Recently, Musk announced that Tesla will release a driverless taxi (Robotaxi) on August 8, 2024, which is regarded by the industry as a strategic move by Tesla's All-in AI and Robotaxi. At the same time, Tesla has a new move in the Shanghai energy storage gigafactory, which is scheduled to start construction in May this year and complete mass production in the first quarter of 2025, accelerating the expansion of Tesla's energy storage business.
Figure 1: Tesla will launch a driverless taxi on August 8, 2024
Compared with other companies focusing on a single product area, Tesla's disruptive innovative technology and integrated application are its strong growth curve and core competitiveness. Based on the in-depth layout of large-scale mileage, self-developed computing platform, and huge computing power, Tesla's FSD (Full Self-Driving) technology has been leading the industry for 3-5 years. Tesla's efficient and transparent execution, as always, will continue to expand its competitive advantage.
Understanding every business move of Tesla can give insight into Musk's real layout and industrial development direction for the future. From electric vehicles, to energy storage equipment, to artificial intelligence and robots, Tesla's business territory has far exceeded that of electric vehicle companies in the ordinary sense, electric vehicles are just the carrier of Tesla's business, and its essence is to break the original industrial division of labor, integrate key technologies in the field of electric vehicles, energy storage products, artificial intelligence (AI) and robotics to form a closed loop of software and hardware integration, solve fundamental problems in the field of travel and energy with disruptive technologies, and form an innovative technology complex with vertical integration of the whole industry chain.
Tesla's FSD fully self-driving mileage far exceeds that of other companies combined, and Robotaxi will be launched soon
On April 5, 2024, Musk announced on social platforms that Tesla will release a driverless taxi (Robotaxi) on August 8. Industry insiders believe that the upcoming Robotaxi may bring the next industrial revolution, and truly realize the leapfrog subversion from the elderly machine to the smart phone, from the traditional paper media to the whole media in the field of travel.
Musk believes that if fully autonomous driving is realized, the vehicle itself can be shared among many users, which can increase the value of the vehicle by 5 times. As Tesla moves deeper into the field of artificial intelligence, Morgan Stanley, a world-renowned investment bank, maintained its optimistic expectations for Tesla in its research report in April 2024, saying that the launch of Robotaxi symbolizes a greater shift in Tesla's business model to the current hard-core AI and robotics technology, and predicts that by 2030, Tesla's mobility business revenue will reach $17 billion, directly driving revenue growth.
"Tesla is not a car company at all, but a robotics, energy storage and artificial intelligence company," said Kathy Wood, the founder, CEO and chief investment officer of Ark Investments, which has $30 billion in assets under management, in a recent interview, saying that Tesla has the world's largest artificial intelligence project. Wood believes that the gross margin of the robotaxi business is between 80% and 85%, and the business is like a software-as-a-service, and the robo-taxi business could generate $130 billion in profits by 2027.
Figure 2: The total mileage of the Slav FSD fully autonomous driving is far greater than that of all other companies combined
The launch of Robotaxi is inseparable from the core competitiveness and moat that Tesla's FSD (Full Self-Driving) technology has long built. Since its release, Tesla's FSD has achieved more than 1.6 billion kilometers of driving, which is far more than Baidu's 90 million kilometers of self-driving and Google's 100 million kilometers of self-driving, and far more than other companies combined - in Musk's words, Tesla's ChatGPT moment is coming.
Tesla will increase its investment in artificial intelligence and Robotaxi in an all-round way to start the era of all-in autonomous driving. Musk revealed on April 6 that the cumulative investment in the field of autonomous driving this year will exceed $10 billion.
Tesla's FSDV12.3.1 version, which Tesla pushed to North American car owners in March this year, introduced "end-to-end neural network" technology, through deep learning of more than one million driving data, using artificial intelligence technology to affect vehicle control, such as operating steering wheel pedals, turn signals, etc., instead of hard-coding every driving behavior, this change has been hailed as "game-changing technology".
"More silky" and "more anthropomorphic" are common comments. A large number of measured videos of overseas car owners show that Tesla FSD can respond flexibly and accurately in the face of complex construction sections, temporary road piles at night, flying paper bags, passing animals, etc.
According to the data, the number of passenger cars in the United States is 270 million units, Tesla is the best-selling electric vehicle brand in the United States, and industry insiders predict that if half of the cars in the United States are turned to Tesla FSD, it will create a huge market size. At Tesla's current FSD mileage accumulation rate, the cumulative FSD mileage is expected to reach 2 billion miles by the end of May and reach a total of 6 billion miles within a year.
Figure 3: Only Tesla has collected all the aces of the fleet's mileage, computing power, and data platform
To truly achieve FSD, it is necessary to accumulate large-scale mileage and huge computing power, which is made possible by Tesla's more than 6 million electric vehicles worldwide and self-developed Dojo chips. In the current field of autonomous driving, many FSDs are not true fully autonomous driving operating systems, but primary integration of various small applications. Looking at the world, only Tesla has gathered the three key elements of large-scale mileage, computing platform, and huge computing power to achieve FSD.
Regardless of which of these three elements requires long-term and large resource investment, Tesla needs to maintain high-speed iteration and flexible collaboration with transparent and efficient execution, so as to pave the way for a new growth cycle. As Musk said in his all-staff letter released on April 15, Tesla is preparing for the next stage of faster growth, and it is extremely important to do everything possible to reduce costs and improve organizational efficiency.
Tesla's energy storage business is growing rapidly: the Shanghai energy storage gigafactory will achieve mass production in the first quarter of next year
According to the latest news, Tesla's Shanghai energy storage gigafactory is scheduled to start construction in May this year and complete mass production in the first quarter of 2025, which is also Tesla's first energy storage gigafactory project outside the United States, and its layout in the energy storage industry is accelerating.
The Shanghai Energy Storage Gigafactory will produce the ultra-large commercial energy storage battery Megapack, which is based on integrated system integration and modular design to help grid operators, utility companies and others store and distribute renewable energy more efficiently, and is the world's largest electrochemical energy storage device to date. Each Megapack unit can store more than 3.9MWh (megawatt hours) of energy, enough to meet the electricity demand of 3,600 households for one hour, and more than 200 Megapack units can form an energy storage power plant that can store 1 million kilowatt-hours of electricity to meet the electricity demand of San Francisco for 6 hours.
Since its inception, Tesla has long had a layout in the energy storage industry, and in recent years, the energy storage business has grown rapidly, and its importance is no less than that of the well-known electric vehicles.
Since 2015, Tesla has launched products such as Megapack and Powerwall in the United States, targeting large-scale industrial and commercial energy storage and home energy storage markets, respectively. Tesla's energy storage products are currently distributed in more than 65 countries and regions around the world, with a total deployment capacity of more than 10 GWh (GWh: 1 GWh = 1000 MWh), and the market demand is huge. In 2023, Tesla's total installed energy storage capacity reached 14.7GWh, more than double that of 2022, and the profit of the company's energy generation and storage business almost quadrupled in 2023. Musk said on the Q4 2023 earnings call: "I have been predicting for years that the energy storage business will grow much faster than the electric vehicle business. It's happening.
Figure 3: Megapack has been deployed in several countries
Megapack has used renewable energy in the United States, the United Kingdom, Australia and other places to provide local power replenishment and security. The Gambit Energy Storage Park in Angleton, Texas, USA, is equipped with a 100 MW system of 81 Megapack units to provide renewable energy storage and improved protection against outages to the grid in severe weather, and Victoria Big Battery, one of the world's largest renewable energy storage parks, is equipped with a 212-unit Megapack unit in Victoria, Australia. Bloomberg predicts that in 2030, the global market demand for energy storage batteries will reach 1,000GWh, with a market size of $1.2 trillion, and the battery energy storage market has huge potential.
The full territory of the "car, storage, AI" strategy: Tesla is an artificial intelligence and robotics company
With electric vehicles as the carrier, Tesla is building a closed loop of software and hardware integration of energy storage products, artificial intelligence (AI) and robots.
On March 30 this year, Tesla became the first company in the world to break the 6 million pure electric vehicle production mark, making it the world's largest electric vehicle seller. In the past year, Tesla produced about 1.85 million electric vehicles worldwide, a year-on-year increase of about 35%. With more than 1.2 million deliveries worldwide, the Model Y surpassed the Toyota Corolla in sales, making the electric vehicle the best-selling model in the world for the first time.
Figure 4: The Tesla Model Y is the best-selling model in the world in 2023
With Tesla's first zero-interest financial policy in the Chinese market in early April, Chinese consumers can save up to 27,500 yuan in interest when they buy the two best-selling models of the Model 3 and Y, and the benchmark model Model S/X has a three-year 45% value preservation commitment. What's more, only Tesla's cars have the possibility of upgrading to state-of-the-art AI technology in the near future. In the current electric vehicle market, many new car-making forces pursue refrigerators, color TVs, and large sofas, and their intelligent driving technology is not a real fully autonomous driving operating system, but a primary integration of various small applications, at least 3-5 years behind Tesla, with the acceleration of Tesla's artificial intelligence development, the gap is still widening.
Since 2024, Tesla's sales in the Chinese market have continued to lead. In March this year, Tesla's Model Y won the top passenger car sales in the Chinese market again with 47,917 units, and its sales soared by 113% month-on-month. The Model Y was also the best-selling brand in the Chinese market in the first quarter, with total sales exceeding the 100,000 mark, significantly ahead of other brands. Overseas, Tesla's growth is just as strong. According to market research agency EU-EVS, the sales of Model Y and Model 3 in the European market in March ranked first and second among electric vehicles, and Tesla won 21.2% of the market share, significantly ahead of Volvo, Audi, Toyota and other manufacturers.
Strong manufacturing capacity is a strong guarantee for stable delivery, and Tesla has accumulated core competitiveness in manufacturing, cost control, and delivery capabilities. Manufacturing is Tesla's core competitiveness that is difficult to replicate. At present, Tesla has six production bases: Fremont Factory, Nevada Gigafactory, New York Gigafactory, Shanghai Gigafactory, Berlin Gigafactory and Texas Gigafactory. Global production reached a record annualized operating volume of nearly 2 million units in the fourth quarter of 2023, from 5 million units in September 2023 to 6 million units today, and Tesla took just over 6 million units.
Taking Tesla's first overseas gigafactory, the Shanghai Gigafactory, as an example, in 2019, Tesla's Shanghai Gigafactory created an industry miracle of "starting construction that year, putting it into production that year, and delivering it that year", and in 2023, the annual production capacity has increased by more than 950,000 units, and a car can roll off the assembly line in an average of more than 30 seconds, becoming an important export center for Tesla. Data shows that for every two electric vehicles exported in China, one comes from Tesla's Shanghai Gigafactory. Relying on China's perfect supply chain system and first-class "Made in China" capabilities, the high-quality smart electric vehicles Model 3 and Model Y produced in Shanghai are sold to many countries and regions in Europe and Asia-Pacific, and have been widely praised by overseas car owners.
Figure 5: Tesla's first overseas Gigafactory, the Shanghai Gigafactory
While global electric vehicles are accumulating large-scale safe driving range, the safety and reliability of Tesla's FSD (Full Self-Driving) are inseparable from the super computing power of its self-developed Dojo chip.
In the field of artificial intelligence, Tesla has built a strong infrastructure, including the Dojo supercomputer, which provides super underlying technical support for Tesla's autonomous driving and robotics business. In terms of performance, at the same cost, the Dojo supercomputer can achieve 4 times the performance and 1.3 times the energy consumption ratio compared with the NVIDIA A100. According to previous Morgan Stanley data, Dojo has saved Tesla up to $6.5 billion in costs, and will bring up to $500 billion in market value growth for Tesla in the future because of its huge potential to empower the development of artificial intelligence technology.
At the same time, Tesla's humanoid robot is growing rapidly. On September 30, 2022, Tesla's humanoid robot prototype Optimus (Optimus) debuted, and in December of the following year, Tesla showed off the more flexible Optimus II — including a more elegant walking posture and more hands, which can even be used to do delicate tasks such as boiling eggs. Optimus uses the same visual perception scheme and neural network technology as FSD's fully autonomous driving technology to complete core functions such as path planning and object recognition.
Figure 6: Tesla showcased the more flexible Optimus II in December 2023
Musk has said that Tesla's robot was initially positioned to replace people in repetitive and boring and dangerous work, and the long-term goal is to make it serve thousands of households, such as cooking, mowing lawns, and taking care of the elderly. In the future, Optimus has the potential to far exceed the value of Tesla's other products combined.
With the improvement of Tesla's layout and integration and innovation in the "electric vehicles, energy storage, and AI" multiple territories, it has shown the growth potential that can subvert the industry and change the imagination of human lifestyle. Morgan Stanley analyst Adam Jonas and his team believe that Tesla's long-term value should not be underestimated, and it is a potential leader in the field of artificial intelligence.