John ⚔️

JUST IN: Only Elon Musk can fire Elon Musk from SpaceX

MUSK PAY TIED TO MARS COLONY AND SPACE DATA CENTERS SpaceX has tied Elon Musk’s pay to bold goals like building a Mars colony and space-based data centers. He could earn massive share awards if the company hits a $7.5 trillion valuation and establishes a million-person presence on Mars, along with major computing capacity in orbit. He gets nothing unless these targets are met and currently earns only a minimal salary. The plan is highly unusual and may create tension with Tesla, as both companies compete for his attention.

Tesla doesn’t need blind defense. It needs clear-eyed investors who can separate signal from noise. The tech is real. The opportunity is huge. But the communication around FSD, Robotaxi, Optimus, and timelines still needs work. That shouldn’t be controversial. That should be useful.

Terafab is a 10 year project, as Robotaxi was. I see no supporting points for why merging with SpaceX is better “sooner rather than later” other than there is some paperwork for joint operations. That’s not meaningfully affecting the terafab schedule. There is in fact very little reason to merge soon. AI5 is 12 months from any kind of volume, then stacking for data centers and Optimus. Data centers in space are 18-24 months out at least. SpaceX can buy AI5 chips. Optimus factory volume is 18-24 months out. Tesla can buy a Grok license. Each company has their own pieces of the puzzle to work on for the next 2-3 years before convergence would be beneficial. Robotaxi is done. Robotaxi should be months away from “the greatest single asset value increase in history with a software download.” Elon has indicated this likely values Tesla at $5T. The only reason to merge before this is realized is for SpaceX to be the acquiring company, for Elon control purposes. That is the only point in support of “sooner rather than later”. I’m also in the $TSLA is undervalued camp, simply because our 10 year investment building the robotaxi product is complete and just needs to scale. We should rightfully walk into any merger discussions as a $5T company. Which is why some will downplay the “valuation” perspective. Tesla at $5T makes it difficult for SpaceX to be the acquiring company. That’s it. To me it’s clear. Tesla has already built robotaxi. It only remains to be harvested. Dilution before the harvest would be morally wrong. This is not short term thinking. This is investing. I say this as a Tesla investor for over 13 years, and SpaceX investor since 2021. If the response to this kind of discussion is “sell your shares” they aren’t really part of the conversation.

1 million robotaxis. That's what Tesla needs to break even with their automotive revenue. Check this out: To reach its current annual automotive revenue of ~$70b with ride-hailing, Tesla would need to provide 70b annual miles (at $1/mile, which many say is the goal) – which happens to be pretty much exactly what Uber likely did in 2025. Assume the robotaxis do ~70,000 miles per year (a possibly realistic high-utilization target with 16–20 hours of daily operation) and you would need a fleet of exactly 1 million robotaxis.

$TSLA I've sold the last of my Tesla position. Tesla has been in a weird place for me for a while. I love the product. I am enamored with how amazing FSD (in a HW4 stack) is, and how excellent the vehicle is. My wife and I aren't likely to buy any vehicle that isn't a Tesla, and I'm already thinking of that nice upgrade (3-4 years from now) for my '22 Model 3. I also would love to own an Optimus at some point. I love the vision, the vertical integration, and wouldn't bet against Elon. Yet the stock is not the company. Tesla has always traded at a premium, but that premium is increasing over time. That's fine if it's in anticipation of significant future acceleration, but it's questionable when that happens. On the call, they stated, “over time, we expect our hardware-related profits to be accompanied by an acceleration of AI, software and fleet-based profits,” but were effusive on the dates. That's probably for the best, as Elon timelines usually need to be extended. Gross margins have improved, and the P/FCF looks like it's improving, but with the CapEx they're needing to do, this ratio will soon be negative. I don't mind buying a stock with extreme multiples, but I see easier opportunities with clearer runways for acceleration elsewhere. Tesla hasn't been a meaningful position for me for over a year, but I'm out for now. I'll still be rooting for the company (and shareholders) even while hoping the stock comes down to more reasonable levels where the R/R fits my portfolio better.

Elon on FSD V14.3: It is the last piece of the puzzle for Unsupervised FSD. But we have a lot of major architectural improvements (coming), so I think it's not going to make sense for us to deploy large scale robtotaxi before deploying those improvements.