I have an overall thesis that "extrinsic value" is underpriced.If intrinsic value is the lifetime earnings plus balance sheet of the current dynamics of a company with a specific product, extrinsic represents what it can add to the business if successful with some of its attempts, or how it can convert into another kind of business or how it can grow into other markets outside of its existing ones or how it can lower costs and increase price or in some cases lower cost by more than it lowers price while capturing wider market and scaling production non linearly. Extrinsic represents unlocks. For instance, a "book store" like amazon becoming the "everything store" while lowering their costs through the buildout of infrustructure. Apple going from selling ipods and macintosh to every iteration of the iphone, the app store, the apple tv, and so on.
I have a wildly bullish case on Tesla. Tesla is far overpriced in terms of intrinsic value. The implied extrinsic value that they are paying as a premium over the intrinsic is large. But I think the actual extrinsic value is much larger. Optimus eventually represents hundreds of spinoff companies using Optimus. About $4-6T market cap is created per year in new IPOs. Add a multiple to whatever percentage you think Elon with a fleet of optimus robots could capture of that per year in new robotic businesses or services within Tesla. Then you have like a 40Trillion dollar labor market. What percentage does optimus capture? Then Optimus, if successful, eventually reduces need for gigafactory capex. Because you don't need to build new factory, plant, and equipment to house machines, you can just have fleets of robots in an open field making the parts or up in space in orbit or on the moon or mars if you want to get wild with your "moonshot"
And then you have overproduction of batteries so what do you do? You start Tesla Drones, get military application (they already have most of the AI and engineering and tech to deliver a payload to a target), get reconnaissance and rescue (lidar and Tesla FSD tech overlap) and they already have production capacity and surplus of battery production since you eventually max out the number of Optimus robots you need. And all the scifi nerds measure civilization by "energy" and Tesla actually can become the largest energy company in the world.
Part of “type1” is also becoming multiplanetary or highly likely that a type 1 civilization will become multiplanetary en route to a type2 civilization.
According to Nick Cruz Patane Elon said we see a path to put 100gigawatts per year of solar powered sattelites to orbit per year, and said he could put them into the air and network them together and we have a plan mapped out to do it. Tesla isn't just a company with the potential of taking FSD from producing cars that previously made $1500 per car sold to $150,000 by charging $0.50 per mile times 300,000 miles per battery and then replacing it with a more powerful, longerlasting, cheaper battery and repeating the process for a larger return per car...
It also has the potential of having subscriptions for added features, a fleet of optimus robots that can do everything, thereby facilitating the use and demand of its tesla energy division, and the car itself making a sale is a loss leader for powerwalls and solar panel roofs and building out, and the profit share for existing owners turns it into an ongoing forever profit source.
But if it can build robots that build robots that build cars and batteries and solar panels and more, while launching sola energy to space, it becomes the primary accelerator of a Type 1 civilization and on towards type 2 after that.
Tesla is the largest energy company in the world in terms of extrinsic value. And what I see after that?
Drones.
Tesla has an overproduction capacity of batteries one day because eventually you have more optimus robots than necessary. You reach law of diminishing returns. But you still posess battery production potential. So what do you do with them?
Drones.
Elon has connections politically and presumably with NASA there's some meetings with DOD about it. Afterall, the US has a history of covertly acquiring and assembling the Nazi scientists after WW2 to start NASA and you think delivering a payload to a precise target isn't of interest to military? Space X has government contracts, the CIA has declassified documents not only showing their connection to operation paperclip and others, but also were concerned about soviet sabotage of the moon program and they had the space race during the cold war, which hellped reveal intelligence about the soviet missile launch capabilities while upgrading our own. There also was a venture capital fund with CIA backing that was behind Google.
You don't need to be a conspiracy theorist though, the fact is there is viable potential and connections if needed for drone companies to collect government contracts just like space X does to help finance aggressive expansion for military usage.
The Tesla Drone Division has to get the timing right. If they ramp it up too much too early, i suspect that will diminish their earnings and growth in the Tesla robotics division with optimus and depending on the battery surplus, they may require too many batteries and they'll have to pick and choose how to allocate their batteries. If drones are going to be more profitable than optimus which i doubt, they should start right away and expand it and make money while they wait for technology in robotics to catch up while focusing on ramping up battery production.
The drones could run on solar power and network and transmit energy somewhat efficiently through lasers just as starlink and the earlier reference could.
The drones could do recon, rescue, identify lithium mines, run on the self driving AI camera and lidar technology to spot rare material topology and identify lithium deposits on earth and using their NASA engineers could also become a weapon or fire a weapon.
But on the moon, drones could identify helium3 which many believe will be used for fusion, which many are saying we will see in our lifetimes, perhaps accelerated by intelligence of AI.
On Mars, drones could identify water sources and iron ore deposits, or potential building sites for colonization. In other words, this technology is somewhat future proof as long as they can stay on the cutting edge.
I have an interesting track record of either predicting what Musk is thinking, or perhaps seeding the internet with these ideas until someone proposes the idea and if it makes sense starting from first principles and works economically, Elon will tend to do it. The idea of ride sharing sericce and the suggestion that one day Elon could compete with Amazon is something later echoed by Cathy Wood, but I was also thinking along similar lines and its possible i went first there.
What I do NOT know is how much of a surplus in battery production is there, and can they efficiently "trade" batteries as needed between robots and drones without too much of a cost relative to the bennefit to get drones started. But Tesla Drone and Tesla mars vehicles and moon vehicles is on brand of creating something very cool and using the brand to create inerest and hype rather than advertise.
You add all of this together and the moonshot for Tesla is easily at least 10x higher and it could even be 10x the market cap in income depending on the longevity of the company and the discount rate. You probably could add a multiplier to the growth of the economy if we are about to converge and see multiple overlapping s curves hit their growth phase simultaneously and increasing economic value.
For instance AI could unlock hard problems which in turn increase their ability to solve hard problems. That could unlock economic growth multiplier resulting in more allocation and growth for AI investment.
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