My Bullish Thesis

Prediction

This is why I believe that Tesla will be worth $1200 per share by the end of 2022:

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Who is TSLA?

Everyone knows TSLA as the autonomous car maker, but it is also a clean energy company, as well as a tech company. Currently, TSLA operates four factories including the (1) Fremont factory, (2) Giga Nevada, (3) Giga New York, and (4) Giga Shanghai. However, Tesla has many plans for expansion in the future including plans to build gigafactories in (5) Berlin which is under construction, and more speculatively in (6?) Central U.S., (7?) Asia and (8?) the U.K.

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CEO (Elon Musk)

Elon Musk is a visionary CEO. Besides TSLA, Elon Musk has also founded SpaceX, The Boring Company, Paypal, Neuralink, and Solar City. While many believe that Elon Musk is crazy because he has (1) appeared on Joe Rogan's podcast smoking marijuana, (2) has claimed that he believes that we live in a "simulation", (3) has tweeted "Am considering taking Tesla private at $420, and (4) has most recently claimed that Tesla's stock price is "too high," anything could be further from the truth. Admittedly, Musk has an eccentric personality, but his eccentricity is far outweighed by his ability to turn his dreams into reality. He reminds me of Henry Ford.

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Products

Just look at the sheer amount of ways that Tesla has to make money.

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(1) Model S, (2) Model 3, (3) Model X, (4) Model Y, (5) Cybertruck, (6) Roadster, (7)Tesla-Semi, (8) Supercharger Network, (9)Tesla Insurance (10) Solar Panels, (11) HVAC(?), (12) App Store (?).

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Tesla's product lineup is extensive and I think speaks for itself. It is the name brand in electric vehicles.

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Autonomous Taxi Network - Tesla will likely be the first company to successfully pull this off because of the size of its autonomous network. Waymo, (Tesla's nearest competitor) has only 600 cars in its fleet. Tesla plans to use the cars already out on the road to build their autonomous taxi network. Tesla has nearly 500,000 cars on the road.

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Everybody has heard the saying that a network grows stronger with the amount of people that use it. So far Tesla has by far the most autonomous vehicles on the road (and its data reflects that). Have you ever seen a Ford autonomous vehicle on the road? GE? You've probably seen a Tesla.

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Artificial Intelligence - The artificial intelligence wave is here. Currently, Tesla and Google's Waymo are the only autonomous vehicles to use artificial intelligence. Below is a more detailed analysis of how Tesla uses AI.

 

The Tesla system consists of two AI chips in order to support it for better road performance. Each of the AI chips makes a separate assessment of the traffic situation for guiding the car accordingly. The assessment of both chips is then matched by the system and followed if the input from both is the same.

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Battery Tech - Tesla's batteries are going to be built into the body of the car. Per Cathy Woods Tesla's battery technology is about 4 years ahead of the competition.

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Real World Driving Data - Tesla has 15 B miles of real world driving data collected. The next closest competitor is Waymo with 25 million miles of real world driving data.

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Total Addressable Market ("TAM") and Current Market Share

According to data gathered by www.buyshares.org, Teslas accounted for 81.66% of all-electric vehicles sold in the United States as of the first half of 2020. 

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The Bear Thesis

Valuation - Tesla trades at a P/E ratio over 1,000. However, 2020 was a big year for TSLA and its valuation reflects this. In this year, TSLA became profitable for the first time for a full year. On December 21, 2020, it was added to the S&P 500 index. I think Tesla's valuation is pretty reasonable as long as it sits below a $1 trillion market capacity. 

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Tesla's are Expensive - Elon Musk has said that he is trying to make the cars cheaper. I think with this one you must never forget -- Tesla was the one that revolutionized the auto industry.

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Competition - Although Tesla is way ahead of the competition in most areas (e.g. battery technology, autonomy, price, variety of products, quality, etc...) it is still worth mentioning that the old ICE vehicle manufacturers are attempting to remain relevant. Tesla also could face competition from Apple, Amazon, Uber, Google and other large and formidable competitors in the future.