Some investors are a concerned that deliveries were not as high as they had hoped, or high
as we had seen relatively in the past when prices were indeed higher.
There are various theories being thrown around, one is that there is too much competition,
which is the one that doesn't concern me.
Currently the vast majority of competition are making losses, if they ramped up further
they would either continue to make such a large loss that they would go bankrupt, or
they would finally work out how to make a profit.
If they went bankrupt, then they are of no long term threat to Tesla, if they go profitable,
then it means the supply chains of EVs are improving and costs are reducing, which would
also benefit Tesla, which means Tesla could reduce prices and thus increase demand.
I am of the belief that these demand concerns these investor have, are of a macro influence,
as that is the biggest change we have seen since Tesla's demand was still abundant.
These are still short term concerns before EVs do get cheaper, and and in my opinion
if you believe this, then Tesla is an excellent investment.
I won't keep you in suspense, but its all about the future of transportation, and whether
it will, or will not be fully electric, or not even fully electric necessarily, at least
in the near time.
It just needs to be a large enough part of the future.
And as the industry grows, so will Tesla.
Tesla will naturally grow with it.
Oh but by then there will be lots of competition, blah blah.
All this competition stuff is just for clickbait.
We know there is no competition.
We know that Tesla have such a lead against all other EVs that they can just keep lowering
prices to gain market share.
Tesla have already won the EV industry, is not even close, its game over by a long shot.
That is not the question.
The real question is, how big will the EV industry be.
By which I mean, how many consumers will make the transition, and go from ICE to electric.
I know in the community we have this narrative that the whole world will transition to electric,
and renewable energy, and we will live in some sort of utopia.
But if this occurs, its certainly not going to happen by 2030.
2030 is the year that most Tesla investors look to, its like its the path to investing,
and you have to ignore everything else that Wall Street and media will throw at you, to
convince you that Tesla isn't the company you thought.
It's long enough to ride out any recession, and long enough for Tesla to hopefully finally
ramp up the 4680 cells by a long way, a possibility of solving FSD, several more models out, energy
growing, and a plethora of other potentials, that should all be showing positive signs
by 2030.
You just need to hold your stock for that long, and you might see a return of something
between 5, 10 or maybe 20 times return.
That is the potential we have, and hence why it is so exciting.
As compelling as an electric car is though, it doesn't necessarily mean people will be
lined up around the block to buy them.
Yes, the industry is growing, but the vast majority of people are still buying ICE cars.
Sure, one obvious reason is the price of electric cars.
But consumers have the rights to choose what to buy, and if the attraction to electric
is not strong enough for the vast majority of consumers to pay extra for it, then they
will keep buying ICE.
Unless governments step in, and actually ban ICE sales.
Consumers can still buy used ICE cars too of course, if they still cant afford a new
electric car, of course subsidies help too.
Obviously Tesla is the one company that is actually reducing the cost of EVs, and taking
the prices down to below parity for the ICE equivalent in some cases.
And Tesla is the one EV company showing a path to actually show it is possible to have
similar production rates as ICE.
But will there be enough people in the world that want to move to electric still.
I mean it seems obvious to me, as they are so superior, especially a Tesla.
But when you look at the legacy competition, they actually arent much better than gas cars,
at least when it comes to driving, and features.
They are just less noisy, smelly and you dont have to go to gas stations.
These are really the only advantages of electric over ICE, when it comes to non-Tesla EVs.
Whereas various ICE vehicles offer all sorts of features due to so much variety available.
Put it this way, I am car enthusiast, and I would not buy an electric car, if there
wasn't a Tesla.
There are other cars out there, that I would rather have over a Ford Mustang Mach E, or
Hyundai Ioniq 5.
These cars aren't great, there are much nicer cars for the money.
Tesla has had to convince consumers to buy a Tesla over the fact its simply electric.
On top of that, electric is so complex to manufacturer, there are simply a lot fewer
models and versions available, you have to compromise somewhat given the limited selection.
Whereas ICE offers a suitable model for just about every type of lifestyle.
So there needs to be more compelling reasons for consumers to buy electric over ICE.
I don't think consumers are naturally moving in that direction at the same rate we saw
people switch over to smart phones.
Obviously due to the sheer difference in size between a phone and a car, its going to take
a much longer time for the industry to evolve, and develop.
The issue is cost still.
If legacy could make as many electric models as ICE models, and make the same amount of
profit, then that would be different, and interesting to see.
But I am not sure this will be the case, at least any time soon.
Although Tesla have shown the way on how to save costs manufacturing, to achieve it.
So it will come down to the rest of the industry to copy what Tesla are doing in order to have
a chance.
And eventually EV demand should rise as these vehicles become more compelling and offer
more variety.
You know what though, the future is very difficult to predict.
Electric vehicles appear to be here to stay.
It just seems like everyone is having trouble in making them, aside from Tesla.
Well even Tesla too, Tesla are behind in their targets as well.
Electric vehicles are very difficult to produce, everyone is struggling.
Remember Elon said how difficult ramping to volume production was, and to do it profitably,
is basically impossible.
So the point I am trying to make is, that rather than focusing on Tesla with things
like deliveries for each quarter, and short term noise.
Think about the industry as a whole.
Will it continue to grow?
How big will it get?
Because I assure you, Tesla will be the largest company to benefit from that growth.
And Tesla's stock price will grow along with it.
In a couple of years the industry will jump quite a bit, as the biggest selling car companies
finally have their battery factories available too.
This industry wont grow at a steady pace, there will be some big jumps, especially when
Tesla can finally ramp up 4680 cells to high volume production.
We are going to see in the region of about 1/2 a trillion dollars invested into EVs and
batteries this decade.
That is a phenomenal amount, and will boost the industry tremendously.
So there are plenty of signs that the EV movement will be big, and grow further, especially
if backed and subsidized by governments too.
And why are governments backing the EV movement.
Two words, climate change.
And I think that is the real movement, not so much electric cars, but a global path in
order to do what we can to prevent any further climate change.
Whether you believe in it or not, I don't think it makes any difference, the narrative
is out, we don't want to risk destroying the planet and everything we have created.
Yet the path Elon and Tesla are taking us on, is one not of austerity, but still abundant
lives to achieve this mission.
So in a way, investing in Tesla, is a way of investing in the belief of climate change,
and that the world will go renewable.
Tesla benefits in so many ways from a future in that direction, which is the future all
the powers that be are point at.
This would result in a somewhat forced demand by governments.
Possibly more tax on non-renewable sources to further subsidize the renewable movement.
Governments are doing what they can to increase the charging infrastructure too.
Along with incentives for battery and cell production, more solar.
The US is leading the way in EV incentives, and in a few years we will see the impact
these have had on the country, and how more popular EVs would have become by that stage.
However, in reality, those subsidies would have likely had much more affect on climate
change if they were spent in developing nations.
America is already using fairly efficient vehicles with low emissions, since the whole
clash for clunkers campaign.
The emissions are so much worse in places like Indonesia.
But America wants the world to think they are furthest ahead in technology and innovation,
so seeing the most EV drivers in that nation is good marketing for them.
And I am just referring to Tesla's EV business, remember Tesla is more than just a car company.
FSD would obviously push Tesla's demand further, but thats another topic.