Tesla's Playing the Long Game

Many people don’t realize that Tesla isn’t just a car company anymore. It’s now a “fuel” company as well. [Outsider Club Header] Oct 16, 2023 by Jeff Siegel for the Outsider Club Tesla's Playing the Long Game $1.2 billion a year. According to analyst Gary Black, that’s how much Tesla’s (NASDAQ: TSLA) most recent price cuts will cost the company. And he’s concerned. Black, who is also the managing partner at the Future Fund, which boasts $136 billion in assets under management, has also been critical of the company cutting prices instead of spending on traditional advertising campaigns. However, while I’m sure Black is a far more successful investor than me, his criticisms are flawed. Uncle Elon doesn’t spend money on traditional advertising campaigns because for a company like Tesla, it would be a massive waste of money. The company doesn’t need brand recognition. It has plenty of that. And the quality and safety of its vehicles are so widely known there’s no reason to spend millions of dollars to convince the masses of these truisms. But that’s not the main reason Black’s analysis is flawed. That reason is directly tied to the fact that Black doesn’t fully understand Tesla’s long game. You see, Tesla isn’t just a car company. It’s now a “fuel” company too. URGENT: Look at This Map of America... [TWA EV Payouts after map] There’s a silent invasion happening. Those black dots you see are electric vehicle charging stations — but they’re not like any chargers you’ve seen before. Because every one of those units could soon be putting money directly into your bank account... Twenty-four hours a day, seven days a week. [Click here to discover what may be the biggest income opportunity of your lifetime.]( Tesla’s $20 Billion Profit Center A few months ago, Wedbush Securities analyst Dan Ives put out a note that took a lot of Tesla bulls by surprise. He wrote that Tesla’s Supercharger network will generate as much as $20 billion in yearly revenue by 2030, or roughly 6% of the company’s total revenue. That’s not pocket change, and it’s far more than the $1.2 billion Tesla could lose due to these recent price cuts. Truth is, while Tesla continues to cut prices, it’s also continuing to expand its Supercharger network, which is the only global DC fast-charging network in North America.  While the company’s Supercharger network and technology were initially only intended for Tesla customers, they have since been adopted by other carmakers, including Ford (NYSE: F), GM (NYSE: GM), Honda (NYSE: HMC), Hyundai (OTCBB: HYMTF), Jaguar, Kia, Nissan (OTCBB: NSANY), Mercedes-Benz (OTCBB: MBGAF), and Volvo (OTCBB: VLVLY). Stellantis (NYSE: STLA) and VW (OTCBB: VWAGY) are currently in discussions with Tesla to get in on this action too, and charging network companies ChargePoint (NYSE: CHPT) and Electrify America also have deals in place with Tesla. Ives opined on this, writing: We view this as another strategic move by Musk & Co. in the long-term story as the Supercharger network is a large monetization opportunity with the company now taking more market share in the charging network ecosystem domestically while laying the foundation for a successful EV transformation over the next decade. Tesla will continue to pump out the most sophisticated and technologically superior vehicles on the market, but even at a discount that will squeeze margins, Moneyman Musk will more than make up for it with charging revenue. To compare this with the early days of internal combustion, think of Tesla as not just a carmaker but the “Standard Oil” of the EV market, which, as you know, will essentially be more than 50% of the new car market in less than seven years. There's $322 Billion Worth of Lithium in Northwest Alberta...Why Can't Anybody Touch It? For more than 40 years, an oil company has been working a 671-square-mile chunk of northwestern Alberta, producing its lifeblood using brine that’s kept in hundreds of massive storage ponds. These storage ponds have long been known to contain a massive lithium resource, totaling an estimated 4.3 million tons. Just recently a tiny Vancouver-based technology company, founded and headed by petrochemical industry veterans, figured out a way to extract the lithium from this brine, very quickly and very efficiently. So efficiently, in fact, that the company can filter this oil field brine, returning it to the pond after processing, with a better than 95% capture rate. Production of salable lithium will cost between $3,000 and $4,000 per ton, while market rates price lithium at $70,000 per ton. They know where the lithium is, they know how to extract it, and, as of now, they have an agreement in place to work this giant lithium-rich property. Commercial production is now projected to be in place by the middle of 2024, with buyers already lining up. [Interested? Enter here to learn more.]( It almost makes you wonder if Tesla vehicles will essentially become loss leaders. Say Tesla eats $5,000 when it sells a Model Y but then generates about $1,000 per year from that Model Y using its charging stations. The average car owner in the U.S. keeps his or her vehicle for eight years. So playing the long game, would Tesla end up generating more revenue by cutting the price of its cars and making it up on the back end with the charging stations? Couple that with the nearly dozen other carmakers that will be using Tesla’s charging stations and technology, and Tesla basically uses its extensive charging network as a profit center. It’s actually quite brilliant, as long as you understand that Tesla is playing the long game here. And that’s not just true for Tesla. There are a number of electric vehicle companies that are actively developing new technologies that will help support that proliferation of electric cars over the next 20–30 years. Those are the companies to watch closely. Take [this solar company](, for instance, which has made a new kind of solar panel designed specifically for electric cars. These panels are so strong and durable they can power a 2-ton vehicle. In fact, one electric car startup is now using this company’s solar panels to power its [new electric car that can travel up to 1,000 miles before needing to “refuel.”]( That’s what I’m talking about when I say next-generation electric vehicle technologies will be worth far more than the vehicles themselves. So yes, perhaps Tesla’s margins may be feeling the sting of these recent price cuts, but Tesla’s larger vision of not only making these cars but also fueling them is why Tesla will continue to be the most successful car company in the world. To a new way of life and a new generation of wealth... [Jeff Siegel Signature] Jeff Siegel [[follow basic]Check us out on YouTube!]( [[follow basic]@JeffSiegel on Twitter]( P.S. Today’s article was originally published by our sister publication [Energy and Capital](, which is solely dedicated to helping readers profit from the ever-expanding and ever-changing energy sector. If you would like to receive daily free email investment letters from the editors of Energy and Capital, [simply click here.]( Follow the Outsiders [YouTube]( This email was sent to {EMAIL}. You can manage your subscription and get our privacy policy[here](. Outsider Club, Copyright © Outsider Club LLC, 3 E Read Street Baltimore, MD 21202. Please note: It is not our intention to send email to anyone who doesn't want it. If you're not sure why you're getting this e-letter, or no longer wish to receive it, get more info [here]( including our privacy policy and information on how to manage your subscription. 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