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ARK's Latest TSLA Price Target for 2026 - YouTube
Channel: Tesla Economist
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welcome to the tesla economist please
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hit the thumbs up and remember to
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subscribe you can follow me on twitter
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and talk to me on patreon
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so arc invest have once again updated
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their price target for tesla which i
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thought was worth reviewing now of all
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the analysts and fan managers kathy wood
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was one of our favorites she had the
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nerve to tell everyone tesla could see
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massive returns setting a price target
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of four thousand dollars however that
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was the pre-split price so it would just
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be 800 equivalent today at that time i
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believe the next highest price target
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was only around 500
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and kathy wood is throwing out numbers
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eight times as high but it wasn't just
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her i mean if you believed in an
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electric future could understand how
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much margin tester could generate and
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believe they could ramp up then the
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numbers were not that difficult many of
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us also arrived at similar figures and
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thought tesla could actually warrant
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such a high price tag by this stage and
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that's what kathy wood was for she was
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our voice our public relations as an
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investor an authority figure that also
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confirmed our beliefs on how well tesla
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would do and made sense to us whilst all
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the other supposed authorities were
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telling us it's going to go bankrupt
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like every other auto startup and that
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it's the short of the century and she
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was mocked somewhat mentioning these
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crazy price targets and she ended up
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being wrong tesla reached that price as
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early at the start of 2021. despite
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kathy woods what many regarded as crazy
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aspirations for tesla tesla stock hit
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that price earlier than even she
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predicted and as a result she received a
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lot of kudos for predicting that it put
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her on the stage she had the fortitude
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to maintain her conviction with tesla
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even through all the volatility and
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drops that we all saw this has resulted
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in arcs tesla price targets now being
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put on somewhat of a pedestal a lot of
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pressure to get it right and we had all
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these lockdowns and arc was invested in
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a lot of the industries that benefited
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from those invested in companies like
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zoom which also went up nearly 10-fold
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over this period kathy would look like a
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hero anything she touched turned to gold
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the arc etf increased about three or
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four times it was a popular investment
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it was a fund set for growth
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except the economic climate changed
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growth companies are great where money
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is just about free as in very low
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interest rates but when rates start to
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creep up the opportunity cost on the
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return increases significantly on top of
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that more people were able to get back
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to their work or offices and the period
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that made other parts of arts portfolio
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prosper were no longer looking so good
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either ark is now trading close to
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one-third of its value from its all-time
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high now we have to bear in mind that
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cassie wood has to manage a lot of
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stocks and not just from this one etf
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but multiple therefore it's axiomatic to
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assume that she simply can't know tesla
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as well as someone who studies only
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tesla like many of us yes she can hire
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professional stock analysts to work
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full-time on researching tesla in the
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industry with a good budget and great
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contacts but they likely don't have the
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same passion nor do they even have as
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much invested in tester as many of us
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they just need to look like they've done
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a good job and tarshikini seems to be
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the person who has assigned this task at
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arc but understanding tesla is about
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much more than studying financials you
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need to have a good knowledge of the
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inner workings of battery cells you need
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to understand even the different
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minerals that go into a cell along with
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the mining practices then all the
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associated manufacturing along with the
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actual ev industry and specifications of
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the vehicles this is a lot to fully
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grasp in the tesla community we're
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fortunate enough to have people with all
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sorts of backgrounds in chemistry
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physics batteries manufacturing
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economics and more who are actively
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involved with and discuss their various
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ideas and theories then some of us get
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to even talk about our theories for say
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10 minutes or so with others who are
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also well versed in the subjects and
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then get tons of feedback in comments
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from people who've been listening i
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don't think any stock analyst does this
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they have to use the conventional means
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of researching and analyzing and it goes
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further than that too now cathy wood has
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already got an arc on the radar from
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their previous success and a lot of it
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coming from tesla well now as a result
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these arc tester price targets are
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looked at as one of the most important
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price targets from the professionals but
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now arc is on the radar their objective
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is to get investors rather than
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headlines therefore arc need to think of
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a price target for tesla that will still
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make them look good whilst not making
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tesla look too good i mean what if they
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came out of a ten thousand dollar price
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target they think you could 10x your
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return in tesla in just a few years
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whereas the arc etf might have only
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doubled by that time implying tesla
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would have been a much better investment
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so it's a bit of a dilemma creating a
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price target for only about 10 of your
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portfolio whilst trying to make the rest
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of your portfolio justified therefore we
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go to the basis of how capitalism works
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from the legendary adam smith himself in
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how people are motivated by their own
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self-interest arc wants what's best for
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arc a tesla price target that will
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motivate people to invest in ark instead
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of tesla therefore i think arc would
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start with the price target that would
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be best and somewhat work back from
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there now we've just had this updated
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arc test the price target for 2026 and
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the expected value is 4 600. now if this
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was a cheerleading channel we would
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focus on that and how an amazing return
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that would be for us and praise how
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amazing cassie wood is because she is so
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bullish on tesla and she's super smart
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and she gets tesla etc etc but now we
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don't simply accept price targets here
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and just increase our conviction as a
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result we like to analyze what others
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are thinking in order to improve our
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thinking for ourselves personally as an
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investor i'd be more than content with
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four thousand six hundred dollars in
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fact for my lifestyle i'm content with
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the current stock price but to me and a
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lot of others tesla is about a lot more
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than just the stock price the stock
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price is just a lagging indicator as to
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how the masses view tesla's success
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tesla has a really big mission though on
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an exponential trajectory if tesla are
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at a stock price of 4 600 then the
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mission is likely not going as well as
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we hoped so i would possibly
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disappointed if this is the case okay
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either way we expect that a lot of time
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and investment has been spent on this
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report so we may as well take a deeper
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look if we compare it to the price
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target for 2025 that we received last
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year well arc only had a price target of
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three thousand dollars i get the
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impression that this means arc are
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feeling more bullish on tesla that's
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over fifty percent increase in just an
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additional year also with a bull case
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now close to six thousand dollars so
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where is this value to tesla comprised
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well arc have 54 of the ebitda coming
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from robo-taxis all right so in this
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scenario arc are expecting robo taxis to
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be a functioning part of tesla's
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business i mean elon seems pretty
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confident fsd will be safe as a human
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this year so robot taxis could certainly
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be operational by 2026 particularly if
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tesla are going to start producing their
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dedicated robot taxi in only a couple of
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years or so now these robot taxi
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earnings are proportion of a total of
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280 billion dollars in ebitda so ark
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think that despite reaching 280 billion
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dollars ebitda by 2026 the stock price
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would only be 4 600 i mean if you take
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away tax and the depreciation is going
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to be negligible by this stage and
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you're still sitting at around 220
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billion dollars at least in earnings in
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other words they're placing a p e ratio
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of about 24 and that's when robo taxis
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have been proven to work and already
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generating over 100 billion dollars in
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earnings and this is for a 5.3 trillion
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dollar tesla market cap and 62 of that
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value is from robo taxes too we've seen
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the robo-taxi numbers they are much
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higher than that if tesla has reached
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this level of rabbit taxis then their pe
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ratio should also be much higher
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robo-tax evaluation to tower over
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everything else arc have also added
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tesla's ride-hailing service too kathy
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wood has talked about this before and
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said she thinks tesla should first do a
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ride hailing service before integrating
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into rabbit taxis personally i think it
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is not at all realistic it's like taking
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two steps back it would require a lot of
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investment and headaches and to only be
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replaced within a short period by robots
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i think it's nonsensical and would be
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concerned if tesla did take this path
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but arcs seem to still be pushing for it
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we're also given this table showing a
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contrast between their bear and bull
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outcome but not unfortunately their
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expected case but in the bare case they
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have 10 million cars sold in 2026 and 17
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million in the bull case despite elon
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saying it's probably about 10 years away
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until they hit 20 million vehicles not
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four years away this is quite the
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contrast okay sure we hope that elon is
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sandbagging but still 17 million
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vehicles a year by 2026 sounds like a
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stretch even from some of the biggest
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bulls in this community the average
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selling price well we have 37 000 in the
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bear case and thirty thousand in the
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bull case okay these are exceptionally
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low we might have thought that this
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could really only be from arc thinking
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test over at least a twenty five
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thousand dollar model after all and that
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might be why the sales are so high too
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it's not until we get into the actual
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model in the spreadsheet we discover
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what they really think has happened well
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yes they do think that tesla launched a
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twenty five thousand dollar vehicle and
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they're giving it an asp of twenty seven
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thousand dollars they're calling it the
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model a i don't like people calling it
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that as ford has the model a trademark
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and they aren't giving it up and we all
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heard elon say on the last earnings call
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that tesla are not working on the 25 000
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vehicle not only that ark seem to think
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that by 2026 tesla would have also come
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out with an even smaller ev called the
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neighborhood ev for fifteen thousand
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dollars
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not only that but tesla will have also
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made an even smaller micro mobility ev
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for around seven thousand dollars oh and
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apparently the total adjustable market
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for this vehicle is 10 billion more than
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the population on the planet i don't
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think they understand a lot of other
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price targets also still trying to
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explain how tesla can reach 10 or 20
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million vehicle sales they must achieve
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this by offering very low cost vehicles
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or reducing their prices significantly
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for supply and demand i think it's more
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the opposite tesla are adding so much
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value that this is a different product
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class from a typical vehicle when you
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buy a tesla you have a vehicle that can
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drive you anywhere and for a very low
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cost this is incredibly more valuable
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than an ice car that you have to drive
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everywhere and costs a fortune therefore
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i don't think tesla need to reduce the
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cost of their vehicles like people think
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it's the actual cost per mile that
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matters which is why robo taxis are so
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beneficial but also the time it would
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take for tesla to launch just a twenty
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five thousand dollar model let alone
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another fifteen thousand one and then a
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seven thousand one oh and to have ramped
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up significantly by 2026 well it just
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sounds bizarre to me i actually think we
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do need lower cost electric transport
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but i mean low cost like 2 000 or so
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probably an electric scooter or
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something but elon has said tesla won't
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make two-wheel bikes because they're too
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dangerous they also seem to think that
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tesla are hitting up to a 46 gross
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margin on these vehicles despite such a
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lower average selling price now when you
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lower prices you tend to lower margins
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but arc think the opposite will be true
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the bear case thinks that tesla will
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also have reached rabbit taxis but still
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using ride hailing about as much whereas
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the bull case is showing robo taxis are
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doing very well then aside from
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insurance there were no other products
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that tesla sell apparently in order to
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boost the share price i mean you would
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think that if you're going to suggest
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tests that are capable of making a 7 000
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micro ev by this stage then they
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probably made some progress on the
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humanoid bot but not only that if
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they've got battery prices as low as arc
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are implying then where is the energy
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business i think if they added energy
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then the numbers get too big no mention
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of hvac or anything else either but not
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only are the van and roaster also left
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out so is the semi-truck i think the
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semi-truck will be a huge part of the
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business it feels like ark have just
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gone off then their own little tangent
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of where they think tesla should be
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headed the way they perhaps understand
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the company it's all very strange and
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contrary to what a lot of things elon
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has said in the past i don't see this as
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the future i believe tasha kini is
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actually quite into the autonomous side
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of things so perhaps there is more
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credibility in her belief as to the
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success of rainbow taxi which may be the
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positive to take from here as far as the
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product makes with the price points i
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can't see that it's just kind of a
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strange price target but it's good
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motivation for me to redo mine thanks
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for listening please hit the thumbs up
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and subscribe you can follow me on
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twitter and talk to me on patreon
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