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and then the third thing which is really the big thing i think right now for uh for the stock is around autonomy so you know we made a call a couple weeks ago raising our price target over a thousand dollars on the the accelerating learning cycles uh related to um you know level four eight s and uh and cars being able to drive themselves around what we heard the company talking about last night was full roll out of the self-driving technology this year and they're talking about not about geo-fenced areas but really having those cars be able to drive wherever uh wherever they'd like uh and and so seeing that um you know come to fruition here this year i think is a big deal for the stock hey i'm stephen and this is solving the money problem if you're new welcome if you're not welcome back so in this video i'm reacting to some comments from a tesla stock analyst regarding tesla's q4 and full year 2020 results their progress in terms of solving autonomy their competitive advantages and more so let's get into the video but first hey guys if you live in the us and you'd like to help out the channel and get up to four free stocks check out the link in the description to weeble if you open a new account you'll get two free stocks between two dollars fifty and two hundred fifty dollars each just for opening an account and if you deposit a hundred dollars you'll get a further two free stocks valued between eight dollars and sixteen hundred dollars each that is an obnoxiously good return on your investment i mean really deposit a hundred dollars and you'll end up with at minimum twenty one dollars worth of stocks a twenty one percent roi on your money and if you're in australia the uk or new zealand you can get a free stock mistake also using the link in the description let's get back to it take a look at a stock that is on the move this morning that is tesla shares under a little bit of pressure after the company out with its fourth quarter earnings report last night joining us now to talk a bit more about the quarter the year for tesla and what to expect as we go forward here is colin rush he's a senior research analyst over at oppenheimer colin great to speak with you uh once again i'd love to just start with with your impressions on um where tesla is today coming off um a quarter where they just generated almost two billion dollars in free cash flow a year they sold almost a half million vehicles um what does the next three years for this business look like and maybe also relative to where you thought it would be a year ago yeah i mean there's a couple of really key elements here one that the unit growth is is in excess of what we anticipated on a multi-year basis so they're talking about 50 unit growth over the foreseeable future so that gets out well ahead of street estimates now i just want to demonstrate what a 50 rate of growth on tesla's deliveries would look like over a long period of time so let's just assume that tesla can maintain approximately a 50 rate of growth on deliveries year after year throughout a decade now i'm not suggesting this exactly what's going to happen but just to illustrate the point how phenomenal a sustained rate of 50 growth on any company in terms of revenues deliveries etc looks like over a decade-long period so tesla delivered half a million vehicles in 2020 if we add 50 percent to those deliveries every year after that we've got 750 000 in 2021 1.125 million in 22 1.687 million oh two and a half million wait things are getting ridiculous now 5.6 8.5 million 12.8 million 19 million 28.8 million vehicles in a single year again this is just to illustrate the point this is insane and tesla are confident that they can maintain a 50 rate of growth in fact on the earnings call elon says he expects that in 2021 and 2022 tesla will grow deliveries meaningfully above 50 but they believe that over the longer term the 50 rate of growth on average is sustainable and just for the record here's colin rush's tip ranks profile ranked number nine out of 7245 analysts so i think colin in general knows what he's talking about in fact let's look at his ratings on tesla stock over the last few years what does colin had to say about tesla stock bye bye bye bye bye bye bye bye okay you get the idea let's go back a little bit further maybe he only woke up recently bye bye bye wow since 2013 he's had a buy a period of holding there 2016-17 then bye bye bye okay so in other words colin has never had a sell rating on tesla stock number nine i wonder why um the second thing is really about capital intensity and efficiency um so one of the things that they're doing is actually getting better throughput on their facilities but also you know figuring out how to make these cars a little bit leaner with less equipment um you know as they have fewer moving parts and and start to really ramp up some of their battery capacity internally for the 4680s and then the third thing which is really the big thing i think right now for uh for the stock is around autonomy so you know we made a call a couple weeks ago raising our price target over a thousand dollars on the the accelerating learning cycles uh related to um you know level four eight s and uh and cars being able to drive themselves around what we heard the company talking about last night was full roll out of the self-driving technology this year and they're talking about not about geofenced areas but really having those cars be able to drive wherever uh wherever they'd like uh and and so seeing that um you know come to fruition here this year i think is a big deal for the stock bullish as colin sounds i actually think that is an enormous understatement at this point in time i personally feel like the stock market is pricing in the potential that maybe one day in the distant future tesla will solve autonomous driving but in my opinion they are just around the corner and i don't think the stock market's appreciating or pricing this in there's gonna come a point sometime this year maybe early next year where i think everybody in general goes oh tesla actually has won the race they actually have autonomous software holy balls and at that point i suspect tesla stock which has already gone to the moon and is on its way to mars will probably be headed towards jupiter or neptune don't say i didn't warn you the second thing kind of underlying that is a move towards a subscription model around that technology and potentially a fleet of vehicles that they would own and operate themselves so there's a couple of things to discuss here the first of which is the idea that tesla in the future may operate their own fleet of robo taxis as in not selling these vehicles to customers to operate but operating themselves deploying them solely as robo taxis and never selling the vehicle to customers just enjoying revenue from those robo taxi fares and this is something that elon musk himself has said he talked about launching the robo taxi network and suggesting that a combination of tesla's own owned vehicles and customer vehicles will build out the fleet so when there's a need for tesla to deploy their own vehicles there aren't enough customer vehicles available for rover taxi fares tesla will deploy their own vehicles in those markets this may have changed who knows what's going to happen with this plan but this is something that elon musk talked about in the past just imagine if tesla in a few years time is producing twenty five thousand dollar evs that are bringing in twenty five thousand dollars per year of profit doing robo taxi fares every year paying for themselves 100 roi every year for the next decade or more insane and a real possibility and the second point is just around full self-driving subscriptions now i'm going to pull some numbers out of my ass feel free to use your own but i just want to demonstrate the kind of impact this could have on tesla's revenue and profits so tesla's fleet size today is around 1.5 million vehicles by the end of this year it'll be closer to two and a half million so let's just see what would happen if there were one million customers subscribed to tesla's full self-driving service and again just pulling a number out of my ass let's just say that that service costs 150 dollars per month pick your own number i don't care this is just to illustrate a point so this is the annual cost for somebody subscribe to full self driving 1 800 if we multiply that by a fleet of 1 million vehicles subscribed to full self driving that is 1.8 billion dollars of almost pure profit because the margins on full self driving are enormous it's literally a matter of turning on a button the vehicles already come equipped with all the hardware necessary tesla behind the scenes if the customer subscribes presses a button suddenly they're able to access the software and tesla starts printing money now just imagine a little bit further into the future if there's 10 million teslas that's 18 billion dollars of almost pure profit per year now let's just extrapolate this even further what if there's 10 million customers paying for full self-driving for 10 years over the decade that would be 180 billion dollars of almost pure profit just from full self-driving subscriptions just from a fleet of 10 million customers subscribed to the service over a period of a decade and now you guys can start to understand why i'm so incredibly excited about tesla's future software revenue there is going to be a tsunami of high margin cash flow think about this tesla's in-store base of users is growing year by year by a million plus vehicles now tesla's ultimately going to have tens and tens of millions of vehicles on roads each of them fully autonomous what do you think the driver who no longer needs to pay attention to the road is likely to be doing inside their vehicles that would be gaming productivity infotainment etc sales through the app store subscriptions through the app store more revenue for tesla almost pure profit so as we look going look out going forward you know the valuation around autonomy is really unclear right now um elon tried to address it last night on the call a little bit i think we want to see what that subscription model starts to look like from uh you know from a monetization perspective and then we can start running our model from there colin interesting exchange uh on the call last night uh an analyst asked how much longer elon expects to be the ceo of tesla and i believe his answer was quote several years what does that mean in your estimation you know he seems like a workaholic uh he enjoys the you know enjoys the process uh you know he said very clearly that he didn't uh feel like the company uh had fulfilled his mission yet and and so there's multiple years left to go it seems to me that there's uh you know at least a three to five year run for him uh and who knows what uh what else gets uh you know kind of built out and evolving within the the tesla umbrella here that he gets interested in uh and so we're not really concerned around a leadership change at this point and certainly what we heard last night on the call was um you know management team that was was very focused they're actually very uh transparent about some of the technology that they're working on and how it comes to market it was really one of the the richest uh earnings calls that we've heard uh in years from this company colin you know people always talk about competition for tesla and it hasn't really seemed to materialize at least not here in the us you can make an argument more so in china um when does it come what does it look like you know if you're a car buyer right now and you want to buy an electric vehicle what are your choices and what to you is as compelling or more compelling than a tesla yeah you know right now um you know we've seen a lot of oems you know kind of on a you know two to three year delay on on some of their programs we're seeing some new vehicles come to market uh like you said you know primarily in in uh in china uh and and what we're seeing is really um you know performance that just doesn't keep up with tesla and so if you're a new car buyer at this point you know i think it really depends on where you're at with your existing vehicle um the the technology feels mature to us for tesla that there is uh you know a reliable uh platform that they've been developing on and shipping cars for uh you know seven eight years and so they really debug that for some of these newer automakers they're still working through that learning cycle and so you know one of the things that we think about is um you know with any sort of new technology there's going to be early adopters that are willing to uh take some risk around some bugs and then you know there's the larger consumers and i think what's going on right now is that as folks take a look at who's bringing products to market and who's really debugged those products um tesla's way ahead of the game on that this is a really important point here from colin we know tesla is years ahead of the competition not just years ahead in terms of having launched compelling electric vehicles but years ahead in terms of learning improving refining eyeing out the bugs and kinks and ultimately coming up with superior technology this creates an extremely uneven landscape most consumers not all i know there's some irrational clowns out there people who are brand loyal at search up but most consumers who are thinking about buying an electric vehicle will probably follow a similar process to this they hear about an electric vehicle whether it's a tesla or a marquis something who knows but they first start thinking oh electric vehicle oh wait i heard they're a bit cheaper oh better for the environment okay cool i'll look into them they jump online they do a little bit of homework and they discover unquestionably that tesla's offer by far the best value for money period you cannot get anything else close to the same price with the same performance features or functionality period so while customers are hearing about another ev that's being advertised by a legacy automaker trying to get their attention to the customer what they're actually going to be doing ultimately in many cases is advertising for tesla for the discerning consumers to do a little bit of homework they see an ad for the ford marquee on tv they get online they do some homework they realize a model-wise much better option so what's going to happen is ford general motors other legacy automotive manufacturers between them will collectively spend hundreds of millions if not billions of dollars ultimately selling teslas to consumers who did some homework after seeing an ad for the marquee or something along those lines and realizing it was a steaming polish versus a model y while that's happening tesla instead of spending hundreds of millions or billions of dollars trying to convince people their products are the best because they actually are the best and they don't need to convince anyone tesla will spend that same money improving their products even further and pulling further ahead rip legacy automakers the other thing that i think people are thinking about is is this full self-driving functionality who really has something that uh can enable that that sort of uh functionality and is gonna be able to upgrade their platform and that's where tesla really stands out and that they have an upgradeable software platform and operating system whereas no other oem or major oem really has ruled that out in a reliable way and really proven that capability yet it seems like most investors out there don't really understand how fundamental software is to tesla's business i mean they've coded their own internal software instead of using enterprise software the software that runs their factories is world class the software in their vehicles is world class some legacy automakers are literally investing tens of billions of dollars and hiring thousands of software engineers just to develop the internal operating system for their vehicles and struggling severely how in the are they ever going to solve fully autonomous driving if they can't even develop an operating system with a lean efficient software team something to think about colin i have about 25 seconds left uh the tesla t's that they are the new model s will be 10 000 more than the than the prior model s uh what's the financial impact of that this year you know it it probably is just a an additional margin at this point you know it's a relatively small volume uh in total vehicles for them in our model it's just a little bit below five percent and so adding a little bit of gross margin on that is uh you know fairly modest at this point i think it is a little bit of a tailwind particularly as they work through some of the supply chain disruptions related to covet and so as they they ramp through uh through the second quarter into the back half and then kind of get to a city run rate on some of these other larger uh you know larger volume vehicles like the model y and both in in fremont and uh in china i think that becomes a fairly small deal but i think you know it's certainly a tailwind for them as they move into the back half of this year i've got to give some credit to colin here level headed clear thinking very valid points and an acute awareness of how fundamentally important tesla's software is to the future of the business i guess that's how you become one of the top ranked analysts of all time on tipranks.com let's spring up colin's profile one more time just to admire a guy being dead right about tesla stock for the last seven or eight years i mean just look at the phenomenal performance i mean this is what being right look oh sorry guys i'm sorry wrong profile i did it again oh man i did it again uh sorry gordon i didn't mean to inadvertently roast you for having no idea about tesla stock for the last five years just uh just an accident just keeps happening i'm so sorry so before i go guys let me know in the comments below who would you prefer to be listening to relating to tesla's stock colin rush or gordon johnson let me know in the comments below i'm stephen mark ryan this is solving the money problem and i love you all and don't forget if you live in the us and you'd like to help out the channel and get up to four free stocks check out the link in the description to weeble if you open a new account you'll get two free stocks between 2.50 and 250 each just for opening an account and if you deposit a hundred dollars you'll get a further two free stocks valued between eight dollars and sixteen hundred dollars each and if you're in australia the uk or new zealand you can get a free stock mistake also using the link in the description thanks so much for watching let me know your thoughts in the comments below and of course if you 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