Elon Musk warned Bill Gates on Tuesday to not mess with him again. The Microsoft co-founder faces destruction if he tries to bet against Tesla again.
Musk is convinced that after Tesla completes its transition from selling electric vehicles to operating a lucrative fleet of robotaxis and humanoid robots, he could have transformed the automaker into an AI giant valued at a whopping $30 trillion.
“As soon as Tesla has completely solved the problem of autonomy and [its droid] Optimus in mass production, anyone still holding a brief position will likely be worn out,” he posted on social media on Tuesday. “Even Gates.”
😂
Once Tesla has fully solved autonomous driving and accomplished mass production of Optimus, anyone still holding a brief position will likely be worn out. Even Gates.
– Elon Musk (@elonmusk) July 2, 2024
The rivalry between the 2 became public after an exchange was leaked in 2022 showing that the world’s richest entrepreneur had refused to support Gates’ charitable work after learning that Gates had still bet half a billion dollars on Tesla’s stock price falling.
“Sorry, but I can’t take your climate change philanthropy seriously when you hold a massive short position against Tesla, the company doing the most to solve climate change,” Musk wrote within the undated text messages.
When this news leaked out, Gates was already regretted his pessimistic view on Tesla. It is unclear whether he still holds a position within the stock and he couldn’t be reached Assets for comment.
But Musk’s warning that short selling could be “wiped out” is a daring claim for somebody whose company was the worst-performing name within the S&P 500 this 12 months.
Tesla’s vehicle sales fell 6.6% in the primary half of the 12 months, its Cybertruck struggled to satisfy high expectations, and it ultimately buried Tesla’s goal of accelerating unit sales from 1.8 million electric vehicles last 12 months to twenty million by 2030.
Musk has been constructing a floor under the stock since April
But Musk is just not the kind to back down within the face of adversity, and he has taken out other famous Tesla shorts like David Einhorn and Jim Chanos, who each made fortunes betting against Lehman Brothers and Enron.
In fact, the Tesla CEO has been in a recovery phase since he set a minimum price for the stock in April.
First, he hinted at unveiling a brand new “CyberCab” robotaxi model, suggesting he had finally found the answer to autonomous driving. Then he announced that 2025 could see growth in electric vehicle sales with latest low-cost models, which might mark the underside of the stock.
Presentation of the Tesla Robotaxi on August eighth
– Elon Musk (@elonmusk) 5 April 2024
Lingering concerns that the totemic CEO might resign from the corporate altogether over the lack of his 2018 severance deal – now price a whopping $70 billion at current stock prices – were all but dispelled last month when the corporate’s second-largest investor, Vanguard, joined others in backing him.
Finally, Tesla announced on Tuesday that it had avoided a good steeper decline in vehicle sales within the second quarter by liquidating excess inventory. Cutting EV production to its lowest level for the reason that third quarter of 2022 meant Tesla had spare battery cells that it could now put into its stationary energy storage business, doubling already record-breaking volumes in the primary quarter to an unprecedented 9.4 gigawatt hours.
Tesla has increased its market capitalization by $100 billion within the last two days.
The stock is trading at 70 times next 12 months’s earnings. That’s a hefty price even for a growth stock, not to say a stock that is predicted to see each revenue and earnings decline in 2024 – the period with the most important forecast.
However, in case you are certainly one of those investors who consider Musk will do the identical for robot butlers as he did for electric vehicles, then that may be a small thing.
He envisions that there is not going to only be a robot in every company or every household, but for everybody – from toddlers to senior residents.
He due to this fact assumes that demand is at one billion droids per 12 months, with Tesla controlling a conservative estimate of 1 tenth of the worldwide market.
Is Tesla price a 3rd of the present global GDP?
He would sell these Optimus robots, that are currently still within the early prototype stageat a price of $20,000 per unit, though the unit production cost is simply $10,000, giving him a 50% margin per robot.
In this scenario, the entire annual profit would 1 trillion US dollarswhich, combined with a reasonably standard earnings multiple of 25, gives a market capitalization of $25 trillion.
Add within the paltry $5 trillion in robotaxi fleets once they launch, and you’ve gotten real value for investors getting in at the present $740 billion market cap.
The problem with such rough calculations is that Musk’s assumptions may be off by orders of magnitude.
Musk predicts that market volume will likely be much closer to demand for smartphones, that are nowhere near the $20,000 he expected. Cars are a greater indicator here, and they have a tendency to top out at 100 million latest cars per 12 months, partly due to their much higher price.
Chanos, for instance, argued that Musk’s recent prediction meant that Tesla would have a market capitalization such as almost a 3rd of the world’s total annual economic output.
So 30% of world GDP…? Lol, okay. $TSLA https://t.co/KBysHiVDTR
— Diogenes (@WallStCynic) June 13, 2024
Take, for instance, his calculations on Tesla’s now-defunct 2030 annual volume goal. Most firms with serious goals conduct a bottom-up macroeconomic evaluation of their markets and the demand forecast over time for the product categories wherein they compete.
For comparison, Musk arrived at his sales figure of 20 million electric vehicles—greater than the world’s two largest automakers combined—by taking the worldwide installed fleet of two billion cars already on the road and assuming Tesla could replace one percent of them annually.
No wonder it was buried long before 2030.
Unless Musk can provide solid numbers to back up his claims this time, Gates may take up his bet.
