I agree with most points made here. However, I wonder if it's as easy to predict the new high-growth/high-margin units as you suggest that Tesla has none.
Were most people in 2011-2015 aware of the "AWS / Ad explosion" that was about to come? Or did we know ex ante that Amazon was willing to shift their focus towards these units? Likely not, but the high multiples (despite the retail margins dragging down the gross margins) suggest that a large portion of investors were willing to bet that better units with protective moats (i.e. AWS) were coming soon.
I don't follow Tesla as much, but it seems difficult to dismiss that some of their business units won't follow high-growth/high-margin paths. What if their FSD software is licensed out? What if the supercharger network is shared with other EVs for a per-charge fee? Given Musk's personality, I can see investors taking on risk and betting that he'll be bringing something better than just selling cough regulatory credits cough cars. It makes me wonder if Tesla losing market share in the EV market will be the ultimate catalyst for this shift.
That being said, I agree with you that the market has "priced in" all these what-ifs for Tesla with extremely high expectations of success -- which did not seem to be case for Amazon. A slip or trip in car sales these days doesn't seem to move $TSLA much - investors that are long seem to be betting on other stuff and we'll see how patient they are in times to come.
I'm curious about the counterfactual here. If they had a VC on their board, they may have been "gently guided" towards a pure subscription model since SaaS valuations are much higher.
But, it sounds like a pure switch to SaaS would have alienated customers and perhaps would have forced more users to seek alternatives, and we might not have seen the business as this scale today.
Were most people in 2011-2015 aware of the "AWS / Ad explosion" that was about to come? Or did we know ex ante that Amazon was willing to shift their focus towards these units? Likely not, but the high multiples (despite the retail margins dragging down the gross margins) suggest that a large portion of investors were willing to bet that better units with protective moats (i.e. AWS) were coming soon.
I don't follow Tesla as much, but it seems difficult to dismiss that some of their business units won't follow high-growth/high-margin paths. What if their FSD software is licensed out? What if the supercharger network is shared with other EVs for a per-charge fee? Given Musk's personality, I can see investors taking on risk and betting that he'll be bringing something better than just selling cough regulatory credits cough cars. It makes me wonder if Tesla losing market share in the EV market will be the ultimate catalyst for this shift.
That being said, I agree with you that the market has "priced in" all these what-ifs for Tesla with extremely high expectations of success -- which did not seem to be case for Amazon. A slip or trip in car sales these days doesn't seem to move $TSLA much - investors that are long seem to be betting on other stuff and we'll see how patient they are in times to come.