Hacker News Reader

Comment by asdf21 | Hacker News Reader

I will be shorting this stock. It's obvious to me that Tesla will be eating Uber's lunch when it comes to Autonomous driving. In fact, I believe this entire IPO is just a way for investors to try to minimize and spread out the losses they know they will incur from Uber going under.

View on HN

Nothing is obvious when it comes to how autonomous vehicles will shake out.

That autonomous driving is coming is inevitable. The scale and timing I can debate though.

A moon base must have seemed inevitable to those in the 1960s too.

1960s is a bit too optimistic. I personally think it'll happen in the 1970s.

If building a base on the moon created wealth and would have rewarded the builders with billions of dollars, then yes, we'd probably have a base on the moon by now.

Not much money in moon bases. Transportation industry is over half a trillion $ though.

Chris Urmson, co-founder of Aurora and former cto if the Google self driving car project doesn't expect to see autonomous vehicles such as robotaxis scale broadly for 30-50 years. His time frames were a fair but more aggressive a few years ago before he had hit self-driving car puberty.

Autopilot's true believers have yet to recognize the full scope of the problem.

> Autopilot's true believers have yet to recognize the full scope of the problem.

Those guys have their head in the sand about autonomous cars effects on congestion.

Well that’s another issue. I don’t drive into my relatively nearby major city much these days because of traffic (and because it’s nearly an hour in any case).

If I could be driven at minimal incremental cost? A whole lot more.

And I doubt I’m atypical.

If I want to invest in autonomous vehicles why am I buying stock in a money losing taxi company instead of a company that makes money and is doing self driving car research.

Are you referring to buying Alphabet stock (Waymo) or GM stock (Cruze)?

Uber and Tesla are both highly unprofitable companies, so you couldn't be referring to either of those.

Exactly.

First I thought your predictions were my favorite part of your comment, but your confidence won out.

Thanks, I enjoy it. Gives me something to link back to once I'm correct.

I mean, Uber's financials are a total mess, and their valuation is 100% predicated on "winning" at autonomous driving, and Elon just said that everyone using LIDAR platforms are fighting a losing battle, and I personally believe him.

Plus he owns the lion's share of the electric car supply chain, so...

Tesla's balance sheet is not in great shape either, and lately Musk seems to be heavily leaning on the autonomous driving network idea as a justification for raising additional capital (largely through dilutive equity offerings of course, since the corporate bond market has had enough of Tesla's shenanigans and they want over 8% interest on unsecured debt).

Also, Tesla is heavily all-in on computer vision - I would be hard pressed to name a single person alive who has a bigger conflict of interest than Elon Musk when it comes to giving advice on the feasibility of vision-based AD. Consider your sources...

Tesla is also just a battery company. They're not specialized in A.I. or even scalable car manufacturing, as they've struggled to hit quotas.

The final computer vision product they're trying to build isn't something you can just bootstrap your way into. Or even will, because building fleets of self driving cars means less car owners and customers for your main business.

If you believe in Tesla autonomous driving you should just buy Tesla stock.

I would, but them being successful at autonomous driving is already priced in, at least to some extent.

Do you think Tesla stock is currently undervalued, assuming they will become a leader in autonomous driving within the next five years?

It's not obvious to me that Uber stock is not also priced for a future where autonomous driving solves a lot of their current problems, do you disagree?

Waymo valuation is estimated at somewhere between $80 to $175 billion (https://www.pymnts.com/news/investment-tracker/2019/funding-...).

Tesla is currently at under $50 billion.

Currrently the markets seem to value Tesla's self-driving technology at about $0.

I happen to think that Tesla has about the same chances of winning self-driving as Waymo, so it should be valued, today, at least $80 billion + whatever the value of car and energy business is (let's say $30 billion).

And those are valuation today, when neither company has demonstrated a working product.

When they actually start a robotaxi service, even in very limited way, the valuation will skyrocket because the consensus is that this is a market that favors natural oligopoloy (2-3 national providers) and the revenue potential is in hundreds of billions, which would lead, eventually, to a trillion-size valuation.

Tesla has a market cap of $42bn, so an EV of under $60bn. If you believe Tesla will be the first to market with their autonomy network, it's hard to see that as anything other than a bargain. They'd potentially bankrupt Uber if they're still paying for drivers while attempting to catch up.

It would be a hell of a moat; anyone who wants to compete has to burn a ton of cash to develop autonomy and buy a massive fleet.

I don't think the market has priced it in; I think it has pretty much disregarded Tesla's claim of leadership.

There are 268.8 million vehicles in the United States. Uber's software and be can use to capitalize on the majority of these vehicles. If they pay their workers a bit more and spend a bit less on the R&D the supply of workers will increase.

https://www.pbs.org/newshour/economy/why-uber-and-lyft-drive...

I think both TESLA and UBER are 20 years away from fully automated vehicles on US roads. Show me technology that supports autonomous driving from Denver, CO to Salt Lake City, UT any day of the year in any weather when roads are open to human driving and I will change my view.

From a stock valuation perspective the question then is; Which of these companies will be the most profitable in the next 10 years? Both firms seem to be spending all available cash and capital on growing their companies fast. While betting on the completion of future technology to sustain their business in the long term.

For this reason, I would short stock on both firms in the short term then switch to long positions if either of the companies had tangible indications of mullite year profitability.

The cost to borrow this garbage is going to be astronomical, just like Lyft.

Can't you just buy options instead?

The time decay will also be astronomical on options.

It’s hard to short an ipo and insanely risky. Uber could pop big on day one and wipe you out even if the price collapses later.

“The market can stay irrational longer than you can stay solvent.”

You can hold a short position for a long time.

The longer you hold it, the more it costs you in fees, but it's not like you have to cover 5 days after taking short position.

You'd be wise to first discuss this with a practitioner in the field, who will tell you unequivocally that Tesla's (and everybody else's, including even Waymo's) claims that L5 autonomy is coming "real soon now" are utter and complete horseshit.

Although, scratch that, it's your money, so yes, you should totally short it. I'll be on the other end of your bargain.

I drive a Tesla on a daily basis, so I have some idea of how close it is.

I never said I thought it would happen in the next two years (it's possible, in some limited region, but not probable) -- however I believe Elon when he says Lidar is too expensive for this application and the companies using it are betting on the wrong horse / protocol.

Also, as I said in another comment, he owns the supply chain and his network / fleet data set will be much larger for the machine learning that is needed.

> I drive a Tesla on a daily basis, so I have some idea of how close it is.

Come on, this has to be self-parody at this point.

Reply on news.ycombinator.com