advancement towards a significant stake in the power grid.
Its charging stations are setting the standard for electric vehicles, thanks to partnerships with numerous major automakers who prefer utilizing Tesla's infrastructure over constructing their own.
Additionally, Tesla's Powerwalls are gaining popularity for home installation, becoming more affordable and a preferred choice for many households.
Even more impressive about the above is that Tesla owns the patents and manufactures almost every part and component for everything mentioned above.
What this means is that Tesla is fully integrated with parts to batteries, from motors to software, as well as chips and hardware, data sources and even its charging networks.
Donāt forget, they can also integrate Starlink into every car and robot so it remains connected 24/7/365 tooā¦
Oh, and for all the crypto fanatics, they will integrate blockchain into all of this to facilitate payments too. Likely it will be Dogecoin, but hopefully it will be something betterā¦ letās see!
When it comes to the exponential age and where the future of our world is going, no one is better positioned than Tesla.
They have it all and are building it in such a way that will be almost impossible for anyone to compete.
Most people do not realize what Tesla is really building, and once they do, Tesla will become the most valuable company in the world.
This brings us to the opportunityā¦
Wrapping Up ā Tesla Charts š
Tesla's stock is currently 51% below its peak levels from 2021, despite the NASDAQ and other major tech companies having exceeded their previous all-time highs from the same year.
When we take a broader view, Tesla's stock appears to be more than one standard deviation below its fair value on a logarithmic chart, indicating it is oversold.
However, it remains within its historical growth range.
Tesla's stock is currently developing a significant inverse head and shoulders pattern, a bullish signal that could propel the stock beyond its all-time highs if or when it breaks out from this formation.
Tesla is at the cusp of two major turning points that have the potential to significantly elevate its stock value this year and in the future.
Firstly, once interest rates move lower, car companies alike will outperform. Tesla will outperform massively here in the car industry.
Secondly, remember, Tesla is not just a car company.
So once the doors open from the lowering of interest rates (and an increase in liquidity), technology stocks (the exponential age stocks) will continue to rally into a full blown tech bull market.
Tesla will have the power of both the cyclical bull market in car companies as well as the technology bull market during this cycle.
In 2 years from now, much of the technological advancements that Tesla is working on will become more known to the world and more usable.
It's also important to note that lower interest rates benefit Tesla beyond just increasing speculative investment liquidity.
When rates drop, car sales generally see a significant uptick, leading to more Teslas on the road.
This not only boosts sales but also greatly enhances Tesla's data collection for self-driving cars, contributing to the improvement and development of their autonomous driving technology.
The positive flywheel is in motion for Tesla and about to pick up massively.
Of course, there is a lot that needs to happen for Tesla to succeed in everything that I mentioned above. None of this is a for sure thing and none of this is easy.
But there is no better founder and innovator in the world than Elon Musk right now.
He simultaneously disrupted the car and transportation industry, while also disrupting and reigniting the rocket industry with SpaceX.
Heās also disrupting the internet provider industry with Starlink and connecting computers to the human brain with Neuralink.
Not to mention that heās in the process of redesigning social media as we know it with X.
Whether you like Elon or not is irrelevant, this man is on a mission to change the world and he will not let anyone get in his way. Heās an absolute force.
Mark my words. One way or another, Tesla will become the most valuable company in the world in the next few years.
Invest accordingly!
Thanks for reading. And remember, you're strong, youāre powerful, youāre alpha! ā¤
How'd you feel about our read today?
ABOUT THE AUTHOR
Kyle Reidhead
Founder of Web3 Academy and Impact3
Find him on Twitter
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