Thread by @bauhiniacapital

I read the Ark model on TSLA.
One thing one has to give them credit for is they aren’t shy about their assumptions.

After 11 yrs of car-making, they made 500k cars in 2020. The ‘bear case’ for 2025 is 5mm units. Assuming capacity grows 1mm cars a year from 2021-2025 that gets

them to their bear case of ~11mm cars on the road by end 2024 and 13mm on average in 2025.

The bear case assumes 40% of all Teslas sold will be on a human ride-hailing platform. That’s 5.4 million human-driven ride-hailing Teslas on the road in 2025.

The bull case is

of course, more aggressive at 10mm units sold in 2025, suggesting avg 22mm TSLAs on the road in 2025, 13.2mm of which are used for human-driven ride-hailing, and there is a 50% chance that 13.2mm is only 8.8mm with the *other* 13.2mm used as robotaxis.

The bull model has a weighted average 90% of Teslas sold being used for robotaxis and ride-hailing in 2025.

The model on GitHub would suggest that in the Ark bull case autonomous driving, in 2025, Teslas would drive 2 trillion miles a year for ride-hailing and robotaxis.

By the end of 2025 that would be a run-rate of 2.5 trillion miles a year.

22.5mm Teslas used as taxis driving 3.3trln km a year (4trln run rate by end-2025) suggests TSLA will have near 100% of the market globally, and average taxi usage will grow dramatically from here.

The market share model seems to ascribe US market share to rest of world (and China/Europe show that’s an iffy idea). The taxi model suggests TSLA’s sales market share outside the US will be a fair bit higher than inside the US. And given ex-US taxi market models, that seems

another iffy proposition. The *average* miles driven by a taxi with paid customers in the highest per vehicle market in the world (Shenzhen) is 60k miles/yr. Tesla’s mean estimate for it’s Monte Carlo-derived TP of $3000 is 59,952 miles/yr. The bull case is 110k miles.

The first problem I see is that in cities, globally, dead-heading (i.e. return trip or trip W/I customer) is 45-55% of total taxi miles driven. The model assumes 110k miles driven earning. Which is 7-8x US taxi avg including deadhead and twice global max.

Total robotaxi miles in the github model is only 1.43trn with gross ride-hail billings of $889bn on 13mm cars is $68,400/car. The amount which would come to the car owner is about 40% of that, or $27k/yr. That is on a $25k car according to the same model.

Presumably, there will be eBay listings for queue space for Model A (the cheap car) cars and some families will get every member to buy one, with a loan. Put down $5k, get paid $27k/yr for letting TSLA use your car. Seems easy. I wonder if TSLA will underwrite the revenue.

So TSLA will have $93bn of EBITDA in 2025. That’s the bear case with no autonomous driving. With autonomous driving and the bull case, EBITDA will be $208bn, with $168bn of free cash flow.

With all confidence, I can say... It’s a model...