Babbitt column | Cai Kailong: Tesla is the next Bitcoin or Apple

"Tesla's stock price has finally fallen!"

It is not the stock shorts who sent this sentiment, but the financial reporter who breathed a sigh of relief. Due to the continuous tracking report on Tesla's rare market, financial reporters have long been poor and cannot find a better word to describe Tesla's "giant monster stock".

In the 10 days ending February 5, Tesla's stock price rose along the way, increasing more than 60%. If it is a small-cap stock, this increase is not alarming, but Tesla is a large-cap stock with a market value of more than 100 billion U.S. dollars, such a surge is really rare. At the time of the fiercest transaction on February 5, Tesla's daily price rose by more than 20 billion U.S. dollars, which is equivalent to the entire market value of Hyundai Motor. The total amount of all transactions on a normal day.

The bulls shouted: "Tesla is the next apple!" The bears think: "If Tesla continues to rise, it is the next bitcoin!"

Tesla and Bitcoin, two new and old stars in the global investment community, are linked in this unique way. Two years ago, Bitcoin broke the all-time high of nearly $ 20,000 and became the hottest topic in the investment world. Today, two years later, Tesla has unlimited scenery, and its market value once surpassed Bitcoin, becoming the most dazzling star in the investment world. Many analysts, including Wall Street, are beginning to understand Tesla just as they did not understand Bitcoin two years ago. They believe that Tesla's stock price has the same huge bubble as Bitcoin's price.

Will Tesla be the next Bitcoin? Like Tesla, after attracting everyone's attention, will the bubble burst and plunge to the bottom?

As an early user and investor of both Tesla and Bitcoin, the author takes a detailed inventory of the similarities and differences between the two.

Tesla and Bitcoin have something in common

The most direct common point: The rising trend of the two stocks is surprisingly similar. Tesla stock has experienced the following rocket-like rise:

$ 300 to $ 400: 976 days

$ 400 to $ 500: 25 days

$ 500 to $ 600: 18 days

$ 600 to $ 700: 4 days

$ 700 to $ 800: 1 day

$ 800 to $ 900: 4 hours

Investment expert Michael Novogratz, founder of well-known digital currency investment fund Galaxy Digital, shorted Tesla after losing hundreds of millions of dollars, admitted that he had misunderstood Tesla, and compared Tesla's soaring market with Bitcoin , I was surprised to find that the graphics of the two are surprisingly similar.

Behind this surprisingly similar price trend, investors are essentially pursuing the leaders of emerging industries and betting on innovation.

In just 11 years, Bitcoin has driven its own industry with its own power, becoming a weather vane for the digital currency and a barometer for the blockchain industry. In 10 years, Tesla has become a recognized leader in the industry by forging ahead in new energy vehicles and intelligent driving, leading the revolution in the automotive industry. If Bitcoin is the evangelist of digital currency and blockchain technology, then Tesla is a leader in new energy vehicles and smart driving technologies.

Both Tesla and Bitcoin have bubbles, but this is not a bad thing. Because investing is investing in the future. Since digital currency and blockchain, new energy vehicles and smart driving are historical development trends, then industry leaders representing the trend must be sought after by capital. The price will definitely exceed the value, in order to attract creative high-end talents and cutting-edge technology for the development of emerging industries, and to drive the development of the industry's upstream and downstream and the entire industry chain.

After Bitcoin soared to a high point at the end of 2017, it led to the development of digital currency mining machines, digital currency exchanges, wallets and blockchain public chain technology, which indirectly promoted the rise of stablecoin and Facebook's multinational alliance stablecoin Libra. It also allows traditional finance to begin to value digital currencies and begin to use blockchain technology to reduce costs. The Bitcoin bubble contributed to the development of the industry. Similarly, Tesla's soaring process has also driven the development of upstream batteries, auto parts, and artificial intelligence. At the same time, traditional auto manufacturers have begun to attach importance to new energy vehicles and vigorously develop intelligent driving technologies. It can be said that the leading price bubble is the only way for emerging industries to rise.

Another thing Tesla and Bitcoin have in common is that they have a huge and committed fanbase . Tesla has produced about 1 million cars so far, and has about 2 million Tesla users. Adding stock holders and fans of CEO Musk, Tesla's proponents can reach 10 million. Bitcoin's real users are about 2 million, and the total digital currency related personnel is about 20 million. Although Tesla and Bitcoin fans only have tens of millions, it may not seem like many fans, but the user loyalty is very high. JDpower had an article surveying Tesla owners. Quite a few owners said they would buy Tesla again, and the owner ’s return purchase rate was amazing. Tesla and Bitcoin have never played any promotional ads, relying on word of mouth from their supporters, showing the strong fan traffic and cohesion of the two.

Tesla is not the next Bitcoin.
Tesla and Bitcoin have too many differences, which may determine their different destinies in the future.

Judging from the attributes of the industries in which they are located, the two are completely different, and their communication influences are also very different . Tesla is in the transportation industry, bitcoin belongs to the financial industry, one is a real company, employees, and a product that can be seen and used-a car, which is relatively straightforward and simple for users to accept; another One exists in the virtual world of the network and adopts a decentralized structure. There is no company and no employees. It is difficult for users to understand and use the product. It requires some education and popularization. The essential difference between the two determines the efficiency of Tesla's influence transmission, which is much higher than Bitcoin. With the gradual increase of Tesla's output, Tesla's remarkable figure can be seen from time to time on the street. Volkswagen can reach Tesla in life, and each Tesla is an active advertisement. In contrast, Bitcoin is very far away from public life.

From the perspective of development history, Tesla stands on the moral high ground and goes smoothly, while Bitcoin has a heavy burden of life experience and is struggling . Tesla produces new energy smart cars to improve the environment and benefit humanity, and is easily accepted and supported by the public. However, Bitcoin is decentralized, and it claims to transform traditional finance, and it is often used by criminals for gray or even black illegal transactions. Therefore, Bitcoin supports many people, but more people hate it. It is not easy for people to accept this controversial new thing.

Regulatory policy and financial markets have very different attitudes towards the two . Countries around the world are actively promoting clean energy, so Tesla is welcomed and supported by governments everywhere. For example, the U.S. government's low-interest loans to early-stage innovative energy companies, coupled with huge subsidies for new energy vehicles, helped Tesla through the difficult start-up period of 2014-2015. For another example, when Tesla's production capacity encountered a bottleneck, the Chinese government gave Tesla the maximum discount and support, and successfully helped it build a super factory in Shanghai within one year and start mass production of domestic Model 3. This is also one of the important reasons for Tesla's stock price soaring this round.

On the other hand, bitcoin has been suppressed by governments everywhere, and the regulation of bitcoin in various countries still maintains an increasingly strict trend. Financial markets, while accepting both, are equally favored. Global financial markets are completely open to Tesla. In addition to the stock market, there are bond markets and funds. According to the current market value of Tesla in the top 30 in the world, analysts predict that in the second half of 2020, the S & P 500 index and other important indexes will most likely include Tesla in index stocks, and the general public will An index or ETF can indirectly hold Tesla, which will once again cause a wave of buying Tesla stocks. In contrast, Bitcoin's support in the financial market is limited to the futures market, where only institutions participate. In the past three years, the Bitcoin ETF has been repeatedly rejected by the US Securities and Exchange Commission, and the prospects for adoption are very slim.

In general, from the perspective of industry attributes, development history, and regulatory and financial market attitudes, Tesla has more influence than Bitcoin, has higher public acceptance, is more supported by regulatory policies, and is easier to obtain. Financial resources, Tesla's market space and upside potential are much larger than Bitcoin.

Will Tesla be the next Apple?  

Despite the large market space and future potential, Tesla's stock price now undoubtedly looks very high, especially for a company that has not been fully profitable for a full year. Although a stock price bubble is the only way for emerging industry leaders, how big is a reasonable bubble for Tesla? In other words, is there any special reason to support Tesla's so high stock price and market value? Will it be the next apple?

First, Tesla does not belong to the valuation system of the automotive industry, but belongs to the high-tech company industry.

Tesla's output is less than that of Volkswagen, but its market value has already surpassed that of Volkswagen. Wall Street analysts are worried about this and conclude that Tesla's stock price is too high. The root of their misjudgment is that it is unreasonable to measure Tesla with the traditional automotive industry valuation system.

From the beginning, Tesla has taken a completely different product route and design concept from traditional car manufacturers, and has invested heavily in and applied the most advanced technology. In the manufacturing process, the optimized process and the most advanced automation system are used to highlight the advantages of its battery, chip and software system on the product. In particular, Tesla's software technology excels in the three electric systems, vehicle-machine systems, and autonomous driving systems. It despise any traditional automobile company and dwarfs Google, Baidu and other high-tech companies that cross the border into the smart car industry. . Although Tesla's revenue is ranked at the bottom of the top ten auto companies, R & D investment is among the top. Software and hardware go hand in hand strategy is Tesla's ace weapon. ''

The advantages of Tesla's software and hardware are concentrated in its autonomous driving system. Its autonomous driving system consists of a chip FSD, vision processing software TeslaVision, and autonomous driving software Autopilot.

FSD is a self-developed smart chip developed by Tesla. It is manufactured with a 14-nanometer process for intelligent chips running autonomous driving software. It has a dual-core neural network array. Its computing power is 40 times higher than ordinary artificial intelligence such as Nvidia chips, but it uses less energy. TeslaVision is an integrated software that processes road condition information. TeslaVision collects and analyzes data from 8 HD cameras, 12 ultrasonic sensors, and an enhanced forward millimeter wave radar at all times to provide real-time road conditions accurate to the centimeter level for driving systems. Autopilot is the benchmark for the autonomous driving industry and is currently the safest, most reliable, and most widely used commercial driving software. At present Autopilot has collected 3.5 billion kilometers of driving data, far ahead of competitors of other autonomous driving software. According to a safety report issued by Tesla, Autopilot-enabled drivers will have an accident every 3.27 million miles. In contrast, the latest data from the US NHTSA shows that a car accident occurs every 498,000 miles of US vehicles. In other words, the safety of Tesla's autonomous driving system has reached 6 times the safety of human driving.

The capital market will greatly increase the valuation of companies that combine software and hardware perfectly. If Apple is just a mobile phone manufacturer, its valuation will not exceed one trillion US dollars, and it will not be a great company. If Microsoft is just a software company and has not launched the Surface series of computers, it will not be able to achieve a recent stock price breakthrough and break through the all-time high and return to the top ten global market capitalization. Just as we cannot define Apple alone as a mobile phone manufacturing company, Tesla should not be seen as a car company, but as a high-tech company.

And the special attributes of the car, the requirements for the accuracy and stability of Tesla hardware and software levels are far higher than Apple and Microsoft. It can be tolerated because the mobile computer slows down, and can be restarted or sent for repair if the error occurs. However, even if the car is driving at high speed, even a slight error will endanger the safety of people and property. Therefore, Tesla's technical content is extremely high.

At the same time, Tesla's software innovation is also remarkable . Tesla took the lead in launching the Firmware Over-The-Air (FOTA) mode. In the past, if a traditional automobile company had a defect, it would cost billions of dollars and recall repairs for several months. Now Tesla can remotely update the data through FOTA mode in half an hour to several weeks. In May 2018, the US "Consumer Report" pointed out that the braking distance of the Model 3 is too long and there are certain safety risks. The company upgraded its braking system through FOTA, shortening all Model 3 brakes by more than 6 meters in a matter of weeks.

FOTA not only shows its talents in repairing defects, but also makes great efforts in updating its functions. The happiest time for Tesla owners is to use FOTA to upgrade the software. It can not only achieve power improvement and acceleration, but also increase battery life, increase the comfort and safety of autonomous driving, and often have unexpected egg features. , Such as surfing the Internet, singing KTV, playing games, and the long-awaited smart calling function (that is, the car owner remotely calls his mobile phone to call Tesla to automatically turn on the cool function beside him). For car owners, every time they upgrade, it feels like they have changed a car, greatly improving user experience and loyalty. Because of FOTA, Tesla's depreciation rate is much lower than other traditional cars. According to IHS Markit's forecast, the cost savings of Tesla's FOTA software update will reach 35 billion U.S. dollars in 2022; other research reports show that FOTA slows down Tesla's depreciation and can save $ 12 billion in auto depreciation costs each year.

Many people believe that Tesla is the "Apple of the automotive industry" , which makes sense. If you experience Tesla yourself, you will be even more convinced. Because Tesla's car is like a large Apple iPhone with four wheels, giving users a completely new driving experience. If it is calculated based on the traditional automotive industry valuation system and ignores Tesla's technical characteristics, it will inevitably underestimate the value of Tesla .

Secondly, the ecological layout of new energy smart cars created by Tesla has huge potential.

Tesla's models range from electric supercar Roadster, electric luxury sports car Model S, electric off-road vehicle Model X, to electric ordinary car Model 3, and the more profitable electric ordinary off-road vehicle Model Y , Electric pickup, Cyberbertuck, and electric truck Semi. Its models cover a wide range and meet the diverse needs of various types of users.

However, car sales are only one source of Tesla's profits, just as Apple's mobile phones are only a part of total revenue. With its leading position in the industry and its leading technology in software and hardware, Tesla continues to expand various businesses based on smart electric vehicles.

For example, as of December 2019, there are 1,804 Tesla supercharging stations and 15,911 supercharging piles in the world. In the early days, in order to expand the market, many charges were free, and now most of them have switched to the charge model, which is equivalent to a car manufacturer operating a gas station. Relying on Tesla's advantages in batteries, Tesla acquired SolarCity in 2016, and actively expanded new energy output businesses including solar energy.

Another example is the value-added data service. Tesla has launched digital value-added services. Car owners can enjoy real-time traffic data, video and audio entertainment data services by paying a data fee of $ 10 per month. If any vehicle software is to run on the Tesla vehicle platform in the future, it will bring real revenue to the Tesla platform. Tesla's biggest trump card is the billions of kilometers of driving data collected through the Autopilot system. It does not rule out that Tesla will develop public data service business in the future and provide valuable data services for industries that need intelligent driving. This is equivalent to a car manufacturing company operating both private and public data services.

With the data collected by Tesla's in-vehicle system, Tesla knows the driving habits and degree of risk of its owners. Tesla has begun to provide customized car insurance services for car owners in the United States, with premiums lower than traditional car insurance costs, which is equivalent to car manufacturers also operating insurance business.

Tesla also plans to launch Robotaxi, a ride-sharing application, to enter the field of shared mobility. Owners can add their Tesla electric vehicles to the online car fleet through a carpool application, or use the App to call a car, which is equivalent to car manufacturing The company also runs shared car travel business.

A huge ecosystem with Tesla as a platform covering charging business, new energy business, public-to-private data business, insurance business, and shared car travel business has been looming.

Finally, Musk's personal charm and the synergies of his companies cannot be underestimated.

Investing is investing. Musk is known as the modern version of "Iron Man". His personal charm, influence, execution and vision are unique in the world today.

Musk is the soul of Tesla, but Tesla is not the first miracle created by Musk. In 2000, Musk founded X.com (the predecessor of PayPal). In June 2002, Musk established Space X to create private commercial reuse rockets, successfully launch and recycle rockets many times, and SpaceX plans to achieve Mars immigration in the future and build a true alien civilization for humanity.

In 2018, Musk also joined other companies in launching the "Vacuum Tube Steel Transport" Hyperloop program, or "Super High Speed ​​Rail", with the goal of driving at an ultra-high speed of 5000 kilometers per hour in a near-vacuum pipeline. If this kind of super high-speed rail is really realized, it will be incredibly fast. If you take a train from Beijing to Shenzhen and accidentally take a nap and forget to get off in Shenzhen, then you will be returned to Beijing in 20 minutes. Already. While preparing for the Hyperloop plan, Musk established The Boring Company to send cars into underground tunnels for rapid transportation at a speed of 200 kilometers per hour to avoid ground traffic jams.

In early 2020, Musk said that his company's biotechnology startup Neuralink, a company dedicated to connecting the human brain and computers, will release a major upgrade of brain-computer interface technology later this year, which will be used in the brain or spinal cord. Human patients with injuries or congenital defects. ,

In February of this year, Musk ’s SpaceX platform was separated from the Starlink plan, preparing to deploy 1,584 communications satellites in low-earth orbit at 550 kilometers above the earth to achieve global high-speed Internet access services. Starlink has sent more than 200 communications satellites to the sky. Musk gleefully announced on Twitter that he could send messages using StarChain, one step closer to the idea of ​​a space Internet.

From Musk's experience, it can be seen that being called a "technical lunatic" is by no means derogatory. The most commendable thing is that most of Musk's promises can be fulfilled, and the necessary style has made investors short of Tesla suffer a lot. In August 2018, Tesla's performance was better than expected. In order to ironically short Tesla shorts, Musk sent shorts to shorts (both shorts and shorts in English are Shorts).

Tesla's high stock price has nothing to do with Musk's personal charm and glorious history . As Musk recently mentioned on Twitter: "Build 100 interstellar spaceships every year, build 1,000 in ten years, and send them to Mars with a carrying capacity of 100 million tons per year or a carrying capacity of 100,000 people. This is my Goal. To build such a large Mars fleet is why I work hard to make money on Earth. "

Musk needs to enable Tesla to achieve great commercial success to support multiple ambitions, including exploring space. At the same time, the synergies of Musk's commercial map will also open up a wider space for Tesla.

Tesla just announced the development of a high-strength, highly conductive body aluminum alloy inspired by SpaceX rocket materials. Imagine a person using Neuralink technology to directly connect a human brain to a Tesla on-board computer, driving on a Hyperloop high-speed vacuum tunnel, and video chatting with his family through StarLink from time to time. Or at the Martian Human Habitat, Tesla's CyberTruck, which is most like an alien chariot, shuttles back and forth. These are not science fiction, and under Musk's leadership, these are very likely to be realized in the future. After all, Musk has delivered the car to the sky for the first time in human history. There is a Roadster of Tesla, which is overlooking the earth from the ground orbit at this time. This may be the best prediction of "Tesla's stock price".

(The current trajectory of the Roadster sent to space)

Many people buy Tesla stocks because they worship Musk. They believe that Musk can lead Tesla to become the "Apple of the automobile industry". They believe that Musk can realize these big-brained dreams that are of great significance to humanity. When sentiment exceeds rationality, and fans and admirers become Tesla investors, it is futile to talk about any valuation system at this time. That's one of the reasons Wall Street analysts are amazed by Tesla's stock price.

Bitcoin's market leader, Bitcoin, has a market value of 160 billion U.S. dollars. As a leader in new energy vehicles and intelligent driving, how can the market value be only 130 billion U.S. dollars?

Apple's market value can reach 1.3 trillion US dollars. As an "Apple in the automotive industry", Tesla has such a broad future, can the market value be only 130 billion US dollars?

Tesla is not the next bitcoin, and it may surpass Apple.