Tesla, Inc. TSLA held its annual shareholder meeting Thursday evening and CEO Elon Musk in his address touted the immense growth potential the company offers but at least one fund manager wasn’t impressed.
What Happened: While reviewing the year for Tesla shareholders, Musk delved into the multiple opportunities before the company. “Tesla has the production capability; it has the engineering capability and it has the AI hardware and software capability,” he said.
The billionaire also said the most optimistic estimates on the Street for Tesla’s humanoid robot, Optimus‘ undercount the magnitude of what it will be able to do.
Doing the valuation math for Tesla, Musk said he agreed with Cathie Wood-run Ark Invest’s analysis of autonomous transport being a $5 trillion to $7 trillion market-cap opportunity. Optimus is worth $25 trillion, he said. The Tesla chief did not specify the timeframe when the company will be able to realize this potential.
That said, he cautioned that it could be a tall order hitting those market-cap targets. “I don’t want to trivialize what’s necessary to get there. I mean it’s an immense amount of work that is required to get there,” he said.
Although conceding that it is “super difficult,” Musk said the company was moving very fast down that road.
See Also: Everything You Need to Know About Tesla Stock
Chanos, who once held a short position in Tesla through his hedge fund and is a critic of Musk, commented on the estimate. “So 30% of global GDP….? Lol, ok,” he said with a cynical tone.
See Also: Everything You Need to Know About Tesla Stock
Why It’s Important: Global GDP came in at $104.8 trillion in 2023, data from Statista showed. The $30 trillion to $32 trillion market value Tesla is targeting will propel the company as the most valued global corporation, with the valuation accounting for about 30% of total global GDP, as Chanos pointed out. It remains to be seen whether Tesla can iron out its wrinkles and push ahead toward the goal.
Tesla just dodged a bullet as shareholders overwhelmingly approved Musk’s 2018 compensation plan. This ensured that the billionaire stays fully committed to his electric-vehicle venture, which is currently going through a fundamentally lean phase.
Given Musk’s accent on robotaxi and autonomous driving, which Tesla is trying to achieve with its full self-driving tech, it appears that he has begun discounting a lack of material improvement in the near- to mid-term.
FSD, though, is not a very big near-term opportunity. The technology has to graduate from Supervised to Unsupervised and overcome skepticism of car users regarding its safety. Securing regulatory approval is also a tall order. Unless FSD is perfected, it cannot be effectively used for Tesla’s robotaxi platform.
In premarket trading on Friday, Tesla climbed 0.51% to $183.40, according to Benzinga Pro data.
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