This is a proclamation I am willing to put out. This is something that many are going to take exception to especially if they believe Tesla is nothing but a car company.
While this is still bulk of their revenues, and even a greater portion of their profits, the company is delving into areas that will extend outside of automotive. To me, they are already laying the foundation, along with the Chinese auto manufacturers, to wipe out legacy auto.
This is going to open up the path for a lot of electric vehicles to be sold. While I do not agree with the pace many bulls lay out, I do believe that they will be the majority of new car sales by the end of the decade.
It is a situation that aligns well for Tesla. The fact that most major manufacturers, at least in the United States, are going with Tesla's charger system is very telling.
AI Company
This is where Tesla is going to stand out in my opinion. While most view it as a car company, one of the biggest advantages it has is within AI. Elon Musk was the founder of OpenAI, the company that is leading the charge with ChatGPT. Hence, this is not a new endeavor for him.
Tesla is building Dojo. This is going to be one of the most powerful supercomputers in the world. It will rival those built by governments, usually by departments such as Defense or Energy.
There is one key difference: Dojo will not use general purpose chips. The chips are designed specifically for neural networks. Thus, it is going to be the fastest AI computer in the world.
Of course, processing is only one piece of the equation. The other is data. Here again, we see Telsa stacking up nicely.
It is now starting to train its full self driving system with video. There is very little coding. That means that Tesla can simply take video that is shot by all the cameras on its cars and train the system.
This is crucial for the bots that it is working on. If this method proves effective, it will be a major windfall. Designing bots to handle many of the chores done by labor will come down to filming the desired action completed and running the video through the system until the task is learned.
Little coding is required.
Computer On Wheels
Remember when Elon started to use the phrase "computer on wheels"?
This is something that gets overlooked now since he doesn't parrot it much anymore. It is, however, the concept they are implementing.
As we close out 2023, there is still only one car manufacturer that does over the air updates and that is Tesla. It started this in 2013. After a decade, nobody else can do it.
What does that tell you about the software capabilities of the other companies? If there is a winner in full self driving, it is going to be Tesla.
Here is where we see the start of incredible revenue. What happens if every vehicle requires autonomous driving at some point? Who else is going to provide it? If Tesla is the one who cracks the code, it will be the standard.
Think if Tesla as being the one with the operating system for cars. We know what Windows, IOS, and Android are worth to their respective companies.
What happens if Tesla becomes this for the automotive industry?
Robots
This goes one step further:
What is Tesla becomes the operating system for the majority of the robots that are produced?
Consider the implications here. If Tesla not only becomes the default for transportation, but also labor, it will be enormous.
Another facet to all of this is the company licensing that starts to roll in. It isn't a matter of selling at that point. The company can either license the software or rent out the cars/robots. This is something that many people are projecting.
My view is that Tesla will become the first $1 trillion company in terms of annual revenue. I think Walmart is the largest with about $600 million. Their growth rate is not fast enough to compete with Tesla. Granted, the latter will require a 10x from where it stands now.
All of what is presented here is within reason by the end of this decade. Elon is targeting 20 million cars per year by 2030. I do not know if that is going to happen. However, 10 million EVs as a minimum is well within reason. That is more than a 5x from here. It is a move that will give the company around $350M-$400M in revenue.
Of course, this doesn't include the production of the Semi, energy, or insurance.
We will see how all of this unfolds. However, by targeting some many different areas, and many of them interconnected, the ability to leverage the existing growth into even greater gains is before them.
The next few years should really tell the story of where the company stands entering the later part of the decade.