Thanks To Robots, Tesla May Someday Be Worth As Much As Apple (TSLA)

It might sound 'delusional', but Elon Musk says he sees 'a clear path to that outcome'.

Tesla TSLA Supercharger

Tesla’s (NASDAQ:TSLA) current market value is pegged at more or less $50 billion. Apple (NASDAQ:AAPL), on the other hand, is worth over $700 billion. At their first quarter earnings call, Tesla’s big boss Elon Musk made a bold (but no longer so surprising) claim that the company will one day be able to catch up to Apple and make its value climb up to $700 billion. And it’s their robot and software technologies that will make this possible.

According to Musk, their upcoming Model 3 is currently being made in a production line that’s comparable with the world’s best car makers. While that might be impressive enough, it’s going to get even better as a result of future advancements.

Musk is referring to the ‘tremendous amount of software’ that Tesla will use to go at ‘the machine that builds the machine’ — the ones that will make the Tesla Model 3 and its batteries.

To build its cars and ensure that they are able to meet their demand, Tesla has new production lines scheduled to roll out in the next few months.

There’s the former NUMMI factory in Fremont, California which is being rebuilt and upgraded so it can increase its annual production output from 100,000 cars to 500,000 cars by the end of 2018.

Then there’s the Gigafactory that Tesla is building in the Nevada desert. ‘Giga’ is the perfect description for a factory that’s going to hold the record for being the world’s largest building once it’s completed. At 5.8 million square feet, it can supposedly house 3 (maybe 4?) Pentagons. And at its full capacity, it can produce batteries faster than the rate that bullets can be shot out of a machine gun.

As described by Inverse, the Gigafactory will be run by a combination of big and small robots capable of charging themselves during the day, and carrying and moving car parts (weighing up to 90 Kg for the small bots and up to 360 Kg for the big bots) from one section of the factory to another.

“This is not just a bunch of robots that are sitting there. It’s programming of the robots and how they interact. And it’s far more complex than the software in the car,” explained Musk in the earnings call.

Although there are those who remain skeptical not just about Tesla being ‘overvalued’ (others still have a hard time believing that Tesla is just running a little far behind General Motors’ market value), but also regarding the company’s capability to deliver their products (specifically Model 3) at volumes that justify the company’s current worth, it’s also hard not to believe that if anyone is capable of overcoming seemingly insurmountable odds, it’s going to be Musk.

If Tesla’s ‘robots’ are as special as Musk is painting them to be, then they can probably build Tesla’s cars not just faster but maybe at cheaper costs as well. And if this is what happens, then the Palo Alto, Calif.-based company might really be on its way to reaching its multi hundred billion dollar potential.

Reference: MarketWatch

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