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Investing in AI: the Incredible Tesla Opportunity (part 2)

When you ask people what kind of company Tesla is, almost everyone will say it’s an Electric Vehicle company. The same is the case for Wall Street, most investors see and value Tesla as an EV business. I think they are wrong though. Right now most of Tesla’s revenues still come from the sale of EVs, but that is changing fast and within a few years selling EVs may just be a side business. In reality Tesla is an AI company disguised as an EV company.

The company is in the early stages of a complete transformation. As Elon put it a few weeks ago, they are not just writing a new chapter for Tesla but a completely new book. Because of that I believe the company is extremely undervalued and will be one of the best long term investments you can make right now. Once I realised how big of an opportunity there was I started investing in Tesla and I plan to keep adding to that investment. 

When I try to put a value on Tesla, I do that based on its upcoming Robotaxis, on the Optimus humanoid robot, and on its energy business. The sale of EVs is not relevant long term in my opinion, so I won’t even take that into account when calculating the potential future value of the company in this blog post.

Tesla Energy

The energy business will be important for Tesla and it could double or triple Tesla’s valuation over the next 3 years. Tesla produces Powerwalls (batteries for homes, sufficient to power a small home for one day) and Megapacks (large battery packs for industrial solutions). Because the demand for energy is growing extremely fast due to Generative AI, Tesla is doing very well in this sector. In Q2 they produced double the amount of battery storage from Q1 and they will keep on ramping this up in their Lathrop factory, with a new factory in Shanghai opening before the end of the year. I expect margins for the energy business to be potentially a lot higher than analysts expect, therefore I believe that the Q2 results (due on July 23) for Tesla Energy will turn out to be much better than expected, which might lead to another surge in the stock price. Because Wall Street only looks at the next 12-18 months and doesn’t really see the opportunity in Tesla’s long term plans yet, over the next 2 years Tesla Energy will be very important for the Tesla stock price, possibly even more important than the current EV production and sales. But in the long run most of the market cap will come from Robotaxi and Optimus. Therefore I will only focus on these 2 products in the rest of this post. I will explain what they are and what their potential is and what will likely happen to Tesla’s stock price. 


I am convinced that the automotive world will change completely before the end of this decade. I think we will see a major shift from people owning their own cars to people using Robotaxis to get around. This will start in big cities where it’s hard to get around and where parking is expensive, but will quickly happen in smaller cities and more rural areas as well.

A Robotaxi is a fully autonomous electric vehicle that works likes an Uber, but without a driver. You will use an app to get one and there will be no interaction with any human beings etiher before or during the trip. The major difference with Uber or a taxi is that it will likely be 80%-90% cheaper. Nobody knows what the price per mile will be, it will likely depend on the location and on future competition. As an example, geo-fenced robotaxis in China currently charge less than $0.10 per kilometer. I don’t expect prices to be that low in the US, but over time it may happen. 

Many people don’t believe Robotaxis will be possible anytime soon, likely because they have not been following how quickly Fully Self Driving (FSD) has developed over the past years. Tesla self-driving systems have gone from an autopilot where a human being had to be at the steering wheel at all times, to an AI-based FSD where the car does everything for you and human intervention is not needed anymore. No other car companies come even close to what Tesla has built. Where regular drivers have an accident rate of about once every 200,000 miles, Tesla’s old FSD only gets into an accident once every 3.2 million miles. That’s an improvement of 16 times and it’s not even the latest FSD yet. Tesla got here by collecting all driving data for many years, but it also went from a rule-based system (“if A happens then you do B”) to a neural network that ’thinks’ like a human driver would think. That means you can drive anywhere, even in places where a Tesla has never been before. I would compare it to how Large Language Models like ChatGPT have changed the way we work and create content, that is the leap that Tesla has made in this field. You have to see it to believe it. Watch some YouTube videos if you are not convinced or even better, try it out by doing a test drive in a Tesla with FSD 12.4.

Having the best FSD is not sufficient to start a Robotaxi company though. You will need a huge network of cars to get started, the same problem that Uber faced when it launched. My assumption is that Elon will use his existing fleet of Tesla cars that have FSD installed for this. It basically means that anybody who owns a Tesla can use it as a Robotaxi and make additional money with it (depending on which assumptions you use a Tesla owner could potentially make $50,000 of profit per year, after Tesla gets a big cut). This will be a game changer, because cars that are used maybe 5% of the time could suddenly be used 50% or more. Suddenly Tesla vehicles will go up in price instead of depreciating over time. Uber could shut down right away, because no company with physical driver can compete against Tesla’s prices.

The next step will likely be a dedicated Robotaxi that Tesla will build. Nobody knows yet what it will look like, but it will probably be revealed later this year. Originally a Robotaxi presentation was planned for August 8, but it now seems that may not happen until October. My assumption is that it will be a 4 seater without a steering wheel, but that there may be other versions as well (a larger van or maybe even a future sleeping version). I believe that Tesla may not sell these vehicles to the public, but keeps them for its own fleet. In that way they can get 100% of the revenues that these vehicles make. 

The estimation is that by 2030 the global market for Robotaxis will be in the $8-10 trillion range. At this point Tesla has no real competion. Nobody else has FSD as advanced as Tesla’s and even existing players like Waymo (owned by Google) or Cruise (owned by GM) still have regular remote human intervention, even though the cars have no drivers on board. Waymo and Cruise are no competition for Tesla because they are geo-fenced, meaning they only operate well within a predefined area. Next to that no other competitor will likely be able to scale as fast as Tesla can. Because of that Tesla has a good chance to dominate this industry.

But let’s be conservative and assume that China’s car companies can scale as well and will be able to get to a similar vision-based neural network type of FSD. In that case Tesla will still have at least 10-20% global market share, meaning revenues of $1-2 trillion per year just for robotaxi. Given Tesla’s current P/S ratio this would mean a market cap of $10-20 trillion for the robotaxi businesss. The current market cap is only about $800 billion, so there will be a HUGE opportunity here.


The Robotaxi business will be huge, but the biggest opportunity for Tesla will be its humanoid robot Optimus. I believe that we are seeing a new industry forming that will become the largest in the world – humanoid robots will transform how we make things and create a massive new industry. 

This week Elon Musk announced on X that Tesla will finish the design of its Optimus robot this year, so Optimus is something that will probably happen sooner rather than later. What is special about the Optimus is that it can basically learn to do anything that a human can do. So it’s not a specialised robot that can do just one thing, but you can teach it anything. You want a robot to clean your house or do the dishes? Optimus will be there for you. Don’t like to hang up the laundry? Optimus is ready to help. Do your kids need a tutor for their homework? Optimus can do that as well. Almost anything that we as humans can do Optimus will be able to to, and likely faster, better and longer than we can do it.

But not just household tasks, it can do any physical labour job that humans do as well. At a much lower cost than humans and for much longer periods of time. Factory workers might work 8 hours a day, Optimus can work 22 hours a day before it needs to recharge itself. Optimus won’t get bored if it needs to do the same job over and over again. And if a job is dangerous Optimus has no problem doing it. Security guards will soon be replaced by robots and I expect that wars will soon not be fought by human soldiers anymore. Firefighters don’t need to risk their lives, Optimus will do their work for them.

Optimus will completely change the way we live our lives. Almost any job can eventually be done by Optimus for a fraction of the cost of human beings, which will lead to huge deflation. That means that over time almost everything could become almost free. It will take some time to get there and I expect there to be a lot of chaos during that time, but we will eventually get to the other, much brighter, side. I don’t want to go into that in this blog post, but the dark side of mass unemployment and chaos is something we have to keep in mind when discussing robots. 

There are already a number of humanoid robot producers, with some humanoids already being sold to companies and doing real work. However, even though Tesla is not the first to market, I expect the company to dominate the sector, like they have done with electric vehicles. They have everything lined up for success: they have the batteries (Tesla Energy can produce them) and they know how to scale up production (something that many robot makers will struggle with). They have the AI models available for these robots and they have the data centers that are needed for the model pre-training and for the inference.

Just Optimus itself could catapult Tesla to the most valuable company in the world and make Elon the world’s first multi-trillionaire. If we would have 1 billion robots and these robots would earn a profit of $10,000 per year, and we would assume that Tesla would have 10% of this market, that would mean $1 trillion profit per year for Tesla annually. At a P/E ration of 25 the market cap of Tesla just because of Optimus would be $25 trillion. Likely there will be a lot more than 1 billion robots though, I actually expect that we will have more robots than human beings in a few years time. And possibly Tesla will have a market share of more than 10% of the market. It’s all speculation right now, but the point is that if they pull this off the stock price of Tesla will go up exponentially over the next couple of years. Based on the current valuation the stock price would go up at least 30 times, and that seems still very conservative to me. 

What’s next for Tesla?

If you follow robotics and AI closely like I have been doing, you might start to understand that Tesla could become the most valuable and most important company in the world. Elon has all the ingredients to pull this off, but the world doesn’t see it yet. That’s the real reason I am investing in Tesla. To me it feels similar to when I first had my Eureka moment with Bitcoin (11 years ago, when it was still below $100). Yes, there are many hurdles and many risks, but Elon has shown time and time again that he can pull things off that nobody else has been able to pull off. If he manages this it will make him incredibly rich, but also the many people that believe in him and that own Tesla shares. Wall Street doesn’t see it yet, even Cathie Woods (ARK Invest) has not put a valuation on Optimus yet. But once Wall Street will understand what’s going on the sky is the limit for Tesla. 

This is part 2 of this blog post, part 1 is here. If you are interested to follow Tesla more closely you could follow this Twitter list I put together. The list has been super valuable for me and it’s how I get most of my Tesla news. I also listen to a number of podcasts and YouTube channels, one of my favourites is Herbert Ong. If you want to go deeper into the Robotaxi check out this report by ARK Invest’s Cathie Wood. The best humanoid robot expert on Twitter is Cern Basher. His calculations are a hidden gem, this tweet has links to all his previous bot research.

As always, my posts reflect my personal opinions, are not related to any of the companies I am involved with, and are not meant as financial advice. Do your own research before you invest.

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