Hi ! After reading the short article "Elon Musk offered no salary, $55bn bonus to run Tesla for a decade" by Simon Sharwood in the Register (https://www.theregister.co.uk/2018/01/24/elon_musk_55bn_bonus_plan/), I just think it is not smelling good, or Tesla has a few good secrets to kill the remaining automotive industry. As pointed out in the article, Tesla current valuation is 65bn and they want to step up to 650bn, which is pretty crazy.
Production Issues
The production improvements for the Tesla 3 and the Giga Factory is chaotic and far from the expectations, there was already a few key people who left the Tesla boat: Jon Wagner, Jason Mendez, Will McColl, Chris Lattner. It is really a very bad indicator when those key people are leaving in a few months.
What I understand is that the production can ramp up slowly, there is a lot of inertia in such a huge machine, I think they are expecting way too much and too soon from people, machines and of course money. It is not a digital age machine like they think, it is not the same scalability for the same cost. It means also that there will be additional cost, reduced margin in the best case and most probably losses that are pointing in the mirror.
Even if the Giga Factory is going to work and provide a definitive advantage on the battery production from a cost, automation and other perspectives. Perhaps if they start to have losses, Tesla will start to perform partnerships with the competition to have the cashflow needed, and they will start to monetize more the supercharging stations (just like they started to forbid Uber/Taxis and start the monetization process).
Also, it is possible that the centralized Giga Factory is simply too big to handle the required throughput and they should have built a more decentralized and elastic system instead of putting all the eggs in the same basket. May be an intermediate car was required to finance this, think more about the production while solving its set of issues, and they missed fully this key step.
Structure of the Market
The thing has to do with the automotive market and how people interacts with it. Historically, Ford was the dominant one with the T model until GM and the competition started to build cars with different designs, colors, more fragile and cheaper too.
My point is that the majority of people are not ready to pay a big premium for a car. So far, the hype and the tax bounty helped to sell high-end Tesla, but there is less hype and the tax bounty is already gone in few countries (China especially).
Now there is more and more competition also, which is not a good sign, you will have to fight on the technology and the cost, that will bring down your potential profit. As Peter Tiel said "Competition is for losers", which actually means too much competition will nuke your profits and your company.
Now do you think that with self driving cars there will be a bigger market ? I would say no in the long term, because it becomes a commodity for the new generations and they are not so attached to the "car". Also most of the cars are not used 90 to 95% of the time, there is a huge potential for reuse and monetization for both the transport of people and goods.
Personally I think it is the network/the grid for the production of electricity that is more worth to invest into, also the grid/the network will need more decentralization and new techniques to cope with forthcoming needs. May be it is part that can help to save Tesla and make it really worth in the future. Also renewable energy has some issues when you have too much power produced, that is a place where the network of superchargers can reload autonomous cars at the right time.
Even if they succeed, I do not think there will be a monopoly and such an important valuation, the more I think about it, the more I think as a decentralized infrastructure.