By Jeff Brown | Apr 8, 2021 | 4 min read
I recommended Tesla in December 2018. At the time, the stock was trading for a split-adjusted price of about $66. Here’s what I published in my initial write-up:
[Tesla] will also likely be one of my most controversial investment recommendations to date. Whether you agree or disagree with my analysis, please read along with me. I guarantee that I’ll show you a different side to this company than what might be expected.
I explained to my readers why Tesla represented a truly unique investment opportunity.
And I showed them why Wall Street was embarrassingly wrong about the stock.
And I was right that Tesla was a controversial recommendation. I remember reading feedback from subscribers who told me that they liked my research, but that they were going to pass on
Tesla. And that’s perfectly fine. We should always be empowered to make the investments that we feel are best for us.
But as we can see on the next page, I was absolutely correct about Tesla’s stock…
As I write this, shares of Tesla are trading over 1,222% higher from where I originally recommended them.
What did I see in Tesla that nobody else did? It’s simple. I understood one important fact about the company: Tesla is not an electric car company, at least not in the way we imagine.
In the next few pages, I’ll prove it. And I’ll also show you Elon Musk’s next big project. It’s something called “S.A.V.” In this special report, I’ll give you all the details. I’ll show how S.A.V could potentially put an extra $30,000 in your pocket every year, and I’ll also reveal a stock that is even better than Tesla today.
A History of High-Tech Investments
Before we go any further, allow me to introduce myself. My name is Jeff Brown. For nearly 30 years, I worked as a technology executive for firms like Qualcomm, NXP Semiconductors, and Juniper
Networks. I’ve earned degrees from Purdue University and the London Business School.
I’ve also received professional certificates from MIT,
Stanford, and most recently the University of
We can think of it this way…
Source: Y Charts
California, Berkeley, School of Law. And I am also an alumnus of Yale University’s School of Management. I’m also an active angel investor in early stage technology companies. I’ve invested in dozens of private technology startups over the years. Many you’ve likely heard of.
I don’t tell you all this to brag. But with so many so-called technology experts out there, it’s important that readers know that I’m truly committed to the world of bleeding-edge technology.
And as I said, I’m going to reveal something about Tesla that few understand. I’ll share details of Elon Musk’s next big project, something called “S.A.V.” And I’m also going to share details on an investment recommendation that I believe is even better than Tesla.
Not an Electric Car Company
I said that Tesla isn’t really an electric vehicle company. Of course, the company sells electric vehicles. But that is not where the true value is.
We can think of it this way…
Amazon (AMZN) went public on May 15, 1997. Do you remember what most investors thought of Amazon at the time? It was “just an online bookstore.”
Yes, Amazon sold books online. But the value of Amazon was its ability to pioneer the model of the online marketplace as we know it today.
And Amazon now commands more than half of the e-commerce market in the United States. And of course, investors who realized this have made an incredible investment return from the time of the initial public offering (IPO). In fact, the stock has gained more than 211,389% over 23 years.
Just like Amazon was not a bookstore, Tesla is not an electric vehicle company. Here’s what I wrote to my readers in an update in March of 2019 (emphasis added):
Wall Street once again proved that it doesn’t understand Tesla (TSLA)…
Simply put, the Street’s focus on EV demand shows me that they still don’t understand that Tesla is NOT a traditional car manufacturing company.
It’s actually one of the world’s most advanced artificial intelligence (AI) companies. That’s the big secret most investors haven’t figured out yet.
And that’s why most analysts are dead- wrong about where the stock is going.
To build their cars, every other carmaker in the world
starts with an engine and a chassis, fills in the details, and then writes software to help control the car.
Tesla is the exact opposite. Tesla first designed a powerful software architecture that includes AI… and then built a car around it. The software comes first.
And because Tesla’s massive fleet of cars are all connected, Tesla can process and analyze a gigantic amount of data… Making it a leader in AI.
That’s correct. Tesla is not an electric vehicle company. Tesla is an artificial intelligence company. And it’s one of the best in the world. That’s the secret I saw. And that is the reason Tesla’s stock has delivered such extraordinary returns in such a short period of time.
Tesla’s Real Value
Tesla’s AI software is used to enable its cars’ self- driving functionality. And in terms of deploying autonomous driving technology in production vehicles, no company is further along than Tesla.
And Tesla has been clever with its strategy. Over the years, it has methodically rolled out both the hardware and software to upgrade its production vehicles for higher levels of autonomy.
Tesla first implemented autonomous driving functionality in its Model S cars in October 2015. Tesla calls this platform “Autopilot.” At that time, Autopilot was capable of auto-steering, auto-parking, automatic lane change, and side collision avoidance.
This was revolutionary in 2015. But Tesla had more refinements in store.
In October 2016, Tesla announced that all its cars would have the hardware necessary for full Level 5 autonomous driving. This
essentially means that the car is in full control of steering, parking and other functions. Tesla’s announcement included the Model S sedan, the Model X SUV, and the lower-end Model 3.
And any car produced since October 2016 is capable of receiving a software update enabling full Level 5 autonomy once it becomes available.
Of course, the tech wasn’t quite ready for widespread use back then.
But last year, Tesla took a major step toward fulfilling its ambitions for a fully self-driving car. In October, Tesla released the beta version of its self-driving software directly to a small cohort of “expert and careful drivers.”[I actually was able to get into a self-driving Tesla recently. And the results were amazing. To see the live demo, go right here.]
And get this… Tesla chose to rewrite its autonomous driving AI from the ground up. It scrapped its previous version, which was already the most advanced on the planet.
Smartly, it took all of the self-driving data generated from more than 4.5 billion miles driven by cars using Tesla Autopilot and redesigned the entire software code.
Ever since the beta’s launch, Tesla has collected even more data to improve its AI. And Tesla’s user base has successfully tested the tech in numerous scenarios once thought to be impossible for its software to handle.
Tesla drivers demonstrated their cars navigating complex and busy parking lots. They reported the cars driving themselves at night and in the rain. Keep in mind – these conditions have traditionally posed challenges for Tesla’s cars in the past.
Drivers even managed to get their cars to navigate gravel roads. That’s especially challenging for the AI because there are no road markings to use as reference points.
Tesla’s Autopilot Beta Software
The technology isn’t perfect yet. There have been instances where the driver needed to intervene and grab the wheel.
But Tesla can use the driving data and feedback from its own passionate customers to improve the software in real time. And the company is currently taking on even more analysts and data specialists to fill out its Autopilot team.
In fact, the team is still consistently pushing out software upgrades. And that speaks to the remarkable pace of innovation Tesla is showing the world. CEO Elon Musk even predicts
Autopilot will reach that Level 5 milestone before the end of 2021.
Tesla’s incredible advances in AI set it apart from the competition.
Unlike traditional carmakers, Tesla’s cars are designed around the computer architecture. That means they can be upgraded as simply as we update the operating systems on our smartphones and personal computers. And
it means Tesla can enable a rapid pace of technological development unmatched among its competitors.
Like I said, Tesla is not a traditional automaker.
Tesla is really a technology company with some of the best artificial intelligence software in the world. Tesla’s constant refinement of this technology has allowed it to take the lead in the autonomous driving space.
And Tesla’s biggest innovations are not just limited to its bleeding-edge AI. There’s another key area in which Tesla is dominating the competition…
The Next Step for EV Adoption
Tesla has made a huge leap over its competitors in another key area – its battery technology.
Expensive batteries have always been the main factor preventing the mass adoption of electric cars. But that’s changing now. The cost of batteries for electric vehicles is reaching a tipping point.
A decade ago, the average electric vehicle battery cost $1,100 per kilowatt-hour. Fast forward to today, and the average cost has fallen to $137.
That represents an 88% drop since 2010… and it’s expected to keep dropping.
Electric cars will become much more affordable than internal combustion engine (ICE) cars in a short amount of time. And if you look at Tesla, it’s already happening.
Here’s an example…
The Tesla Model 3 and the gas-powered BMW 3 Series both sell for about $41,000 in the U.S.
When you factor in maintenance costs, then Tesla is already more affordable. Remember, there’s no need for an oil change or new spark plugs in one of Tesla’s cars. And electricity is generally cheaper per mile than gasoline.
And Tesla is constantly updating its battery technology to outperform the competition.
Tesla announced that its next-generation battery will allow it to offer an EV for just $25,000 by 2023. That would make it less expensive than the average gas-powered car today.
Tesla has also worked hard to strip cobalt out of its batteries entirely. This is a key part of Tesla’s strategy to dominate the EV space.
Cobalt is the most expensive material in an EV battery. And the cobalt supply chain is hard to manage because the mineral comes from far- flung places that are often mired in geopolitical tensions.
Tesla has already made incredible progress by reducing its use of cobalt by more than 60%. This has been a major contributor in getting the price of its Model 3 down to where it is today.
As it continuously drives down the level of cobalt in its batteries, Tesla will be able to offer EVs at an even more affordable price point over its competition.
And Tesla even plans to expand its own battery manufacturing to keep up with rising demand. In fact, it has been working on a battery that can last over one million miles. Think about that – most traditional car engines don’t last even a third of that mileage.
The company is already building out enough production capacity so that it can make 20 million cars a year by 2030.
That would make Tesla the largest carmaker in the world. Already, Tesla’s signature Gigafactory 1 in Nevada has allowed the company to produce batteries and other components for its cars at
a rapid clip. Tesla is similarly expanding the manufacturing capacity for its vital components all over the world as I write this.
As it expands these capabilities, Tesla will ensure it becomes the industry leader in affordable EVs for years to come.
While Toyota, Ford and other legacy automakers are still playing catch-up, Tesla has initiated a whole revolution in the EV space that shows no signs of slowing down.
And while Tesla is the leader in the EV/self- driving space, it is certainly not alone…
The Self-Driving Boom
2020 was the year autonomous driving finally launched into the mainstream. And this wasn’t limited to traditional car manufacturers.
In fact, some of the biggest players in tech helped propel the self-driving space forward with their own key innovations.
Late last year, Apple finally revealed more details about its EV/self-driving car initiative, Project Titan. Apple has kept this project quiet over the years.
But strong rumors are swirling that Apple will tap its manufacturing partner, Taiwan
Semiconductor Manufacturing, for the self- driving prototype’s chip set. And rather than build its own cars, Apple will likely tap another carmaker like Hyundai or Nissan to license its technology. That would ensure Apple’s self- driving tech gains an entrenched position in the EV space in the coming years.
And Waymo, Google’s self-driving division, also ramped up its self-driving efforts in 2020. Back in 2018, the company started testing its own ride-hailing service in Phoenix, AZ. The test originally covered a small stretch of the Phoenix Metropolitan area.
Well, by 2020, Google expanded to a more than 50-square-mile stretch of Phoenix.
And get this… Google’s taxi required no safety driver in the front seat. Waymo worked to “geofence” this 50-square-mile area in Phoenix behind the scenes. That means it mapped out all the streets and addresses. Google’s cars have the equivalent of a working memory to navigate within the geofence.
Waymo’s Ride-Hailing Service in Phoenix, AZ
And its cars have racked up more than 20 million self-driven miles on public roads. Of course, the pandemic ultimately affected its ability to widely test the service last year.
But Google is eyeing an expansion in 2021. In fact, it’s already begun testing its robo-taxis in San Francisco. And it’s planning to further expand its fleet across parts of California and Florida.
Now, Google and Apple are far from the only players in the space. Traditional carmakers have also rolled out their own home-grown initiatives over the last year.
Cruise – General Motors’ (GM’s) self-driving division – saw over $2 billion in investments from Microsoft, Honda, and SoftBank to aid in its autonomous driving build-out. And GM even launched its own battery-powered 2022 Hummer EV.
Volkswagen is planning to launch 70 new electric models by 2028. And even Honda announced that it is the first carmaker to receive regulatory approval to sell Level 3 self-driving cars in Japan.
Clearly, the industry is gaining momentum as more and more companies roll out their own electric vehicles with self-driving technology.
2020 simply set the stage for these companies to drive innovation in the EV space. And it’s setting up a whole wave of profits for EV producers this decade.
The $4 trillion market for electric vehicles will continue to grow as more players enter the ring. And it’s multiples larger than the consumer market for televisions, personal computers, or smartphones. Even though annual production may be higher for smartphones, PCs, and televisions, the average price point for EVs will ensure that the market remains profitable for years to come.
Total EV sales are predicted to hit north of $60 billion by 2030. And as EV costs go down, these cars will see even wider consumer adoption across the globe.
Quite simply, it’s a trend that will gain more and more momentum over the next few years… and it represents one of the most profitable opportunities for smart investors.
But this begs the question: How do we profit?
How to Profit From the EV/ Autonomous Driving Boom
I’m on record as being bullish on Tesla in the long term. As I mentioned, I recommended my Near Future Report readers build a position in the stock back in 2018.
At the time, the stock was trading at an enterprise value to sales ratio (EV/sales) around 4, and its enterprise valuation stood at $68 billion. I saw an opportunity for my readers to jump into the stock while it still had some fantastic growth ahead of it.
With all that being said, you might be surprised to hear what I have to say next: I do not recommend readers buy Tesla’s stock right now.
Right now, Tesla is simply too overvalued. Shares are now trading above $700. They were trading at a comparative bargain back when I recommended the stock. But today? The risk/ reward setup simply isn’t attractive.
But here’s the good news. We don’t have to buy Tesla to profit from its dominance…
And it all has to do with Elon Musk’s secretive project: S.A.V.
What is Project S.A.V.?
Put simply, it is the future of transportation. It is the “marriage” between electric vehicles and self- driving technology. And it’s coming faster than most expect.
And I’ve found the ideal way for investors to profit from this emerging trend. It all has to do with a little known Tesla supplier. This company produces a key piece of technology for Elon Musk’s Tesla. And it is this technology that will make S.A.V. possible.
I’ve put together a special presentation with all the details. Go right here to get started.
Regards, Jeff Brown
Editor, The Near Future Report
P.S. As I mentioned above, several of my readers probably thought I was crazy to recommend Tesla in 2018. But as we saw, I was right about Tesla. And I believe the company linked to S.A.V. could be an even better opportunity today.
If readers missed the rally in Tesla, then I’d encourage us to get the full story. Go right here.