Image Credit: Bild
Early on Monday, April 22nd of 2019, Tesla Motors CEO Elon Musk made international news when it was announced that he believes autonomous driving innovations will help his company reach the historic milestone of achieving a $500 Billion market cap.
Musk made his claim during “Autonomy Day”, an investor focused event held at Tesla’s Palo Alto headquarters which was designed to share the latest innovations the company has achieved to bring electric self-driving automotive technology to the forefront of the automotive industry.
During “Autonomy Day”, Musk hosted a “broad investor call” sponsored by Citibank and Goldman Sachs with the hopes of securing an additional $2 Billion in funding for his company Tesla. While the company currently has a market cap of $42 Billion, Musk believes that autonomous vehicles will be the driving factor which will help the company eventually earn more than $500 Billion.
Among many ambitious claims, one piece of news stands out about the long term investment opportunity that all Teslas could one day represent. According to Musk, thanks to self driving updates which will be applied via software, all existing Teslas are likely to be worth over $250,000 once the company’s technology is released to the world. Musk expects that this technology will be released within the next 3 years.
Currently, Tesla is seeking to raise $650 million in equity with an additional $1.35 billion in convertible bonds. Corporate filings indicate that the company plans to use these funds to cover general expenses and corporate purposes.
During the investor call, Musk said that while he expects to be able to fund day to day business through cash flow, he believes this extra cash infusion would serve as a safety in case of a recession or weak global automotive demand.
Tesla Betting Big on Self-Driving Tech
Tesla is planning to deliver 90,000 to 100,000 vehicles in the second quarter, and 360,000 to 400,000 vehicles total this year.
According to investors who had the chance to join the call with Musk, the company plans to direct the majority of its attention towards expanding its driverless technologies. This means that the electric vehicle, solar panel and energy storage aspects of Tesla’s business will all take a backseat in favor of the company’s supposedly game changing self-driving tech.
Musk believes Tesla will be able to pull away from self driving competitors like GM’s Cruise and Alphabet’s Waymo thanks to his companies existing fleet of connected cars and proprietary microchip technology.
With hundreds of thousands of Teslas already driving on the road today, the company has been collecting constant streams of data which it is hoping will help it to advance its Autopilot and Full-Self Driving systems. Additionally, Tesla’s self-driving computers apparently use less power than models from competitors such as Nvidia.
Musk believes that because Tesla’s can be updated wirelessly, using software patches and downloads, they will increase in value, unlike any car ever produced or marketed. He believes that within the next three years, all Teslas on the road will be worth between $150,000 and $250,000.
To expand upon his view of the future, Musk continued that he believes the 1 million Tesla’s currently on the road, as early as next year, should be able to function as “robo-taxis”. That is, when their owners are not using them, Tesla’s will be able to take passengers and according to Musk, preform up to 100 hours of extra work per week.
Not all industry analysts are as optimistic about Musk or the view of the future he presented at “Autonomy Day”.
Cowen analyst Jeffrey Osborne wrote: “We see a significant amount of technology and execution risk in the shift in strategy from competing in just electrification to Tesla also beating Nvidia in hardware, Google in software, and building a better ride-hailing service than current ride hailing leaders. ”
He added, “The Tesla Network robotaxi plans seemed half baked, with the company appearing to either not have answers to or not even considered pretty basic question on the pricing, insurance liability, or regulatory and legal requirements.”
Optimistic Musk Continues to Hype the Automotive Industry
Unphased by doubters, it appears Musk was pleased with the success of “Autonomy Day.”
By the afternoon of Monday, April 22nd of 2019, Elon Musk took time to share his enthusiasm about the success of “Autonomy Day” with his employees in Palo Alto and around the world.
Comprised of two lines of text, each featuring an emoji, the Tesla CEO’s communication has been released:
Subj. Great day for Tesla!
The Autonomy Day was extremely well-received. Feedback has been incredible. [Smiling emoji here.]
Awesome result of extremely intense effort by the Autopilot Team!
[two clapping emoji]
Elon
While self-driving technology received a great deal of attention during “Autonomy Day”, perhaps the bigger Tesla related news item of the day was the release of pictures and specifications of the next generation Roadster.
The all-new Roadster is expected to be able to complete a 0-60 mph acceleration in a nimble 1.9 seconds. It is expected to reach 100 mph in just 4.2 seconds, and complete a quarter-mile speed burst in under 8.8 seconds.
Capable of reaching speeds in excess of 250 mph and with a 200-kilowatt-hour battery capable of keeping it going for up to 620 miles in between charges, this certainly is an electric vehicle unlike any other in the world.
Source: CNBC