Thread by @alexandrosM

Tesla is continually misunderstood by markets & media because it's hard to model a feedback loop that cuts across functional silos in excel. Linear models and systems thinking are oil and water. To help our analyst friends, I'll list out 10 feedback loops that Tesla has going:

1. Cars sold emit data, which accelerates motor & battery software optimization, which improves power efficiency, which reduces batteries needed, which reduces cost, which reduces price, which increases demand, which increases cars on the road, which emit even more data, & so on.

2. Tesla insurance uptake creates data about repair costs, which informs design & manufacturing choices, which reduce repair costs, which reduces cost of insuring a Tesla, which can reduce price of insuring a Tesla which leads to more Teslas sold, and more insurance uptake, ...

3. Tesla being the #1 buyer of li-ion batteries in the world makes them the first point of call when someone has a breakthrough. Which accumulates more breakthroughs, sells more cars, increases the amount of li-ion batteries they buy, ...

4. Tesla has accomplished some of the most audacious engineering feats in recent memory. Which attracts the world's best engineers to want to work there. Which creates an incredibly high-quality team, accomplishing even more audacious engineering feats, ...

5. Tesla's expanding technology lead (due to many of the above) makes a lot of the established manufacturers realize they can't really compete, which makes them underinvest in EV tech and milk ICE instead, which increases Tesla's technology lead, and so on.

6. Tesla's widespread supercharger network leads more EV buyers to buy Tesla, which increases their ability to build out the supercharger network, which leads even more EV buyers to buy Tesla, ...

7. Tesla's expertise at building factories capital efficiently gets them low overhead on their cars, allows them to reduce prices, which increases demand, which requires them to build more factories, which they can keep getting better at building efficiently, ...

8. Tesla's super high customer satisfaction means a buyer of Tesla cars is an evangelist who gives test drives, which causes more people to buy Tesla cars, ...

9. Elon's super-short feedback loop on Twitter with Tesla customers asking for features and fixes means the cars are ever more closely aligned to what customers want, which increases demand, which increases feedback, ...

10. And I haven't even mentioned Autopilot! This one is easy, but here goes: More cars sold -> more miles driven -> more data available -> better Autopilot performance -> more cars sold (eventually also as robotaxis) -> ...

The spreadsheet-literate of you will notice that so many of the above are super hard to model using traditional tools. Nevermind when all these loops are running in parallel. There is a discipline that addresses this, called System Dynamics, but for some reason is not well known.

OK, let's make this a community effort and gather as many Tesla feedback loops as we can. Perhaps some of the smartest Tesla bulls can pitch in? Folks like @enn_nafnlaus @Gfilche @matty_mogul @truth_tesla @TeslaPodcast @stevenmarkryan @WholeMarsBlog @LimitingThe @heydave7 maybe?

Let's add 3 more loops to the mix that are Elon-specific:
1. Elon is constantly learning how to imagine and realize new projects, adapt to opportunity and/or adversity. The better he gets at it, the better his companies get at it, and that has to count for something.

2. Elon is constantly jousting with the best engineers across his companies. He learns new things every day and cross-polinates his companies (e.g. various SpaceX/Tesla collaborations). The more of this he does, the better his companies do, the more smart people he can learn from

3. Elon set his compensation package up so that he owns more of Tesla, the better Tesla does. But that bigger percentage will be worth more the better Tesla does. Which proceeds he plans to use to fund Mars colonization. And what is more valuable than making life multi-planetary?

Watching the last @stevenmarkryan video, he actually named a few more! 1. As Tesla optimizes its manufacturing, it will make more cars at its existing facilities, further reducing cost per car, reducing price, increasing demand and profits, hiring more talent, to optimize faster.

2. The more cars are sold, the more tesla can invest in software add-ons, increasing high margin revenue per car further, which can be used to hire more software engineers to work on more software add-ons, which will further drive software subscription revenue, etc.