About Tesla

$Tesla(TSLA.US)

Last year, before Tesla's shareholder meeting, there was a major event where shareholders voted on whether Elon Musk could receive his equity incentive. At that time, Elon threatened that if he didn't get this incentive, he would consider leaving with FSD and Optimus because he needed dominant control over Tesla.

In fact, as early as the latter part of the Q1 2024 earnings call, Musk repeatedly emphasized that Tesla is not a car company but a tech company. By then, he was no longer just making excuses for the poor performance of a car company's financial report but was determined to change the public's perception of Tesla.

Car companies and tech companies are two different types of investment targets, with different risk-return profiles and investor preferences. Not everyone can readily accept the changes he brings. Faced with increasing skepticism from old shareholders who thought they had invested in a car company, perhaps only absolute control could reassure him to continue developing his career at Tesla. He didn’t want to pretend anymore.

The controversy ended with most shareholders voting in favor of the incentive, although the court is still ruling, and Elon hasn’t mentioned leaving since.

If Elon had left back then, would Tesla really have collapsed? I don’t think so. When both the car manufacturing and AI sectors grow large enough, resource competition increases, synergies decrease, and marginal returns inevitably decline. Forcing them into one company might limit growth; splitting them could be a better option.

As a car company, Tesla could focus more on being a car company—developing more models, optimizing hardware, from energy storage batteries and charging stations down to air circulation systems. Technologies currently neglected could be further refined. Not to mention the long-overdue Robotaxi commercial platform. Even as just a car company, Tesla would still stand out, with endless possibilities.

On the other hand, there’s the tech side of Tesla. Unlike the fiercely competitive generative AI, the general AI model referred to by FSD has almost no rivals in the market, leaving competitors no room to enter. This gap largely stems from Tesla’s advantage in training data. Applying evolved general AI to Optimus would be the next logical step. This is also Musk’s biggest confidence in justifying Tesla’s soaring valuation.

So, would Musk really leave Tesla? At least for now, I don’t think so. The tech division is like a hungry baby. Unlike generative AI, general AI has very limited data sources. As a whole, Tesla possesses vast real-world data, giving it a unique training advantage—no need to buy data or worry about scarcity. The vehicle business benefits from FSD’s iterative progress while continuously supplying training data for general AI. This is the most efficient and logical approach.

For a split, the ideal scenario would be Musk spinning off the tech division and privatizing it while retaining majority control of the car company. Then, appoint a like-minded professional CEO to ensure smooth collaboration without future concerns. Yes, no need to worry. Tesla, equipped with FSD, can never be just an ordinary car company again. Whether as one or two entities, the vehicle and AI businesses will remain deeply intertwined. But for now, the timing isn’t ripe, and Musk isn’t ready.

So, is Musk short on money? At least by the standards of majority control plus privatization, he’s far from having enough. The valuation is his own claim—no backtracking, and it wouldn’t help anyway.
Does Musk still love cars? The truth is, he might never have loved them.
But one thing’s certain: he truly loves TESLA.
After all, as he said: I do deliver.