Thread by @DisruptResearch

The insane magnitude of the $TSLA robotaxi oppty seems underappreciated.

@elonmusk: "Flipping of the switch from a car that is from not robotaxi to robotaxi, I think, will probably be the biggest step-change increase in asset value in history by far."

What does this mean?

1/5

On autonomy day, Tesla suggested that the NPV (Net Present Value) of a robotaxi is ~$200K. Includes depreciation (the car cost).

Tesla's pricing assumption here ($1/mile) is conservative, especially in a Tesla-first-mover scenario. Could be much higher. But let's use $200K.

2/5

What happens if Tesla produces ~5M robotaxis/year (~0.3% of cars on the road), which seems plausible in 5-7 years?

$200K NPV * 5M / year = $1 TRILLION of NPV created...

PER YEAR.

Put any kind of multiple on this, and it's easy to see value creation in the MANY trillions.

3/5

This NPV may not get immediately recognized in Tesla's GAAP earnings.

However, the company could develop advanced financing programs to generate all of the NPV upfront (e.g. through securitization or a robotaxi financeco spin-off).

4/5

I realize all of this sounds insane, but it's just math.

Of course, this hinges on whether Tesla can solve autonomy.

But if they do, it's easy to see why Tesla has a good shot at becoming the most valuable company on Earth.

5/5