Now we've got to touch on a Tesla and a price Target by a company that has billions of dollars under not only management, but specifically in Tesla stock. We're going to go through what their price Target is for both 2025 and 2030.. But first, what I'd like to do is look at an opinion piece by a balloonberg uh journalist and I have to say it's pretty good I think it really hits on some sentiment and I love the title. Musk has turned Tesla's quote failing into winning.

And really what? What he's starting off by saying is that there's so much fear, uncertainty, and doubt that's placed on Tesla that it's almost like the old Shakespearean line of me thinks thou protest too much I've changed that slightly. but that's what we generally colloquially say: uh And that's really to say that it seems like so much of the hate for Tesla is misplaced. Now, there's so much criticism. While at the same time as there's so much criticism, you end up with a company that outperforms over and over and over again.

It's really incredible. I mean I Have to say from a personal point of view, uh, I I Could not believe when somebody came up to me and said that they actually uninstalled Twitter solely because of Elon Musk that they won't buy a Tesla solely because of Elon Musk And I'm thinking to myself like how much CNN are you watching because the hate is totally misplaced. They can't actually give you a really good reason for hating on Tesla One of the things people do who hate on Tesla is They talk about uh, recalls and and I Love this. This was a fantastic uh quote here.

it was actually from a Forbes article Sawyer Merit here uh quoted this Forbes piece. It was fantastic. Since January 2022 Tesla has had quote 21 or quote unquote recalls for about 4.1 million vehicles with some Vehicles counted multiple times. 99 of those Vehicles were fixed using a software update that did not require customers to go into a dealership or replace car parts And remember, like when you get a recall for a car, it is an opportunity for the dealership to sell you more service, right? So in some regard, the recall game is actually profitable for companies.

They get people to bring their cars into the dealership thinking they're getting something for free. But of course, when you go in inconveniently taking time obviously out of your day to actually go there and do it and have somebody drive you back and drop you off or whatever. you actually often get sold some form of other upgrades or service because you may as well get that additional service done because you're already there. You've already gone through the inconvenience of going there, so the sunk cost fallacy sets in.

people are more likely to spend money on their vehicles because they're already there. But going back to the rest of this tweet right here from this Forbes piece. Meanwhile, Fiat Chrysler Kia Hyundai VW BMW had no software fixes and Ford Nissan GM and Mercedes did have software fixes, but they were able to only fix one percent of the Ford recalls, two percent of the Nissan recalls, 32 percent of the GM recalls, and 17 of the Mercedes recalls were fixed via software updates, whereas again, with Tesla, 99 of Teslas were fixed using some form of software update. Here's that Forbes piece.

By the way, if you want to look at it, Tesla recalls 4 million Vehicles since January of 2022. you could, uh, read the rest of that Forbes article if you'd like. But really there, there does seem to be this hysteria around hating Tesla And what's remarkable is despite all of this hate, somehow Tesla continues to get stronger. And this is what the Bloomberg writer here is saying.

While everyone thought Musk's entanglement with Twitter would be damaging to Tesla or the recall fod the uh, you know, business practices, lawsuits, whatever, what you end up getting are results that prove otherwise Tesla they say is now turning 100 of Revenue into an industry-leading 26 dollars of profit for their per Uh for gross profit. Now keep in mind that is expected to go down to about twenty dollars. So I don't want anybody to freak out when we see margin potentially go down to twenty dollars at least in the next few quarters after some of the price reductions that we've seen and until some of those Uh commodity costs actually start flowing through, is lower borrowing any. For further increases, keep in mind the Tesla in their last earnings call told us this.

They told us they expect to potentially see gross profit go down to twenty dollars, and then of course the goal would be to see that rise back to thirty dollars. About that thirty percent margin. But even at twenty six dollars, this is seen as the widest gross margin. Uh, really in the industry.

And if you look at their net profit margin, the way this they wrote this and then showed a chart here was a little confusing. But this chart right here here is actually a chart of their net profit margin. Tesla's net profit margin far exceeds any of its competitors. And what you really want to pay attention to is Byd is right here on the right.

It's this: Orange Line Let's go. let's use the laser. here. There we go.

Uh, it's this orange line right here. You can see that their net, at least on this chart. Here for last year, sitting somewhere under five percent, right around three to four percent is where Byd sits. Volkswagen Knocking on the door of uh, probably what? Half of that maybe? maybe somewhere around two percent? Uh, Toyota is over a little bit higher at about seven percent.

Uh, and Tesla on a net basis is sitting up here at uh, 16 to 17 net. That's really incredible. Now, what's also really incredible. is you just had the uh, the the uh, who was it uh uh yeah toy Mr Toyoda who is the CEO over at Toyota He ended up saying hey, about a month ago he was interviewed and and the Wall Street Journal ran this story.

He ended up saying ah, I'm part of the silent majority everybody wants a hybrid car. This is Toyota often regularly deemed one of the most reliable vehicles in the industry, right? Uh, vehicle manufacturers in the industry with some of the highest resale values. they're convinced on hybrids. yet within a month of that, it turns out he's getting the boot and they're replacing him with a CEO Who realizes no, no, we need to double down on electric vehicles, not just hybrids.

But let's keep going with the with the Bloomberg piece here. So you've got 30 analysts have a buy recommendation on Tesla a record for the company since their IPO in 2010 number of upgrades on the company Rose a 32 last year even though Tesla share price is plummeted 65 percent amid a nasty bear market for Tech related stocks. Bloomberg's consensus rating which quantifies analyst forecast reveals no other automaker was so emphatically upgraded. Perhaps the reason why analysts are so enamored is because Tesla continues to prove doubters wrong and these were some interesting quotes here.

Listen to this: Model 3 sedan sales increased from basically zero to about half a million units in 2022. Uh, they had, so they had less than 2 000 in 2017, ran that up 278 times to about half mil in 2022.. I Don't think it's in necessarily really fair to use that 278 number, because obviously, if I mean you could just say they increase sales infinitely from Zero, right? But from a comparison point of view, it's very interesting that the Toyota Prius has seen its sales Fall 66 during the same period. And While the next biggest arrival for electric vehicles saw their sales at Byd rise just 17 times now, Byd is crushing it.

Okay, don't get me wrong, anyway, he's crushing it. They do not have anywhere near the margin. Tesla Does they have somewhere around one-fourth to one-fifth of the net margin? We just saw that on the prior chart. but anyway, uh, this was this is pretty remarkable.

and and I think they make a really good argument here that hey, look, despite all of the hate around, Tesla Tesla's killing it. But beyond that, some of the price targets from people with massive amounts of money like Baron funds which is billions of dollars of assets under management are really incredible. Let's take a look at some of these price targets. So this is a um uh, you could actually read this full article in Uh Seeking Alpha Uh, anyway uh, the Baron Funds letter was was posted here and they talk a little bit about the history of them investing in.

Tesla first making uh 1.6 percent of their asset under management uh, uh, purchase into Tesla back in 2016. Uh, and since then, obviously a Tesla has grown substantially. They did end up selling around 6.8 million shares between 2020 and 2022, about a fourth of their shares to reduce their allocation to Tesla because it ran so much. Their average cell was about 221 a share, slightly above where it sits now.

Uh, and and of course this was over the last two years here. but they still hold 17.6 million shares of Tesla which is valued at about 3.1 billion dollars. Pretty remarkable. But look at their price target for the Baron fund and and it's just the show this is.

You know when people are bullish in the industry, it's It's really interesting to see if they're actually putting their money where their mouth is. and here's an example where they are. We believe Tesla's share price would reach 500 per share in 2025. now I'll try to Pat myself on the back here, but that happens to be my price target for 2025..

maybe they're watching my videos if you are I'd love to do an interview with y'all and if you're not, that's okay because I don't want to read my own opinion I want to read other people's opinions? Uh, but anyway. Uh, and their 2030 price Target which I don't really have a 20 30 price? Target uh I mean I I've mentioned some out there. there's somewhere out there we've done some numbers on in the past, but it's not super Salient in the back of my mind. But anyway, 1500 is there 20 30 price Target and they are still reiterating that price Target Today that's based on our expectations for Tesla's long-term sales growth.

High Industry-leading profit margins achieved for its exceptional products. Not only are there approximately 80 million cars sold per year, but the quote car park worldwide that needs to be replaced is more than 2 billion Vehicles These are cars powered by pollution emitting ice engines. Internal Combustion engines. I Mean that's kind of like saying an ATM machine, right? Automated Teller Machine machine, right? It's ice engine is kind of like internal combustion engine engines.

Now we gotta be careful on that. But anyway. uh, if you just say ice, it sounds a little funny. So anyway, gas cars, gas guzzlers Fair Simpler Anyway, this is pretty remarkable and a remarkable price Target and it makes sense I Mean after all, the profit margins alone speak for themselves at Tesla where is it? where? oh, they were on my uh in my Bloomberg piece.

Stand by. Uh, the charts over here are ones that we talk about regularly at Tesla and we could really use these and and model uh, some of the more in my opinion. Worst case scenarios with with Tesla pricing by seeing hey, how what does tests look like even if we end up with only a 20 margin in potentially lower growth rates, right? Uh, and so if we do that, well, let's model it together. Let's see what we get.

So let's go to a 20 uh gross margin. Let's assume 20 vehicles, uh, or over here by 2025. let's assume 4 million vehicles and we'll go with Uh 47 000 Revenue per vehicle. We'll keep everything kind of stable here.

Uh, that we generally do so, sort of re-explaining this whole sheet. Again, if we go with just a 20 gross margin, which is pretty weak, we expect that to rise up to 30 percent again the end of the decade, maybe within the next few years? Who knows. Uh, At Uh, at a 30 percent assumed growth rate which is lower than that's probably the lowest part of the range that that Wall Street is generally expecting, you're still sitting at about 400 bucks per share at a 30 growth rate, and then a 1.67 x Peg which is a very reasonable ratio. Very, very reasonable for for a company growing at 30 to be selling for 1.67 times.

Peg We're closer to like Point Eight Point Point Nine right now on on what Tesla's selling for. Uh, but it's it's a long-term average is substantially even above 1.6 but anytime anyway. So if we just change that to where the margin is approximately right now and we go to say uh, oh, I don't know, let's go with an expense of 74 that gives us profit of about 26. So if we go with about a 26 margin, uh, that number changes to 533 bucks pretty quickly.

but you could see how every one percent makes a difference. You have 533 bucks. We just change margin one percent. Uh, 533 turns into 511.

So you're looking about 20. Every one percent of margin at Tesla is worth about 22 dollars per share. It's quite a bit because that margin is going to fluctuate and I do think there's going to be some fear around what happens in the Q1: Q2 earnings for Tesla Uh, specifically because marginal probably be its weakest during those quarters. and those will be quarters that, uh, that that were also still evaluating.

Hey, is inflation ever going to go away? Is the Fed ever going to relax? So uh, these These are. uh, you know these. These are things to uh, pay attention to. Uh, from some comments here, Uh, we've got someone saying Mr Toyota is a genius slash sarcasm.

Someone's laughing too. How much a CNN are you watching I mean I Hate to say it, but they seem to be one of the pure ones that seem to be bagging on them pretty pretty heavily here. Have you guys seen The Electric Solar powered? Yachts You know I think I Hate to say it. but I think a lot of anything.

Any solar powered engine for now, probably just clickbait. Most of the solar power that we can actually support on any kind of vehicle right now just goes into pre-conditioning cabin temperatures for either cars or boats. Uh, you know anything widely. If it's if it's powered solely by solar, it'd probably take you know, 12 hours or more of sitting in the sun.

potentially days of sitting in the sun to actually fill up your batteries. Is it possible? Yeah, I mean to some regard, we could put a Tesla you could put a solar panel on a Tesla and potentially charge the sucker up if it sits out in the sun for a couple weeks. you know I mean eventually it'll it'll it'll charge it up. Solar power isn't quite there.

uh for for compact form factors yet? Now can you do it with solar? Farms Absolutely. Big fan, big fan of solar forms I Think we should have a lot more solar Farms out in in uh, you know, the desert areas of California or Vegas We've already got solar Farms but we should have even more. I Think that's a phenomenal way to do it. and now you're also producing solar at scale, throwing solar panels on on smaller Vehicles though I think is mostly just click bait and and trying to make people you know be able to say oh, I'm green You know that'd kind of be like oh, my Jet has a solar panel on it.

It's like that's it's just it's like excuse me but for for you know the what, what it's actually producing. So I'm not I'm not a fan or a believer in any kind of solar panels on vehicles. and I probably won't be for a very long period of time because the solar panel technology its capture rate is still very, very weak. I Mean its efficiency is gosh.

a solar panel efficiency has got to be somewhere in the 20 range, so it's still really inefficient. But what's remarkable is as much as we're seeing solar panels spread. Imagine if we could just increase the efficiency of solar panels I Mean they're already good in in bulk Factor Good enough to be on the roof of your house, for example, good enough to be in a solar in a solar arm. Not there yet for vehicles.

but but uh, there's so so much potential science that can go into making the capture technology for solar so much better. Uh, that, uh, that that in the long term, there'll be some pretty neat advances. and yeah, I think in the long term in the future. Sure, solar panel of vehicles I think uh would be a possibility, but I don't think we're anywhere close to that I think we're 20 30 years away from seeing that.

but uh, you know it's interesting. Still interesting anyway. Uh, a yacht was unveiled in Dubai The hull of the art was all solar panels. That's interesting.

Thank you for sharing that. uh let's not possible. smart. um you guys still don't buy it.

especially the hull of the ship. I'm like you really need the angle of incidence matters so much and I mean maybe you could argue you're getting some reflectivity off of the water to try to power. uh, this. but I wonder how much how much efficiency? Falls Now if the hull of the ship instead of you know, actually pointing at the sun is exposed to um, uh, to solar, the solar radiation.

uh that that brings the solar energy I don't know I don't know I'm not buying that one. and then and then when I hear Dubai too I'm like okay, like a world of like facade man, come on and I'm like sorry if you live in Dubai but you probably know it or you've been to Dubai it's all facade. uh but anyway, so you know what? It's very fitting actually that the facade of a solar panel boat was unveiled in Dubai.