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Remo Uherek
12 Things People Don't Understand About Tesla (Thread)
Note: This is not investment advice. At heart, I’m a value investor, and Tesla is no value investment. I view it as a binary venture-type bet. I am a shareholder. This is part 1 of my exploration of...
Remo Uherek Remo Uherek @remouherek
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Remo Uherek Jan 31
Replying to @remouherek
1. It’s all about batteries, and Tesla has a multi-year head start.
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Remo Uherek Jan 31
Replying to @remouherek
2. Gigantic ambition: They did what they said they would do in their public master plan from 2006. They won’t stop until *all* cars are electric.
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Remo Uherek Jan 31
Replying to @remouherek
3. Healthy gross margins: The common belief is that Tesla is losing money on each car they sell. This is wrong. Their automotive gross margin is ~20%. Exactly the same as Volkswagen’s.
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Remo Uherek Jan 31
Replying to @remouherek
4. Software and in-app purchases: Tesla is not just a manufacturer. It’s also a software company. This is where the future superior margins will come from.
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Remo Uherek Jan 31
Replying to @remouherek
5. Investing as fast as possible: Tesla is not cash-constrained. On the contrary, they invest as fast as they possibly can. Also, Tesla generated $1.1 billion in free cash flow in 2019.
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Remo Uherek Jan 31
Replying to @remouherek
6. Exceptional customer satisfaction: Each Tesla customer is an ambassador. I’ve both driven a Model S and Model 3 from friends. They love to spread the experience. The Tesla fleet is growing exponentially, and so are its ambassadors.
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Remo Uherek Jan 31
Replying to @remouherek
7. Direct to consumer: Tesla has no dealership structure, removing a middleman and major source of complexity. The Innovator’s Dilemma with it’s inherent path-dependency is making it impossible for the others to do the same.
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Remo Uherek Jan 31
Replying to @remouherek
8. Startup DNA: Tesla fundamentally has startup and Silicon Valley DNA. They move fast. They iterate fast. They have tight feedback loops. Compare that to mature and bureaucratic companies, with mercenary managers. Who will innovate faster?
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Remo Uherek Jan 31
Replying to @remouherek
9. High degree of vertical integration: Out of necessity, they had to “vertically integrate, or die”. Now reap the rewards: much less complexity, much faster feedback loops, more innovation.
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Remo Uherek Jan 31
Replying to @remouherek
10. Ride sharing: Tesla will not just make money from cars and software, but also make money from each mile that is driven on its ride sharing network. Spoiler alert: they will launch ride sharing before full self driving.
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Remo Uherek Jan 31
Replying to @remouherek
11. Solar and energy business: Tesla is not only a car, software and tech company. They are have a major solar and energy business. For many customers, adding solar and Powerwalls will be a no-brainer.
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Remo Uherek Jan 31
Replying to @elonmusk
12. Level 5 leadership: Yes, is quirky and eccentric. But more importantly, he is a Level 5 leader. Caring more about the mission than himself.
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Remo Uherek Jan 31
Replying to @remouherek
Conclusion: I don’t see a reason why Tesla shouldn’t have a chance of becoming a $1 trillion market cap company, possibly multi-trillion, within the next 10 to 15 years. (Or, they could still go bust, of course. Because they will keep betting the company.)
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Remo Uherek Jan 31
Replying to @elonmusk
Tesla remains the “most shorted US stock“. I get it. Most new car companies fail. So on average, short sellers probably make money. But it‘s wrong here. Morally wrong. Founders like are super rare. Instead of wanting them to fail, we should cheer them on. I do. Go Elon!
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Remo Uherek Jan 31
Huge thanks to , , , , , , , , , , , , , , and the whole Tesla Twitter & YouTube community (so many amazing people)
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Remo Uherek Jan 31
I intended for this to be a “quick blog post”. It ended up considerably bigger. However, this is by no means complete, and by no means bulletproof. It just is my summary of the things I believe are most misunderstood, from almost 3 years of following .
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Remo Uherek Jan 31
Replying to @remouherek
My full write-up:
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Remo Uherek Jan 31
Replying to @ARKInvest @skorusARK
Love the work by and Here‘s their research update on Tesla:
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Remo Uherek Feb 3
Replying to @ARKInvest @skorusARK
Some people are selling now. (Might turn out to be smart.) Others believe this is a $1+ trillion market cap opportunity. (7x upside from today.) If you stay on board, buckle up. It will get bumpy.
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Remo Uherek Feb 15
Replying to @ARKInvest @skorusARK
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