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During the 2010 peak, Tesla (NASDAQ: TSLA) was one of the highest polarization stocks on the market, but over the next year, this bullish bear-opposing debate has become increasingly one-sided, as TSLA’s stocks have soared by more than 800%. thank you for recording demand, record deliveries, record revenue and record earnings.
Did the bulls win?
In the long run, it will be perfectly transparent that Tesla is long-term transportation, for two undeniable reasons: first, electric cars will achieve global ubiquity in the next two decades; secondly, Tesla is way ahead of everyone else when it comes to making the most productive electric cars.
Still, it can be argued rather that Tesla, with a market capitalization of $400 billion that is more than thirteen times the capitalization in the Ford market (NYSE:F), already has a full price to take the place of the global transportation market.
He is — he is — he
But it’s not entirely successful for the company to take the global energy market, and make no mistake, Tesla will do just that with its solar panels, Megapack and Powerwall over the next two decades.
Needless to say, this means that long-term investors attach to TSLA’s shares.
Here’s a look.
There will be no further disruption in the 2020s than the electrification of car transport.
Obviously, the switch to EV has already started. This will increase in the 2020s.
The demand is transforming, as more than 80% of potential car buyers now need an electric vehicle. Legislation is being transformed because California just banned the sale of gas cars after 2035. Technology is improving, the average diversity of an electric vehicle is over 140% since 2011. Costs are falling, with average costs of EVs dropping 70% since 2010. Supply is changing, because each and every automaker in the world is making a blitz in the EV category.
Perhaps most importantly, the need is only growing. Global warming won’t go away soon. Gasoline cars still emit tons of greenhouse gases. We want to oppose that path, and we will, because the economy and the generation of electric cars are now smart enough to make mass adoption possible.
The long term may be clearer.
In numbers, the global automotive market is likely to grow to 80 million annual sales by 2035, driven by population expansion and urbanization. Given the trends that exist, the penetration of 50% of electric cars internationally is quite achievable up to that point, involving about 40 million. electric vehicle deliveries through 2035, nearly 20 times more than the 2019 base.
Tesla will dominate this market of 40 million electric vehicles, which still means nothing to TSLA’s action in the future.
When it comes to electric vehicle production and promotion, Tesla is the most productive in the game, and has no competition.
Tesla cars are the best-performance electric cars on the market, mainly thanks to Tesla’s unparalleled leadership in generating electric vehicle batteries (Tesla’s 4 electric vehicle models are also the 4 most widely used electric cars on the market today, all power, faster, more responsive speeds and the fastest 0 to 60 times).
Not to mention that the company has the logo in the automotive market, as the popularity of the Tesla logo continues to grow among consumers.
In general, when it comes to the manufacture and sale of electric vehicles, Tesla is the dog, so the company, according to my figures, controls approximately 17% of the global electric vehicle market today.
I suspect Tesla will be able to leverage its technology, production and logo benefits to maintain a large 15% percentage in the electric car market for the foreseeable future, despite the festival’s expansion (mainly because that competition cannot “compete” with Tesla in an electric vehicle market that will measure 40 million deliveries in 2035, meaning 6 million annual deliveries for Tesla.
With an average promotion value of $30,000, that means $180 billion in automotive profits for Tesla through 2030.
Everyone sees TSLA as an automotive company. He is, he is, he, but he is also an energy company and as a result, the broader wave of energy in white is the same as TSLA’s bull thesis as the wave of electric vehicles.
Make no mistake. Just as the electric car wave has arrived and will cause massive disruption over the next two decades, the blank energy wave has reached it and will cause a major disruption to existing energy markets over the next two decades, and, yes, Tesla will. be in the corazón. de this disruptive megatendence as well.
In 2000, renewable energy, such as solar, wind and hydraulics, accounted for only 9% of US electricity generation. But it’s not the first time This percentage has increased to 17% in 2019 and is on track to eclipse 20% in the coming years. expansion driven by 3 things:
None of these trends will be reversed.
Summary: The blank force revolution has come and will radically replace our world (for the better) over the next decade. By 2035, we will be living in a world forced by the force of the sun and wind, and for this, annual investment in sun force wants to increase by 68% to around $200 billion a year.
But the sun doesn’t shine. And the wind does not blow The great display of the complex generation of garage batteries to buy excess solar and wind energy will therefore be essential for the massive deployment of solar and wind energy over the next two decades. The battery garage market is expected to grow 10 times between 2019 ($59 billion) and 2035 ($546 billion).
Therefore, between solar power generation and battery storage, Tesla’s addressable market for its strength activities is close to $750 billion, and the company can capture a significant portion of it, implying a huge upstream prospect for TSLA’s actions.
Tesla has the visibility to dominate the large-scale blank energy market, as the company now dominates the electric vehicle market.
Meanwhile, at the front of the battery garage, the underlying chemistry of manufacturing rugged batteries for electric cars is very similar to the chemistry of manufacturing rugged garage batteries. That’s why Tesla now offers outstanding answers for the ad battery garage (the Megapack) and personal/residential battery garage (the Powerwall). This is also why Tesla deserves to be able to dominate the large-scale battery garage market, as the company will continue to have an unparalleled advantage in battery technology.
In addition, Tesla has a logo merit here. The company is already well identified through consumers as a true smart call in the field of blank energy thanks to its more productive electric vehicles. Given this forged reputation, consumers are most likely to accept it more as true with Tesla by opting for solar panels and/or residential batteries.
Therefore, in the long term, Tesla is projected as a world leader in solar energy and battery storage.
How much of this $750 billion combined market can Tesla capture until 2030?
Between its automotive and electrical businesses, Tesla is a one-billion-dollar looming company.
The calculation is simple.
By 2035, revenues will be approximately $ 400 billion, adding $ 180 billion from automobile, $ 187. 5 billion from energy and the rest of similar services. Gross margins are expected to remain above 25%, while that the opex rate is expected to scale down into the upper single-digit range, implying a company-wide operating margin of approximately 20%.
The traditionally forecasted price-earnings ratio for the market is 17. Based on this multiple, Tesla will exceed $ 1 trillion through the 2030s.
Considering that Tesla now has $ 400 billion, the investment implication is clear: The TSLA percentage is expected to remain a core long-term stake for all investors with a multi-year horizon.
Ignore the bears.
Tesla’s inventory is a long-term winner. And given the company’s leading position in the burgeoning electric vehicle and blank energy markets, TSLA’s inventory is overrated today.
At the time of publication, Luke Lango did not hold (or hold) any position on the values covered in this article.
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