At around 1 trillion USD market capitalisation, in my personal opinion, Tesla Inc. the electric vehicles producer, is grossly overvalued. I estimate the long-term intrinsic value of Tesla is 120 billion USD.
However, if Tesla succeeds in developing artificial intelligence good enough to power autonomous vehicles, then Tesla's valuation story changes dramatically.
If Tesla manages to produce good enough AI to enhance self-driving vehicles it can charge much higher prices compared to the cars it currently produces, because it will save people the ultimate limited resource - time, along with effort and money.
Which will be remarkable, as Tesla is primarily active in the luxury vehicles sector and there the prices of vehicles are quite high, since this part of the vehicles market is boutique essentially in nature.
However, the current state of artificial intelligence is akin to the intelligence of a two year child. And that is in the words of leading proponents, analysts and scientists in the field. Which means artificial intelligence or AI cognitive and 'thinking' capabilities can possibly be even less than that of a two year child.
As with every innovative, evolutionary, breakthrough technology, the outcome is usually binary at the very nascent stage. Autonomous vehicles are currently faced with a 0 or 1 outcome. Either AI to drive autonomous vehicles will be a resounding success or it will not live up the the current expectations as artificial intelligence, AI algorithms have done several times in the past 70 years.
Personally, I think artificial intelligence can be significantly better developed than its current stage.
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