Speaker 1: Now, I don’t know how many of you have been following Tesla stock lately, but all I can say is one thing, it’s made a lot of people a lot of money. If you had invested 15 K in Tesla less than a decade ago, you would now be a millionaire for those who invested more than that, the likes of Elon Musk.
Well, let’s just say they’re now extremely wealthy. He’s now in the top 10 richest men in the world. Not that I think he cares that much about being the richest man in the world. He’s more worried about saving the world and also going to other planets as well. Just your everyday guy with your everyday goals. Now, obviously, that’s sarcasm, but a regular go for a regular guy often as to become a millionaire. And Elon Musk Tesla stock has made a multitude of regular people into wealthy guys, those who are smart and invested. When Tesla was just nineteen dollars a share, they made an 8000 per cent return on their investments. Those who were slightly less smart like myself and invested when Tesla was around two hundred dollars, well, we still made a solid return on our investment. Let’s just say that. But what I want to do in this video is go over how how to Tesla make so much money for itself and for its investors will then move on to where Tesla is going to go in the future. Is it still currently a good investment to hold? What potential does it still have? So the question that we need to ask ourselves is what was it that those early investors saw and what was it that Elon Musk was able to do in order to make Tesla the biggest car company in the world? By the way, back in the day, no one even had a hope of a dream that an electric vehicle company could become so big. Nowadays, it seems like it was inevitable.
The breakthrough from Tesla came not from delivering the Roadster, not from the Model S. It was the model three. This was a car that was sleek. It was well designed and most importantly, it was affordable to the broader public and the broader public. They went absolutely nuts on this vehicle. They started buying it by the bucket load, as you can see, in terms of total sales. It destroyed its competition, selling over 140000 total vehicles worldwide. The funny thing about this graph was that coming in at fourth and fifth was also Tesla vehicles as well. It just shows you how strong they are. But the model three was the big seller in the big game changer. You know, it was the first time that people could really stop picturing Tesla as the company that bought about electric vehicles to the world. You see, granted, everyone knew that electric vehicles would be the car of the future, but no one knew when this will be happening or who would do it. When Elon Musk showed that you can produce a quality electric vehicle car and sell at mass market at a cheap rate with the model three, it changed everything. But the thing is for Tesla, they’ve now got the whole world to sell their product to most people, OK? They already have a gasoline vehicle, so they don’t really have a need to buy another one. However, it’s very rare that someone has an electric vehicle. This creates an enormous opportunity to sell to the entire world. And it’s one of the big reasons why Tesla stock is up by so much in terms of price and why it’s made a lot of people a lot of money. The other thing that Tesla has done is grown its presence in China. As we all know, they’ve got their Gigafactory three and Shanghai, which is producing the model Y and model three vehicles. And this is for a growing demand in Tesla’s cars in the second most powerful economy in the world. By the way, the most powerful economy in the U.S., Tesla already dominates that market. But China, Tesla is also number one. But more importantly, they’re growing as well. As you can see, they delivered the most electric vehicles ahead of any other Chinese brands.
As Dan APH said, China appeared to be the star of the show and was a major source of strength in the second quarter based on our analysis and industry data. He then went on further to say, We believe that the China growth story is worth at least three hundred dollars per share and four hundred dollars and a bull case to Tesla as this EV penetration is set to ramp significantly over the next 12 to 18 months, along with major battery innovations coming out of Gigafactory three. Which brings me on to my third reason why Tesla has made so much money for its investors is its battery. I don’t know if you have heard the news or heard Elon Musk quotes, but Musk has plans to deliver a million mile battery with minimal need for upkeep. Routers reported that Tesla made the new million mile battery design. In collaboration with a Chinese company, and then Musk plans to launch the new battery in China first. Very interesting, but currently 200000 miles is considered a great run for a battery. So one million miles is going to be an absolute game changer for investors. And then on top of this, you got people buying into their companies promises to deliver an electric semi, which is expected to come into production by 2021. Then you’ve got the cyber truck towing their competitors vehicles uphill. Then you’ve got their solar section of their business, which is basically unlimited potential to deliver clean energy to the households across the entire globe. You’ve got their autonomous vehicles, self-driving, which has the potential to take over all driving industries, you know, trucking, Uber, Lyft, Posman. The amounts of money to be made here is vast when you truly think about it. So basically what you have is a multitude of these assets their Tesla have that are growing and compounding on themselves. And eventually investors could not deny the results and the potential that Tesla has, which is why the company is so big right now. And it’s for these reasons going forward why you have people like Cathy Wood from ARC Invest predicting Tesla to go to 7000 dollars per share. She said Our confidence level that the stock is heading for several thousand dollars over the next five years is very high. We’ve arrived at that price by weighting the probabilities of 10 different scenarios, including bankruptcy, to be honest.
So we’ve tried to be as fair and balanced as we could possibly be. And it’s as I was trying to show you earlier on, one big reason of this is because of their battery technology, she said. Already, Tesla is way ahead of its competitors around battery technology, both in cost and range. Their battery cost is three to four years ahead of any other auto manufacturer in terms of cost declines. If rivals such as BMW want to compete with Tesla, they will have to sell their cars at a loss. At the same time, they’re losing their internal combustion engine business. At the end of the day, Tesla is far ahead of any competition that almost a one man band. But are they worth the current price tag? It’s hard to say. If you ask more conservative investors like Buffett and Ray Dalio, they’d be avoiding it. If you ask more enterprising investors like Kathy Wood or Ron Baron, they were all over Tesla stock. And it’s because of all the upside potential that they have, you know, their battery technology, their cars, they are autonomous driving systems. This could take Tesla stock to 7000 dollars or 10000 like Ron Barron thinks it could get to. The upside is big, but the likes of Buffett and other investors who look at the stock, they see the downside to, they know if a recession comes, the economy slows down. Tesla could face some big troubles. It’s all well and good after an 11 year bull market run. And we all know car companies do so well at the end of a bull market cycle. They don’t do so well, however, when their economy is on its heels because no one has any excess income left over to buy cars. So despite what you hear, Tesla is still a risky stock to own. There’s no doubt about it. You know, I also find it a little bit weird when you’ve got Elon Musk making these odd tweets, for example, his tweet saying that, quote, Tesla stock is too high in my opinion. Now, I don’t know that he really meant it or if he was just playing with the media. I don’t know what he meant with it at all. But I’ll say this is definitely an argument to be made that Tesla stock is too high. That’s why when I get people asking me about Tesla, asking about their portfolio, I like to recommend balance. OK, if you love Tesla. Nothing wrong with owning some shares. But if you want your portfolio to be guaranteed to grow over time like I do, then you may want to spread your risk a lot more in other stocks throughout countries in gold, maybe a bit of real estate, which I’m looking into. Diversification, I think is important.
Nevertheless, I cannot deny that some investors have put pretty much all of their money into Tesla stock in the past, and they’ve come out a lot wealthier sometimes just betting with Elon Musk. Tends to work out.