Is Tesla a good investment?

[NorCal]

Liberals tend to be loud on the internet and they have been for this.

I find populists really loud online, but I think that's just a reaction to when they frequently say stuff that's factually incoherent to align with their Great Leader's latest random pronouncement. Things that make sense to you don't jar the brain and seem so "loud". I wouldn't be shocked to find all the political stripes post their thoughts online about the same amount.

Elon seems extremely loud to me

His average Xcrements last summer was 68/day. He's been hitting the keyboard, and the ketamine, even more this year.

I think billionaires and top government officials have PR teams to do this for them, while creating the illusion of Someone Who Just Wants To Communicate Directly With You Because They're Just So Damn Authentic. There is no way for us to prove or disprove the hypothesis.

I personally suspect most of them come from an AI agent.  Most social media "engagement" is already some kind of AI/bot algorithm.

Either that, or it's figuring out whether it's his uppers or downers are talking on any given day. 

[MinorMiner]

A little FSD update: My Dad is running 13.2.8 on his Model Y. It has gone 3000 miles without a necessary intervention. Looks almost certain that we are getting vision based unsupervised self driving cars in the next 12 months. Right now is a very interesting time to invest if you are considering doing so.

[reeshau]

A little FSD update: My Dad is running 13.2.8 on his Model Y. It has gone 3000 miles without a necessary intervention. Looks almost certain that we are getting vision based unsupervised self driving cars in the next 12 months. Right now is a very interesting time to invest if you are considering doing so.

Has your Dad done any poor weather / night time driving?  Not knocking it, but I am curious.

[ATtiny85]

A little FSD update: My Dad is running 13.2.8 on his Model Y. It has gone 3000 miles without a necessary intervention. Looks almost certain that we are getting vision based unsupervised self driving cars in the next 12 months. Right now is a very interesting time to invest if you are considering doing so.

I do wonder if there are “necessary interventions” needed by other drivers that are never captured outside of the family dinner table “honey, please pass the butter, and you should have seen how close I came to bending the Corolla on my way home thanks to some damn Tesla.” I’ve seen good drivers and bad drivers create problems.

[MinorMiner]

A little FSD update: My Dad is running 13.2.8 on his Model Y. It has gone 3000 miles without a necessary intervention. Looks almost certain that we are getting vision based unsupervised self driving cars in the next 12 months. Right now is a very interesting time to invest if you are considering doing so.

Has your Dad done any poor weather / night time driving?  Not knocking it, but I am curious.

As far as night time driving, it does excellent. Way better than he does. As far as poor weather, it seems to have issue with the cameras getting dried salt spray on them. It performs better when they are clean and can refuse to drive if they are too dirty.

A little FSD update: My Dad is running 13.2.8 on his Model Y. It has gone 3000 miles without a necessary intervention. Looks almost certain that we are getting vision based unsupervised self driving cars in the next 12 months. Right now is a very interesting time to invest if you are considering doing so.

I do wonder if there are “necessary interventions” needed by other drivers that are never captured outside of the family dinner table “honey, please pass the butter, and you should have seen how close I came to bending the Corolla on my way home thanks to some damn Tesla.” I’ve seen good drivers and bad drivers create problems.

Yea, there's no doubt that it does things that you might question it's judgement on. It isn't perfect, but it is improving very very quickly. It will supersede human level driving very soon. However, remember, humans still make mistakes, so will FSD. The question is: Who makes less mistakes? Who is constantly improving?

[NorCal]

A little FSD update: My Dad is running 13.2.8 on his Model Y. It has gone 3000 miles without a necessary intervention. Looks almost certain that we are getting vision based unsupervised self driving cars in the next 12 months. Right now is a very interesting time to invest if you are considering doing so.

Has your Dad done any poor weather / night time driving?  Not knocking it, but I am curious.

I used a free trial of FSD late last year, but I wouldn't pay for it.  It did well at night.  In some road circumstances I felt safer with FSD on than off.  In others, I felt I was a safer driver.  This was entirely subjective on which was safer.

Inclement weather is "not a chance in hell".  The cameras get obscured by any amount of road slush or dirt.  This disables the whole system including anything related to autopilot or FSD. 

[ChpBstrd]

Inclement weather is "not a chance in hell".  The cameras get obscured by any amount of road slush or dirt.  This disables the whole system including anything related to autopilot or FSD.

When you say "disables" do you mean it pops up a warning that says "the lenses are too obscured to use FSD, please clean me"?

Or does the system make more and more errors, driving in a jerky or concerning manner, the dirtier the lenses get? Does the system stop or does the human stop using the system?

And what happens when the car in front of you splashes your car with a blast of muddy puddle water or dust? Does FSD just quit right there?

[reeshau]

Well, we have an idea how many Cybertrucks have been built, as all built since Novwmber 2023--46,000--have been recalled due to the issue of panels detaching.

https://finance.yahoo.com/news/tesla-recalls-more-46-000-155548028.html

[GuitarStv]

Huh.  The panels on cybertrucks are glued on?

[reeshau]

robotaxi service due to start in Austin in 3 months.

Meanwhile...

https://x.com/greentheonly/status/1902731311883632951

[ChpBstrd]

robotaxi service due to start in Austin in 3 months.

Meanwhile...

https://x.com/greentheonly/status/1902731311883632951

Here's what you have to look forward to!
https://www.youtube.com/watch?v=040ejWnFkj0&t=3139s

[NorCal]

A prior comment got me thinking about this Robotaxi business a little more.  It's usually trotted out as the reason Tesla deserves some kajillion dollar valuation.  Let's apply a little critical thinking to these assumptions.

Let's start with the assumption that the business is eventually successful and can even reach a few billion in revenue.  Let's also assume Tesla doesn't have to partner with an existing service provider like Uber/Lyft (even though Waymo has to).

What does the business look like?

It's not a SAAS business that can have ongoing 80%+ margins. 

Tesla still has to manufacture the cars and not sell them.  Instead, they're selling time used in the cars.  It's fundamentally a short-term car rental business.

The business has the manufacturing overhead of an automotive company.

It has the asset ownership/overhead/depreciation of a rental car company.  Except it's worse because rental car companies make good money on used car sales.  It doesn't look like there will be a secondary market for robotaxi's.

So why should Tesla get a valuation above that of Hertz, GM, or Ford? 

[PathtoFIRE]

It is hard to me to imagine it being a business with enviable margins long term.

I would guess it's appealing to tech for moat reasons, at least initially. A technology that few have, offered to address current consumer needs.

Maybe like Uber/Lyft, you offer it as a car replacement at below cost (Google AI tells me the average American spends >$12000/yr on car ownership). You get many single/young people to ditch their only car, and many families to get rid of all but one of their cars. What would be the time needed to decimate the drive-yourself practices of today (two pronged approach; decimate the car selling business in order to diminish car supply; decimate the knowledge base and expectation around having a license and learning to drive and doing it daily)? If you succeed in destroying car ownership culture, and you do it fast enough before too many competitors gain traction, then you can jack up prices with minimal short term consequences.

Seems like it would take a lot more time and luck to do, compared to destroying the taxi business, and the timeline needed for people to be dependent on your product would take too long to make it quickly profitable, especially before competition sets in. Seems like the kind of business where being the first may mean incurring most of the costs of implementation, and later entrants will be the ones to reap the rewards.

[41_swish]

I am terrified of Tesla's business model long term. They will continue making EVs that are fine and people will buy them. I am much more worried about the legacy automotive industry players catching up in terms of price and quality.

Tesla had a lot of alure 10 years ago that they will not have in 2035

[MinorMiner]

When evaluating the potential of the the autonomous car business the key metric to look at is cost per mile of transport. A self driving Tesla's current competition is a human driven gasoline powered car. The self driving Tesla eliminates the labor or human attention cost, most of the fuel cost and most of the maintenance cost. A robotaxi would also be expected to have much higher utilization as well spreading out the amortization cost over a larger number miles per year. In the end, low cost = large market share.

As far as competition, there really is none in America (Waymo's unit costs are too high). A couple of weeks ago, FSD was released in China. Observers there have commented that FSD appears to be 1.5 years ahead of the Chinese competition. So, this basically means that Tesla has a lock on the Western robotaxi market (Do you think that we will let Chinese spy cars be sold here??) and a decent lead in China.

Lastly, I grew up in the beautiful forests of America. I keep being drawn to cities for career reasons, but I resist it because of my love for nature. This revolution offers an opportunity to green our cities if we take advantage of it. We can replace parking lots with trees and green. Here is the Robotaxi unveil video set to show this: https://www.youtube.com/live/6v6dbxPlsXs?si=foDl4WrSrdFPnfBQ&t=1011

[travel2020]

When evaluating the potential of the the autonomous car business the key metric to look at is cost per mile of transport. A self driving Tesla's current competition is a human driven gasoline powered car. The self driving Tesla eliminates the labor or human attention cost, most of the fuel cost and most of the maintenance cost. A robotaxi would also be expected to have much higher utilization as well spreading out the amortization cost over a larger number miles per year. In the end, low cost = large market share.

As far as competition, there really is none in America (Waymo's unit costs are too high). A couple of weeks ago, FSD was released in China. Observers there have commented that FSD appears to be 1.5 years ahead of the Chinese competition. So, this basically means that Tesla has a lock on the Western robotaxi market (Do you think that we will let Chinese spy cars be sold here??) and a decent lead in China.

Lastly, I grew up in the beautiful forests of America. I keep being drawn to cities for career reasons, but I resist it because of my love for nature. This revolution offers an opportunity to green our cities if we take advantage of it. We can replace parking lots with trees and green. Here is the Robotaxi unveil video set to show this: https://www.youtube.com/live/6v6dbxPlsXs?si=foDl4WrSrdFPnfBQ&t=1011

Your take about observer comments on FSD vs Chinese options is at odds with other commentary. See for example: https://www.reddit.com/r/SelfDrivingCars/comments/1ibwr6u/has_china_fsd_caught_up/

There have also been recent videos where Tesla did quite poorly vs other competitors in US. E.g. Tesla’s camera based systems vs LiDAR based systems.

Overall, Tesla may not have a significant lead or advantage.

[bacchi]

When evaluating the potential of the the autonomous car business the key metric to look at is cost per mile of transport. A self driving Tesla's current competition is a human driven gasoline powered car. The self driving Tesla eliminates the labor or human attention cost, most of the fuel cost and most of the maintenance cost. A robotaxi would also be expected to have much higher utilization as well spreading out the amortization cost over a larger number miles per year. In the end, low cost = large market share.

That's an unfairly weighted comparison. Why not compare an EV driving Uber driver to a Tesla robotaxi?

[MinorMiner]

When evaluating the potential of the the autonomous car business the key metric to look at is cost per mile of transport. A self driving Tesla's current competition is a human driven gasoline powered car. The self driving Tesla eliminates the labor or human attention cost, most of the fuel cost and most of the maintenance cost. A robotaxi would also be expected to have much higher utilization as well spreading out the amortization cost over a larger number miles per year. In the end, low cost = large market share.

As far as competition, there really is none in America (Waymo's unit costs are too high). A couple of weeks ago, FSD was released in China. Observers there have commented that FSD appears to be 1.5 years ahead of the Chinese competition. So, this basically means that Tesla has a lock on the Western robotaxi market (Do you think that we will let Chinese spy cars be sold here??) and a decent lead in China.

Lastly, I grew up in the beautiful forests of America. I keep being drawn to cities for career reasons, but I resist it because of my love for nature. This revolution offers an opportunity to green our cities if we take advantage of it. We can replace parking lots with trees and green. Here is the Robotaxi unveil video set to show this: https://www.youtube.com/live/6v6dbxPlsXs?si=foDl4WrSrdFPnfBQ&t=1011

Your take about observer comments on FSD vs Chinese options is at odds with other commentary. See for example: https://www.reddit.com/r/SelfDrivingCars/comments/1ibwr6u/has_china_fsd_caught_up/

There have also been recent videos where Tesla did quite poorly vs other competitors in US. E.g. Tesla’s camera based systems vs LiDAR based systems.

Overall, Tesla may not have a significant lead or advantage.

Be careful to check which version of software is used in some of those comparisons. I'm seeing lots of videos that are using old versions of the software (The above Greentheonly video and the Mark Rober video I assume you're referencing).

When evaluating the potential of the the autonomous car business the key metric to look at is cost per mile of transport. A self driving Tesla's current competition is a human driven gasoline powered car. The self driving Tesla eliminates the labor or human attention cost, most of the fuel cost and most of the maintenance cost. A robotaxi would also be expected to have much higher utilization as well spreading out the amortization cost over a larger number miles per year. In the end, low cost = large market share.

That's an unfairly weighted comparison. Why not compare an EV driving Uber driver to a Tesla robotaxi?

Exactly! This is an unfair competition. That is why it is such a good business!

Most of the price of an Uber is the cost of the driver.
Some back of the envelope math:
Assume a driver does 50k miles a year and earns $40k annually. This works out to a labor cost of $0.80 per mile. The federal mileage reimbursement rate is $0.70 per mile. AKA the driver is more than half of the cost. Elimination of just the driver results in a service that only costs half of what it currently does. Low cost is what will drive robotaxi adoption.

[reeshau]

Be careful to check which version of software is used in some of those comparisons. I'm seeing lots of videos that are using old versions of the software (The above Greentheonly video and the Mark Rober video I assume you're referencing).

I still assert:

1) The ability to avoid hitting children should be a base capability, not a $12k add-on (should be in the scope of automated emergency braking, as with all other OEM's, and EU pedestrian safety regs)

2) If software isn't capable, it should not be discovered by customers and the unwilling public on public roads.  Any other automaker who discovered their cars could slam into objects on the highway would immediately issue a recall / do not drive order.  Tesla seems to think "that's just part of beta testing!"

[FINate]

When evaluating the potential of the the autonomous car business the key metric to look at is cost per mile of transport. A self driving Tesla's current competition is a human driven gasoline powered car. The self driving Tesla eliminates the labor or human attention cost, most of the fuel cost and most of the maintenance cost. A robotaxi would also be expected to have much higher utilization as well spreading out the amortization cost over a larger number miles per year. In the end, low cost = large market share.

That's an unfairly weighted comparison. Why not compare an EV driving Uber driver to a Tesla robotaxi?

Exactly! This is an unfair competition. That is why it is such a good business!

Most of the price of an Uber is the cost of the driver.
Some back of the envelope math:
Assume a driver does 50k miles a year and earns $40k annually. This works out to a labor cost of $0.80 per mile. The federal mileage reimbursement rate is $0.70 per mile. AKA the driver is more than half of the cost. Elimination of just the driver results in a service that only costs half of what it currently does. Low cost is what will drive robotaxi adoption.

It's an unfair comparison because you've compared ICE taxi to BEV robotaxi. An apples-to-apples comparison would be BEV taxi vs BEV robotaxi.

And that labor cost doesn't just zero out and go away, it gets replaced with autonomous vehicle costs. First, there's the cost of capital for the roughly $10 billion Tesla has invested (so far) on self driving cars. Then there's the cost for teleoperators and all that goes along with this. Since there's no human driver someone or something has to clean the vehicle and maintain and charge it. It all adds up.

That $0.70/mile reimbursement includes fuel, maintenance, repairs, insurance, registration, and depreciation. Only one of these is specific to ICE vehicles.

So if we assume your math is correct and Uber drivers get paid around $0.80/mile, then after all expenses they are really making around $0.10/mile, perhaps a little more IF they're in a BEV and can get relatively low charging rates (fast charging isn't much better than gas in many places).

This means a) Uber drivers aren't making nearly as much money as it may appear on the surface (much has been written about this) and b) the tech industry is spending many billions of dollars to automate some of the lowest paid work.

[PathtoFIRE]

b) the tech industry is spending many billions of dollars to automate some of the lowest paid work.

It's an admirable societal goal to automate away the dangerous, dull, monotonous work, but it's hard to see how it's a slam dunk good business idea, at least from a tech company comparison. And I reiterate my point that I think there's good reason to believe that first movers in this space may be losers, and it'll be second generation companies that capitalize on this in the end.

[Fru-Gal]

First mover disadvantage at play now, definitely. Plus: distracted, erratic CEO. Fatal brand maneuvers. Worldwide boycott. Never say never but… Tesla is toast.

I just took a Lyft ride with a BMW ix and wow that was fancy. Also walked past two electric car showrooms and neither were Tesla.

As for robotaxis, Waymo is way ahead, both in technology and experience/time on the road.

[NorCal]

When evaluating the potential of the the autonomous car business the key metric to look at is cost per mile of transport. A self driving Tesla's current competition is a human driven gasoline powered car. The self driving Tesla eliminates the labor or human attention cost, most of the fuel cost and most of the maintenance cost. A robotaxi would also be expected to have much higher utilization as well spreading out the amortization cost over a larger number miles per year. In the end, low cost = large market share.

That's an unfairly weighted comparison. Why not compare an EV driving Uber driver to a Tesla robotaxi?

Exactly! This is an unfair competition. That is why it is such a good business!

Most of the price of an Uber is the cost of the driver.
Some back of the envelope math:
Assume a driver does 50k miles a year and earns $40k annually. This works out to a labor cost of $0.80 per mile. The federal mileage reimbursement rate is $0.70 per mile. AKA the driver is more than half of the cost. Elimination of just the driver results in a service that only costs half of what it currently does. Low cost is what will drive robotaxi adoption.

It's an unfair comparison because you've compared ICE taxi to BEV robotaxi. An apples-to-apples comparison would be BEV taxi vs BEV robotaxi.

And that labor cost doesn't just zero out and go away, it gets replaced with autonomous vehicle costs. First, there's the cost of capital for the roughly $10 billion Tesla has invested (so far) on self driving cars. Then there's the cost for teleoperators and all that goes along with this. Since there's no human driver someone or something has to clean the vehicle and maintain and charge it. It all adds up.

That $0.70/mile reimbursement includes fuel, maintenance, repairs, insurance, registration, and depreciation. Only one of these is specific to ICE vehicles.

So if we assume your math is correct and Uber drivers get paid around $0.80/mile, then after all expenses they are really making around $0.10/mile, perhaps a little more IF they're in a BEV and can get relatively low charging rates (fast charging isn't much better than gas in many places).

This means a) Uber drivers aren't making nearly as much money as it may appear on the surface (much has been written about this) and b) the tech industry is spending many billions of dollars to automate some of the lowest paid work.

Most rideshare drivers make below minimum wage after factoring in expenses.

Tesla needs to undercut rideshare prices by a decent margin.  They'll have a modest business at price-parity, but won't displace incumbents.  They'll pick up business if they can undercut rideshare drivers by ~10%.  They'll own the market if they can undercut it by ~25%.

So the question is, what do Tesla's gross margins look like if they're undercutting ride share by 10%-25%.  While we don't know the exact answer to this, it's sure as hell not going to be a 50%+ margin business.  Do I believe it will even be a 30% margin business?  Not really.

It's would probably scale to be 20% gross margin business at best.  Likely lower.  It would also be a capital inefficient business between manufacturing and operations.

Go out and find me all the 10%-20% gross margin businesses with a PE greater than 100.  Or even PE 50. 

[jnw]

This is How Tesla Will Die
https://www.planetearthandbeyond.co/p/this-is-how-tesla-will-die

[windytrail]

Around these parts, leaving your Tesla outside puts you at risk of an "incident."

For those who are still believers, let's hear about your recent plays. How much are you wagering? Talk is cheap.

[LightTripper]

What electric cars are popular in the US other than Tesla?  My impression always is that Tesla is far larger there than in Europe but maybe I'm wrong.  Still, it's hard to see if others are producing equally good (and more varied) cars in Europe why they (or somebody else) would not be able to do so in the US also.

Here in London we just bought an EV (Skoda Enyaq - so far very happy) and so in the run up to that started paying attention to what other electric cars are around.  Looking at fully electric cars parked in my neighbourhood (helpfully marked with a green stripe on their number plates) it's mainly Hyundai and Kia, with quite a few BMW, VW, Nissan and Skoda, and the occasional Tesla, Porsche, Audi, Volvo or Polestar (but all of those seem way less common than the others listed above).  I do see more Teslas driving around in the centre of the city (presumably from the more Bankery neighbourhoods), though everyone I know who has one (leased) is switching to a different brand as soon as the lease is up (and there is plenty to choose from these days).

[jnw]

Over half the country hates Elon now, I don't see them continuing to be popular in the USA anymore.  I warned about this 2 years ago -- Elon should of stayed out of politics.  My friend who bought a Tesla a few months ago can't stand Elon now.

[41_swish]

In hindsight, him buying Twitter was the start of all of this. We should have seen this coming...

[FINate]

In hindsight, him buying Twitter was the start of all of this. We should have seen this coming...

Some of us on this thread have been warning about this for years now:

I think TSLA fans are ignoring (or severely underestimating) the implications of the Musk-Twitter-Tesla association in the mind of consumers. At some point people are going to feel uncomfortable being seen in Twitter cars.

[reeshau]

This is How Tesla Will Die
https://www.planetearthandbeyond.co/p/this-is-how-tesla-will-die

Since this is an investment thread, I will point out the fact laid out in this article that Elon has $70B in loans to Tesla, SpaceX, and X which are secured by his shares.  (The article says 70% of his shares)  as Tesla's price falls, he could be subject to margin calls on this collateral, and could have a hard time coming up with more given current business conditions.

This is, essentially, off-balance sheet debt for Tesla.

[NorCal]

In hindsight, him buying Twitter was the start of all of this. We should have seen this coming...

The 2016 election is when it all started.

Most of us saw the 2016 election and were horrified.  Elon Musk was inspired. 

That's when he started being an internet troll himself.  It got him power, and he was smart enough to recognize the power he would have by owning the platform.

Buying Twitter was never about making money.  It was about gaining power as an end in itself. 

[Retire-Canada]

Elon's role model has demonstrated you can fail at business and go bankrupt again and again while being successful in gaining celebrity and power. So while the failure of Tesla will be bad for the retail investor Muskrat will probably spin it into his next conspiracy fueled enterprise and be just fine.

[dividendman]

Elon's role model has demonstrated you can fail at business and go bankrupt again and again while being successful in gaining celebrity and power. So while the failure of Tesla will be bad for the retail investor Muskrat will probably spin it into his next conspiracy fueled enterprise and be just fine.

He seems to have copied Trump in this regard.

[Cannot Wait!]

We can replace parking lots with trees and green.
What do you think the chances of this actually happening are?  H

[NorCal]

Elon's role model has demonstrated you can fail at business and go bankrupt again and again while being successful in gaining celebrity and power. So while the failure of Tesla will be bad for the retail investor Muskrat will probably spin it into his next conspiracy fueled enterprise and be just fine.

He seems to have copied Trump in this regard.

There are a lot of similarities in personality, motivations, and behavior.  Two peas in a pod.

A big distinction is that Space Karen and Tesla's board have a fiduciary duty to public stockholders.  Trump could get away with a lot more because of the ownership of his companies.

There hasn't been much of a legal remedy against Tesla behavior to date simply because the stock price kept going up.  It's hard to argue for damages against shareholders when the stock is a record holder for performance.

This all reverses when the stock price persistently declines.

For all the talk of recent declines, the stock is still trading about where it was 6 months ago, and is up from a year ago.  The stock has a lot further to fall before there's really shareholder damages.

[Retire-Canada]

The stock has a lot further to fall before there's really shareholder damages.

Peak was about $480/share and it's now down to $250/share. If you can draw a straight line between the CEO's behaviour/performance and that share price decline I'd say you have a pretty good argument for shareholder damages even if they are still up vs. some other time period.

[41_swish]

@FINate I wasn't on the forum back then. I was naive and said it was nothing but look at where we are now.

[FINate]

@FINate I wasn't on the forum back then. I was naive and said it was nothing but look at where we are now.

If you look at my comments from that era you'll find a number about the damage Musk was doing to the Tesla brand. Branding is squishy and difficult to quantify, but it's very powerful in the sense that it's the first thing potential customers think of when a company comes to mind. It's also very sticky and hard to change. They probably don't want to admit it, but branding is the main reason Tesla bros continue buying/holding TSLA even though the fundamentals indicate it's a poor investment. What I underestimated was how completely toxic Musk would become. Musk single-handedly took the Tesla brand from visionary innovative disruptor to backwards pariah in just a couple of years. The level of destruction is breathtaking. 

[NorCal]

The stock has a lot further to fall before there's really shareholder damages.

Peak was about $480/share and it's now down to $250/share. If you can draw a straight line between the CEO's behaviour/performance and that share price decline I'd say you have a pretty good argument for shareholder damages even if they are still up vs. some other time period.

I suspect the next few earnings calls will be a real inflection point.  The online rhetoric is talking about how bad things are for Tesla.  Things aren't great, and I'm bearish myself.

However, we'd be seeing factory shutdowns and mass layoffs if things were truly as bad for Tesla as the internet commentary suggests.  People are latching onto some delivery numbers that inherently have a lot of noise, and are difficult to predict from. 

The stock will surge if Tesla is able to re-affirm their guidance on the Q1 call.  The impact of guiding lower will depend on how much lower they actually shift guidance. 

[41_swish]

@FINate I wasn't on the forum back then. I was naive and said it was nothing but look at where we are now.

If you look at my comments from that era you'll find a number about the damage Musk was doing to the Tesla brand. Branding is squishy and difficult to quantify, but it's very powerful in the sense that it's the first thing potential customers think of when a company comes to mind. It's also very sticky and hard to change. They probably don't want to admit it, but branding is the main reason Tesla bros continue buying/holding TSLA even though the fundamentals indicate it's a poor investment. What I underestimated was how completely toxic Musk would become. Musk single-handedly took the Tesla brand from visionary innovative disruptor to backwards pariah in just a couple of years. The level of destruction is breathtaking.

Okay, so take his politics, antics, and branding out of the picture. Why is Tesla a bad investment? I am genuinely curious. Are the cars lackluster? Is competition catching up? Are the legacy auto makers making a more compelling product?

[dividendman]

@FINate I wasn't on the forum back then. I was naive and said it was nothing but look at where we are now.

If you look at my comments from that era you'll find a number about the damage Musk was doing to the Tesla brand. Branding is squishy and difficult to quantify, but it's very powerful in the sense that it's the first thing potential customers think of when a company comes to mind. It's also very sticky and hard to change. They probably don't want to admit it, but branding is the main reason Tesla bros continue buying/holding TSLA even though the fundamentals indicate it's a poor investment. What I underestimated was how completely toxic Musk would become. Musk single-handedly took the Tesla brand from visionary innovative disruptor to backwards pariah in just a couple of years. The level of destruction is breathtaking.

Okay, so take his politics, antics, and branding out of the picture. Why is Tesla a bad investment? I am genuinely curious. Are the cars lackluster? Is competition catching up? Are the legacy auto makers making a more compelling product?

I think all of the above. Plus Tesla has less revenue than last year and is priced for growth so...
YoY revenue growth in 2024, 0.9%
2023 - 18.8%
2022 - 51.35%

Not a promising trend... but who knows, maybe they'll get 300% growth this year...

[FireLane]

Okay, so take his politics, antics, and branding out of the picture. Why is Tesla a bad investment? I am genuinely curious. Are the cars lackluster? Is competition catching up? Are the legacy auto makers making a more compelling product?

Tesla is losing market share to competitors, especially the Chinese company BYD. BYD beats Tesla on price and now claims their cars charge faster too:

https://www.cnn.com/2025/03/18/cars/china-byd-supercharging-system-ev-tesla-intl-hnk/index.html

I'd also say that Elon's politics matter for more than just branding or reputation. Now that he's tied so closely to Trump, other countries are going to put the screws to Tesla and his other businesses as a way to pressure Trump. The CNN article points out how this is already happening in China:

The Financial Times reported last month, citing two unnamed sources, that Chinese officials were considering withholding Tesla’s FSD license approval as leverage in trade negotiations with Trump. This was the primary reason for the permit’s delay, the sources were quoted as saying.

[NorCal]

@FINate I wasn't on the forum back then. I was naive and said it was nothing but look at where we are now.

If you look at my comments from that era you'll find a number about the damage Musk was doing to the Tesla brand. Branding is squishy and difficult to quantify, but it's very powerful in the sense that it's the first thing potential customers think of when a company comes to mind. It's also very sticky and hard to change. They probably don't want to admit it, but branding is the main reason Tesla bros continue buying/holding TSLA even though the fundamentals indicate it's a poor investment. What I underestimated was how completely toxic Musk would become. Musk single-handedly took the Tesla brand from visionary innovative disruptor to backwards pariah in just a couple of years. The level of destruction is breathtaking.

Okay, so take his politics, antics, and branding out of the picture. Why is Tesla a bad investment? I am genuinely curious. Are the cars lackluster? Is competition catching up? Are the legacy auto makers making a more compelling product?

Ford is valued at a PE of 7.  GM is valued at a PE of 8.

If Tesla was valued at a PE of 7.5, it would be a $15 stock.

Tesla's cars are pretty good.  They do have value.  But there isn't a lot that sets them apart from the competition.  I own a Tesla today, but I would pick an EV6 or Ioniq 5 if I were in the market today.  Rivian's R2 is also going to hit Tesla's sweet spot in the Model Y for price, value, and capabilities.  A lot of other brands like Ford, GM, and Honda are finally hitting their stride in the EV market with compelling products and dealers that know how to sell them in volume.  It doesn't mean these other makers are going to put Tesla out of business, but it does mean there's much less opportunity for Tesla to grow.

I'd be willing to accept the argument that Tesla deserves some type of growth premium if they showed a promising path to revenue growth over the medium term, or if it appeared Tesla margin advantage was sustainable.  I'd say the stock could be worth a PE 20 or even 30 at fair value if I believed that growth story.  That puts fair value in the $40 - $60 range for those that still believe the growth story.

[Fru-Gal]

What electric cars are popular in the US other than Tesla?  My impression always is that Tesla is far larger there than in Europe but maybe I'm wrong.  Still, it's hard to see if others are producing equally good (and more varied) cars in Europe why they (or somebody else) would not be able to do so in the US also.

Here in London we just bought an EV (Skoda Enyaq - so far very happy) and so in the run up to that started paying attention to what other electric cars are around.  Looking at fully electric cars parked in my neighbourhood (helpfully marked with a green stripe on their number plates) it's mainly Hyundai and Kia, with quite a few BMW, VW, Nissan and Skoda, and the occasional Tesla, Porsche, Audi, Volvo or Polestar (but all of those seem way less common than the others listed above).  I do see more Teslas driving around in the centre of the city (presumably from the more Bankery neighbourhoods), though everyone I know who has one (leased) is switching to a different brand as soon as the lease is up (and there is plenty to choose from these days).

It’s true that Tesla has become a commonly seen car, and that’s an undeniable achievement for an EV company. Other companies had tried but not succeeded well before Tesla. Toyota had some electric fleets in the late 90s! Nissan Leaf did fairly well as an early entry.

But now, on a regular day, in addition to all those Teslas driving badly, I will see EVs from the following makers: BMW, Hyundai, Chevy/GM, Ford, Rivian, Lucid, Nissan…

[neo von retorch]

I've been saying for over 5 years that what Tesla investors keep ignoring is that they actually have competition. They keep acting as if it does not exist and only Tesla can achieve anything, and in "5 years" there will only be one company providing all cars (or energy or robotaxis or...) to the U.S. market.

That's simply not how either U.S. car buyers work, or how innovation in technology works.

[FINate]

@FINate I wasn't on the forum back then. I was naive and said it was nothing but look at where we are now.

If you look at my comments from that era you'll find a number about the damage Musk was doing to the Tesla brand. Branding is squishy and difficult to quantify, but it's very powerful in the sense that it's the first thing potential customers think of when a company comes to mind. It's also very sticky and hard to change. They probably don't want to admit it, but branding is the main reason Tesla bros continue buying/holding TSLA even though the fundamentals indicate it's a poor investment. What I underestimated was how completely toxic Musk would become. Musk single-handedly took the Tesla brand from visionary innovative disruptor to backwards pariah in just a couple of years. The level of destruction is breathtaking.

Okay, so take his politics, antics, and branding out of the picture. Why is Tesla a bad investment? I am genuinely curious. Are the cars lackluster? Is competition catching up? Are the legacy auto makers making a more compelling product?

Ford is valued at a PE of 7.  GM is valued at a PE of 8.

If Tesla was valued at a PE of 7.5, it would be a $15 stock.

Tesla's cars are pretty good.  They do have value.  But there isn't a lot that sets them apart from the competition.  I own a Tesla today, but I would pick an EV6 or Ioniq 5 if I were in the market today.  Rivian's R2 is also going to hit Tesla's sweet spot in the Model Y for price, value, and capabilities.  A lot of other brands like Ford, GM, and Honda are finally hitting their stride in the EV market with compelling products and dealers that know how to sell them in volume.  It doesn't mean these other makers are going to put Tesla out of business, but it does mean there's much less opportunity for Tesla to grow.

I'd be willing to accept the argument that Tesla deserves some type of growth premium if they showed a promising path to revenue growth over the medium term, or if it appeared Tesla margin advantage was sustainable.  I'd say the stock could be worth a PE 20 or even 30 at fair value if I believed that growth story.  That puts fair value in the $40 - $60 range for those that still believe the growth story.

Yes, this^^^

A very high PE needs a believable growth story to be justified. Which is what the Tesla bulls have been trying to spin for a long time.

In the early days of this thread the theory was that Tesla would essentially own the EV market and then the entire vehicle market. It was a simple linear interpolation of their first-mover advantage. Back then there were no credible competitors to challenge Tesla's dominance.

Skeptics pointed out that competition would follow, but the claim was that Tesla was so far ahead technologically that no one would be able to catch up.

Well, other companies did catch up and now there are many great competing models, with more coming every year.

Then the story pivoted to COGS and how Tesla's innovative manufacturing ("gigacasting") was going to drive down production costs which would undercut competitors while maintaining margins.

Well, that also didn't happen. Tesla started a price war and defended market share at the expensive of declining margins.

Once it was clear that Tesla would not be able to maintain high margins and growth, the growth story shifted to energy, which is inherently a low margin commoditized business. This part of the business will never grow fast enough or have margins high enough relative to what the PE demands.

So once again the focus shifted, this time to AI and robotics as the growth story. But AI is already a crowded field and LLMs are rapidly depreciating assets (e.g. DeepSeek and others). And Tesla's humanoid robot isn't particularly innovative as compared to competitors. Waymo is ahead of Tesla in the robotaxi world, and this is also a relatively low margin business.

On top of all this, Tesla's vehicle line-up is extremely stale, requires more than minor refreshes. Whereas they spent a huge amount of time and money on the Cybertruck, a niche product that increasingly looks like a dud.

Sales, market share, and profit are all in decline.

I just don't see any credible revenue stream to support such a high PE.

[GuitarStv]

Speaking of Tesla's loss of market dominance . . .

https://www.fastcompany.com/91303128/chinas-new-evs-can-charge-in-5-minutes


Seems like Tesla keeps falling behind.

[dividendman]

Tesla is up 10% today! My remaining puts are only up 30% now from over 100%!! :(

[Kapyarn]

Love him or hate him (more hate now I guess), but never bet against the Elon.

I wouldn't have bet against Wernher von Braun either and the USA used the heck out of him even though he probably saluted way more than Elon.

[41_swish]

We always harp on saying that past results do no guarantee future performance. Do we just live in an era now where these high-flying tech stocks can have obscene PE ratios?