[Tesla’s 2Q 2024 performance announcement after lunch]

[Tesla’s 2Q 2024 performance announcement after lunch]

Automobile sales have declined and then rebounded. But compared to the same period last year, it’s -7%. Not very impressive. I didn’t expect Tesla to sell a lot of cars in this high-interest era anyway. And I don’t think I’ll ever sell more than BYD in the future.

Recently, Tesla’s stock price has been rising a bit excessively, and I think this is due to the expectation of FSD AI due to robo-taxi. On August 8, it was said that this would be delayed by a few months. I think it will only be released within this year. Comments on AI were also meek.

One thing that impressed me was the energy sector. Sales in the energy production and storage sectors grew by a year-on-year basis. Even in comparison to the previous year, it’s almost a year-on-year basis. It’s just a vertical rise, as shown in the graph. But the profit is low.

The gross profit margin of the car sales sector is 14%. But the energy sector is 25%. But the sales are so low that sales alone are about $3 billion, or 4.1 trillion won. It’s 12 percent of total sales, which is the first double-digit percentage. If you multiply that annually, it’s 16.4 trillion won.

LG Ensol’s annual sales are around 30 trillion won, and the net profit rate is around 5%. This is about 76 trillion won in the director’s valuation, but even if the Tesla energy business is separated and valued, it seems that it will easily exceed 100 bUSD right now. Even Elon says this is a level that cannot keep up with demand.

If so, if you ask what Tesla’s energy business is, you can think of it as solar power or residential power walls, but I think the key is the Megapack Factory. The Megapack is just an energy storage device, or ESS, built with a lot of batteries in the Model 3 or Model Y.

One Megapack stores about 3.9 MWh of power these days, so if the Model Y is about 75 kWh, it’s about 52 Model Ys. The Megapack located in NSW, Australia, is about 300 MWh, so it must have contained about 77 Megapacks, which is about 4,000 Model Y batteries in one place.

Personally, I think this is a future-oriented business model because of the intermittent nature of new and renewable energy. The cost of producing new and renewable energy is getting much cheaper than I thought.

According to data such as EIA and BloombergNEF, the current cost of electricity generation per MWh of solar or land wind power in the United States is between $30 and $40, nearly half of that of natural gas or coal.

The problem is that there is no electricity when we want, whether it’s solar or wind. This creates a load on the grid or Grid in any country. In the Netherlands and Ontario, Canada, this is controlled by a system called NEM, and in the case of our country… [Speechless]

To make it a little easier, if the solar power capacity is 100 MW, it doesn’t produce 100 MWh 24 hours a day or 365 days a year. 100 MWh of power can be generated for 4 to 5 hours at sunrise (without considering system efficiency), but it produces 0 MWh at night. So, from the perspective of the transmission and distribution network operator, they have no choice but to be annoying. I built a 16-lane highway, but it’s only used as a pool for Chuseok or New Year’s Day, and it’s similar to teasing during the rest of the year.

One savior who can solve this problem is currently ESS, and the other is hydrogen. The market ecosystem is bound to change depending on what saves us first. Tesla is rapidly developing its ESS business model and even making profits there.

If this is successful in commercialization, the transmission network will actually lose its utility value. This means that there is no need to build many more pylons across the country. Currently, Jeju Island is connected to Haenam and Jindo Island by two high-voltage wires, which can be eliminated.

Few predicted that Nvidia would grow this much with data center-oriented sales five or 10 years ago. GPUs were only used for games, and I didn’t think AI would cause such an explosion in demand. Now, sales in this part are more than 10 times that of games, and the profit margin is almost over.

Tesla’s energy division also smells like this. Tesla didn’t even intend to run an energy business. However, since it produces electric cars, I started this business because I thought it would be attractive to install power packs with solar panels on your home. Moreover, it was a battery manufacturing business that I started because I was frustrated because battery companies were slow to develop technology.

It’s the Megapac business that combines the two. But now, the business that I started somehow is starting to grow and make money. I wonder how it will unfold.

From that point of view, Tesla’s long-term future valuation should be roughly viewed as 1) car sales, 2) energy business, 3) robo taxi, 4) FSD external sales. For now, if 1) has been driving the valuation with one tool, we will have to see which of 2) and 3) and 4) will pop out.

Nevertheless, I think it’s a little too much to go up 70% from the low earlier in the year. I don’t recommend short-term trading.

2024.07.24 Written