Behind the video
wtf Tesla Earnings [Full Breakdown]
Overall Thesis
Kevin sees substantial long-term Tesla upside from FSD subscriptions, autonomous vehicles, energy storage and robotics, with conditional 2030 valuation scenarios around $740–$854 per share. He nevertheless considers the current valuation expensive against Wall Street forecasts and highlights execution delays, ambitious margins and substantial financing needs.
Narratives
TSLATeslaKevin's long-term Tesla valuation model suggests meaningful upside if vehicle production and margins scale, while FSD subscriptions and energy products provide additional opportunities. He views the present stock as expensive and acknowledges execution and funding risks, but expects a possible acquisition premium to support its valuation.
Key Arguments
- FSD subscription growth and recurring revenue support a potentially high-margin business with limited demonstrated competition.
- Vehicle gross margins excluding regulatory credits improved, and deliveries remained resilient despite the loss of the US tax credit.
- Domestic battery production and data-center demand could support the energy storage business.
- Five million vehicles by 2030 and 25% vehicle operating margins produce a modeled future share value around $854.
- Reducing modeled vehicle operating margins to 20% still produces approximately $740 per share.
- A potential SpaceX acquisition could provide a premium to Tesla shareholders.
Risks acknowledged
- Current operating margins and GAAP earnings are weak, while research and development expenses have increased sharply.
- Energy revenue declined despite increased storage deployment.
- Reported free cash flow benefited materially from working-capital timing.
- Robotics commercialization and chip fabrication may extend into the 2030s.
- Customer-owned robotaxi fleet participation and near-term cybercab deliveries appear unrealistic to him.
- His modeled margins may be too high, and his forecasts exceed Wall Street expectations.
- Tesla's expansion requires substantial financing.
- The acquisition is not guaranteed.
Kevin criticizes what he describes as an Archer founder leaving to pursue a robotics startup shortly after the IPO. His concern is governance and commitment to shareholders; he does not make a forward-looking share-price prediction.
Key Arguments
- He dislikes founders leaving after raising public-market capital around a long-term vision.
- He prefers sustained founder involvement and the ability to pursue new opportunities within the existing company.
Risks acknowledged
- He acknowledges the individual may have had reasons for leaving.
- He says he has never invested in Archer.
Hedges & Caveats
- The 2030 valuation scenarios require five million vehicles and vehicle operating margins of 20%–25%, substantially above current performance.
- His projections are considerably more optimistic than Wall Street forecasts.
- He expects robotics and chip fabrication to take longer than management suggests and doubts near-term customer robotaxi deployment timelines.
- Positive free cash flow benefited from increased payables and deferred revenue.
- Tesla will need substantial additional financing for its expansion plans.
- The anticipated SpaceX acquisition and acquisition premium are explicitly described as uncertain.
- He considers approximately $170 an attractive valuation based on comparative growth metrics, rather than predicting that the stock will reach that price.