Cathie Wood’s INSANE Prediction | Summary and Q&A

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August 28, 2023
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Solving The Money Problem
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Cathie Wood’s INSANE Prediction

TL;DR

Costs of electric vehicles are declining rapidly, making them more affordable and competitive compared to gas-powered vehicles. Tesla is seen as the biggest AI opportunity in the automotive industry, with potential for autonomous taxi platforms and rising gross margins.

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Key Insights

  • 🚙 Electric vehicle costs are declining rapidly, making them more affordable and competitive with gas-powered vehicles.
  • 🥺 Tesla is leading in AI development and has the potential to revolutionize the automotive industry with autonomous taxi platforms.
  • ✋ The SaaS-like model adopted by Tesla will drive higher gross margins and profitability.
  • 🚙 The market and analysts have overlooked the implications of declining electric vehicle costs and the potential of AI opportunities in other stocks.
  • 🚙 The shift towards electric vehicles and AI technology will have a significant impact on the automotive industry, with implications for consumer preferences, market dynamics, and profitability.
  • 🚙 Wright's Law, which predicts cost declines with increasing production, is applicable to electric vehicles and can be used to forecast their future affordability.
  • 🤳 Tesla's advancements in AI technology, particularly in full self-driving capabilities, are positioning the company as a leader in autonomous vehicles.

Questions & Answers

Q: How are costs of electric vehicles declining?

According to Wright's Law, for every cumulative doubling in electric vehicle production, costs decline by 28%. This reduction in cost makes electric vehicles more affordable than gas-powered vehicles.

Q: What is the significance of Tesla in the AI industry?

Tesla is considered the biggest AI opportunity in the automotive industry. With their AI advancements, they are moving towards full self-driving capabilities and are close to achieving a fully commercialized autonomous taxi platform.

Q: How will Tesla's gross margins evolve?

Tesla's gross margins, currently in the 20s, are expected to rise into the 50s and 60s. This increase can be attributed to the SaaS-like model they are adopting, which allows for higher profitability.

Q: How have the market and analysts underestimated electric vehicle costs and AI opportunities?

Most automotive manufacturers and analysts have ignored the declining costs of electric vehicles and the potential of AI opportunities. This is primarily due to the profound implications that the transition to electric vehicles and AI technology will have on the industry.

Summary & Key Takeaways

  • For every doubling in the number of electric vehicles produced, costs decline by 28%, making the total cost of ownership lower than that of gas-powered vehicles.

  • Tesla is at the forefront of AI development and is seen as the closest auto company to a fully commercialized autonomous taxi platform.

  • The company's gross margins, currently in the 20s, are expected to rise into the 50s and 60s due to a software-as-a-service (SaaS) model.

  • The market and analysts have underestimated the implications of declining electric vehicle costs and the potential of artificial intelligence opportunities in other stocks.

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