Why I Own Tesla Stock

"I could either watch it happen or be a part of it."
-Elon Musk

I have had many conversations about my close to all-in position on TSLA. It's only appropriate to have my thesis accessible somewhere.

Yes, it's true, over 95% of what I own is in Tesla stock (TSLA), and yes, I sleep just fine at night. I believe this is an amazing oportunity for those who are interested in investing in future technologies. That does not mean you should listen to me. Do not outsource your thinking, make your own decisions.

I want to go through some of the reasons why I believe purchasing this stock is going to make me a lot of money. There are some big ideas here that are hard to boil down into a short article but I will try. These are the ideas I'll be discussing:

- The EV disruption
- The Cataclysmic Impending Doom of Legacy Automotive Companies
- Autonomous Driving
- The Data Gold Rush
- Humanoid Robot

I hope this finds you well with a coffee or tea in hand. Enjoy.

The EV Disruption

In my estimation, by the mid 2030's, close to 100% of new vehicles in the USA (and probably Australia) will be electric. This will happen whether there are government incentives or not. Generally, consumer choice is driven by cost, convenience, quality, and cost. Did I mention cost? In order to understand Tesla, you need to see why their first mover advantage is critical. EVs are about to take over! This is why...

On the one hand, the internal combustion engine (ICE) was invented well over 100 years ago, because of this, basically all innovation around ICE manufacturing has already occurred, and now has very little room to develop. The cost of ICE is not going to trend down. On the other hand, the most expensive parts of an EV is the battery and the computer. Both of these technologies have been and will continue to precipitously decline in cost due to technological innovation. For example, "The price of batteries has declined by 97% in the last three decades" according to Our World in Data (https://ourworldindata.org/battery-price-decline). And in case you didn't realise, computers have gotten slightly better and cheaper in the past couple decades. (FYI: It's actually several thousand times cheaper when looking at cost of transistors per mm squared, I digress) Here is the effect of that: After accounting for inflation, in 2019 the Model 3 started at $74,343 AUD. Currently, the Tesla Model 3 starts at $54,900 AUD (2025).

Tesla has demonstrated their ability to drive costs down whilst maintaining profitability and factory footprint expansion. In 2024, Model Y was the world's best selling vehicle. This should be no surprise if you understand that affordability and value for money are the main drivers of product adoption. Tesla continues to drive costs down and make the product better, it is no wonder they are so popular. When they start to roll out even cheaper models, it's over for ICE. Not only will EVs be a fraction of the price of a comparable ICE vehicle, but they are actually better in basically every way: They are safer, cheaper to run and maintain, easier to drive (1 pedal driving, more autonomous features), and more convenient (no more petrol stations). Game Set Match. As costs come down, there will be no competition to EVs.

The Cataclysmic Impending Doom of Legacy Automotive Companies

Here is the problem legacy auto manufacturers will face: EVs get cheaper. ICE won't get cheaper. Thus, you are going to be forced to make EVs if you want to survive. EVs are expensive to produce at small scale. ICE are expensive to produce at small scale. As soon as you start to transition, you lose money on your EVs because they are at small scale. As you change your product line, your old products don't sell as well because EVs are better in every single way that matters for the average consumer. When you reduce your old product line just a little bit, you destroy your already razor thin profit margin you were making on those products. You end up losing money on your old products while losing money on your new products. Unfortunately for you, you have to compete with an already profitable Tesla and heavily subsidised Chinese EV producers. It does not end well for you. Most of these companies are fucking doomed. If the leaders of these legacy auto companies had any brains or any balls, they would have started the transition at least a decade ago, but they didn't. Now, it is too late.

Autonomous Driving

This brings me to the first multi-trillion dollar opportunity, autonomous driving. Let's start with the supposed competition... In private conversations I have had people tell me that Waymo is a serious competitor to Tesla's Robo-Taxi. LOL. This is a clear indication to me that they have absolutely zero idea of the two strategies these companies are employing. Waymo has a rigid, rules based, heuristic approach to solving autonomy. Waymo does not make the cars they release, they pay someone else to, lining someone else's pocket, then they put expensive LiDAR and radar all over it, making it look like a Frankensteinish abomination. They then have to map out the area they plan on releasing the cars with high fidelity mapping/scanning tools to make sure the car knows exactly where it can and can't go. This is fundamentally a bad approach as it does not scale cost effectively. The best solution to autonomy is one where the car is intelligent enough to interpret and react to unique real-world scenarios. The only way to achieve this is to have mountains of data to train AI computers with billions of scenarios.

Tesla's CyberCab approaches this with extreme simplicity. The CyberCab is designed for manufacturing efficiency with as little parts required as possible. The design embodies the saying 'less is more'. This product will be produced in the tens of millions per year, saturating our roads with the next generation of transport. Because Tesla's approach is so generalised, the car can drive in any country, any city, any town. The car can interpret signs that have diagrams, English or even Chinese, making it possible to deploy in any location on Earth, mapped or unmapped. As the system matures the safety profile will become so good that you will be silly to drive yourself or get in a taxi with a human driving.

Analysts often point out that Waymo is so far ahead, 'look how many sensors they have compared to Tesla!' Remember this, complexity appeals to stupid people. Blackberry was also very far ahead of Apple when the iPhone came out, 'The blackberry has a keyboard! More ports! Look! Apple will never compete without a keyboard!'. Complexity appeals to stupid people. Not to hate on Steve Ballmer too much but he was a ripe example of the incumbents laughing at the iPhone at the time. There seems to be an eerily similar sentiment around Tesla's autonomous approach today. Many laugh at the fact Tesla's don't have LiDAR or a spinning KFC bucket on the roof. History does not repeat itself but it sure does rhyme.

The Data Gold Rush

The new gold is not Bitcoin, it is data, and we are in the data gold rush. This should have been obvious to investors during the rise of Google. Today it is blindingly obvious. If you understand Google's story, you know that their competitive advantage came from figuring out advertisements that are easy on the eyes. They put ads where it is convenient and many times you don't even notice you clicked an ad. This is not why they became the multi-trillion dollar business they are today though. Google got ahead with pretty ads but they won the race with their snowball of data which grew exponentially. The more data Google gathered, the better the product got, a better product stimulates user growth, more users means more data, rinse and repeat.

Something very similar is happening today. Tesla has ~7 million vehicles globally which all are covered in cameras, collecting data every day. There are billions of miles of video data being piped into Tesla's AI computers constantly. This is how they will win with artificially intelligent driverless robots. Nobody else has had the foresight to do this. Tesla has stuck their neck out by spending money on these cameras for years with the vision of one day using the data to create an intelligent driving system. It is truly something special. The more data, the more capable and safe the system becomes, the more capable and safe the system, the more use it will have, generating more data, rinse and repeat. Long story short, the one with the data is the one that wins this battle. Remember, history does not repeat but it sure does rhyme.

The Humanoid Robot

The next moonshot product is the Optimus humanoid robot which, like the car will understand the real world and perform useful actions in real time and space (or space-time for the nerds). Tesla is the only company with all the ingredients for this. The world's best real-world artificial intelligence, incredible manufacturing prowess, extremely talented robotics and electrical mechanical engineering teams. If successful, this will be a generalised, mass producible, useful humanoid robot that is capable of conducting real laborious tasks. The market for this is virtually infinite. I'll keep this section brief. All I can say is that if this succeeds, it's going to trump autonomous driving and EV sales in terms of profit by far in the long term.

Conclusion

The world is about to change, rapidly and drastically. AI will change everything, digital and physical. Most AI companies are going after digital. Few will succeed with physical. Physical AI is useful intelligent robots (some have wheels, some have arms and legs). Tesla is set to dominate this field. It starts with the EV disruption, this leads to autonomous electric vehicles flooding our streets, this leads to intelligent useful humanoid robots. These all have extremely large markets, with the proceeding one an order of magnitude larger than the last.

P.S.

Many stock analysts have outsourced their thinking to the "experts" who have completely led them astray. The ones who put Tesla dead last on autonomy leader boards, the ones who think Tesla is 'just a car company', the ones who think full self driving unsupervised will never happen (it's already started), those are the ones who will miss this opportunity. Wall-Street-Think can not be cured. Best to stay away and think for yourself... With that in mind, I haven't dreamt these ideas up myself. This is the curation of thousands of hours of research and deep ponderous thought. Shout out to Steven Mark Ryan, Farzard Mesbahi, and Gali from Hyperchange. These guys have informed me and provoked me to think about how I can change my life financially, spiritually and psychologically.

I'm sure most readers will have questions, queries, and doubtful points. Please reach out via email or in person to have a chat about this, I love talking about it.

Thanks for reading.