Thanks for your work, Jo! Bought the dip with my daughter’s Christmas money today! Hard to believe this was the worst Christmas selloff since the 1950s! Gotta love Tesla stock though. So simple to predict based on our fundamental first principles knowledge. I’m up on her single share 6% and my own purchase was at $161/share. I’ve figured out Tesla is my stock to not only own, but to completely understand. It’s amazing what one can learn after being in the market for six years!
Very interesting. I plot these numbers alongside Cern's detailed valuation build-up and except for the near future (next 3 years) they are surprisingly in the same ball park.
I saw some of cerns numbers recently - yes, quite surprising - his underlying are a bit different (less volume, higher price and margin) but that actually makes sense, Tesla can either grab market very quickly or have higher prices , both on Optimus per hour fee and robotaxi per mile
Great analysis and video, although I understood your first video already. I am a scientist who creates many often very complicated models. I think you are right that over time, WS analysts will have to adapt to these kind of models. We already see this being played out today. From the risk adjustments, I would argue that the value WS assigns to a certain revenue stream is not proportional to the total probability of this revenue stream. For example if the total probability for robotaxi is 50%, I assume that most analysts would not add 50% of the value but much less, arguing that this revenue stream may never happen or only happen 3 years later than you have modelled it. So basically, you have done great work and your WS background helps us. When the probability increases from 50% to 80% for example because a new version say v14 unsupervised comes online and during 1 month not a single intervention occurred. That could be the moment that the majority of PM decide to go and adapt these future revenue streams because they will undeniably come to reality. This also explains why the stock price seems to show these steps upward from time to time, when a new revenue stream gets unlocked with sufficient probability (say >80%). imo this is what happened after Trumps win and v13, probability exceeded a certain treshold. Many thanks for your refreshing appearance on YT and X
Exactly - instead of being binary on or off, we can dial the revenue now in much more smoothly based on real world evidence that impacts risk. Btw, since this is a 10 year DCF model , the risk will never be fully removed - even if robotaxi is launched and works seamlessly, the risk then evolves into demand risk for the next 10 years (chance that the revenue a really will scale as projected vs not at much etc )
Another great video Jo. I love how thorough your analysis is and that you are constantly modifying and updating it as you learn new information. Thank you for continuing to share your thoughts and analysis. Happy New Year!
This is a very thorough analysis; thank you for sharing it. (It would be nice if you zoom out just a bit so the column showing the text on the very left is sometimes fully visible )
Thank you ! I really appreciate your feedback (since I have to take a out politics more now , some people are mean to me so it’s nice to hear positive feedback :)
Thank you Jo. I don't think there is a better model out there. Your detailed analysis of your own models is inspiring. Greatly appreciate you sharing your expertise!
Thanks for going through your model. This adds to the pool of consciousness around Tesla and while assumptions will be challenged along the way, the model allows to readjust variables. I learnt that you believe humanoid value will overtake taxi value in 2026 🤯
Love tables and numbers! Thanks, Jo. I was looking forward to this video of the complete breakdown of the analysis and the future projections. Amazing job as always and thank you.
Joe, imo you really need to differentiate between Robotaxi (SEXY Models) & CyberCab (different cost bases) AND Tesla deployed / Consumer deployed in both cases.
True - the reason I don’t count this is that the transaction was very planned and slow, which mitigates the risk drastically. Without wanting to sound morbid, but a slow disease like Jobs cancer allows for a diligent succession plan. Hard risk would be a sudden drop out that leaves the company hanging. Obviously, Jobs death was very bad for apples stock long term, but investors had years to get out
Hi Jo I have like 590 shares and one of herbets video Cern mentioned that since the IPO tesla out of 3 thousand some trading days tesla become what it become today in only 41 daysand all the rest of the days cancelled each other. so stayin long is super important for tsla however out of this 3000 some days 1000 days tesla increased 2 percent and 1000 days increased 2 percent. cant we just play with 5 to 10 percent margin (to just stay super safe) and buy and sell to increase our number of shares? can you come up with some kind of mode?? i have been doing that and increased my stock number 23 in 6 month. sometimes i buy a bit high 10 of them and it goes down then i buy 10 more if goes down some level again buy 10 more if goes up 2 3 percent up sell 10 wait to go up if goes down buy again reduce risk and increase to make some money so far hasbee working out fine but i never go above 40 shares in margin. small money every week turned 23 extra shares for me . can you model this so we all can benefit?
Yes I realized this today , I think the reason was my computer had too many programs open which slowed the processing down (weird), hope I fixed it today
Jo, I appreciate your thinking but I am obliged to observe an opinion . You currently fail to sufficiently differentiate between FSD & Robotaxi . FSD is a supreme ADAS for USE by owners - people will buy it for convenience . Call it FSD AD. FSD RT will sell for much more than FSD AD. RT will enable owners to submit vehicle to the fleet : AD will not . FSD sales do NOT equal RT participation .
You probably have the Best Models and Overall thinking. What i dont agree with are the probabilities, you should add a margin of Safety because at this current Point it seems so positive but a Lot can change. You update your Model often so its Fine but if you would think longer Term i think a margin of safety would b good Things are likely Not as good or Bad than we think at this current Moment
I think the Key Man risk is cumulative. By cumulative I mean the first year without Elon is 2% but the 2nd year without Elon is 4% and the third year is 6%.
Yes, but the risk I am looking at is the risk that Elon drops out, not the risk of what happens once he does. So, 2% key man = 2% that Elon drops out = 2% risk that FSD doesn’t happen (the latter matters). So, you could also say if Elon drops out, there is a 50% risk of FSD not happening, and the chance of Elon dropping out is 4%. Think of it as a probability chain that starts with Elon dropping out and end with FSD not happening, and the totality is a 2% risk - doesn’t matter how you distribute it
Bill, Steve, Larry, Sergey, Jeff - all left or died. Nothing happened. I do think Elon is different though...Tesla will no longer bet the farm on new innovations.
In order to do this, Tesla will have to reach monopoly status (market controlling position). With robots, I think this risk can be managed (by allowing a critical mass of competitors to have their models in the market). With robotaxi, it’s hard to see how they avoid it. Tesla could decide to preemptively share their AI stack with a subset of competitors to avoid this situation. Elon is smart enough to see the problem and manage it imo
I think we are counting our chickens before they hatch. These are services that never existed before. We don't even know if they are going to work let alone scale. Why would we think FSD is a trillion dollars business? Both Uber and Lyft are only 200 billion?
Fsd is 100% profit margins after a fixed cost. Uber and lift have a 25% profit margin. The TAM of robotaxi is also much greater since it costs less per mile for the user.
You are right that we have to be smart about timing. Here is why I am bullish for 2025: AI progress is going vastly exponential since 2022. The game for FSD is fundamentally changed 24 months ago, and now we are seeing truly exponential progress. Once real FSD exists, it’s an unlock of enormous proportions. Lowering price by 50-70% expands Uber market by 10x .
Really? Watch some recent content on V13.2 or any V13. They have figured it out BUT they need to finalize many details! Like 6 months worth of details. You need to do more research on your own to truely understand the opportunity in Tesla….Im 52 and was broke at 49, in fact negative net worth. Elon inspired me to wake up and start buying Tesla stock!!!!!! Now I’m low Sox figures in my pension
@@jobhakdi It's nerve racking and exciting! I visited Pheonix last month. WAYMO is real. They are all over the place. They are breaking the ice when it comes to regulations, so we have to give them credit for that.
Uber because of cost is used maybe 1% of the time. At some point near is the future, people are going to stop buying cars with gas and insurance at around $1,000 mo and get a $400 mo subscription for robotaxi. This opportunity is massively bigger than Uber. If you use economics you can properly predict the future. Same with Optimus. Just getting rid of your $200 biweekly payment to a maid service pays for the Optimus. And I will be an early adopter so I’ll be renting it out to my neighbors, so my optimis will be free.
Interesting model. I think the Trump risk is much higher than 5%. I'd probably say there's a 30-50% chance Elon and Trump have a big falling out this year and Trump becomes his enemy. They're both big personalities and when the consequences of the cuts they're planning and the backlash starts to happen I think there'll be a lot of stress.
Maybe, but Trump risk is not a dimension in my model - the risk is regulatory, and I think even if aomething happens (I actually doubt it, since both men benefit tremendously from each other), the path will have been prepared before for nationwide full self driving regulation
Conservative but has 7% discount rate lol Yes you discount for risk because you are discounting with a rate that reflects opportunity cost of investment vehicle with similar risk profile Do not take this logic as good this investment analysis is flawed I own lots of Tesla shares myself but this discount rate is ridiculous
As I explain in the model, the concept of factoring risk into the discount rate is wrong and outdated , since it does not allow effective risk modeling. Therefore , I am using a relatively high discount rate outside the risk consideration to reflect the time value and opportunity cost. The risk is modeled independently. This is a new approach that leads to far better predictive accuracy, as you will see over time.
I would appreciate it if you could create a video that in depth explains to us finance folks because what you are presenting is very confusing about discount rate Lets start with risk free rate used and additional factors used to come up with 7%
Thanks for your work, Jo! Bought the dip with my daughter’s Christmas money today! Hard to believe this was the worst Christmas selloff since the 1950s! Gotta love Tesla stock though. So simple to predict based on our fundamental first principles knowledge.
I’m up on her single share 6% and my own purchase was at $161/share. I’ve figured out Tesla is my stock to not only own, but to completely understand. It’s amazing what one can learn after being in the market for six years!
Your model is incredible. The most detailed I have seen. Great work.
Thank you, I really appreciate it! I constantly refine the model and my goal is to be more accurate in predicting the actual stock price
Wonderful analysis. Between you and Cern Basher as you mentioned, we can better understand Tesla's growth trajectory better.
Very interesting. I plot these numbers alongside Cern's detailed valuation build-up and except for the near future (next 3 years) they are surprisingly in the same ball park.
I saw some of cerns numbers recently - yes, quite surprising - his underlying are a bit different (less volume, higher price and margin) but that actually makes sense, Tesla can either grab market very quickly or have higher prices , both on Optimus per hour fee and robotaxi per mile
Great analysis and video, although I understood your first video already. I am a scientist who creates many often very complicated models.
I think you are right that over time, WS analysts will have to adapt to these kind of models. We already see this being played out today.
From the risk adjustments, I would argue that the value WS assigns to a certain revenue stream is not proportional to the total probability of this revenue stream. For example if the total probability for robotaxi is 50%, I assume that most analysts would not add 50% of the value but much less, arguing that this revenue stream may never happen or only happen 3 years later than you have modelled it. So basically, you have done great work and your WS background helps us. When the probability increases from 50% to 80% for example because a new version say v14 unsupervised comes online and during 1 month not a single intervention occurred. That could be the moment that the majority of PM decide to go and adapt these future revenue streams because they will undeniably come to reality. This also explains why the stock price seems to show these steps upward from time to time, when a new revenue stream gets unlocked with sufficient probability (say >80%). imo this is what happened after Trumps win and v13, probability exceeded a certain treshold.
Many thanks for your refreshing appearance on YT and X
Exactly - instead of being binary on or off, we can dial the revenue now in much more smoothly based on real world evidence that impacts risk. Btw, since this is a 10 year DCF model , the risk will never be fully removed - even if robotaxi is launched and works seamlessly, the risk then evolves into demand risk for the next 10 years (chance that the revenue a really will scale as projected vs not at much etc )
Another great video Jo. I love how thorough your analysis is and that you are constantly modifying and updating it as you learn new information. Thank you for continuing to share your thoughts and analysis. Happy New Year!
Happy New Year and thanks for watching and for giving f great feedback !
This is a very thorough analysis; thank you for sharing it.
(It would be nice if you zoom out just a bit so the column showing the text on the very left is sometimes fully visible )
Noted! Will work on zooming in more next time
I like your way of thinking!!!!! Great work my friend.
Thank you ! I really appreciate your feedback (since I have to take a out politics more now , some people are mean to me so it’s nice to hear positive feedback :)
Thank you Jo. I don't think there is a better model out there. Your detailed analysis of your own models is inspiring. Greatly appreciate you sharing your expertise!
Thank you, this is great feedback and glad you like the model !
Love your videos. happy new year.
Happy new year!
Lets embrace the future abundance.❤ Danke schön!
Thank you Jo !
Fabulous work as always Jo. Good health to you in 2025.
Thanks Jo!
PLEASE - If you are presenting and navigating a spreadsheet on screen
LOCK the far left column .
Thanks for going through your model. This adds to the pool of consciousness around Tesla and while assumptions will be challenged along the way, the model allows to readjust variables.
I learnt that you believe humanoid value will overtake taxi value in 2026 🤯
Glad it was helpful!
Love tables and numbers! Thanks, Jo. I was looking forward to this video of the complete breakdown of the analysis and the future projections. Amazing job as always and thank you.
Glad you enjoyed it!
Thanks Jo
Joe, imo you really need to differentiate between Robotaxi (SEXY Models) & CyberCab (different cost bases) AND Tesla deployed / Consumer deployed in both cases.
Hi Jo! Thank you for this video! Would it be possible for you to share or sale this model to me so i can use it to enter my own inputs?
Steve Jobs died of cancer while CEO.
True - the reason I don’t count this is that the transaction was very planned and slow, which mitigates the risk drastically. Without wanting to sound morbid, but a slow disease like Jobs cancer allows for a diligent succession plan. Hard risk would be a sudden drop out that leaves the company hanging. Obviously, Jobs death was very bad for apples stock long term, but investors had years to get out
Hi Jo I have like 590 shares and one of herbets video Cern mentioned that since the IPO tesla out of 3 thousand some trading days tesla become what it become today in only 41 daysand all the rest of the days cancelled each other. so stayin long is super important for tsla however out of this 3000 some days 1000 days tesla increased 2 percent and 1000 days increased 2 percent. cant we just play with 5 to 10 percent margin (to just stay super safe) and buy and sell to increase our number of shares? can you come up with some kind of mode?? i have been doing that and increased my stock number 23 in 6 month. sometimes i buy a bit high 10 of them and it goes down then i buy 10 more if goes down some level again buy 10 more if goes up 2 3 percent up sell 10 wait to go up if goes down buy again reduce risk and increase to make some money so far hasbee working out fine but i never go above 40 shares in margin. small money every week turned 23 extra shares for me . can you model this so we all can benefit?
Very useful model!
Thank you 🙏
Hi Jo, last few videos have delayed audio. Seems like a recorded live stream with delay.
Yes I realized this today , I think the reason was my computer had too many programs open which slowed the processing down (weird), hope I fixed it today
Jo, I appreciate your thinking but I am obliged to observe an opinion .
You currently fail to sufficiently differentiate between FSD & Robotaxi .
FSD is a supreme ADAS for USE by owners - people will buy it for convenience . Call it FSD AD.
FSD RT will sell for much more than FSD AD. RT will enable owners to submit vehicle to the fleet : AD will not .
FSD sales do NOT equal RT participation .
You probably have the Best Models and Overall thinking. What i dont agree with are the probabilities, you should add a margin of Safety because at this current Point it seems so positive but a Lot can change. You update your Model often so its Fine but if you would think longer Term i think a margin of safety would b good Things are likely Not as good or Bad than we think at this current Moment
Kya baath 👏
200 million cars on the road? That's like one car per adult, and who will need a taxi when they have a car? Your numbers don't make sense to me.
That’s worldwide, 1 car for every 400 people, or every 200 in developed countries
I meant 40/20 people
Right now, there are 1.5B cars on the road , not counting for buses (which will be replaced) and hundreds of millions of motorcycles
I hesitated a few months ago not buying tsla. Now I want to buy a lot. A whole lot. I’m hoping it goes down again. Great video. Thanks.
Great Video. Somehow your last vids seem very choppy, like recorded with 10fps…
Yeah sorry for the choppiness , I think I found out the reason and fixed it
Tesla to the moon 🚀
Mars!
Please can you just share the Google Sheet as read only.
If you say that economics are number one reason to decide for something why won't BYD still be bigger then Tesla? if not bigger as of today?
Because BYD’s only path to robotaxis is to license FSD from Tesla
Yes, but I think I won’t take 5 years for autonomous driving to take over. It will transform the world.
I think the Key Man risk is cumulative. By cumulative I mean the first year without Elon is 2% but the 2nd year without Elon is 4% and the third year is 6%.
Yes, but the risk I am looking at is the risk that Elon drops out, not the risk of what happens once he does. So, 2% key man = 2% that Elon drops out = 2% risk that FSD doesn’t happen (the latter matters). So, you could also say if Elon drops out, there is a 50% risk of FSD not happening, and the chance of Elon dropping out is 4%. Think of it as a probability chain that starts with Elon dropping out and end with FSD not happening, and the totality is a 2% risk - doesn’t matter how you distribute it
Bill, Steve, Larry, Sergey, Jeff - all left or died. Nothing happened. I do think Elon is different though...Tesla will no longer bet the farm on new innovations.
Do you think the government will force Tesla to split part of the company off as another company?
In order to do this, Tesla will have to reach monopoly status (market controlling position). With robots, I think this risk can be managed (by allowing a critical mass of competitors to have their models in the market). With robotaxi, it’s hard to see how they avoid it. Tesla could decide to preemptively share their AI stack with a subset of competitors to avoid this situation. Elon is smart enough to see the problem and manage it imo
Only think i disagreed with is how stupid wall street can be!!!! lol
I think we are counting our chickens before they hatch. These are services that never existed before. We don't even know if they are going to work let alone scale. Why would we think FSD is a trillion dollars business? Both Uber and Lyft are only 200 billion?
Fsd is 100% profit margins after a fixed cost. Uber and lift have a 25% profit margin. The TAM of robotaxi is also much greater since it costs less per mile for the user.
You are right that we have to be smart about timing. Here is why I am bullish for 2025: AI progress is going vastly exponential since 2022. The game for FSD is fundamentally changed 24 months ago, and now we are seeing truly exponential progress. Once real FSD exists, it’s an unlock of enormous proportions. Lowering price by 50-70% expands Uber market by 10x .
Really? Watch some recent content on V13.2 or any V13. They have figured it out BUT they need to finalize many details! Like 6 months worth of details. You need to do more research on your own to truely understand the opportunity in Tesla….Im 52 and was broke at 49, in fact negative net worth. Elon inspired me to wake up and start buying Tesla stock!!!!!! Now I’m low Sox figures in my pension
@@jobhakdi It's nerve racking and exciting! I visited Pheonix last month. WAYMO is real. They are all over the place. They are breaking the ice when it comes to regulations, so we have to give them credit for that.
Uber because of cost is used maybe 1% of the time. At some point near is the future, people are going to stop buying cars with gas and insurance at around $1,000 mo and get a $400 mo subscription for robotaxi. This opportunity is massively bigger than Uber. If you use economics you can properly predict the future. Same with Optimus. Just getting rid of your $200 biweekly payment to a maid service pays for the Optimus. And I will be an early adopter so I’ll be renting it out to my neighbors, so my optimis will be free.
Interesting model.
I think the Trump risk is much higher than 5%. I'd probably say there's a 30-50% chance Elon and Trump have a big falling out this year and Trump becomes his enemy. They're both big personalities and when the consequences of the cuts they're planning and the backlash starts to happen I think there'll be a lot of stress.
Maybe, but Trump risk is not a dimension in my model - the risk is regulatory, and I think even if aomething happens (I actually doubt it, since both men benefit tremendously from each other), the path will have been prepared before for nationwide full self driving regulation
Conservative but has 7% discount rate lol
Yes you discount for risk because you are discounting with a rate that reflects opportunity cost of investment vehicle with similar risk profile
Do not take this logic as good this investment analysis is flawed
I own lots of Tesla shares myself but this discount rate is ridiculous
As I explain in the model, the concept of factoring risk into the discount rate is wrong and outdated , since it does not allow effective risk modeling. Therefore , I am using a relatively high discount rate outside the risk consideration to reflect the time value and opportunity cost. The risk is modeled independently. This is a new approach that leads to far better predictive accuracy, as you will see over time.
I would appreciate it if you could create a video that in depth explains to us finance folks because what you are presenting is very confusing about discount rate
Lets start with risk free rate used and additional factors used to come up with 7%
Please tell me more about the community you're trying to build of people who are deep in $TSLA?
I qualify 🫶