We Study Billionaires – TIP761: Tesla Stock Deep Dive w/ Clay Finck

Date: October 17, 2025
Host: Clay Finck
Podcast: The Investor’s Podcast Network

Episode Overview

This episode features host Clay Finck’s detailed deep dive into Tesla as an investment, exploring the evolution of the company from its early days as a disruptor to its current ambitions in energy, artificial intelligence, and robotics. Clay analyzes Tesla’s unique culture, competitive landscape, potential opportunities and threats, and discusses why CEO Elon Musk is one of the most influential (and polarizing) business leaders of our era. The discussion covers Tesla’s master plans, the core automotive business, energy initiatives, robotics (Optimus), robotaxi ambitions, and both bull and bear cases for Tesla’s long-term future.

Key Discussion Points & Insights

1. Disruptive Innovation & Tesla’s Journey

[02:03 – 08:45]

• Disruptive companies are often misunderstood initially, as their innovation doesn’t fit into traditional business models.
• Quote:
  “Disruptive innovations tend to follow an exponential curve. Progress looks slow and almost invisible at first. Then it suddenly takes off at a pace that catches nearly everyone by surprise.” — Clay [04:00]
• Tesla’s growth exemplifies this, with revenue jumping from $0 in 2004, to $3B in 2014, and nearly $100B a decade later.
• The cost of batteries declined by 90% (2008–2023), enabling EVs to go mainstream.
• Influence of visionaries: Elon Musk likened to Steve Jobs; overestimation as a driver for outsized success.
• Quote:
  “Never underestimate the man who overestimates himself.” — Charlie Munger on Musk [07:33]
  “The people who are crazy enough to think they can change the world are the ones who do.” — Steve Jobs [08:07]

2. Elon Musk’s Leadership & Compensation Plan

[13:55 – 19:44]

• Elon Musk has a nearly 20% stake, and the new “2025 CEO Performance Award” could give him up to 423M more shares if highly aggressive benchmarks are hit (potential for $1 trillion in compensation).
• Key milestones: $8T market cap, 20M vehicle deliveries annually, 1M robotaxis and 1M Optimus robots produced.
• The plan is meant to retain and motivate Musk for the next decade.
• Quote from Robin Denholm (Tesla board chair):
  “Elon Musk is a once in a generation visionary... This requires a one of a kind compensation structure that both retains and incentivizes him.” [18:47]
• Criticism: Achieving these goals would require unprecedented growth.

3. Core Automotive Business & Competitive Landscape

[20:55 – 36:19]

• Model 3 & Model Y are Tesla’s main revenue drivers; both are among the world’s top-selling vehicles.
• Tesla stands out for its design, vertical integration, software, and unique sales model (direct-to-consumer, no dealerships).
• Firsthand dealership experience described as Apple Store-like; focus on customer experience, product education, and intuitive technology.
• US competition: GM, Ford, Hyundai, Kia, but Tesla’s US EV share has fallen from 70% (2020) to ~40%.
• BYD, a Chinese automaker, is now Tesla’s leading global competitor: more affordable vehicles, vertical integration, surging sales in China and expanding internationally.
• Quote (Elon Musk on competition, CNBC):
  “I don’t really think about competitors. I just think about making the product as perfect as possible... what we want to achieve is the platonic ideal of the perfect product.” [36:52]

4. Charging Network & Market Expansion

[37:10 – 39:40]

• Tesla’s Supercharger network is a competitive advantage in the US; many other brands are now adopting Tesla’s charging standard.
• Infrastructure is key to EV adoption, especially for long distance travel.

5. Tesla Master Plan Part 4 & Shift to AI/Robotics

[39:40 – 43:21]

• September 2025: Tesla announces Master Plan Part 4, pushing beyond sustainability to “sustainable abundance”.
• Focus shifting to AI, automation, labor, mobility, and energy.
• Plan criticized for being more philosophical than operational (lack of concrete roadmaps/timelines).
• Tesla’s narrative increasingly aligned with the AI investment trend.

6. Energy Generation and Storage Segment

[43:21 – 46:00]

• Rapid growth: from $2B (2020) to nearly $10B (2024) in annual revenue.
• Products: solar panels, solar roof, Powerwall (residential), Power Pack (business), Mega Pack (utility).
• Vertical integration in battery production drives down costs and boosts innovation.
• Elon Musk:
  “If conventional thinking makes your mission impossible, then unconventional thinking is necessary.” [45:20]
• Energy segment margins have surpassed auto segment in recent quarters; some believe it could rival car sales in value.

7. Optimus – Tesla’s Humanoid Robot Vision

[46:00 – 51:40]

• Optimus robot: 5'8", 160 lbs, designed to automate “unsafe, repetitive or boring” human tasks.
• Morgan Stanley projects the humanoid robot industry at $5T by 2050; Elon claims Optimus could account for “80% of Tesla’s value” in the future.
• Quote (Elon Musk during We Robot event):
  “It’ll basically do anything you want. It can be a teacher, babysit your kids, walk your dog… I think this will be the biggest product ever of any kind.” [49:30]
• Competition: Figure AI, Apptronic, Agility Robotics, plus Chinese firms—all racing for humanoid applications.
• Tesla’s advantage: scale, manufacturing, self-driving AI.

8. Robotaxi Ambitions & Autonomous Vehicles

[51:40 – 56:20]

• Tesla piloted first robotaxi service in Austin, offering rides at a fraction of Uber’s price.
• Robotaxi market estimated to be worth trillions by 2030s (Ark Invest).
• Regulatory approval is a key obstacle; Waymo ahead in autonomy, Tesla leads on scale/data.
• Vision: fleets of Teslas autonomously serving passengers, generating recurring revenue.
• Potential industry disruption: Uber’s terminal value threatened by large-scale robotaxi rollout.

9. Tesla Bear Case & Risks

[56:20 – 64:30]

• Bear case:
  1. Tesla fails to meet aggressive long-term goals.
  2. Even with success, overvaluation erodes investor returns.
• Emotional investing: Musk's divisiveness colors public perception.
• Short sellers’ main critique: historically, most “profit” was via regulatory credits; this is less true today.
• Increased competition narrows Tesla’s first-mover advantage; auto industry naturally features low margins and tough economics.
• Ongoing risks: US EV adoption slowing, dropping market share, threats from BYD and global automakers.
• On Elon’s projections:
  “Given Musk’s track record of making predictions, how can we put any weight on anything he says about the future from here?” [62:00]
• Valuation is still primarily “story stock”; success in energy, robotics, and autonomy is not guaranteed.

10. Capacity to Suffer & Final Reflections

[64:30 – end]

• Clay emphasizes Tesla and Nvidia’s willingness to endure pain and setbacks—what he calls “the capacity to suffer”—as a source of greatness.
• Multiple near-death experiences for Tesla, with Musk leading through “manufacturing hell”.
• For investors, the wide range of outcomes makes Tesla unpredictable and volatile; story is still unwritten (and highly risky).
• Suggests the best opportunities may arise during market panics and sharp stock declines.
• Clay:
  “Few businesses in history have pushed the boundaries of technology and manufacturing quite like Tesla. Through relentless innovation... Elon Musk has proven himself to be a truly generational CEO.” [66:20]

Notable Quotes

• Clay Finck:
  “Disruptive innovations tend to follow an exponential curve. Progress looks slow and almost invisible at first. Then it suddenly takes off at a pace that catches nearly everyone by surprise.” [04:00]
• Charlie Munger (via Clay):
  “Never underestimate the man who overestimates himself.” [07:33]
• Elon Musk (regarding competition, CNBC):
  “I just think about making the product as perfect as possible... what we want to achieve is the platonic ideal of the perfect product.” [36:52]
• Robin Denholm (Tesla board chair):
  “Elon Musk is a once in a generation visionary... This requires a one of a kind compensation structure that both retains and incentivizes him.” [18:47]
• Elon Musk (on Optimus):
  “It’ll basically do anything you want… I think this will be the biggest product ever of any kind.” [49:30]
• Clay Finck (on forecasting):
  “Given Musk’s track record of making predictions, how can we put any weight on anything he says about the future from here?” [62:00]
• Jensen Huang (Nvidia, cited by Clay):
  “Greatness comes from character. And character is not formed out of smart people. It’s formed out of people who suffered.” [64:30]
• Elon Musk (closing quotes):
  “It’s okay to have your eggs in one basket as long as you control what happens to that basket.”
  “Being an entrepreneur is like eating glass and staring into the abyss of death.”
  “When something is important enough, you do it, even if the odds are not in your favor.” [66:50]

Timestamps of Major Segments

• Disruptive Innovation and Tesla’s History: [02:03 – 13:55]
• Elon Musk’s Leadership & Compensation: [13:55 – 19:44]
• Automotive Business & Competition (incl. BYD): [20:55 – 36:19]
• Charging Network, Tesla’s Advantage: [37:10 – 39:40]
• Master Plan 4 & AI/Robotics Focus: [39:40 – 43:21]
• Energy Segment Overview: [43:21 – 46:00]
• Optimus Robot & Humanoid Ambitions: [46:00 – 51:40]
• Robotaxi & Mobility Services: [51:40 – 56:20]
• Bear Case & Investor Risks: [56:20 – 64:30]
• Capacity to Suffer & Closing Reflections: [64:30 – 67:12]

Memorable Moments

• Clay’s firsthand experience at a Tesla showroom [~27:30] highlights the distinctiveness of Tesla’s customer experience and brand.
• The comparison of Tesla’s culture and ongoing innovation to Apple’s transformation of the phone market.
• Elon Musk’s ambitious vision for Optimus, and the suggestion that it could represent the vast majority of Tesla’s eventual value.
• The discussion of Tesla’s pilot robotaxi service in Austin undercutting Uber and the implications for the mobility industry.

Takeaways

• Tesla continues to be a uniquely ambitious, innovative, and volatile company—one that defies easy categorization.
• The company’s potential depends not just on EVs, but also on energy, AI/robotics, and mobility services, each with massive but highly uncertain upside.
• Elon Musk’s personality and track record are deeply entwined with both Tesla’s success and its risks.
• Valuation remains a “story stock” dynamic; the best investors may only benefit if they recognize and act during moments of market dislocation.
• The story of Tesla is still unfolding, with the future holding both extraordinary opportunity and existential risk.