Tesla is today widely seen as the major disruption company in the automotive industry and leader in battery electric vehicles with its size and market opportunity assessed accordingly. A more precise, but still not comprehensive and accurate view, is that Tesla is the leader in 5 disrupting technologies and its market opportunities much more profound and larger than just automotive.
Both groups are right but miss the most important aspect which will propel Tesla to become the world’s largest company the earth has ever seen. The combined disrupting technologies are much more than just the addition of its elements and that’s overlooked.
A disruption like the one we see today with battery technology, autonomous driving, and artificial intelligence, is like a Tsunami wave that in its dimensions is hidden and can’t be seen because it runs under the Ocean surface deep in the water. When the wave gets closer to the coastline it erects and becomes visible like a product or service that is finished in its innovation and hits the market with unexpected energy.
But a more precise description of what Tesla represents is the analogy to 5 large Tsunami waves deep in the sea that combine into one. It’s been so far hidden and the energy is larger than just their combined power. Those 5 combined waves enforce each other and are an underestimated energy generator with nothing standing in their way. While a Tsunami is a negative force of nature that destroys – Tesla is a positive force that protects against climate change.
The most hidden and misunderstood disrupting innovations that, once combined create more value than each of them alone, could fundamentally help to reduce climate change and its negative effects. Translated to Tesla more value means more revenue and more profit and that’s what the world will see unfold in the next decade.
Let me give you three concrete examples of how Tesla creates incremental value with the disruption of several technologies and what combining them together means.
Micro Energy Grids
Tesla Micro Grids adds several groundbreaking innovations together and is already implemented in the UK and Germany. Their solar roof combined with house batteries and autobidder software is a service allowing households to become a small decentralized and independent power generation and transmission trading energy utility. It is a unique offering that stabilizes the energy grid for households and large utilities and creates income for private owners. Micro Grids disrupt all large energy utilities reducing power plants for the electrification of vehicles and costly power transmission lines. Most importantly it reduces the costs and provides sustainable, reliable, and cheap renewables.
The global renewable energy market is worth about $1.5 Trillion in 2025.
Rototaxis
Tesla Full Self Driving combines Neural Nets that are trained with large amounts of real-life driving data, an innovative FSD silicon-chip included in a dedicated unique computer and battery technology. FSD enables Rototaxis and income for its owners and Tesla and is born out of the combination of several innovations. Each of the innovations is available already, or can be sold separately, but in its combination, Rototaxis are an incremental disrupting product and service that will change the world we are living in fundamentally. Rototaxis and FSD will disrupt the transportation industry as we know it by reducing carbon footprint and cost of transportation.
Ark Invest estimates the market for Rototaxis to represent $10 Trillion.
Deep Learning & AI
Dojo is a training center for neural networks Tesla develops to accelerate the training of its Full Self Driving (FSD) vehicles via Neural Nets (NN) by an order of magnitude. It’s a combination of a training data center, massive volumes of real-life data, and a dedicated chip design and data center for a fraction of the costs – all of these are innovations and unique. Dojo is still in development and planned to start training the FSD Neural Net in 2022. It will be, according to Elon Musk, used for the training of NN with different purposes like Robots. It will be instrumental to develop Artificial Intelligence (AI) solutions outside of vehicles. Every future developed NN for autonomous driving, Robots, or similar AI purposes is inferior in cost, energy consumption, or speed of development if it does not have access to Dojo. Dojo disrupts a large portion of the internet cloud business and the emerging NN industry.
Ark Invest estimates the global market for deep learning represents $30 Trillion.
If we add together those 3 market opportunities with the automotive industry, with an estimated value of $9 Trillion, Tesla disrupts a market value of in total $50 Trillion. If Tesla manages to capture just a few percent of them the market valuation will grow into a multiple of it.
“Right now people think of Tesla as an electric car company or as an energy company. I think long-term people will think of Tesla as much as an AI Robotics company as we are a car company or energy company. I think we have one of the strongest AI and Software teams in the world.”
Elon Musk, April 26th, 2021
The world is missing the incremental value Tesla creates with the combination of several incredible innovations combined into new products and services. When it happens, everybody will say that it could not have been anticipated but it’s written on paper today.
Tesla does not stop with what they have achieved and the organization that was built to innovate continues to do so. Each new invention increases the options to be combined with others developing into a unique and groundbreaking step change. The massive cash Tesla already creates today makes the execution of its vision a certainty and with it the company larger.
The three examples given are just a glimpse into the future of combining innovations into a new innovation that creates incremental added value on a higher level. With Automotive, Micro Grids, Rototaxis, and DOJO alone Tesla disrupts industries that are creating Trillions of Dollars revenue today.
The attentive reader may have recognized that I did not even talk about Tesla automotive that still dominates the headlines and likely continues to do so. While everybody discusses Tesla BEVs they overlook at least 3 elephants in the room that will create tremendous pressure on industries that have not any or minor connections to cars.
It will take many years if not decades for the public to understand that the automotive business of Tesla is just one of many and not even the largest disrupting element within Tesla Industries.
Just executing on the three unique solutions mentioned above Tesla is on its path to becoming the largest and most profitable company the world has ever seen.
About the author
Alex Voigt has been a supporter of the mission to transform the world to sustainable carbon free energy and transportation for 40 years. As an engineer, he is fascinated about the ability of humankind to develop a better future via the use of technology. As a German, he is sometimes frustrated about the German automotive industry and its slow progress with battery electric vehicles which is why he started to publish in English and German. With 30 years of experience in the stock market, he is invested in Tesla [TSLA], as well as some other tech companies, for the long term.
