http://aswathdamodaran.blogspot.com/2013/09/valuation-of-wee...
OP's article nails it: precise financial analysis is meaningless if you base your projections on way-off assumptions.
Google brings self-driving cars to market. Instead of owning a car, a fleet of autonomous vehicles drive around and pick up any passenger who requests it. No drivers are necessary, the app is built into the Android OS, and all the logistics are handled by Google Maps.
Workable telepresence solutions are developed, relying on combinations of e-mail, web applications, GitHub, videoconference, and some yet-to-be-invented virtual presence system (holodecks? Oculus Rift?). Instead of requiring that you be in a physical office, all knowledge workers can telecommute from wherever they live, and their "office" exists only in virtual reality. Seeking cheaper real estate, larger houses, and yards, workers leave cities in droves. Socializing happens in virtual worlds, and all those trips that Ubers are currently necessary for never happen.
The taxi union lobbies hard and gets Uber and similar ride-sharing services declared illegal in all major cities.
And that's discounting the truly black-swan events like "World War 3 breaks out, and we're all wiped out by nuclear winter."
It really drives home how the market value of a company is set by the last person to buy a share of that company, no matter how crazy or irrational his beliefs are. I could momentarily drop the market cap of Google to $6.75M by selling a share at $0.01, but presumably the market would correct itself in a millisecond. In thinly-traded private stocks, this market correction mechanism is not always available, and so valuations can be way off the mark until all the assumptions built into those valuations have become public and been judged as likely or not likely by the market.
One challenge I would make to this article's assumptions is that the world is like San Francisco. In many places there are already cheap private hire options available[0]. I'm not sure how to calculate for the existing cost and availability of such options. If it makes sense for the drivers they may become Uber drivers but there may be less decrease in car ownership and changes in customer behaviour.
[0] Minicabs, rickshaws etc.
(We also have rickshaws; mostly as a tourist novelty, though)
Doesn't mean they can't do well here too, but certainly a different proposition to one where they only competes against normal taxis.
This article is refuting the market for the product; I don't think anyone believes the market for electric vehicles is significantly larger than the current automotive market.
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http://old.ycombinator.com/munger.html
One of the advantages of a fellow like Buffett, whom I've worked with all these years, is that he automatically thinks in terms of decision trees and the elementary math of permutations and combinations....
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Here is a probability model vs DCF based model. Goldman uses a probability based model which can be used to evaluate changing shifts in technology such as Tesla's Autonomous technology