Grant Melson, CFA

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Grant Melson, CFA

Grant Melson, CFA

@grant_melson

Engineer. CFA. $TSLA. Follow for a unique perspective on the future of robotics and Robotaxi

Austin, TX Katılım Ağustos 2021
1.4K Takip Edilen3.7K Takipçiler
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Grant Melson, CFA
Grant Melson, CFA@grant_melson·
“Uber is dead” is only a side effect of Tesla Robotaxi. At a fraction of the cost of ride share today, Tesla isn’t going after Uber’s market share. They’re going after the big prize that Uber could never collect - the TAM of ALL miles driven by humans today.
Grant Melson, CFA tweet mediaGrant Melson, CFA tweet media
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Grant Melson, CFA
Grant Melson, CFA@grant_melson·
It is ok to recognize that Elon’s incentives clearly align with SpaceX merging with or acquiring Tesla soon. Even though this may not align with Tesla’s best interest. Tesla is on the verge of converting its low margin car manufacturing line to a high margin robotaxi army. This changes the present value of every car Tesla produces dramatically. A one-time $7K profit transaction becomes a $30K+ annually recurring profit machine. It would be lunacy to dilute this when we’re so close However, SpaceX has dual class voting rights that clearly align with Elon’s desires for control at Tesla, should the two be merged. Because of the sway he has with his voting shares and the sway he has with retail investors, it is up to Elon whether he does the right by Tesla retail investors or not. It’s a toss up for me because I both trust Elon’s moral character, but also recognize the truth in Charlie Munger’s “show me the incentives and I’ll show you the outcome.”
Bradford Ferguson@bradsferguson

@phasegatejumper Better for $TSLA shareholders or for SpaceX shareholders and Elon? SpaceX is getting value recognition, Tesla presently, imo, is not.

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Grant Melson, CFA
Grant Melson, CFA@grant_melson·
@thejefflutz The only real barrier to achieving this is higher than human safety within those specific geofences. Hard to tell when that threshold will be achieved. But if it’s safe for 14 robotaxis, not sure why it wouldn’t be safe for thousands in the same geofence
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Grant Melson, CFA
Grant Melson, CFA@grant_melson·
Tesla could still be in a “dozen or so states by EOY” and still be deployed in dozens of cities. How many robotaxis does it take to saturate a given city’s demand for $1.25/mile transport? It’s a lot more than a couple of thousand per city. The currently mapped ramp could have 10s of thousands across dozens of major cities, and still only have regulatory approval in ~8ish states.
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Jeff Lutz 🔋
Jeff Lutz 🔋@thejefflutz·
10K Tesla Robotaxis would be 2-3x bigger than the current market leader depending where they end the year at, but 1-2 orders of magnitude below what Elon may believe a volume scaled roll out consists of… agree this may be not well understood & causing some confusion
Doctor Jack@DoctorJack16

What is your definition of Robotaxi at scale? Many folks in the Tesla community seemed to be caught up on the interpretation of what Elon said. My definition of scale is 10K vehicles with thousands of the 10K Robotaxis unsupervised in 12 cities by the end of 2026. And most importantly there continues to be no injuries due to Robotaxi. The fact is that the latest version of FSD is enough to do unsupervised Robotaxi. Cybercab has begun production. Are my numbers that unreasonable? Would u not consider this “scaling”? Elon is always thinking bigger. Therefore I believe that people are misinterpreting what his definitions are.

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Alex
Alex@alex_avoigt·
The Tesla stock is in a perfect set up to move this year towards and likely beyond $500. $tsla Love it ❤️😄
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Grant Melson, CFA
Grant Melson, CFA@grant_melson·
I think we're missing each other on different definitions of step changes. Broadly speaking, Elon's companies only work on step change technologies. He doesn't start a business to do something just 10% better. He always swims orthogonally versus what everyone else is doing in search of a massive step change in any domain. RoboTaxi is unique in this realm in that it carries off of the current install base and current manufacturing capacity to deliver a product that will turn an existing low margin product into an extremely high margin product. It's worth noting this is also their core business we're talking about multiplying many times, not a new product line. Notice I'm not even talking about cybercab, purely robotaxi Optimus is a step change in many ways, but it would be a whole new product line, so I am not counting it. Setting aside HW3, there are still millions of HW4 cars out on the roads and are annually produced every year. HW3 is a distraction. The CFA speak comment was said knowing that you are a charterholder as well. I was moving away from street talk of "hype train".
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Cern Basher
Cern Basher@CernBasher·
Both have step changes. Pretending SpaceX has none is selective framing. There doesn't need to be millions of Starships in order for it to be the multiplier. One launch = 60 Tbps Starlink capacity at 1/10th the cost. Starlink is already a real revenue engine; Starship makes it exponential. Robotaxi is still essentially pre-revenue (at about $2.5 million in revenue in Q1). Millions of dormant robotaxis is fantasy. HW3 (~40% to 45% of the fleet) can’t do unsupervised. Retrofitting them will take time. We also have validation issues and the regulatory pathway hasn't been cleared. We aren't likely to see this switch flipped any time soon. "To put it more in CFA speak, sentiment is measurably more positive on SpaceX than Tesla rn" - Is CFA speak a higher power? Perhaps you should ask yourself why that's the case. Instead of dismissing it, is there something real behind it? "Robotaxi is more likely and closer in time than a mass driver on the moon" - now you're adding something into the discussion that wasn't present before. That is another step change for SpaceX, but not one that I included in the discussion. By the way, what's your CFA Charterholder certificate number? Mine's 23595.
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Cern Basher
Cern Basher@CernBasher·
Tesla and SpaceX - Should They Merge? I'm responding to @grant_melson post and his discussion with @TeslaBoomerMama - bringing it here so that more people see it and can join in on the discussion. Both companies have several "step changes" in their pipeline. For Tesla it's Robotaxi, then Optimus and perhaps Digital Optimus (btw, none of which are fully featured without Grok/Xai, and Starlink in many situations). Tesla is joined at the hip with SpaceX already. For SpaceX it's Starlink (a far bigger and more immediate opportunity than most think - just ask @aaronburnett) and Starship (SpaceX's "Robotaxi"). The cross pollination between the two companies is too numerous to name here. Then they jointly benefit from TERAFAB and the scaling that it allows - a huge quantity of chips for Optimus and for orbital data centers. If this doesn't happen Tesla will be severely chip and inference compute constrained. Only investors who are focused on the short-term worry about the potential short-term dilution that merging with SpaceX brings. The implicit assumption with this line of thinking is that SpaceX is overvalued. What happens if it's not? What happens if SpaceX is really worth a few trillion more? Again, listen to @aaronburnett, @TeslaLarry and @pbeisel. What happens if Robotaxi adds a trillion to Tesla's valuation, but SpaceX gains two trillion in the meantime? Or some other amount, but where SpaceX gains more. The problem with valuation arguments is that they are subjective. There are people that feel Tesla is massively undervalued (I put myself in that camp) and others think that SpaceX is more valuable. Reasonable people can disagree on valuation. That said, once SpaceX is a public company (and the index additions and lock-ups are behind us), then at least we will have an apples-to-apples valuation comparison - as both will be valued in the public market on the same terms. However, in my view, investors who are focused on the long-term will welcome a merger - as the opportunity for the combined company is greater than two separate entities. Just look at what Elon said this week on the Q1 earnings call when asked about TERAFAB - the challenges of making sure both sets of shareholders is slowing things down - it's a clear frustration for him. It's a massive unforced error to tie Elon's hands. Why put unnecessary hurdles in front of him in the name of protecting shareholders? These companies should merge - and probably sooner than later. Let the man build unencumbered! And for those that might think that Elon is somehow slow rolling Robotaxi so that SpaceX can acquire the company on the cheap - if you don't believe that Elon always acts in your best interests (as he's required to do), you should sell your Tesla stock and move on to another company/CEO that you trust.
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Grant Melson, CFA@grant_melson

Wanting a SpaceX merger is incompatible with believing “robotaxi will lead to the biggest step change in value in history.” @TeslaBoomerMama if you truly care for the Tesla retail community, please consider this. There are many others cheering the spacex merger as well

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Grant Melson, CFA
Grant Melson, CFA@grant_melson·
@bradsferguson TSLA influencer scene is being lulled to sleep to capitulate to a merger. Where do you stand Bradford?
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Bradford Ferguson
Bradford Ferguson@bradsferguson·
$TSLA shareholders, should Tesla wait for robotaxi value unlock before allowing itself to be merged with SpaceX for no premium vs current share price?
🤖🧠👀 AI 4 Everman@Everman

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.

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Grant Melson, CFA
Grant Melson, CFA@grant_melson·
@TeslaBoomerMama No where here are they saying “it’s too long for us!”. In fact they are speaking to what Tesla is doing and what competitors do not yet understand. This is a moat for TSLA, not a merger endorsement
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Grant Melson, CFA retweetledi
🤖🧠👀 AI 4 Everman
🤖🧠👀 AI 4 Everman@Everman·
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.
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Grant Melson, CFA
Grant Melson, CFA@grant_melson·
It depends on how big we believe the addressable market is at $1/mile in regulatory states that Waymo is already operating in (~40% of US population). I would predict it would take several years of Tesla’s current production to saturate that with high margin robotaxis. I think we have different definitions of step change. I agree starship is a game changing product if and when it works. But there are not millions of dormant starships waiting to be awakened. But this is true with robotaxi and current robotaxi-eligible production capacity To put it more in CFA speak, sentiment is measurably more positive on SpaceX than Tesla rn. Prioritizing imminent is a function of discounting cashflows and weighting outcomes by probability. Robotaxi is more likely and closer in time than a mass driver on the moon. All things equal, I am partial to ascribing value to robotaxi than the latter
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Cern Basher
Cern Basher@CernBasher·
"Instant shockwave / flip-of-switch" may be fantasy: Robotaxi isn't a pure software update. Regulatory approval, unsupervised FSD validation, liability issues, fleet operations scaling, and HW3 limitations (majority of installed base) may make it years away - it may not be an immediate 10X in value. Your SpaceX downplay is weak: Starship is the multiplier (cheap access to orbit enables AI data centers, Starlink V3 scale, etc.) - it's akin to robotaxi but with bigger TAM. Look at the economics of Starlink's V2 vs V3 (one Starship V3 launch adds ~60 Tbps downlink (vs. ~2.7 Tbps for a Falcon 9 V2 Mini launch that's 20×+ more per launch). That's a step change. Your merger take is subjective: "SpaceX is riding a hype train, while Tesla is stuck in the dumpster" ignores Tesla's execution gaps. Prioritizing "imminent" robotaxi over combined upside is timing bias, not fundamental analysis.
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Grant Melson, CFA
Grant Melson, CFA@grant_melson·
It’s a false dichotomy also to assume that the only 2 choices are “get on board or sell your shares if you have concerns”. I trust Elon’s moral judgement, but I also see a massive incentive for more voting control and he is a master strategist. I hope he will do the right thing if he truly believes his words of “shockwave of value” to let it play out over the next year prior to a merger.
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phil beisel
phil beisel@pbeisel·
I believe SpaceX and Tesla should merge. Tesla investors don’t yet fully grasp the magnitude of SpaceX’s potential (see my pinned article). It’s going to be a monster. In my view, the gains from operational efficiency outweigh any “value unlock” arguments for keeping them separate. The complexity of managing their relationship as two independent companies is only going to increase and become a real constraint on execution.
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StripMallGuy
StripMallGuy@realEstateTrent·
What kills more real estate deals than anything else?
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Bobby Plewniak
Bobby Plewniak@BoBbyPleWniaK·
@JOBhakdi Correct. Can’t just disappear. If so, I’d just cover 100% with covered calls then keep the money
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Jo Bhakdi
Jo Bhakdi@JOBhakdi·
I did some more research on $TSLA Leaps in case of merger. I am 95% sure now that we are safe. Example: 1 x 2028 Jan 700 strike call gives you the right to buy 100 $TSLA shares at $700. When $TSLA is acquired, this right gets converted into the right to purchase the value-equivalent assets of that that were excahnged for 100 shares of $TSLA. In the case of SpaceX, that's SpaceX shares. I might do a video on this that also shows the contract language and where to find it.
Michael Soliman.@Alopex_UG

Moin @JOBhakdi Do You think, that a merger of equals will be eliminating the risk fir TSLA-far-OTM—LEAPs. Tschüß, Michael.

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Jim French
Jim French@French_Jim·
@CernBasher @grant_melson @TeslaBoomerMama I think the hypothesis is rooted in SpaceX not having an equivalent growth step function with: Starship reuse 10x cost drop AI data centers in space XAI model X money Gen 3 Starlink global Internet and carrier wireless Intraplanetary high speed travel Moonbase mfr & mining
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Grant Melson, CFA
Grant Melson, CFA@grant_melson·
The sudden unanimous shift to “We need to merge with SpaceX right now!” from Tesla influencer community is very irksome. Makes no sense 5 months ago, everyone was praising robotaxi as a coming “shockwave”. “Biggest stepchange in asset appreciation of all time.” Half the US by the end of the year! Pre-pay package Elon’s (and Tesla influencers’) messaging was as such. One quarter later (starting in Q1 earnings call) timelines got pushed out waaay far. That’s when things started getting ambiguous with timelines. Then all of a sudden at the same time there’s a unanimous groundswell of support for a merger with SpaceX. I believe in Elon’s morality and loyalty. I also believe in him as a ruthless master strategist. I cant know what his intentions are. The Tesla community is starting to worry me with how unequivocally supportive it is of diluting the massive step change in value from robotaxi though. Doesn’t make sense
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Grant Melson, CFA
Grant Melson, CFA@grant_melson·
The drag from management of the relationship is negligible in Tesla’s main line of business. The framing prior to the pay package coming through was “shockwave”. “Biggest stepchange in asset appreciation of all time.” Post pay package (one quarter later) and now eerily accompanied by all these calls for a merger is now “maybe perhaps end of next year” for robotaxi. Equally as irksome is the sudden and unanimous shift in sentiment among the Tesla influencer community (bigger accounts) towards “we need to merge right now!” It feels too weird for everyone to shift from “robotaxi will be a tsunami” to let’s merge right now
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Grant Melson, CFA
Grant Melson, CFA@grant_melson·
Wanting a SpaceX merger is incompatible with believing “robotaxi will lead to the biggest step change in value in history.” @TeslaBoomerMama if you truly care for the Tesla retail community, please consider this. There are many others cheering the spacex merger as well
🤖🧠👀 AI 4 Everman@Everman

Some of us have been investing in the $TSLA vision of robotaxi since 2016 (or before). “The greatest asset value increase overnight with a software download.” - Elon We’ve patiently supported and sown as Tesla solved an incredibly hard problem, with the promise of an incredibly valuable business. I believe the value of TSLA is at least $1,500/sh based on what we’ve built. All that’s required is to scale it. Now the specter of getting bought out by SpaceX puts a clock on that value recognition. If Tesla can’t realize their 10 year vision and reap the value creation before getting bought out, shareholders will lose half or more of that value recognition through dilution. For Elon, he must get SpaceX IPO done quickly before Tesla gets way too expensive. There’s no way SpaceX could buy a $5T Tesla. For SpaceX to be the buying company (and the dual class share structure to be the final structure), they must act before Tesla runs away. Unfortunately this perverts the incentives. The best thing for SpaceX (Elon) is for Tesla (Elon) to slow-roll robotaxi until SpaceX can buy them. It may be inevitable now based on the disclosures during the call yesterday. I’m just trying to illuminate the probable path for people who can’t see it yet. If Elon asks you to sell your shares to SpaceX for less than $1,500/share, you’ll know what happened. Influencers will try to tell you this is for the best. What it actually means is that you will get 50% or less of the value recognition due to dilution, and SpaceX shareholders get the rest. My position is simple. Tesla shareholders deserve to see the realization of the value creation of the business we’ve invested in for 10 years. $5T should do it. Tesla is undervalued. Then we can talk about merging with SpaceX. I say this as a Tesla and SpaceX shareholder. I’m going to get robotaxi profits either way. I’m saying all this looking out for retail investors who didn’t get the change to buy SpaceX in 2021. SpaceX has 10x for me since then. TSLA has done nothing. It’s time to scale robotaxi and for Tesla shareholders to reap.

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Grant Melson, CFA
Grant Melson, CFA@grant_melson·
I don’t see starship or star link or ai data centers as the same step change. They have great growth prospects with different risk profiles. I’d say that starship and space ai data centers are more akin to optimus. Fantastic prospects. Revolutionary. But still a lot of unknowns to de-risk and they’ll have their own manufacturing ramp with its own unknowns. Starling is an existing business that is growing fast. Similar to Tesla’s energy business. But Tesla robotaxi is a coming SHOCKWAVE. They have millions of cars capable of this on the roads already. They have a manufacturing capacity in place that already can make 2M+ of these things a year. With the flip of a switch (I believe it truly is close) the present value of these existing assets will 10X+. SpaceX while a great company with a huge TAM, has no such product positioned in the same way. SpaceX is riding a hype train, while Tesla is stuck in the dumpster. Another reason a merge would not be to the benefit of TSLA investors
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Keşfet

@thejefflutz @alex_avoigt @TeslaBoomerMama @aaronburnett @TeslaLarry @pbeisel @bradsferguson @CernBasher