I’ve decided to do a brain dump on the big topics that command most of my attention and thoughts: Tesla; Axie Infinity; and the plant-based food movement. My plan is that through the process of writing, revising and editing I will end up with a series of structured and coherent blog posts. There won’t be a whole lot of originality in these posts, just a synthesis of thoughts. I hope this will free up some brain space so I can be a bit more engaged with my day-to-day activities. This crazy jumble of ideas in my head is causing me to lose focus too easily.
Another side-note I thought worthy of mention - whilst these topics do command my a lot of my attention, the amount of money I have invested into them is not proportionate to the time I spend thinking about them. The same can also be said for bitcoin and other cryptocurrencies. I only have what I would call play money invested in them. I’m not sure if this is a good thing or not?
Tesla’s mission is to accelerate the world’s transition to sustainable energy.
Ark Invest has identified five primary innovation platforms - blockchain technology, AI, robotics, genome sequencing and energy storage.
Extension of Ark’s five primary innovation platforms. Image from Ark Invest’s website.
That sounds really sexy but Tesla is actually working on harnessing several of these platforms to change the world for the better. In 2020 I’ve become slightly obessed with finding, following, and investing in these kinds of companies. Whilst I didn’t find Tesla in 2020, I’m definitely obsessed with it and this is because their mission aligns with my values. As an investor it’s also been great watching their stock outperform market returns this year.
Flywheel from Hyperchange.
The flywheel was devised by Tesla YouTuber Gali Russell. It demonstrates that Tesla is much more than a car company - it is an energy company that produces products for each of the three sections of the flywheel: energy production (solar roof tiles); energy storage (batteries); and energy consumption (electric cars).
Tesla batteries are used in their cars and as standalone products for the home in the form of their Powerwall. The roof tiles business is a part of Tesla thanks to the merger between Tesla and Solar City a few years ago. For now Powerwalls and the roof tiles are taking a back seat while the cars are scaling up. Once the cars business matures I expect the other businesses to come into their own and grow to be bigger pieces of the Tesla pie.
Then there’s also the idea of vehicle-to-grid, ie. you are your own utilities company - the power from your charged Tesla can be sent back to the grid for $$$. However, Elon Musk talked this down at Tesla’s Battery Day a couple of months back as “it might come down to how much an EV is paid to provide services to the grid compared to operating as a transport service” (not Elon’s words but this is essentially what he was getting at), because ...
I don’t own a Tesla - I’m a Kombi guy (incidentally, there are videos on YouTube of people building custom Tesla-powered Kombis!!!). I would love to get one (or two) before Tesla rolls out their robo-taxi network. In the meantime expect Tesla to roll out a human-powered Uber-like platform, then full autonomy with regulatory approval for them to drive on roads sans drivers at the wheel - so I think it’s a few years away. But just imagine it - your car goes out at all hours to take people from A to B, it returns back to base and it pays you!! A-MA-ZING!!!
The Tesla flywheel is a closed loop - while the car’s at home, the powerwall charges it, it goes ‘out to work’ and the solar tiles generate more energy for the powerwall. Elon Musk expects this to be more profitable than leaving the car at home to transfer its energy back to the grid. Why break the loop?
Tesla is obviously growing exponentially. They are smashing their sales numbers as they ramp up production, and they are building gigafactories at a rate of knots. They are iterating on their currently producing gigafactories to increase efficiencies. We know that in the near future, as Tesla production expands, the demand will exceed supply for the rare earth materials their batteries and other parts need - so these are imminent problems they will need to solve (for more on this topic, I recommend this Hyperchange video). Another problem is that currently a lot of the rare earths mined around the world are done so using questionable (unethical?) means. I believe that Tesla needs to take a leadership role in helping to turn this around. They seem to be taking action on that front - they have announced plans to reduce (even cut it out altogether) the amount of cobalt (said to be the most problematic rare earth metal) in their batteries.
What do Nike, Apple, Lululemon and Tesla have in common? Brand power. Pricing power. Loyal customers. Emotional attachment. Believers (in the story). Tesla is most definitely a premium brand but the outcome of increased efficiencies in production should be greater affordability. This should result in a “premium but attainable” brand - the word for this is ‘masstige’ (hate this word!!). And this should lead to increases in market share.
Lifestyle image source.
I consider my My Kombi van to be a lifestyle vehicle. To me, it represents freedom. With Tesla’s camp mode and the yet-to-be-released cybertruck, they’re also positioning themselves as lifestyle vehicles. Yet another ‘string to their bow’.
More Tesla lifestyle content -
Tesla shorters have lost a lot of money this year. In the past, folks on Wall Street looked at traditional metrics and refused to believe that this company would ever amount to anything. Check out this hot thread on twitter from Chamath where he rips into traditional analysis of Tesla.
Whilst I would say there is still a chance that Tesla could fail, with its market-cap and its Lindy (similar to Bitcoin), in my opinion it’s only a very slight chance now. Roll on Tesla!!
It’s the thing now to be a Tesla YouTuber. These are some of the originals and the best. There content is not exclusively Tesla but they have other interesting videos as well.
I also recommend you read or listen to anything Tesla by Ark Invest to really go down the Tesla rabbit-hole.
The brand and the lifestyle, the vast array of user-generated content by normies - Tesla does not spend any money on marketing. They don’t need to because its fans are its marketers. We’re a few years from fully autonomous self-driving cars, but Tesla is years ahead of its competition. Every mile (or kilometre) a Tesla drives, the smarter it gets. All that data gets lapped up by its self-driving AI. That’s just one-third of the flywheel. Wait till the rest of it scales up.
