Tesla lands a new patent and is called a software play by UBS

Justin Sullivan/Getty Images News

• UBS keeps a Neutral rating on Tesla (NASDAQ:TSLA) and moves its price target on the electric vehicle maker up to $1,000 from $725, although the tone from the firm is pretty positive.
• "Tesla's structurally better access to chips and batteries through vertical integration is a key differentiator vs. most competitors and should help to cement Tesla’s market leadership," updates Patrick Hummel.
• Hummel and team do not expect competition to be a significant factor for Tesla (TSLA) in 2022 and forecast deliveries of 1.4M
• The long-term view from UBS is more bullish than the 12-month Neutral stance due to the potential of the software business.
• "Software is the next battleground in the global car industry, and no other carmaker is closer to monetize fully autonomous driving for everyday use, and the scalability of Tesla’s technology creates the biggest software-driven revenue opportunity in the industry, in our view."
• Hummel and team think the current share price for Tesla already reflects the software potential for the next few years.
• In other software-related Tesla news, the company landed a new U.S. patent for QOS manager for system on a chip communications (read the patent details).
• On the big board, shares of Tesla (TSLA) are up 3.15% premarket to $1,049.81. TSLA has underperformed the S&P 500 Index over the last month along with the rest of the EV sector.

Comments

[Nick Cox]

This analyst is about right in those comments I think.And it shows Tesla's biggest advantage over the ICE manufacturers trying to switch to the new world.

[Sermer]

Ha. UBS acknowledges the fact that Tesla is close to FSD moving out of beta yet thinks the share price reflects that. Lol, not even close.

When FSD moves out of beta, it will be a paradigm shift in transportation. It will change how people view owning cars. It will shake up the trucking industry. It will transform how people access goods. We’ll look back on it like before and after the internet or smartphone.

$1T is cheap relative to where the stock is going.

[Jlagreen]

@Sermer
LOL, FSD Beta doesn't even exist outside US.

I have driven in over 50 countries worldwide and trust me what works in US doesn't work in many other countries. Just sign recognition and understanding becomes a huge issue.
Tesla isn't really testing outside US.

So the change you speak of might only happen in US and not for all people. Here in Germany Tesla owners still wait for simple recognition of signs and display of them. Nothing special nor intelligent, something my 12 years old Golf can even do :P

Sales in Germany are high because you get tons of money if you keep the car for 6 months. After 6 months you sell your Tesla in other EU countries and profit the subsidy. Just check German Tesla message boards to see that there are guys to buy/sell a Tesla every month. It's clearly not reflecting actual demand.

Fortunately, our new government intends to change that by changing subsidy practice.

[Sermer]

@Jlagreen I think you are greatly overselling the difficulty of expanding FSD to other markets. The rules of the roads differ but it's not like physics change. Driving to your destination without hitting anything is the goal everywhere, not just in the US.

[James Hanshaw]

Some people look at things differently, including myself seekingalpha.com/...

[Durwood Dugger]

Musk turned all Tesla patents over to the public in 2014 (www.tesla.com/...) I assume this one will be public also. While public patents can be monetized as Toyota has done some of theirs, I am not aware of any patents being monetized by Tesla to date. Which means this one is likely to also have no impact on Tesla's bottom line. The lack of interest and sales in buying rights for Tesla technology patents - says a lot about how Tesla competitors see their value.

[vvatcher]

@Durwood Dugger could also just mean that the other companies aren't anywhere near to what Tesla is doing, and so don't have anything that needs those patents.

[Acculader]

@Durwood Dugger
None. The patents are all worthless. The grandly titled
"Battery cell with a partial dielectric barrier for improved battery pack mechanical and thermal performance " is a plastic insulating washer ( a dielectric), preventing the top rim of the can from shorting against the collector plate that doesn't allow for a better position. The 'improved thermal performance' arises because the plastic is a better thermal conductor than the air gap occupied by the washer.

Like many other corporate examples, Tesla's patents are produced for the advertising and marketing potential, related to the common notion that a patent signifies innovation and technical prowess....like...errr... these examples.

www.wipo.int/...
and these www.freepatentsonline.com/...
'

[Confusius]

You just described why it does what they claim it does. Who else has been smart enough to put something so simple in their battery?

[jp3smiles]

QOS patents don't impress me much :-)

[sr1952]

Tesla FSD is a joke and a fraud. They've been selling a non-existent product for 5 years and it is not even close to working. Independent organizations rate Tesla dead last for FSD and the videos of "Beta 9" are just downright scary. On the other hand, Tesla IS leading in monetizing FSD because they are actually taking money from a bunch of people that just don't understand the situation.

[mr.S.G]

@sr1952 I drive a model 3 2020 with FSD, and I agree with you ,it is far from perfect and a finished product.In Europe we don't even get to be a beta customer and the regulators are so slow here ,that every step forward is forbidden until the big fat Germans can offer the same.I have tried most other systems on offer and built in other car models, they are far behind.My money is easily on Elon to deliver, its anyone's guess when, but the waiting has been extremely rewarding sofar.God knows what will happen with Tesla should they achieve this goal.

[No4]

@sr1952 I think they are on FSD Beta 10.6. While significant improvements have been made over Beta 9 your assessment on FSD still stands.

[Acculader]

@mr.S.G
> I drive a model 3 2020 with FSD, and I agree with you ,it is far from perfect<
A portait may be "far from perfect". When software and hardware errors steer a car towards on-coming traffic, that's outright failure of the most basic kind, and not something that needs 'tweaking'

EU regulators have a set of over 170 track tests that must be passed by all cars applying for level 3 permits. Fleet data alone isn't acceptable. Cars must navigate around obstacles with an accuracy of 10cm, testing both the sensors, and the car's dynamic control. At least two driver monitoring systems must be installed.

In Dec last year, 20 US manufacturers agreed to install AEB as standard.
www.nhtsa.gov/...

That's what Tesla knew ( but assumed you wouldn't), when they falsely claimed Robotaxis - prior to telling the DMV that FSD and FSD Beta are level 2 driver assist.

[Legacy Legends, LLC]

$1k is low balling, this is code for $1500/share, should of bought the dip folks!

[wsattler]

FSD doesn't work after 5 years of development.

[Ramy Taraboulsi, CFA]

On average, over the last four years, Tesla has been filing for a new patent every two days...

[Ruffdog]

@Ramy Taraboulsi, CFA When you have the design team that TESLA has that is a possibility.
Have you heard of one engineering, computer or electrical graduate that would rather go to work for F or GM than TESLA!

[Ramy Taraboulsi, CFA]

@Ruffdog Not a possibility. It is true. I did my research in the USPTO and confirmed that they file for a new patent every two days. I documented it in my article: Tesla: A Justification For A $3T Company,
seekingalpha.com/...

[Big Fat Dummy]

@Ramy Taraboulsi, CFA If patent applications are indicative of future success, we should be plowing money into IBM…

[Valber]

Tesla is the patriarch and champion of the forward growth virtuous cycle (the virtuous cycle of i) visionary leader with a compelling long-term vision and execution of a superior product that consistently delivers ii) top-line growth above expectations which propels even higher valuations and accompanying fund-raisings which in turn iii) brings the further success/dominance in a widening base of core products and vertical expansion that iv) continues to drive higher forward looking valuations).
I have been a bull on Lucid Group (from October’s $25 levels) which I viewed and continue to view as the best placed in the EV space to emulate the Tesla-like virtuous cycle.
The EV space now of course, is valued based on a voting machine presently than a weighing machine. But one when looks at the valuations and recent analyst price targets of certain EV play or plays, assuming this momentum continues in the near-term, there’s going to be a looking back to the granddaddy Tesla and how Tesla is the “value” play presently within the segment (and the implications for this in how one might have a “hedged” long EV exposure).
As with the rest of the tech sector, there are the virtuous cycle contenders and pretenders in the EV space, time will tell which these are vs current valuations.

[deviruchi]

Has anyone at UBS or SA bothered to look at patents held and recently gained by other auto manufacturers? Tesla hardly looks newsworthy by comparison.

[Gordonr]

@deviruchi
Problem is they just don’t make a good EV!!!

[Acculader]

@Gordonr
Studies of the Leaf, and PEV discontinuance (20% discontinued use of the PEV), show that BEVs are also sold to high income earners. The discontinuation survey had only one owner claiming $50k/year. Tesla household average household income is $128K, which also reflects house ownership and parking availability. Median age of the Model S owner is 54 (reflecting accumulated wealth) and 80% male - yet similar demographics apply in owners of the Leaf and PEV surveys.

Tesla could claim over 60% market share (of a small US BEV market), because they produced a rapidly accelerating car, appealing to older and wealthier males. The general lack of US interest in BEVs, and the overwhelming popularly of larger vehicles, allowed Tesla to be a big fish in a small pond. The shallow end of the much larger pool that also doesn't want a Tesla.
Targeted marketing can convince the recipients that a bucket represents advanced technology - and that's the font of the copious but banal patents

[SallyV6]

My slow adult cousin (formerly of UbS), called my cat a dog but that doesn’t make it so

[Chase8888]

OMG that's a new a reason Tesla is worth a trillion $ it's a TecHnOloGy company!l....LOL

[Ruffdog]

@Chase8888 The reason are those bright, innovative and motivated employees!

[ckarabin]

UBS once had an avoid rating on this and a price target of $200. Now it's $1000. So they obviously have no real skill is assessing this business since they were off by 5x!

[Ruffdog]

@ckarabin Back in 2018 when I had TESLA shares put to me, name me 1 brokage firm that had a TESLA PT of $1,000?

[ckarabin]

@Ruffdog NONE! Of course, one does always have to ask the question if the analysts had it wrong or do the investors have it wrong now! Only partly tongue in cheek there, as you must admit that as much as it rose so far, it did not prove its valuation to be value just yet. Lots of risks and lots of cards to play in that industry. Still when UBS had it down as target 165-200 and they are making $5 and growing, then they sort of missed it! And to admit ti is now a target of $1000, says that one of their two opinions was waaaaay off the mark. Lack of consistent thinking, following the market instead of leading it (as so many brokers do) or just plain wrong.

[Actionable Conclusion]

Do Cathie Wood and Ron Baron count?

Anyway, price targets are for pigeons. Entry targets are for snipers.

[vooch]

"Tesla's structurally better access to chips and batteries through vertical integration is a key differentiator vs. most competitors”

Vertical integration ?

1) Tesla doesn’t make its own batteries, it buys Batteries from the same suppliers as everyone else.

2) Tesla doesn’t make its own chips, Tesla buys chips from same suppliers as everyone else.

3) Tesla DOES make its own seats.

[User 28897925]

@vooch Go ahead Vooch, ignore the FACT that they ramping up 4680 batteries that are a game changer, then put your money where your mouth is and short TSLA and lose.

[The Driver 80]

@vooch you are wrong about both 1 & w. Google 'Tesla Gigafactory' and 'Dojo D1' chip. 'Dojo supercomputer' might also explain analyst comments better.

[deviruchi]

@The Driver 80 Giga batteries are made by Panasonic and similarly, Tesla does not have a semiconductor foundry. Thank you for the google suggestions which confirm this.

[Builder Trader]

It’s just a car people

[User 28897925]

@Builder Trader Drive a Plaid, then let's hear back.

[Ruffdog]

@User 28897925 0-60 by the time you cross an intersection!

[Big Fat Dummy]

@Ruffdog That sounds like an entirely safe and sound maneuver to pull on the streets of America.

Again, just a car. You know, that depreciating hunk of metal we need to go from A to B for work…

[David p7730]

Regardless the only thing you can count on, is Tesla stock rising. Bet accordingly.

[Ruffdog]

@David p7730 It is a rocky ride but it is from lower right to upper left!