Out of the box thinking & math. The Tesla "assembly line" starts with the atoms going into cars and ends with customer.

Out of the box thinking. 

The Tesla "assembly line" starts with the atoms going into cars and ends with the customer (payment). 

At first, Elon Musk considered the factories to be future "alien dreadnoughts" automated battleships. (the word goes back to the late 17th century when it meant a fearless person (who dreaded naught — nothing). The speed of the line should keep increasing with automation. Four years ago he expanded his view of the (cash flow) system out of the production box to the customer. 

On November 16th 2018 I wrote down thoughts and math on Tesla cash flow focus instead of profit: http://sinaas.blogspot.com/2018/11/tesla-innovation-is-often-based-on.html

"Math: Sales Tesla $75m a day November 2018, Toyota $700m a day (automotive, not an energy company)

Today:
Payment to suppliers after 60 days, delivery in 10 days = 50 days float.
$75m x 50 days = $3 750 float - $250m COGS at factory = $3,5b float
Sales doubling:
$150m per day = $7b float
$300m per day = $14b float
$600m per day = $28b float
Current Tesla long term debt: $10b 

If growth continues Accounts Payable should keep increasing, but the company will be generating cash (as well as profits) and be less reliant on external financing."

Follow up: 

Sept 30th 2018

Cash $3b

Accounts Payable $3,6

Debt $12b (including $2b current portion longterm debt)

Net debt: $9b 

--------------------

Sept 30th 2022 

Cash $21b 

Accounts Payable $14b

Debt $2b 

Net cash: $19b 

Sales: Tesla $210m a day (3x in 5 years), Toyota $700m a day 

Should be able to pass Toyota in a decade: 2033? 

In the short-term, automotive markets in US and China are very weak. Europe is very weak in general. On the other hand Brandenburg and Texas factories are increasing production, batteries are/were a bottleneck. Semi-truck production just started in Nevada. Cybertruck Texas soon. 

Long-term huge demand for batteries for electricity networks. Europe EV only in the 2030s. Teslabot coming. 

Valuation: 30% growth ten years? 

Chat.OpenAI.com (just online this month): 

"If a company has 10 billion in cash flow now and it grows at a rate of 30% for ten years, the company's cash flow will be $33.1 billion after ten years. This is calculated as follows:

10 billion x (1 + 0.30)^10 = 33.1 billion"

Tesla as a "cybernetic collective" may be one of the companies that profits most from the technological singularity we are currently entering.

$30b free cash flow x 15 multiple = $450b value. Enterprise value Tesla today: $482b 

If the stock price goes under $140 (now $150 per share *$450b/$482b = 140) a "reasonable" buy. 

Sanity check: Aswath Damodaran got roughly the same value (half a trillion) last year in his most optimistic scenario when the market cap was a trillion: https://aswathdamodaran.blogspot.com/2021/11/teslas-trillion-dollar-moment-valuation.html

Sanity Check: Pass

Sanity Check 2: It seems there is a bug in ChatGPT? 

10 billion x (1 + 0.30)^10 is NOT 33.1 billion. It is 137 billion.

Closer to Elon Musk's October 19th 2022 calculation: "“Now I’m of the opinion that we can far exceed Apple’s current market cap. I see a path for Tesla to be worth more than Apple and Saudi Aramco combined,” the Technoking said. Combined, the two companies are worth just over $4 trillion."