Tesla’s latest earnings report was loaded with good news: the company’s sixth straight quarter, and first full year, of profitability; increased sales ($31.5 billion in 2020, compared to $24.6 billion in 2019); a healthy cash position ($19.4 billion as of year-end, compared to $6.3 billion at the end of 2019); and plausible plans for steady increases in production (an estimated 50% annual increase).

What’s not to like? Plenty, apparently. Wall street punished TSLA stock the next day, due to the fact that announced earnings of $0.80 per share were actually a “miss,” falling short of the figure expected by analysts—and probably also due to the fact that net income would have been negative if not for massive sales of regulatory credits ($401 million) to legacy automakers, a revenue source that isn’t expected to continue for much longer. (TSLA shares recovered part of the loss before plunging again the following day, perhaps in response to doubts about the new “koala” steering wheel).

So far, so ho-hum—a stock price drop following a mostly positive earnings report is standard behavior for TSLA. However, also as usual, Elon Musk’s conference call contained some interesting news items for those inclined to look beyond the headlines.

Tesla’s stock-market valuation, which long ago floated free of the company’s share of the global auto market, remains a puzzle to old-school market observers. On the earnings call, the Wag of Wall Street helpfully spelled out something that’s been discussed at length in the EV press: TSLA’s future prospects aren’t tied to how many cars the company sells, but rather to the transformative potential of the cars’ self-driving capabilities.

The world’s richest videogamer explained that once Tesla’s vehicles evolve into self-driving robotaxis, their level of usage will soar—from 12 hours per week to 60 hours per week in Musk’s example. This isn’t going to be a free amenity for owners—Tesla plans to take a piece of the action, generating ongoing revenue on each car after the sale. As a few brilliant visionaries have noted, this transportation-as-a-service model promises to be far more lucrative than the traditional hardware-sales model of the auto industry.

Musk announced that Tesla’s Full Self Driving package will soon be available on a subscription basis, and predicted that even a mere doubling of usage could justify a trillion-dollar valuation for the company. “If you made $50 billion worth of cars, it would be like having $50 billion of incremental profit, basically because it’s just software,” said the Disruptor of Detroit.

Of course, this isn’t the first time we’ve heard about this, and savvy stock-market seers suspect that such a software-subscription scenario is already baked into TSLA’s lofty stock price. It’s anybody’s guess how long it will be before you see a robotaxi on the road. The Full Self Driving package isn’t ready for prime time yet, but little beta birdies have been tweeting that it’s getting very, very close.

Another tasty tidbit—Tesla’s biggest constraint on production at the moment appears to be the supply of batteries. Asked if Tesla had plans for an electric van—a promising niche for electrification—Musk said, “I think Tesla is definitely going to make an electric van at some point, so the thing to bear in mind is that there is fundamentally a constraint on battery cell output. If one is not involved in manufacturing, it’s really hard to appreciate just how hard this scale of production is. It’s the hardest thing in the world. Prototypes are easy. Scaling production is very hard.”

Musk said the Tesla Semi program was also being held hostage to battery cell supply. “We could easily go into production with the Semi, but we would not have enough cells. We would have to supply cells ourselves for Semi when we are producing the 4680 in volume. But for example, Semi would use typically five times the number of cells that a car would use, but it would not sell for five times what a car would sell for. So, it would not make sense for us to do the Semi right now, but it will absolutely make sense for us to do it as soon as we can address the cell production constraint.”

Tesla still plans to begin deliveries of the Tesla Semi this year, but probably at low volume, using 4680 battery cells made at the pilot cell plant in Fremont. The company says it’s on target to produce 10 GWh worth of cells at Fremont this year, and to add 100 GWh of production capacity at the new Berlin and Texas Gigafactories by the end of 2022.

Sources: Electrek, EVannex, CNBC