Where will Tesla be in 10 years? (w/ @HyperChangeTV)

[Music] Hey guys! Welcome back to yet another episode of the New Money Advent Calendar. We're still going strong, and a very special video is coming in for you guys today - another collab! This time with my mate, Gally Russell, over in Seattle at the moment from HyperChange. How you doing, mate?

Great! What up, Brandon? Great to be here. How's your Tesla going? Tell me about your Tesla! I've been so keen following your channel, seeing you scoot around in it.

Fantastic, dude! Life is coming full circle! Tesla stock mooned so hard, I actually got a Tesla! Which is like - and you know how high my expectations were for my Model Y? I have to say, it like literally blasted through them! Delivered on every level! I'm just on the highway, auto piloting, like bumping Joe Rogan, living the dream. You know, get my software updates. No more range anxiety! I was a little freaked out about that, but even the range is like - I'm driving all around town for a week, I don't need to charge it!

You're about to get yours, right?

I'm so excited for that! Soon it's coming. It's kind of - we don't have the Y over in Australia yet, but that's one. I've got absolutely no idea when they're going to make the right-hand-drive Model Y. I've got absolutely no idea. It seems like it's roughly - how long have they been making them for? Almost a year now. Hopefully soon, right-hand drive.

But anyway, wow! See, you're making me feel better because everyone has a Model Y here, right? But now I'm like, "Oh, Brandon can't get one in Australia!" Like, the new thing. It's all good!

Yeah, yeah! You lucky, lucky Americans here! But you got the refreshed Model 3, right?

Yeah, refresh. Yeah, I mean, that's the line and the range bump. I don't know what's going on there, but yeah. The new center console! So, yeah, it'll be interesting. I have to make a video about it when it comes! But yeah, I'm super pumped. It's going to be great!

But I want to get stuck into talking about your - well, I want to touch a little bit on how you got started with Tesla stock. Because you, if like, obviously, I know you, but a lot of people don't - you're not someone that just got in like halfway up this massive 10x that we've had in the last year. You've been following this company for like years and years and years. So, how did you actually get started? How did you learn about it and actually want to invest in it?

Totally! This has been a very long-term relationship with Tesla, starting back in - I want to say like 2009, 2010. I was in high school here in Seattle, and Tesla had just put out the original Roadster. This was kind of like this, like ooh, kind of cool party thing we were talking about. Wow! This electric car is like 200 miles of range! Like, actually, actually good range! And there had never been an electric car that was cool. And so, the Tesla was cool! And my mentor - like stock mentor - was my friend's grandpa at the time, had won a test drive in the Tesla, and he went and told us how epic it was and gave me this hat and was like just telling me about it. And I'm like, "Oh my God! Like, they actually made a cool electric car!"

And as someone who grew up in Seattle, we kind of have a big outdoor culture here, very climate-focused, sustainability. So, that's always been a great passion of mine, and I always didn't know how to like channel my passion for the environment. And then when I saw Tesla and Elon, it's like, okay, the Roadster is coming out now, but you read the master plan! This is not just a sports car company, this is a vision to change the entire way the energy and transportation system works, starting with a sexy sports car, moving to make sexy sports cars basically everyone!

Like, the Model Y I drive, I feel like is faster than a Ferrari! You know, pretty much! Like, it's the fastest car on the road! So, it was this amazing hybrid of doing the right thing and being really good for the world, but also my fascination of high-tech disruption, amazing companies I could make a huge fortune investing in this vision. That sort of business excitement with we're making the world better if this succeeds. And to me, there's no company still to this day, ten years later, that I feel like has such a big overlap there. So, yeah, you know, once you find that out, it's off to the races!

Yeah, no fair enough. When you invested in Tesla back then, obviously, it's a much more nervous, speculative kind of stock investment to where it is now. Like, obviously, it's gone! It's de-risked so much over the past, well, probably since the Model 3 ramp. Was that something that kind of concerned you way back in the day? Or do you just like, yeah, it's risky, but you know, kind of that Elon quote, you know, if it's something that's important enough we should kind of stand behind it kind of thing?

Totally! I mean, I was so fortunate that I was so naive in some ways because I was buying Tesla at a 3 billion market cap at $28 per share in 2012 was when I really started first buying it. And you know, I was like what, 18 or 19 at the time? Did not, you know, I've been investing for four years, but I just was like, you know, this is a company doing like 100 million in sales at 3 billion. It's a 30! At 20x price sales multiple for a car company that's losing money! It's just a toy for rich people!

You know, there was no question in my mind that Tesla was gonna have to dilute and keep coming back to the capital markets for years to get to be successful. So, it was so – like, it almost took that insane naivety to believe in it because there were no financials that worked! I hadn't driven in a Tesla! I barely - you couldn't! I was in New York at NYU my freshman year of college, there were no Teslas around! Like, if you go look at my Instagram two years into NYU, I found my first Tesla in New York, and I was like, totally lost it! You know, because I was so – like I'm sure how you feel when you see them in Australia for the first time.

Yeah!

But yeah, it was a totally different story! And I would say even until a year ago, I was still like kind of walked and laughed out of the room in, you know, these investing and economic circles for actually thinking Tesla would be a strategic investment and a well-run company.

To be honest, like I've been following your channel for a fair while now because I love the content that you make, and that really, it annoyed me seeing that! And it seemed like it, you know, wasn't it was you, but it was also other people that were, you know, all for Tesla and, you know, not people that were just like, oh, Tesla, you know, I love it! I love it with no actual reasoning behind it! You're making solid points! Like, I can't argue to that! Like, he's right!

But so many people just continued, I don't get why, why did Wall Street just hate Tesla for so – I mean, clearly, they must love it now look at what the stock are – well, I guess like some people still hate it even now! But how did you kind of get through that?

I'm thinking of like a funny analogy of where the entire world of Wall Street and business school was almost like more concerned with like thinking that they sounded smart! Almost like, I don't want to say like liking the smell of their own farts, but that's like the phrase that comes to mind of like they would just like say something that sounded smart and want to hop onto it! And of course, the economic recession happened! So, I grew up in, you know, '0.9010' was coming up in the market!

What was the thing? It was viewed as to be a shrewd skeptic was the in thing of the moment! You know, because everybody there was a shrewd skeptic of the bubble going up to '08 saying the housing market's this, it's a total scam, it's a total fraud! They were right! And so, everybody in business school is saying I gotta be that guy to call out the fraud! You know, everything that's good is too good to be true!

And so there was this mentality on Wall Street that to be the smartest guy in the room you were that one guy who said, "No, this isn't right, it's a total scam, it's gonna crumble!" And so there was that mentality and everyone thought that Tesla, they could be the smartest guy in the room by predicting Tesla's failure, but they weren't doing the homework!

And so I think there was this really kind of clouded mentality of like, let's try and sound smart and be a skeptic versus let's start from the first principles and see what we're looking at here! Like, you know, I would just start every video being like this is the chart of how many cars Tesla sold, it's like this every single year, they're making a huge record! It's going up! It's like, it doesn't take a rocket scientist to figure out this is a huge exciting trend!

And so it was this big schism of one world just focusing on the news and the clickbait and, you know, what we could get angry about at Tesla today versus the group of people looking at the data and the financials and the numbers and, to use Elon's thinking, the first principles approach. And that's what really, you know, let us see through to the data that Tesla was crushing it!

Oh, I'm glad that you were able to do that and not be put off! Because even I remember when I started out on YouTube and you get like negative comments. Even you're just like, oh, okay! So dude, you probably experienced that! Like, your career is over! Like, bro, like you're young and you're gonna put your career on betting on Tesla? Like, wait till this fraud crumbles! Your entire career's you're gonna be a laughingstock!

Like, people would comment to me like you're literally gonna be a case study on insanity in business because so many people thought you were right! And you led so many people, like Jonestown to the poison Kool-Aid! You know, I even have my friends being like, bro, you got 30,000 subs! That's 30,000 people's life savings that are gonna implode because of you! Even though I'm not a financial advisor and I never tell people to follow my advice!

Like, the amount of like weight on your shoulders because you know…

Yeah, no, that's crazy! Well, well done on getting through it!

So I don't get bogged down too much into the real basics of kind of what Tesla is. I mean, for people that – I think for the better use of your time is to go deep and try and look to the future and see where you think Tesla's headed. So I think if someone came up to you and they said, hey, like what's this Tesla company? And you kind of just had to quickly explain this is what they do and this is where they're going, what would you kind of say to those kind of people?

Man, this is so tricky! I love to say at the start, walk outside. How many cars are electric? How many roofs are generating energy? Probably zero! I think about the future, 10 years from now, I think that all changes! And so, you can start with that very simple approach of which is the company leading, which is the company doing that.

So I think that's one way! It's like the bigger the problem, the bigger the opportunity! We need to go sustainable energy! You can just look outside and see every single car emitting fossil fuels! Big picture kind of thinking!

Yeah, yeah! And so the other big part of that is the Elon Musk thing! You know, Elon is, as much as the news kind of says he's like, you know, this problem and this crazy guy and he seems like a liability, like to me he's by far Tesla's biggest asset! It's like, you know, I just want to put my money with the greatest inventor and tech disrupter of the time.

And now he's got computers! He's got software! The world's connected! Like the Thomas Edison of our time is gonna make Thomas Edison, the real Thomas, look like a pip squeak for what he did! Because this guy's got so many resources, he’s got the internet, he’s got so many smart engineers! We're in the era of hyper change! Things are moving faster!

So to me, I'm just like, the smartest guy in the world is Elon Musk! You have this inventor who's also a business guy, who's also an engineer – like this is just – he's just such a unique, once in a million years kind of person that I feel so blessed to be able to put my money in him!

And it's like he's like LeBron James playing with kindergartners! And I know that's like too much of an exaggeration, but it's actually like on the EV basketball court right now! I look at LeBron James, he's like dunking on the EV game and his mind's already on the energy game!

You know if I do the analogy for Tesla, like he's already playing the next game! And so to me, I look at this as there's all these industries that have yet to be disrupted by this, you know, visionary inventor who's using software and physics and all the technology available to reinvent industries! And Tesla's going piece by piece! It starts with sport cars, then it moves to mass market cars, then it moves to electric trucks.

They're just going to systematically disrupt every piece of the transportation and energy markets! And so – and I think we're just blessed to be able to mess with this guy, Elon Musk! And I think one of the key components of looking at Tesla's business is because of a large part because of Elon is that now Tesla – I mean, the world's going there and it's completely obvious!

And you hear like the CEO of Toyota speak, and it's still like, oh no, no, no, no! Like internal combustion engines! I think like, was it the CEO of Porsche was just like don’t worry, ICE cars are gonna be around for a long time to come! And then there's Elon saying that's clearly not the case! So, I'm just gonna use my, you know, engineering prowess and the engineering prowess of my team to completely destroy you through innovation and get so far ahead that it really doesn't matter how much money Volkswagen has, you guys are gonna always come second to Tesla kind of thing!

Yeah, and it's just a—I mean, it's a bet against science if you want to bet on the internal combustion engine! I mean, we have energy hitting all of where we live every day that we could plug into our car and yet we're, you know, mining dinosaur juice halfway around the world, using more dino juice to ship it over to us to drive to a shitty gas station!

It feels like we're gonna look back at this and be like this was the dumbest system ever when we literally had free sunlight hitting our house every day and we didn't have to move. Like so from a first principles basis, I can't believe that it's even on the table that we're still talking about the internal combustion engine!

Yeah, well, let's not talk about it because I don't want to talk about it because quite frankly I hate dinosaur juice and I would quite like to move away from dinosaur juice as quickly as possible!

Um, let's have a look! I've drawn up some Tesla schemes for you because I want to see what your take is! So these are just me thinking, doing what you do, think about where the future is headed, but also where the future is headed for Tesla specifically! So where should I start? Where should I start?

Oh, this, this one's been floating around and you’ve definitely heard this one before! When or do you, or if you do think so, when do you think Tesla says, you know what, our mission is to get to sustainable energy, we can now produce just a crap ton of batteries, we're going to actually sell the skateboard of our cars to everyone else! Whether it be just the battery, whether it be the battery and the drive train as well!

Um, how do you see that playing out? Do you see that happening?

I'm a lot more skeptical on that side of the business because I think Tesla is selling half a million cars a year right now! They have a business plan to sell 25 million cars a year! Yeah! And so, and the biggest reason they're not selling 25 million is because they can't get their hands on enough battery packs!

So we need to go from—keep it! Tesla needs to go from 500 million to 25 million worth of battery packs before they even think about letting one go, right? So I think it's going to be a while before they hit 25 million battery packs that they can make! So that's why to me, it's not as simple as software!

It's not like we just coded this and we can send it to Volkswagen and they can do it! You know, they bought a mine in Nevada, they're building a cathode facility in Nevada! Like, this is – there's moving dirt around the world! It's not like you can just click a button and there's more dirt that we can move!

So, there's only so many engineers! They're gonna scale this as fast as possible and I think the highest return on capital for Tesla's battery is in its own products, right? And we still have so many of Tesla's products to put these batteries in that to me, as an investor, the excitement and is zero for outsourcing batteries!

Alright, well I'll ask you that one again in 25 years!

Okay, yeah, ask me again in 25 because everything will go electric!

Yeah, and an interesting part of that was the—yeah, I was just going to say that leads me to kind of talking about, you know, there's Tesla wants to build so many electric cars! Is there a is there a point where, you know, yeah Tesla's business, they almost—the most critical part of their business is no longer—like we look at the financials that come out every quarter and the first number that we look at is vehicles produced, vehicles delivered! Right?

Is there going to be a point where yes, vehicles are very important and obviously the batteries are in the vehicles, but the number one thing we need to be looking at is how many batteries Tesla is producing! What's the production of their battery manufacturing facilities?

Potentially! But I would still say, V, if you're concerned about the battery constraint, which means how many cars can we deliver? Like the cars delivered will capture that statistic because that's why I think cars delivered is such a beautiful and simple way to analyze Tesla!

Because you know that is the limit of their biggest constraint! Their biggest constraint, whether it's batteries or production, I don't know what it is, but it'll manifest in that delivery number! So the thing that I'm really looking to keep track of the value of Tesla right now is this Elon quote; is the amount of cars produced times the value of autonomy!

And so I think we have this very simple equation for amount of cars, but it's like we're at half a million, we'll get to a million, two million, three million, four million, they'll scale that, that battery supply chain will inch with vehicle deliveries for years! And I think that will just kind of be the status quo - is they'll figure out how to scale that!

But this value of autonomy thing goes up a lot faster than 2x a year! You know? And so that's the lever that I think is going to be really exciting in the thesis for Tesla that is going to start driving the story!

So do you think that with that rationale, do you do you think that Tesla energy is kind of, at least for the foreseeable future, going to continue to get, like, come second? I suppose continue to be, you know, yeah we like to make Powerwalls, we like to make Mega packs, but we're gonna do that definitely after we make cars because cars are just going to be too important in terms of where they're going, what they're trying to achieve first.

I would say strategically, yeah! It's kind of like Tesla's a victim of their own success in that their car business is $30 billion a year and like doubling! So it's really hard to make another business look cool compared to that!

But their last quarter for energy, they're hitting their stride! I think they're gonna—well, they're gonna be able to start diverting a little bit of these batteries to Mega pack—like that's the first non-automotive Tesla customer to get batteries is not you know Volkswagen, it's the Mega pack!

And so—and maybe with some new iron-based less density because if you have a Mega pack, this isn't driving around, this battery pack's driving around! So it's a lot more weight, size sensitive! This battery pack on the Mega packs? Not so, they can use a simpler iron-based battery technology for that!

So I'm very bullish on it and I would think, you know, let's remove everything that Tesla was doing with automotive! Let's start just looking at their energy revenue! And just last quarter, they really fired into gear where the Solar Roof is taking off and that's going to start to be positive growth and the batteries are still doing well!

So I think the energy business, if you just start looking at it as a standalone, will actually become a really big exciting business! But it's just still not gonna be—it's not gonna like catch up to the car business anytime soon!

Do you reckon here's a scheme? What comes first? In 25, 30, 40 years time, does Tesla start selling battery packs to other autos or does Tesla become its own utility? Does it start just saying, you know what, let's transition this grid, I'm going to start building Mega packs, and we're just going to start Tesla, you know, like Berkshire Hathaway Energy, it's going to be Tesla Energy and we're going to pump out solar panels and just provide energy! Do you reckon they ever do that?

Yeah, but now you're almost—I almost have a really hot take prediction to make, which is that Tesla will never license a battery pack because why would you license it to someone who's crappier at building a car than you? Tesla wants to be the best manufacturing company on earth! They can build a better, cheaper car faster!

So why would we give our battery to a car company who's going to build a more expensive, slower, crappier car with more humans building it, less sustainably built? Like it's like what's the expertise that Volkswagen is going to bring? None!

So to me, it's this autonomous thing changes it! We don't have 50 car brands scattered around! We have one car brand that runs an autonomous service! And if you're super rich, you have your own car that nobody else is allowed to drive in! If you're not that rich, then you have to get your butt in the seat where other people have their butts in the seat and it's a robo-taxi!

And that industry dynamic is a lot more oligopoly, monopoly s with one or two huge players! Tesla, Waymo, versus fragmentation! And so the entire way that what the car is, how we get around is totally gonna change!

And that's why when I think about that oligopoly future scenario, there's not a gazillion automakers for Tesla to license their battery pack to! There's just Tesla pumping out robo-taxis that need batteries! And they also are the best at building that! Like the aluminum shell is the dopest, lightest, strongest! That's aluminum! They develop, co-develop with SpaceX! They're gonna also license that to VW at some point!

And then they're going to license the factory design to VW at some point! It's like VW doesn't have any value! Like the brand sucks at VW! That's all we're left with!

So this whole theory that there's a huge, you know—and I actually was sold on this in the past and even made a moonshot that Tesla should do this and it's because one of my dumb finance bros pitched it to me! That's the only people who think licensing battery packs are good ideas! Wall Street MBA types who can make a spreadsheet saying if we double the amount of batteries we sell because Volkswagen says "ten million cars, yeah," will make more EBITDA next year! You know, but there's no thinking through!

Volkswagen is not good at building cars! We don't even have enough batteries for five years! And then when you actually play it out, my bet is Tesla never licenses out a battery pack to an auto OEM, especially not a legacy one!

I like it! I like that! I'd like to see that! That would be fantastic! I think the only reason where I think—because I agree with your take, definitely, that that makes sense! Just like why does there need to be 50 car brands? Why can't it just be—I mean, if Tesla's got the best car, then they win!

Why don't they just make their own cars? I think the only potential is because Elon is just so like, my number one goal is to transition the world to sustainable energy! And there's always going to be some, you know, some dude out there that just wants to drive a Porsche! Like, oh no, I don't want to drive a Tesla! I want to drive a Toyota! I want to drive a Porsche!

I want to drive this! So maybe that—there's probably not that many people that care that much, but anyway! I want to talk—so going back to robo-taxis because you touched on that there! This is another scheme! This is another thing I've been thinking about! Is there a point in the future – don't know how far away this is – where Tesla decides to not sell cars anymore and just keep them once they've got this robo-taxi network up? Just keep them for themselves?

Because when you sell one of us a Tesla and we connect it to the robo-taxi network, we're going to get a cut of that revenue! So will Tesla ever just cut out the middleman, which is us, and just say, you know, we're just going to keep all that revenue for ourselves?

Yeah, totally! I think they will! And they've also said that they will start to deploy robo-taxis in certain cities and jurisdictions where they don't have enough people! So they're already indicating that they will basically—and they were like, once you lease a Model 3, we're gonna buy it at the end of the lease!

So it looks like Tesla is saying we know how much value there is in this autonomy software! We will, you know, operate that as a network! And their goal is to reduce the amount of emissions overall!

So I think the really way it'll evolve is some really rich people will have their own Teslas because they don't want to share them! But otherwise—and then Tesla—but you'll have to basically pay the price up front of all the revenue Tesla would have ever generated from that robo-taxi, which might be like 300 grand!

So, yeah, I can buy a Tesla, but it's not $70 grand anymore! It's $400 grand because they're gonna make 400 grand as a robo-taxi! So if they're like, Gally, if you want it, you gotta pay us what we would have gotten for it!

So that's why the price of FSD is the biggest lever! And even though the cost of Tesla's going down, the price of FSD is going up! And soon the price of FSD is going to go up faster than they can drop the prices on the hardware! I'd argue it's already happening!

How big of a player is full self-driving in terms of the future of Tesla's revenue? Because that's something that I don't know that much about! Over here in Australia, it's currently in Australian dollars, the full self-driving package is ten thousand Australian dollars! How—where do you have any rough estimates of where you think that figure is going to go? Maybe in US dollars?

What do you think the actual value is? Because I guess for full self-driving, they always have to have it, at least in the short term, when the robo-taxi network is out, they always have to have it at an equation where it's still profitable for someone to buy the full self-driving package or buy the subscription because otherwise, no one will do it because it just wouldn't be profitable for the robo-taxi thing!

So where do you reckon that balance is? Have you thought much about that?

Hmm, do you—do you get what I'm saying though?

With that! Phrase it again!

So, like Tesla's going to create this robo-taxi network, right? And for a lot of people, that's where the full self-driving package is really—

That's where like—because we can buy a Tesla, it's got full self-driving and it's going to go out, it's going to make us money. Okay so ultimately there's an equation there! Well full self-driving can't get too expensive! Otherwise, we simply won't make money when our car goes out there and is driving around!

So do you have an idea of what you value kind of full self-driving at the long term?

Yeah, I think it's around 200—you know, 100 or 200 thousand dollars! Like net present value! And this is like—yeah! And that's like the same kind of equation and math that Elon was doing at autonomy day!

But I think there's something interesting what you said is that if the value to me is not the - I don't want to make money on my robo-taxi! I want to go wherever I want to go autonomously!

Yeah!

Like, it's not like it's a product! You know, it's a transportation service! I don't want to rent it out! And so I think that'll be worth a couple hundred thousand per car!

And so this is the fun part of why Wall Street now, everyone's scratching their head on Tesla! Tesla's making billions of dollars selling this computer on wheels for, you know, 70 grand! And if they can sell it for 200 grand at the same cost and they're selling ten times as much of them, and their profit margin just went up 10x? You know, this is Tesla just made a billion in quarter in cash flow and we're talking about a 10x amount of cars and a 10x amount of value!

That's 100x! That's 100 billion! And so we make a 10 times multiple on that! And that's—that's a trillion dollar company just from this robo-taxi! And so that's why ARK is getting these crazy estimates!

And I take a step back of like, what is the most valuable company, technology company that I've seen in my generation? Apple! What did Apple do? They turned the phone into a computer! And that com—then everything we could do on this computer—like they got a piece of trillions of dollars in market cap were created on the software eating the phone and the digitization, computerization of the phone!

Now, we're turning the car into a computer! It's a huge smartphone, but it has wheels! To me, this is 10 times more useful! And the amount of—we're going to have tens of trillions of applications created on the back of this autonomous vehicle platform!

Whether it's getting you food, whether it's a bus service, take you anywhere in the city for super cheap at any time even though you're drunk! Like there's the amount of, you know, value we can't even fathom! Like I have an idea! I would love to make a direct to consumer cinnamon roll startup! I heard the story about this like bagel startup in Seattle!

Like freshly baked bagels every day! And like now they distribute them! So I want to freshly make cinnamon rolls! Now I can have my autonomous Tesla delivering all the cinnamon rolls around to everybody! That's like—they're gonna get a cut of my freshly baked cinnamon roll business!

And now I can do that business that would have never even existed because now I have the cheap autonomous safe distribution network for it! So like that is such a lame tiny idea, but Tesla's gonna get a piece of the cinnamon roll business! They're gonna get a piece of, you know, the moving people around business, the hotel business!

Um, so there's gonna be tens of trillions of apps created on this robo-taxi platform and Tesla's going to get to be the toll booth for every single one of them!

That's smart! That's really smart! Because you, yeah, that's right! Everything that requires transportation, Tesla could potentially stick its finger in with full self-driving! Like what you’re saying, like what!

That's—that's such a small idea with your cinnamon rolls, but such a bigger—I mean, you just put a package in the Tesla, go deliver it over there! And Tesla will get a little bit of that revenue! You know, put a person in there, go—put—you know, a person needs to go from A to B or you can even think bigger because like all of Tesla's vehicles are going to drive themselves!

We've got the Semi truck, which is coming out! Sure, there's going to be drivers, human drivers in there, but not eventually! So is there a point in the future where, you know, Tesla starts their own trucking business? You know, Tesla Logistics, trucking logistics! And, you know, all of a sudden they're taking freight all around the, you know all around the world just based on their autonomous trucks!

You know, do you see that?

Yeah, I do! And I love that example of, you know, we’re future-ford thinking Texas investors! Right? So what are we really investing? Not the financials, not the spreadsheets, but the value of that technology!

Because that technology and so to me, Tesla's autonomous technology they're developing, the electric technology developing? Yeah, we're gonna do trucks with that too! So it's like you really have to stretch your imagination of what's possible beyond the financial statements and beyond what they announced today!

Because to me, Tesla's gonna build the home of the future! You know, every single home is gonna go with Tesla with the AC, with the solar, with the car, with the battery! Like this is, you know, the share of human value is hundreds of dollars per month per human! If I can get anywhere for free and I can get my energy for free, and I have my home?

Like that's worth a thousand dollars a month! Probably two thousand dollars a month for two billion humans! Yeah, you know?! So, uh, like that's why I love thinking about this! Tesla as a technology R&D house of dozen startups! The skunk works of the future of energy and transport! Not just one company, Tesla!

Because to me, this electric autonomous truck business is moving stuff around that we're all buying online is going to be a potentially 500 billion or trillion dollar market!

That's true, right? I think that's probably where it's probably a good point to raise as to why so many Wall Street people don't really get Tesla! Because when you're coming at it as an investor, as you do, you do have to think like an inventor! You have to picture the things that don't exist yet!

And because that's obviously what Elon, Elon's doing! I mean, rewind the clock, how long, like 10 years? And it's like a car that drives itself, you know? You see it in a sci-fi movie, but that's not a rule, that's never going to happen! But now, obviously, it is happening, it's very close to happening!

So I think you're right! You have to do—you have to think outside the box! And that's what I think Wall Street people fail at sometimes is because they're so used to just, you know, oh let's look at the auto sector! This is how things are done! This is what happens in the auto sector!

They get the parts together, they glue them together, and then it becomes a Ford truck! And then they sell it! And all of the players do the same thing, but they really fail to do what you do, which is think outside the box and see what potential applications the underlying technology has throughout many, many different industries and the potential disruption!

I think that a lot of people, they just get caught into, I'm just working a nine-to-five analyst job! You know, oh what are the numbers out of the auto industry this month? You know, and compare Tesla how do they fit into that! And they don't really, they don't really use their brain like a lot of like you do!

And you know, Robert Power and Joyce and Matt Joyce, all those guys, I love following you guys because you actually use your brain! You're like, how can this underlying technology work for Tesla? You know, I love I love watching you guys for that!

That's—that's the main reason!

Yeah, yeah! No, it's so true and it's like—and I think we're gonna look back and say, why are we telling this guy who worked for Morgan Stanley who never ran a business in his life was behind token spreadsheets is gonna tell us how to run Tesla better than Elon? And that's what like people believed! It's like, dude, you know, I've had a couple times where like people are just crapping on Tesla! I'm like, dude, what company have you built?

How many people, like have you ever hired one person? No! You know what I mean? So it's like from us, the angle of the entrepreneur like trying to build something so that is you care so much about and everyone tells you it's dumb and nobody believes in you!

Like, you know, to me that was one of the most valuable lessons of looking at Tesla is just a company that's trying really hard and a really bold, gutsy entrepreneur! Like I give so much, you know, respect to that for someone who just sits behind their computer and critiques!

And the fact that the investment world, like, it's almost karma! It's like you listen to these people who are lazy and did no homework, of course, you know, the story was missed! And so I'm really excited about this reawakening that Tesla's had!

Is a huge moment in financial history where, you know, people like you and HyperChange, Tesla Daily, like all these kind of grassroots creator networks have put out the best research on this company!

And the wealth that was created in Tesla, this 450 billion run in market cap, didn't mostly go to Wall Street! It went to mostly retail! And it wasn't to these fat dumb bankers! For the first time, it was for the little guy who earned it! And did the research, and put his money where his mouth is and believed in it for the right reasons!

And this is one of the most exciting things that makes me so optimistic about the future, is everybody on Wall Street wanted to fail! But the collective good of humanity wanting a better, brighter future putting their money where their mouth is won!

And this isn't going to be the first time! This is the new paradigm! And so it makes me so, like, even though we're tiny YouTubers and we feel like we're in our own little world just podcasting from our rooms, like, yeah, this is truly the forefront of, you know?

That's why those Wall Street analysts are out of a job and they're irrelevant!

No, I like it! And I mean you must be doing something right if you're catching the attention of, you know, the CEO himself!

How was it when you—I watched your third-row Tesla interview with Elon! That was crazy! Like, got to go to his house and everything! How was that experience?

Dude, Elon is so cool! Such a nice—I mean, he seems like a very good earth guy! Like, he's the second richest dude in the whole flipper world right now! But he still seems like just a pretty down-to-earth dude, you know?

Dude, he's such a hustler! He built his empire from nothing! He did it for the right reasons! You know, I feel honored to just be in his presence at all! And in that podcast, it's just like I—the part that most people don't get, I think, you know, and it kills me when people say Elon's a dick or he's an a**hole or like he's mean because he's just so not!

He's actually just genuinely a really nice cool guy that I would love to like have a beer with, honestly! And like hang out with! Like that's how awesome and like down-to-earth he is! But also just with this level of like thoughtfulness and mindfulness that I've never seen on another human!

And his clarity—I mean, the dude is—it goes without saying, he's a genius! But, you know, I talked to all these people, Elon is just—I've never, ever, ever met anyone even close in the same room as smart as this dude!

And if—when you meet him, you're just like, oh my god! You know, he's larger than life! He's huge! He's like six five! Boy, he wears these shoes with the heels on him and everything! He's a big guy!

Yeah, that's crazy! When was the first time you met him?

Oh, this is a good story! So I met—so after the, remember, let's go to YouTube moment Q1 2018! Yeah! I got on! It kind of had this crazy moment! I was cheering so hard! Then I was cheering so hard, I was like wait, what? I know that guy! No way! That's it, the Gally I know!

They let him on! Like, is there another Galileo Russell?

No, sorry, continue your story! Continue!

Oh yeah, so I went to the shareholder meeting a month after that! And you know me, I'm like loitering around! I'm like maybe I'll be Elon! Like who knows who will pop out of the side, you know?

Yeah, yeah! Like what am I just kind of like, you know, at the Tesla shareholder meeting, making my friends like wait outside! Like bro, it's over! We got to go to the Airbnb! Like whatever! And I'm like dude, we just—I feel the magic!

And, but they knew me because I was on the call and I hadn't ever talked to the team, but they totally knew who I was because right! I just—the whole viral moment!

And so I get one of Elon's people like pulls me aside, he's like come up here and say, like run up these stairs and I'm just like, yeah, what's up! Like, you know? And then they're like boom, Elon's out there! And he's just like, Elon!

Yeah! And he's like, oh what's up! Nice to meet you! Like, I just—I was totally star-struck! And like, I told him that I was like, yeah I don't know! I was like, bro, you do more YouTube content? Like any way I can help?

Like I don't know, I was just star-struck! And I basically just said thank you for like making humanity sustainable and being my hero! Directly watches HyperChange! You know, I have a sneaky like deep down suspicion that he actually might watch HyperChange!

You know? Do you reckon?

I'm gonna make no comment on that!

No, I don't know! You don't have to comment on it yourself! What about some of the other Tesla guys out there?

I think Elon and his team are very in the know more than people think and I think they know who's doing the best research on Tesla and those are the people they respect!

Nice! No, I think you're right! You know, one thing I wish I could say to Elon because I would not want to waste his time, it's like dude, like I really want to meet you! Like my idol! But in all honesty, don't talk to me because I'm just right!

That's how I—it's like I'm just a mashed potato! Like don't talk to me! Like seriously, your time is better spent elsewhere! But I reckon the one thing that I would say, yeah!

Exactly! I'd be doing those!

I think one thing I would say to him is that he's always like, I think he gets frustrated with how much negativity there is around his company from mainstream media and Wall Street! But when I look at, you know, where's the attention going on the internet right now?

It's obviously places like YouTube! I wish I just, one thing I'd say is you know, you hate the idea of advertising, which is fair enough! You're wasting money that you don't need to waste because you're already selling as many cars as you can make!

But at the same time, you get frustrated with the perception of your company being twisted by malicious people! You know, on news sites, utilize Tesla's YouTube channel much, much more!

I think that's one thing that I would say is kind of like a weird scheme that I would recommend because I reckon they could obviously—they're such a name! Imagine if like when Elon's in his car, he just records like a one minute clip of what's going on at Tesla each week? Just like, I'm sure he's got a minute of downtime where he could just be like, what's going on?

And then hand it to some content manager who can edit a weekly Tesla kind of snapshot! Do you reckon that's something that they should do?

I don't know! I just got thinking about that and I think you—I think you're right, dude! I think they should! Don't spend money on advertising! Spend money on producing content!

That is a million—I’m so on board with you! But now I'm like, your little idea of Elon is Elon should he launch like a micro-podcast like once a week, like just like, you're hanging with me!

Because I look at like the Tesla YouTube channel, and you're—they've got their, you know, live streams and whatnot, but then there's like Model 3, how to open your door! It's like Model 3, how to turn on autopilot!

It's like, dude, there's so much more potential! Like I don't know, just get a content creator, get a content manager and get you—Tesla YouTube could be massive!

Get some videos pumping out about the actual technology and stuff and I reckon they—they already got a massive following! But I reckon they could utilize—there's so much more potential there! I don't know!

And you're harping on them for not using it, but I would say it's—and I think you're right in a lot of ways! They could do better!

But this is actually their biggest strength! Is they lean into this from day one! Like back in 2012! So one of the big things in my thesis is I did a study for six months on the ratio of Facebook, Twitter, YouTube and Instagram, increasing likes and engagement per post of every single car company!

And I published this data! You can check it out in the Value Investing Journal 2012! Right? It is mind-blowing! Like Tesla is increasing at like 80%! Everyone else is like 6%! The engagement proposals through the roof! You could see there was a mountain of data that everyone was ignoring that would have told you this brand was paying for zero exposure and getting unprecedented amounts of authentic organic, you know, marketing power!

Well, every other auto company is paying millions to get less followers and less engagement! And this was like the first tint of my data of like this is Tesla’s a totally different beast! It's insane!

It's such a powerful brand now! I'm so glad that it succeeded because it is now—I mean, it’s going to be very hard for it to fail just purely based on the strength of their brand alone!

You know, you think about an Apple now, they can bump up their prices every year and to no consequence whatsoever! You know, everybody still loves all their phones! It’s just such a powerful brand, which I’m so glad that, you know, it didn't get crushed or stepped on and smooshed!

You know, it actually shone through! I think it's probably a credit to Elon and Tesla not focusing on, you know, spending X amount on advertising! Instead just pumping into R&D, it's just like, we're just going to make the best cars we can possibly make!

And you know, if we do that, then we're going to be alright! You know? So I think we should think about wrapping it up! We've been going, I've taken up so much of your time!

Are there any last minute, you know, schemes that you're currently working on?

They're basically my schemes! I've got a couple more, but they're boring! What are you scheming about in your head at the moment? Is there anything that's really taken your brain in all directions in the last little while?

Yeah, I could give you a kind of interesting one of why is SpaceX raising money at 50 or 60 billion but Tesla's worth 500 billion? You know, if I was gonna—if I was gonna make a radical move, you know, and almost like part of me wants to—this is a very kind of personal story, but I'm like part of me just wants to do the troll move of like cashing out of my Tesla and buying all into SpaceX just to prove at how much of a ridiculous disparity it is that SpaceX trades at half—one-tenth of Tesla!

Because if I could, if it was a one-for-one or one-for-two. I would get it! But this is something that keeps me up all the time is why is Elon Musk and SpaceX willing to dilute his cap table for evaluation that every one of us would be desperate to buy in it twice as high?

Why is he selling it to crappy investors at half the price? And I think there's really—the way that SpaceX is trading right now is not sustainable! And they're gonna open it up to new people soon!

And that is what keeps me up constantly! Is how do we get the people who believe in Mars invested in SpaceX? And how do we get SpaceX to get the capital it needs from the right investors to not dilute Elon Musk so we can focus on Mars?

Sorry I was gonna say, that's something I don't really know much about because it’s not a publicly-traded company, right? So how do investors go about getting into SpaceX?

Would it benefit them to be a public company? I don't know!

Well, they've said they don't want to be public because of the scrutiny! Tesla got so much hate from short sellers! Imagine it for SpaceX! You're going to Mars? What a joke! You know, rocket blows up, Elon, so they just don't want to deal with that!

I totally get that!

Yeah! But the flip side is, what have you sacrificed? They said that Tesla was, you know, it almost killed Tesla! It was public! But it also saved Tesla in my opinion! Because you had everybody who was a shareholder who didn't have a car rooting for the company!

You had this grassroots movement! And as much as they—there was hate for Tesla, it was valued at 50 billion dollars doing 3 billion dollars in revenue was the highest multiple car company ever!

I mean, to me, this public market did its job and gave Tesla the leeway necessary to raise the capital and do the thing! But I get why they don't want to go public with SpaceX! So Elon’s in this catch-22 of SpaceX has been programmatically raising money, increasing its valuation, 20, 30, 45!

But now Tesla's up here and the public markets are here! We all know that if SpaceX was an IPO, it would not be worth 50 billion! It would be worth 150 billion! But yet Elon is still diluting it for 50!

So that's kind of this weird dynamic going on right there! And the flip side, the way you buy into SpaceX, I just got into SpaceX! My biggest investment ever six months ago! Took me six months to do the deal!

And I had to basically find a friend who had a friend who was in the VC industry who had friends who had a VC firm that were willing to part with SpaceX shares! Have three homies do me massive favors to pull out every single stop!

They have to get me a 250,000-dollar block of SpaceX stock, paying an 8% up front fee and a 10% carry on top of 30% higher than the last round!

So you’re paying like 50% higher than what you read in the news that it's trading at! And I have to create—I have no idea how to do this! I have to create a separate company called SpaceFilthy to combine my four friends’ checks!

Yeah, you love that name?

Yeah, that's fantastic! Right? They let me pick the name! So I was like, bro, you know I’m going all out! Whatever! Right? So we combine our checks into this company SpaceFilthy! 250 grand! And this is after I've like—and this is like bro, you gotta write me the check!

We have no idea what the terms are! I can't even promise you you're going to get the money! I have no idea what the f*** I’m doing!

And so, I’m sorry, excuse my friend! So we have—we have no idea what we’re doing! Everybody, like, is just totally out on the limb! I'm wiring 200—my life savings! My 50 grand! That was what I put in! Literally like my life savings! My biggest investment ever into this LLC that I've never heard of to some guy across the country I've never met! Just—and I just signed a form!

So to this day, I've just signed a piece of paper! I don't even have anything! I signed a docusign and sent away my life savings and I've been saying I'm a SpaceX investor! So people—and I get emails all the time! That's why I'm really explaining this! Like people always ask me!

And I'm like, you know, part of me wants to set up another deal like this! But other people are doing it! And it's really, really hard! And it's really like cumbersome! And it took, even with four of my best homies doing the deal that I've known for like years, it took me hours and hours of phone calls convincing them, walking through the paperwork.

Um, so it's a nightmare! It seems like a deal for rich people and not a deal for the, you know, the people that make Tesla so great as a stock which is like the grassroots, the people like us that actually genuinely believe in it! Not the people managing, oh you know do we put another billion into Tesla today or do we, you know…

Yeah, yeah! And who's billion is that? It's just some conglomerate of rich people who some other rich dude is managing these other rich people don’t want to go to Mars! They don’t give a f*** what they’re investing in, yet they're the people that Elon Musk is letting on his cap table instead of the people who want to hold for 10 years who want to go to Mars!

Who are literally like, you know passionate and believe in it! They're not on the cap table! It's these people who don't care who are just rich! So it's—it’s a really messed up system!

And how does—sorry I'll cut you off! Continue!

Oh yeah! Come on!

Okay! I was just going to say, how does that change though? How? Because Elon, we love him! He said that he's all for, you know, retail investors! And he always wants to protect his kind of retail investors, which is fantastic! Thank you very much, sir! I appreciate that!

But how—yeah, how do retail investors get into SpaceX? Can they? Can't they?

I mean, it sounded like for you it was just as five steps that most people would just like see and be like, man, I just, I can't do that! You know?

And I didn't even tell you the first step was you literally have to be a millionaire or you can't even get in, really! So I technically because I own HyperChange, I'm the CEO and founder, that is technically worth a million on paper!

I'm a paper millionaire! Like I'm broke! But I have a paper million! So that's how I got around being accredited! But it's really frustrating to me and it's what I plan on pushing heavily to change the legislation!

Because I think the legislation only makes the rich richer! It divides the wealth gap! And it's a big like, it's going against my thesis of HyperChange, which is let's let anybody with a laptop anywhere in the world with one cent to their name invest in the technology they believe in!

You know? And that—and the companies who are putting those technologies forward will benefit from having the biggest supply of investors! And right now we're constricting them to this micro supply of these rich douche bags who are running the game, setting the prices!

And it's—but the good thing is, is I got into SpaceX! So even as much as I told you I did the maze and I had to do it, like I got in! And guess what? I got a couple of my other YouTube homies in!

I'm sorry, I didn't get you in! You're not us! So that's why! But like, it may be like I didn't make any money on it! Like I just—I spent money! But the fact that like I got three people in who couldn't have gotten in otherwise! Like that's the people that—that's three that better than zero!

And I'm about to do more! And so I think there's a lot of hope where all of this is gonna change!

Nice! Oh, Gally Russell, thanks for your time, dude! That was awesome! Good way to end it too, man!

Was that epic?

Yeah, thank you! We could like, uh, I've been doing so many collabs lately! I have to stop them, you know! Otherwise they just go and go and go! And even to be honest, like I was talking to, like Nate O'Brien and some other guys, and like we stopped hitting record and then I'm still talking to them for like another 45 minutes to an hour! So I'm like, man! I really just have to call it!

But no, that's a awesome detailed breakdown of every of the Muskerverse, the Musketeer, the Moscow!

Yeah, thank you so much for having me, Brandon! I really appreciate it!

No worries at all! Thanks for coming on! Um, it's always great to hear your insights because Tesla's one of those companies as well!

It's—you ask like when did we last speak? I don't know, maybe like six months to a year ago, but completely different stuff that we were talking about back then! Just because the pace of innovation, it moves so quickly that it's almost like we could do a weekly thing and you'd be talking about something different!

You know? But no, I appreciate that! And I want to give you props because not many people saw Tesla! Not many people saw Tesla, bet on it! And were willing to put their reputation on the line and make content about it when nobody believed in it!

And you were one of them! So huge props, Brandon! You're the OG! I've been at it since what, like 2017, I think? But when did you buy your first shares again? What'd you say, like early 2012?

2012! That's insane!

That's insane! Well, I'm glad it's done well for you! That's all I can say! It's done well for all of us, hey?

Yeah, well enjoy that new Tesla, Brandon! You're gonna love it!

Yeah, and keep enjoying your HyperShip! I'll be closely following your adventures through Seattle and surrounds in the fully autonomous Tesla!

So thanks very much for coming on, Gally! And hope to talk to you! See you soon, bro!

Yeah! YouTube wrap! Peace!

Um, [Music] you!