Panasonic Sold Off Tesla Stock
Panasonic announced that it sold off its Tesla Stock. Up to 2020, the Japanese company was the primary battery supplier for Tesla. Recently, Tesla announced that they have struck deals with LG and CATL, and it is rumored that CATL will have a manufacturing facility close to Tesla’s Shanghai factory. Apart from switching suppliers we could also consider a scenario where Tesla is trying to develop their own batteries internally. After all, batteries are what puts them ahead of competition. They could therefore seek to follow an Apple-like model whereby they internalise critical aspects of the supply chain.
Starlink - Spacex
In a recent twitter exchange, Musk noted that Starlink won’t IPO in the near future. This is due to inconsistent streams of revenue. However, when Starlink does go public, Musk will seek to give long term Tesla investors preference. According to a Morgan Stanley valuation, Starlink accounts for 80% of the total SpaceX value. Currently, Starlink has 1,500 satellites orbiting the earth and they are launching their own internet network which could compete with other established providers, such as AT&T in the US, and Vodafone in Europe. Starlink is one of many Musk companies that could create a strong ecosystem for Tesla users, thus creating a strong network effect. Another such company is ‘The Boring Company’ which is already teasing the creation of tunnels designed for Tesla cars. Those companies could develop a strong complementarity effect, whereby the growth of one could benefit the other, and, of course, vice versa; if Tesla fails, the demand for Tesla-compatible tunnels will plummet as well.
Dumping Radars
According to Tesla’s AI chief, Tesla is dumping the radar technology. This is due to conflicting signals between cameras and radars, confusing the AI of the car. They believe that they can achieve better measurements from the installed cameras, and that the technology they are using is far more advanced than radar sensors. In the past, Musk has also said that Lidar (laser radars) are too much of an expensive choice to consider for Tesla vehicles.
Superchargers for all EVs
Tesla is said to allow the use of Superchargers by competitors in Norway. This is due to the fact that, in order to secure funding from the norwegian government, all EVs were required to be able to charge on Tesla’s Superchargers. This could potentially generate a new stream of revenue for Tesla whereby they offer charging as a service.
Price Target
Cathie Wood’s ARK Invest has three scenarios for the price of Tesla stock by 2025. They based those scenarios on a number of assumptions and speculations, ranging from the number of cars sold by 2025, to Profit Margins per car, to estimated EBIDTA. The Bear case has a price target of $1,400/share, with a probability of 25%, and the Bull case has a price target of $4,000/share, with a probability of 25% as well. However, they’re expecting Tesla to hit $3,000/share, with a probability of 50%. Keep in mind that when Cathie Wood first came out as a Tesla advocate she was mocked, until Tesla achieved Wood’s price target much earlier than previous estimates. The report also highlights that Tesla has a competitive advantage in other industries apart from EVs, including insurance autonomous driving.
