Ron Baron is worth over $5 billion, manages about $45 billion in his stock funds and he and his funds are a top 20 owner in Tesla. He has picked multiple big winners in Tesla, SpaceX, Gartner, Arch and CoStar Group.
As a big and early Tesla investor, Ron frequently talks personally with Elon Musk and gets private tours of all of factories and research.
In a CNBC interview yesterday, Ron reveals several things:
* the Next generation Tesla car will cut costs in half vs the Model 3/Y and will enable prices to be reduced by 1/3
* the next generation car, the model 2, will come by 2025.
* the energy storage business (megapacks and powerwalls) are $6 billion per year in revenue now and will triple over the next year but will eventually be 30 times more
* Dojo will enable Tesla to have more compute than anyone else. Tesla has more data and will have more compute than anyone. No one will be able to catch them
Ron also says that while Tesla has more than 20X while he has owned it from 40,000 cars to 1.8 million cars per year that is halfway to 20 million cars per year.
In the last quarter, the energy business produced $2.15 billion in revenue but had $1.2 billion in costs. Gross profit was $900million. If Energy storage and generation triples that would $6.5 billion per quarter and costs would be about $3.5 billion. Quarterly gross profit would be $3 billion.
Energy gross profits of $12 billion per year vs total gross profits of $20 billion over the last twelve months.
Energy getting thirty times bigger than today would be $120 billion per year in gross profits.
The car business getting eleven times bigger (1.8 million to 20 million cars per year) would be $200 billion in annual gross profits.
The Dojo, FSD and robotaxi business would multiply the profits by two to four times. Tesla profits would be $650 billion to $1.3 trillion.
Brian Wang is a Futurist Thought Leader and a popular Science blogger with 1 million readers per month. His blog Nextbigfuture.com is ranked #1 Science News Blog. It covers many disruptive technology and trends including Space, Robotics, Artificial Intelligence, Medicine, Anti-aging Biotechnology, and Nanotechnology.
Known for identifying cutting edge technologies, he is currently a Co-Founder of a startup and fundraiser for high potential early-stage companies. He is the Head of Research for Allocations for deep technology investments and an Angel Investor at Space Angels.
A frequent speaker at corporations, he has been a TEDx speaker, a Singularity University speaker and guest at numerous interviews for radio and podcasts. He is open to public speaking and advising engagements.
The main and perhaps biggest risk in Tesla and the others Elon ventures is Elon himself.
Everything is concentrated around him, decisions in design, engineering, politics, policies, public relations, you name it.
If he has a health problem, an accident or a terrorist attack everything can crumble down.
Elon Musk is the most valuable living asset in the world today.
I know you like Tesla, but this idea:
“The car business getting eleven times bigger (1.8 million to 20 million cars per year) would be $200 billion in annual gross profits.”
Is a little far fetched for me. Tesla has 5 models? Toyota is the worlds largest manufacturer and “only” produced 10.5 million vehicles last year. Sold in 180 countries. And it took at least 70 different models to accomplish that. How do you expect Tesla to become double the size of Toyota? Is this like a hundred year plan or something?
I want to know more about who they are selling half a billion dollars worth of Powerwalls to each year. Are these replacing back up generators for businesses in countries with spotty electrical service? I find Teslas battery business to be clever. Its not just the fact that they will sell a Model 3 customer a 75 Kwh replacement battery for $16,000 and then sell a home owner a 19.2 Kwh Powerwall plus for $15,500, its their battery farms. Tesla recently opened a 129 MWh Moss Landing battery farm in California, just south of Santa Cruz. Its conveniently located adjacent to the Moss Landing Power Plant. They fire up the gas turbines at night and pump electrons into the battery farm next door. Tesla buys the electricity cheap, stores it for 12-14 hours and then sells it on the grid during peak demand for a nice tidy profit. I think that can be a very profitable, global model that they can build on.
What about the robots, Ron?
The robots are coming!