Tesla’s (NASDAQ:TSLA) ability to raise capital should mitigate fears over solvency. The $350 million equity and $850 million in convertible notes offers improved operating leverage with minimal dilution of approximately 4.6 million shares or 3% dilution. Not too bad considering expectations of generating futures revenues of over $12 billion in EVs.
In the big picture, let’s focus on how Tesla is positioned to leverage the additional capital and build the infrastructure to effectively compete in the EV, energy storage, solar and in particular, what IP can be gained from competencies in self-driving vehicles. Tesla’s position in energy storage is a differentiator in EVs where it commands the lead in battery efficiency and vehicle range. Tesla can gain a cost advantage by continuing to drive lower battery cost per kWh.
Tesla Vision can generate substantial value because of the competencies extended through image and sensor processing that are also a catalyst for AI. Tesla Vision is leveraging testing and data compiled from its relationship with Mobileye (NYSE:MBLY), recently announced target of acquisition by Intel (NASDAQ:INTC) for $15 billion. Image and data processing of numerous data points from RADAR, LIDAR, and cameras are complex requiring graphic floating-point intensive operations and neural network architecture. The capabilities gained through autonomous driving offer substantial competitive advantages that create additional value for Tesla.
Energy Storage and EV Performance
Tesla has improved its EV positioning as the leader in the EV market by extending the EV range battery efficiency can be measured by energy density or kW per kilogram of battery weight power duration. In practicable measures the vehicle range relative battery kWh size is a relevant measure. However, vehicle size and weight will have an impact on the range metric. To compensate for vehicle weight a measure of distance and weight may offer a more impartial performance metric. The following chart shows the battery kWh size relative to vehicle ton-miles similar to comparing freight costs.
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