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Ron Baron Talks About Tesla 2024-04-25

发布时间 2024-04-26 12:15:51    来源


What do you think right now? The stock came out. The earnings this week came out. It was a disappointment for the quarter. It was the worst cash flow quarter that the company's seen in its history. But the stock was up 12 percent because Elon started talking about what he sees in the future. And the idea of bringing out cheaper cars to go through these things. Where do you stand on the. what the company should be valued. So I know Joe's not a big believer in electric cars because he likes his Porsche. But I think all the cars are going to be electric. And I think this hybrid is just a holding off action so the automobile companies don't have to lose money on the electric cars. But the electric cars, I think it's going to be all the cars 10, 15 years from now. And I think hybrids, I know you love hybrids. That's not going to last either. They're too expensive to, and they're not effective enough and they're not going to be part of the mix either. So it'll be all electric. And so what I think is going to happen is that the reason the stock is down is not because of the quarter. The reason the stock is down. Well, it's stocks up because of the stuff that he says. Well, it's stocks down so much. Well, it's down 35 percent year to date. It's down 1 percent. Or it's up 1 percent over the course of the last year. Yeah, that's so exciting to be up 1 percent in a year when everything is, you know, every market is so strong. So, you know, I don't worry about short term, but I do look around all the time and see everyone getting rich and I'm not poor, but I'm not making. I haven't made a lot of progress in the last three years. So therefore, I think it's like a rubber band. I'm going to catch up again. But so what I think about the reason the stock is down is because people were concerned that he was going to abandon the idea of having a low cost car and go all into robo taxis. That's the reason stock is down. And then there was a report and Reuters said he's canceling this new factory that's going to make robo cars, this is going to make low cost cars, $25,000 cars, competition from China.

So there's only one company in China that's profitable, by the way. That's BYD, Warren's company, Buffett's company. And that's the company makes a billion dollars a quarter, and our company makes $4 billion a quarter. No one else makes money. Ford loses so much. General, everyone loses money on this. It's much more complicated to make this. You know, it's interesting. I was talking yesterday about motors. So motors in a car cost $5,000 a car. That's what the normal, these 100 year old companies cost them $5,000. We can make a motor for $1,000, cost $5,000. So they get.

But then you have to have a battery that's more expensive. Oh, no. I'm talking about if you're making the internal combustion engine cars, I'm just talking about how stagnant businesses become and how used they are to operating the way they've always operated, that they don't look for new things to do, new ways to operate, operating oriented toward making things cheaper. He can do things for $1,000, that other people cost $5,000. It's amazing. That's if you wanted to be a guest-alink car company. All I'm pointing out is that people get entrenched and they do things without trying to make them things better and cheaper and faster all the time. There's no incentive to do that.

So a monger says, show me the incentives and I'll show you how people act. And that's the idea. The people, the incentives. What's the incentive for guys? Someone who's 55, we've got to get off of this. But the idea is that that's the reason it's knocked down. So what's the reason it's going to go up? Oh, it's going to go up huge. When? Now. I mean, now is the bottom. And so what you're doing is they're going into robo taxis and they're going to make the low-cost cars. So they're making the low-cost car, except they're making it, they have excess capacity right now. They have capacity to make 3 million cars a year. They're making a million eight. So the million two cars, they can make extra in an existing facility with no more capital.

And they're not going to make the cars direct cost as cheaply as they did before, as they expected to. But overall, until they expect to do $5 million in these new cars. Can I say to your robo-taxi question? Because that is, I think, the future of this company. And a lot of the value is reliant on that. Questions, what do you think the genuine timing of a robo-taxi that's reliant on cameras only? And this has always been the question about, can you do it with just cameras relative to what Weimo and Cruz have done? And there's been even questions about that using the radar and the LiDAR and the whole rig that lives on those vehicles.

Well, we have a small investment in Cruz, because I wanted to see what they're doing. And Weimo is, their cars are $250,000. Because of all of the sensors and all of the. And they're trying to take cost out. And for us, it's software. And so basically, the advantage that we have right now at Tesla is that they have they've sold 6 million cars and 3.5 or 4 million are collecting data. So the data is what's really valuable. They're doubling their amount of compute every every 90 days. I don't disagree through the questions. It's a timing question of how quickly you can actually put these things into the wild.

I was just in California. I was on last Sunday. I was in Vail. Because I want to see what they're doing with AI and the mountain and capital spending. And then that was on Sunday. And then on Monday, I was in SpaceX and L.A. in the morning with some engineers and some finance people. And the afternoon I went to Tesla and I was with the autonomous driving people and also the compute people. And then afterwards, I said to me, Ron, would you like to see how much we made unbelievable advances? The first 11 versions were how to be designed so that they had code every single thing that happened. Now it's all AI. It was impossible. And so therefore, they weren't making progress for two or three years that were out of plateau. And now what's happened, they have version 12 to have all this enormous amounts of data.

And now they have compute to figure out everything out. And so now you're in the verge with autonomous driving in your car. So I said, OK, show me. So we do the few hours, a couple, three hours. And then before I'm going to go back to New York, I said, OK, so I want to see how it works. So we go into the park a lot and we get into the car. And I have an analyst with me. And then they had the compute person and they had a investor person. And so we're sitting in the car. And so where do you want to go? I said, I want to see Steve Jobs house. And say, OK, they punch in the address. And we get into the car. The car drives around by itself. Didn't do it. All we did is punch it in. Drive around the parking lot goes to the road. There's traffic going both ways. It looks both ways, looking for an entry to get in. Gets an entry, pulls in, makes a left-hand turn, drives right behind cars in front of us. This is the stop sign. First car stops, goes. Second car stops, goes.

We pull up the stop sign. Car looks both directions. Makes the right hand turn. Just drives. And then all of a sudden, there's a pedestrian crossing the street. The car stops. So that the pedestrian crossed the street. The pedestrian, I don't know if I was going to set up on this, but the pedestrian waves. And then the car starts going again. Then it goes, then it pulls up, then it makes a left-hand turn. And then goes in front of Steve Jobs house. It's a nice house. It was just the house, though. I was detecting house. But it was a house. So stopped in front of Steve Jobs house. Then he has that house. And he doesn't. His wife does. He has next door. And then he had a, looks like three quarters of an acre for sale next door for $15 million. Then he goes back. But it drove all by itself. All the way. It took me to the stock somebody's house. It drove all by itself.

So what's going to happen is that I thought the idea had been that you're going to sell a lot of cars. So as a result of that, once they have those cars out there, you'll sell autonomous driving. And he said the other day that he's negotiating to sell autonomous driving for some other cars too. No one has to compute. No one has to date. And that's the long-term thing. If Tesla's everywhere, just like the Tesla charging. If they're making cars, if they're making cars, they make $7,000 in profit a car for a car that's selling for $35,000 minus the $7,500 credit. But you're timing. But just give me the timing. That's the whole game. Now. Now. It's now. People think it's forever. But listen to how much you're going to make. So they're making $7,000 in profit a car for a car that they sell for. Do I have time? How much time we got here? We're running short on time.

We've got about four minutes a time. When I say now, you believe on August 8th. They're going to make that they're going to announce robot taxis that will be available now. For $20,000, well, they're going to talk about it in August. Oh, eight. Oh, eight. $20,000 car. They're going to make $40,000 or $50,000 a car a year. And if they have a million cars, too many cars, five million, they're going to make hundreds of cars. I believe that's the promise of the company. And I think it's amazing.

The reason I'm asking the question about this timing is I think there's a view that those vehicles are not comparable yet to what we are or the other guys are doing. And by the way, those guys can't even do it in some cities, most cities. You will be amazed at how quickly they come. I mean, maybe it's not this moment in robo, but it certainly is Roman, this moment in autonomous. And for the government approval that would come with that? Well, it takes a while for all those things to happen. Two or three years for everything. But that's, you're going to make hundreds of millions of dollars a year on that business. Hundreds of billions, not including the batteries, not including the E.A.I., not including, you know, robots, robots. I'm really glad it stopped for that pedestrian. I mean, that was big when you told me it did that because it did. Now, if it hadn't, that'd be a problem. Ron, right? I mean, you were surprised to stop for the, yeah, I was, I was. Did you have your foot on the break covering? Nothing. Nothing. So you're a total believer. I'm sitting next to the guy. And it's just driving. Oh, okay. I was, I got to give a couple minutes to space. No, no.

But before you get to SpaceX very quickly, Tesla's pay package for Elon Musk has been a huge center of controversy. A Delaware court overrode it. There's this idea that you can vote on it in their shareholders. But I saw another article that I just read that said, even if you vote on it again, it could be brought back to Delaware. The only way it was to live is because of this guy. So how would you resolve it? Well, I think that the class action lawsuit for someone who had 10 shares or something. Yeah. And the lawyer's wanting $5 billion. That's crazy. And so the way it seems to me is there was a contract that was arranged and arrived at and agreed to. And how do you go back in a contract? This isn't fair. And the only reason the company is surviving, because the guy slept on the floor, run under his desk for, so let me go SpaceX.

Let's do it because we're running real short space. SpaceX, we've been investing in, so 2014 to 16 with Tesla 2017 on. We've invested $900 billion now in space X. It's now worth $2 billion. We have a partnership that's $650 million of that. I think that we're going to make a double in 2027 when they go public. 2030, I think we'll make another double. And in the 2030s, I think we can make five times again. So I'm thinking about 20 to 30 times your money. What they have is that they have the only way you can get the space for nothing. Because, well, for not for nothing. It's $20 million to cost us right now. It's about to cost us $6 million to get to space. It costs other people $100 or $200 million. So we get to space cheaply because we use the rockets over and over and over again, like an airplane.

And then what happens is that we have the internet for the entire planet from space. So Elon owns 48%. Google owns 7%. We don't want to know 1.25%. We buy more. So most people have partnerships that charge 2.20. We charge 1% on the way to 0.5% in no carry. And the reason for that is this is a customer acquisition tool. I want people to know that we're doing them a favor. This is the way I want to make sure all of my mutual funds are on this customer acquisition for me. I want to know that all of my, that I want to be on all the platforms for all these brokerage firms. That's what we're doing for that. And the opportunity here is that Goldman Sachs and Morgan Stanley think that the internet opportunity is $1.2 trillion in revenues a year. Elon thinks he's going to get it 50% of those revenues in the next 15 years. And that's for a company you're valuing today for $180 billion last year, $150 billion. And I'm so excited about this.

So I was reading about Sam Altman, who doesn't get along very well with Elon, of course. And he said that the way you become really successful is by doing things, you just think different from everyone else. And everything you do makes everything you've done before just a footnote to what you're going to do next. I think SpaceX has that opportunity. Anyway. It's mind boggling. We can't even get our minds around what the potential of cheap travel into, sub-over to our even. It's the internet.

So if you want to have equal distribution of wealth, you have to have everyone in knowledge, or you have to have education. The only way you get it is with the internet. And so basically, there's 8 billion people on the planet. 30% don't have the internet. And in order for us to make a quadruple by 2030, means it will have 50 million customers and $60 billion of revenues. We're now growing about 30, 40% a year. And we have now, it's $12 billion of annual revenues, $75 billion in cash, no debt, and growing.

And everyone, they do offerings of $750 million twice a year for employees, the company, and Elon buys, he owns 48%. It's not quite enough. He still adds. And so my feeling is that this is a business that when people start seeing financials about it, they're going to be so excited. There are three or four times oversubscribed every one of these offerings with no investment banker in five days. Five days. The biggest buyers are the biggest fidelity, GIC, the biggest buyers and backstone.
然后每年两次,每次都为员工、公司和埃隆购买总额为7.5亿美元的股票。他拥有48%的股份。这还不够。他还在增加。所以我的感觉是,当人们开始看到有关它的财务数据时,他们会非常兴奋。每次这些发行都有三到四倍的超额认购,而且在短短五天内就没有投资银行家。这里最大的买家是 fidelity、GIC、backstone。