Their 5+ year lead in market-proven designs of electric cars, and of the factories that make those cars is, by itself, a really exciting thing to bet on
They do have a lead, but I doubt that it's a five year one. BMW for one has a good electric car initiative going on, and the rest of the car industry is going that way too. I assume that all the major manufacturers have electric cars for sale by 2025, and they're much more able to ramp up production than Tesla is because of their existing factories. Just look at all Tesla's problems over the last few years ramping up by a factor of 5 over four years. To overtake the whole US market, they'd have to ramp up to ~20 million cars and light trucks/year, a factor of 200 more, plus you're imagining them selling to the rest of the world too. Frankly I think that's impossible for them. Becoming a major manufacturer is definitely plausible. Owning the entire market is impossible though.
Their 5+ year lead in autonomous driving is, by itself, a really exciting thing to bet on
Waymo (ie. Google) has a significant lead on Tesla, and would probably sell to all the other car manufacturers. Plus the last few years have shown that autonomous driving is very difficult to get to the truly valuable level. I'd give Tesla a <5% chance of getting to valuable levels (ie. level five autonomous driving) by 2025, and the chance of them beating the rest of the market there by a significant lead as <1%. P(beating market | valuable levels) = 20%
Their 5+ year lead in battery technology and manufacturing is, by itself, a really exciting thing to bet on. Even if they were to exit the car industry, they could earn $100B+/yr revenue making batteries for countless applications
That's their best bet I think, but the same difficulties with ramping up to that revenue remain. Plus they have the difficulties involved in running two largely separate businesses inside of one company.
Model 3 is the most popular electric vehicle in the world by far, and there's still plenty of room for quality improvement and price lowering.
This is basically the same point as your first one. The vehicle is exciting, but getting those price and quality improvements while ramping up production to high levels is very very difficult.
Tesla is already profitable, yet are still many ways they can increase their gross margins, the most obvious of which is simply scaling up and optimizing everything further (they're the youngest major car company and have done this the least)
Their margins are currently riding on not having significant competition, which is changing quickly and the rate of change is increasing. Electric cars are currently a luxury choice, thus having a high margin. But once you are trying to sell to the entire US market, prices are going to have to drop, and margins will drop with them.
As a final note, Tesla isn't going to do well in the short term, just like the rest of the car industry, since we're currently in a recession.
While I do think that Tesla can sell more than they currently are, the stock price already has that very factored in. Their market cap is $150B right now, which, assuming an insane $10k profit per car and a normal car manufacturer PE ratio of 10, shows sales of 1.5M cars/year, a 10x ramp up in car sales, again with an insane profit margin. Given that, clearly the market is already pricing in some significant gains.