Is Tesla a good investment?

[neo von retorch]

Really, I don't know. Average new car price in the US is approaching $40k. Average that out over 10 years of ownership. That's $4k/yr. Then add the opportunity cost of buying a depreciating asset versus investing $40k. Then add annual tax, title, registration, insurance, maintenance, and fuel costs. Owning a car costs around 8-10k/yr. As shown above, a Cybercab can profitably be operated for $1/mile.

How many Americans drive less than 8-10K miles/yr?

BTW, Musk is quoted as saying the cost to operate a CC is 20 cents/mile. Even if you double that to 40 cents, it would mean the cost of car ownership would be more expensive than using AEVs for transport unless you were driving over 20,000 miles a year (or lived in a very rural area, which is a small minority of the pop). Owning your own vehicle could become a luxury only justifiable to the wealthy in suburban and urban markets.

Overall, given the billion factors that go into deciding on car ownership or not, etc...

- not everyone buys new or only decides between buying new and using ride shares (and public transit and biking and walking)
- not everyone buys only to get around to local places (e.g. 1-2 seats in a car vs. trunk, car seats, cargo area, road trips, etc.)
- the average driver in the U.S. travels ~13,500 miles per year (see How many miles does the average person drive a year? 2025 with some states having averages over 21,000 (!)
- not everything Musk is quoted as saying has translated to fact...

Just as an anecdote, my last car, which I drove very little... ~32,000 miles over 6 years. It still only cost me ~$0.30 / mile (doing some napkin math here). Low deprecation, good gas mileage, low insurance costs. Very little maintenance. (A few oil changes I did myself, tires were the biggest expense at ~$700.) Overall insurance and depreciation were the biggest costs. (Not so much the gas engine and related equipment, though once you hit 60,000 miles and beyond, those sorts of costs start jumping up.)

Anyway, the point was that for my use cases, the "per year" cost was $1600 / year. Not "8-10k/yr." $1/mile ride-sharing would've been over $5k/yr.

This ignores things like driving to Home Depot, loading it with plywood, and driving home. Does the hypothetical future "van-sized" Cybercab also cost $1/mile? Or do I have to hail a Cybercab, take a ride to a Budget Rental, and rent a van? Oops. In my use cases, I opt to own a car because it is cheaper, more convenient.

It's just a point you really need to consider. People prefer owning for a large number of reasons. Only some of them are money or stubbornness or worrying about germs or feeling special or thinking about how their car choice signals things to other people.

[GuitarStv]

This ignores things like driving to Home Depot, loading it with plywood, and driving home. Does the hypothetical future "van-sized" Cybercab also cost $1/mile? Or do I have to hail a Cybercab, take a ride to a Budget Rental, and rent a van? Oops. In my use cases, I opt to own a car because it is cheaper, more convenient.

FWIW, I finished my whole basement by cycling down to Home Depot, buying lumber, renting a van from HD, driving it home and unloading, then dropping off the van and riding my bike back home.  Van rentals ranged from like 20$ for 90 minutes to 100$ for the whole day.

[neo von retorch]

This ignores things like driving to Home Depot, loading it with plywood, and driving home. Does the hypothetical future "van-sized" Cybercab also cost $1/mile? Or do I have to hail a Cybercab, take a ride to a Budget Rental, and rent a van? Oops. In my use cases, I opt to own a car because it is cheaper, more convenient.

FWIW, I finished my whole basement by cycling down to Home Depot, buying lumber, renting a van from HD, driving it home and unloading, then dropping off the van and riding my bike back home.  Van rentals ranged from like 20$ for 90 minutes to 100$ for the whole day.

That is admirable. In my current situation, the bike ride is ~1 hour each way (which makes some assumptions because leaving my house I have to go up a lot of elevation first, and not die! (Which, on the roads around here, even if my heart holds up, well I'd probably get run over by a loud truck while it rolled coal...)

Before I moved, biking to Home Depot would've been more feasible - I did make the opposite ride once even
 further back in time, as I was renting an apartment close to Home Depot, but wanted to ride to my in-law's house.
 But that's... a tangent :) I also did rent a truck from Home Depot once when I needed full sized plywood and drywall,
 as those don't fit in my (previous car) regardless!

But the bigger point is even clearer, then. Your lifestyle and your use case tends to drive your vehicle choices. Where you bought a house, and what you plan on doing with it probably matters more than whether you can get a ride for $0.30 / mile or $1 / mile.

[Telecaster]

I easily can see an autonomous rideshare company being cheaper than one with human drivers, but I don't see how it works out to be meaningfully cheaper than owning the equivalent vehicle.

Really, I don't know. Average new car price in the US is approaching $40k. Average that out over 10 years of ownership. That's $4k/yr. Then add the opportunity cost of buying a depreciating asset versus investing $40k. Then add annual tax, title, registration, insurance, maintenance, and fuel costs. Owning a car costs around 8-10k/yr. As shown above, a Cybercab can profitably be operated for $1/mile.

How many Americans drive less than 8-10K miles/yr?

BTW, Musk is quoted as saying the cost to operate a CC is 20 cents/mile. Even if you double that to 40 cents, it would mean the cost of car ownership would be more expensive than using AEVs for transport unless you were driving over 20,000 miles a year (or lived in a very rural area, which is a small minority of the pop). Owning your own vehicle could become a luxury only justifiable to the wealthy in suburban and urban markets.

The operative words are "equivalent vehicle."   There are unavoidable fixed costs associated with owning a vehicle.   Those costs exist regardless if the vehicle is owned individually or by a corporation.    Roughly 20-30% of the cost of a rideshare is labor costs.   If you eliminate the human driver and associated costs, you can make rideshare more financially attractive.   But it isn't wildly more attractive.  It is incrementally more attractive.

[reeshau]

(or lived in a very rural area, which is a small minority of the pop).

The 2020 Census reported that 66.3 million people live in rural areas--20% of the population, which I consider not a small minoeity.  Now, add up those afluent suburbanites who have vacation homes, or otherwise spend significant time in rural areas, and it may not be a minority at all.

[ChpBstrd]

Relevant summary from Patrick Boyle:
https://www.youtube.com/watch?v=AT7x31Jm9go

[ColoradoTribe]

Relevant summary from Patrick Boyle:
https://www.youtube.com/watch?v=AT7x31Jm9go

This board did a better job dissecting and analyzing Tesla's business prospects in the last couple pages than this guy does in a 20 minute video. Clear he has no actual expertise in this area. Virtually zero analysis. Just a bunch of general opinion and sentiment with the tired claim that Tesla investors are a cult and it's all hype yada, yada. Same claim that was made when Tesla sold 2,000/cars a year and as when Tesl sold nearly 2 million/year. Collapse is imminent, no really this time.

[reeshau]

Relevant summary from Patrick Boyle:
https://www.youtube.com/watch?v=AT7x31Jm9go

This board did a better job dissecting and analyzing Tesla's business prospects in the last couple pages than this guy does in a 20 minute video. Clear he has no actual expertise in this area. Virtually zero analysis. Just a bunch of general opinion and sentiment with the tired claim that Tesla investors are a cult and it's all hype yada, yada. Same claim that was made when Tesla sold 2,000/cars a year and as when Tesl sold nearly 2 million/year. Collapse is imminent, no really this time.

So, false claims have been made by all sides, for years?

The truth is, no destiny is certain.  People who speak in certainties are salesmen, not investors.  Serious investors speak in probabilities.

[Telecaster]

Relevant summary from Patrick Boyle:
https://www.youtube.com/watch?v=AT7x31Jm9go

I watched that the other day.   I enjoyed it, but he goes on a little long and the title is click-baity.    I don't think Tesla or SpaceX are going anywhere any time soon.   But he has a banger of a point right at the beginning:  Tesla's free cash flow.    Which is to say there isn't much of it.  The FCF Yield is about 0.5% which is Not Good™       The FCF growth rate is negative, which is also Not Good™

The stock price isn't connected to the fundamentals, no matter how you slice it.   

[neo von retorch]

Tesla Posts Worst Deliveries In Over Two Years

Q1's delivery numbers came in 13% below the same period last year...

Sales reports and estimates from markets around the world throughout the start of 2025 have shown that demand is way down.

Tesla suffers worst quarter since 2022 as deliveries tumble (ft.com; web archive link: https://archive.ph/oeBUY)

The figure lagged behind that of China’s BYD, which has regained its crown as the world’s best-selling electric-vehicle maker after this week reporting sales of 416,388 EVs in the same period.

The company is banking on a revival in demand after finally launching the redesigned Model Y in China in February and Europe last month.

But the upgrade has not yet lifted sales, with new registrations falling sharply in France, Sweden and other European markets.

[reeshau]

It's hard to sort out the factors from the big number.  I hope some analyst takes the time to do that in the next few days.  We all know the Model Y changeover was a big part of that.  Now we need to see the trend after that.

The news out of China is not encouraging, on that front.  Down 11%, while BYD was up 23%.

https://www.cnbc.com/2025/04/02/tesla-china-made-ev-sales-fall-11point5percent-in-march-as-competition-rises.html

[41_swish]

I really just don't get what drives Tesla's insane evaluation at this point. The PE is insane, and the competition is and will continue catching up or even being better.

[reeshau]

I really just don't get what drives Tesla's insane evaluation at this point. The PE is insane, and the competition is and will continue catching up or even being better.

“In our view, Tesla’s softer auto deliveries are emblematic of a company in the transition from an automotive ‘pure play’ to a highly diversified play on AI and robotics,” Morgan Stanley analyst Adam Jonas wrote on March 20.

[dividendman]

I really just don't get what drives Tesla's insane evaluation at this point. The PE is insane, and the competition is and will continue catching up or even being better.

It could also be the tariffs will make Tesla more competitive since their parts and assembly are made more in the US than any other car. Tesla is up 5% today on the news... I am tempted to buy more puts.

[bacchi]

I really just don't get what drives Tesla's insane evaluation at this point. The PE is insane, and the competition is and will continue catching up or even being better.

“In our view, Tesla’s softer auto deliveries are emblematic of a company in the transition from an automotive ‘pure play’ to a highly diversified play on AI and robotics,” Morgan Stanley analyst Adam Jonas wrote on March 20.

That almost makes it seem like reduced deliveries is on purpose.

[Kapyarn]

I really just don't get what drives Tesla's insane evaluation at this point. The PE is insane, and the competition is and will continue catching up or even being better.

It could also be the tariffs will make Tesla more competitive since their parts and assembly are made more in the US than any other car. Tesla is up 5% today on the news... I am tempted to buy more puts.

All signs seem to point to a disaster in Telsa sales...I can't even fathom that they have sold more than a couple hundred cars in the last month with all of the protests and worry.  I should toss some money at $150 puts for August but then I remember Elon knows how to play games and could do something like have X buy Tesla or other weirdness.

[Telecaster]

That almost makes it seem like reduced deliveries is on purpose.

Yep, that's some bullshit there.   

[reeshau]

I really just don't get what drives Tesla's insane evaluation at this point. The PE is insane, and the competition is and will continue catching up or even being better.

It could also be the tariffs will make Tesla more competitive since their parts and assembly are made more in the US than any other car. Tesla is up 5% today on the news... I am tempted to buy more puts.

As posted in Off Topic:  Elon is supposed set to leave DOGE when his 130 days runs out.

https://www.politico.com/news/magazine/2025/04/02/trump-musk-leaving-political-liability-00265784

I can imagine many Tesla investors cheering that news.

[ChpBstrd]

I really just don't get what drives Tesla's insane evaluation at this point. The PE is insane, and the competition is and will continue catching up or even being better.

“In our view, Tesla’s softer auto deliveries are emblematic of a company in the transition from an automotive ‘pure play’ to a highly diversified play on AI and robotics,” Morgan Stanley analyst Adam Jonas wrote on March 20.

There's something about Tesla that has allowed investors to jump from one growth narrative to another, even as the previous narratives have successively collapsed. Back in the dot-com bubble, Pets.com and the like had one narrative and they collapsed within 1-4 years when the narrative didn't play out. Yet the way we treat Tesla now would be like if the CEO of Pets.com announced they would go into the business of selling AI pets, and we all threw more billions into their next round of equity/stock offering, and then announced they'll start accepting bitcoin for AI pets and we threw in billions more. Certainly the example doesn't hold now the TSLA started operating at some minor scale and generating profits, but it does apply to the question of how a car manufacturer with falling sales and major brand damage sports a PE of 128 instead of 12.8?

Tesla went from being a car company (success!... but where's the Model 2?) to being a solar company (just forget that ever happened) to being a FSD company (still waiting for the product to work...) to being a truck company (a non-serious product was introduced) to being an AI robot company (with demo robots that were shown to be remote controlled by humans) to now being a FSD taxi company (back to still waiting...).

If this is a bubble, it seems to have gone on for longer than any other bubble. Housing 1.0, dot com, roaring 20's, South Sea, tulips... all were done within a few years; yet TSLA has been insanely priced for - what? - a decade now? And throughout that time, Tesla has still not produced as much free cash flow as has been invested in the company.

This suggests there's something bigger going on than a mere bubble. Some might say it's the meme stock phenomenon. Others might say it's the Cult of Elon (formerly comprised of environmentalists, now comprised of MAGA bros?). But even these factors seem too small to prop up an anti-growth company this way for this long.

I'm looking for more systemic explanations. Maybe saturated markets, high asset prices, and maxxed out consumers create a world where the possibility of breaking open new markets or disrupting old markets is the only thing perceived to have value? Maybe tax policy distortions and industrial subsidies are pushing money into less-productive directions? Maybe more liquid markets for options, swaps, or collateralized lending are propping up asset prices by making assets more useful or less risky than in the past. Maybe there's simply a worldwide savings glut propping up everything - an "everything bubble" caused by wealth inequality reaching critical mass? Maybe microplastic pollution and the internet have made us all gullible? Or maybe Tesla has real advantages that justify the extreme price, despite all the negatives.

All I'm saying is, we need to be past the point of considering little factors.

[Fru-Gal]

Maybe it’s money laundering and influence purchasing.

[Stasher]

Maybe it’s money laundering and influence purchasing.

LOL I like this scenario..... hard to not imagine this with Musk. He funneled his money out of Tesla to buy Twitter. Now he just funneled money out of X, its a shell game of crazy levels and tech oligarch games.

"He announced Friday he sold X, the site formerly known as Twitter, to his artificial intelligence startup xAI. Both will be part of a new Musk-controlled company. Musk said the deal had a total value of $113 billion. That's $80 billion for xAI and $33 billion for X."

[bacchi]

I really just don't get what drives Tesla's insane evaluation at this point. The PE is insane, and the competition is and will continue catching up or even being better.

“In our view, Tesla’s softer auto deliveries are emblematic of a company in the transition from an automotive ‘pure play’ to a highly diversified play on AI and robotics,” Morgan Stanley analyst Adam Jonas wrote on March 20.

There's something about Tesla that has allowed investors to jump from one growth narrative to another, even as the previous narratives have successively collapsed. Back in the dot-com bubble, Pets.com and the like had one narrative and they collapsed within 1-4 years when the narrative didn't play out. Yet the way we treat Tesla now would be like if the CEO of Pets.com announced they would go into the business of selling AI pets, and we all threw more billions into their next round of equity/stock offering, and then announced they'll start accepting bitcoin for AI pets and we threw in billions more. Certainly the example doesn't hold now the TSLA started operating at some minor scale and generating profits, but it does apply to the question of how a car manufacturer with falling sales and major brand damage sports a PE of 128 instead of 12.8?

Tesla went from being a car company (success!... but where's the Model 2?) to being a solar company (just forget that ever happened) to being a FSD company (still waiting for the product to work...) to being a truck company (a non-serious product was introduced) to being an AI robot company (with demo robots that were shown to be remote controlled by humans) to now being a FSD taxi company (back to still waiting...).

If this is a bubble, it seems to have gone on for longer than any other bubble. Housing 1.0, dot com, roaring 20's, South Sea, tulips... all were done within a few years; yet TSLA has been insanely priced for - what? - a decade now? And throughout that time, Tesla has still not produced as much free cash flow as has been invested in the company.

This suggests there's something bigger going on than a mere bubble. Some might say it's the meme stock phenomenon. Others might say it's the Cult of Elon (formerly comprised of environmentalists, now comprised of MAGA bros?). But even these factors seem too small to prop up an anti-growth company this way for this long.

I'm looking for more systemic explanations. Maybe saturated markets, high asset prices, and maxxed out consumers create a world where the possibility of breaking open new markets or disrupting old markets is the only thing perceived to have value? Maybe tax policy distortions and industrial subsidies are pushing money into less-productive directions? Maybe more liquid markets for options, swaps, or collateralized lending are propping up asset prices by making assets more useful or less risky than in the past. Maybe there's simply a worldwide savings glut propping up everything - an "everything bubble" caused by wealth inequality reaching critical mass? Maybe microplastic pollution and the internet have made us all gullible? Or maybe Tesla has real advantages that justify the extreme price, despite all the negatives.

All I'm saying is, we need to be past the point of considering little factors.

1) The democratization, and gamification, of stock trading

Even in the dotcom era, the buying and selling of equities was not well spread. Commissions were $8 at Ameritrade and the 20 somethings, other than the dot commies, weren't trading. Now we have a Robin Hood app with $0 commissions. It's fun, it's profitable, it can be done on your phone as you eat lunch!

2) There is definitely an Elon factor going on here. Someone posted on MMM about EM's ability to create a reality distortion field around him when discussing his grand ideas. He pulls people, even analysts, into his orbit. In D&D terms, he may not have a high Intelligence but he does have a very high Charisma.

[Telecaster]

All I'm saying is, we need to be past the point of considering little factors.

I think the simplest explanation is best:   Tesla devotees really believe in Tesla and are willing to pay a premium for the stock.

[Must_ache]

All I'm saying is, we need to be past the point of considering little factors.

I think the simplest explanation is best:   Tesla devotees really believe in Tesla and are willing to pay a premium for the stock.

I don't think that explanation works at all, considering that Tesla is 1.65% of the S&P, 2.8% of the Nasdaq, and almost 2/3 of the shares are held by institutions.

[reeshau]

All I'm saying is, we need to be past the point of considering little factors.

I think the simplest explanation is best:   Tesla devotees really believe in Tesla and are willing to pay a premium for the stock.

I don't think that explanation works at all, considering that Tesla is 1.65% of the S&P, 2.8% of the Nasdaq, and almost 2/3 of the shares are held by institutions.

"ARK Invest CEO Cathie Wood maintains her ambitious $2,600 price target for Tesla (NASDAQ:TSLA) by 2029—valuing the company at over $9 trillion—despite the stock’s near 41% decline since the beginning of the year.

'It’s winner take most,' Wood said of Tesla’s position in the autonomous vehicle race during Bloomberg’s 'Odd Lots' podcast. 'And we do believe that Tesla will be and is in the pole position here in the United States.'

Wood sees robotaxis as an $8 trillion to $10 trillion opportunity that could transform Tesla from an auto manufacturer to a software company. She predicts autonomous vehicles will boost Tesla’s gross margins from the current 16% to up to 90%, according to Fortune."

Institutional investors can be true believers, too.

[ChpBstrd]

All I'm saying is, we need to be past the point of considering little factors.

I think the simplest explanation is best:   Tesla devotees really believe in Tesla and are willing to pay a premium for the stock.

I don't think that explanation works at all, considering that Tesla is 1.65% of the S&P, 2.8% of the Nasdaq, and almost 2/3 of the shares are held by institutions.

"ARK Invest CEO Cathie Wood maintains her ambitious $2,600 price target for Tesla (NASDAQ:TSLA) by 2029—valuing the company at over $9 trillion—despite the stock’s near 41% decline since the beginning of the year.

'It’s winner take most,' Wood said of Tesla’s position in the autonomous vehicle race during Bloomberg’s 'Odd Lots' podcast. 'And we do believe that Tesla will be and is in the pole position here in the United States.'

Wood sees robotaxis as an $8 trillion to $10 trillion opportunity that could transform Tesla from an auto manufacturer to a software company. She predicts autonomous vehicles will boost Tesla’s gross margins from the current 16% to up to 90%, according to Fortune."

Institutional investors can be true believers, too.

Isn't this an extension of the meme stock phenomenon? I.e. people on Reddit theorizing about how Gamestop will use crypto to trade video game IP sound a lot like Cathie Wood. It's just unrestrained, but focused, hyper-optimism. I suppose that's what worked for the 100-bagger tech companies of the past, and so now people are aping the attitude that led those investors to lotto tickets.

[Telecaster]

I don't think that explanation works at all, considering that Tesla is 1.65% of the S&P, 2.8% of the Nasdaq, and almost 2/3 of the shares are held by institutions.

Market cap has literally zero to do with it.   Stock prices are set by traders based on the expectation of future profits.   That's been the case since the first stocks were traded in 1602.

For years, TSLA's stock price has been hotly debated, to the point where discussing TSLA is banned on some investment boards.    But the arguments all boil down the same way:   If you believe that Tesla's versions of autonomous driving, the cybercab, AI, and Optimus will dominate the future, then TSLA is a great buy at only 117 times current earnings.   There are lots of people, including a few in this thread, who firmly believe that is the case and are willing to pay that price.   

Other people don't believe that, but the price isn't set by people who don't buy the stock.  The price is set by people who do buy the stock.   And before you can say "What about index funds?"   Index funds don't do price discovery.   

[neo von retorch]

Tesla Bull Slashes Stock Price Target 43%, Citing Musk and Trump (yahoo.com)

Ives’ biggest concern is the potential for Tesla to get caught up in backlash against the US president’s tariff policies in China, where Tesla generated more than a fifth of its revenue last year. President Xi Jinping’s government plans to impose a 34% tariff on all imports from the US starting April 10, matching the level of Trump’s so-called reciprocal tariffs on Chinese products.

“This will further drive Chinese consumers to buy domestic such as BYD, Nio, Xpeng and others,” Ives said in his note issued Sunday. “We now estimate Tesla has lost/destroyed at least 10% of its future customer base globally based on self-created brand issues, and this could be a conservative estimate.”

(Obviously the above doesn't matter if Tesla drops the finite car business and somehow makes infinite money as a software and services company!)

[41_swish]

I tried to do my own research. I am out on Tesla. The company will probably exist for my entire life, but their insane P.E. and competition from legacy automotive companies spooks me too much. I will buy them in the S&P 500, but that's about it.

[PathtoFIRE]

I toyed with the idea of buying a little TSLA when it dipped below $250, but decided I didn't care enough. After today's insane run-up, I missed out, but still don't care.

I did think it was a bearish sign that at my work, where there are 20+ Teslas, not a single one is one of the refreshed 3s or Ys. And was musing over that exact thought again today as I pulled into the lot, only to see that the owner now has a brand new Y, paper plates and all. Kind of disappointed, as he was a big Elon fan (constantly using him as an example) but had supposedly soured on him since the election. But I "think" he made a good chunk (maybe most?) of his money off of TSLA and SpaceX, so I figure maybe the story for him is an attempt to do what he can to prop up the price of whatever shares he still has, and maybe that story has been and is being repeated all over among those that Tesla enriched, and partially explains why Tesla has so far avoided a catastrophic crash?

[ChpBstrd]

I toyed with the idea of buying a little TSLA when it dipped below $250, but decided I didn't care enough. After today's insane run-up, I missed out, but still don't care.

I did think it was a bearish sign that at my work, where there are 20+ Teslas, not a single one is one of the refreshed 3s or Ys. And was musing over that exact thought again today as I pulled into the lot, only to see that the owner now has a brand new Y, paper plates and all. Kind of disappointed, as he was a big Elon fan (constantly using him as an example) but had supposedly soured on him since the election. But I "think" he made a good chunk (maybe most?) of his money off of TSLA and SpaceX, so I figure maybe the story for him is an attempt to do what he can to prop up the price of whatever shares he still has, and maybe that story has been and is being repeated all over among those that Tesla enriched, and partially explains why Tesla has so far avoided a catastrophic crash?

It's not logical behavior, but it does seem to match what I see in reality. Tesla fanboys always like both the stock and the product. A friend who is always texting me X links about Musk saying something pseudo-profound and semi-misleading thinks the Cybertruck is badass. He can't afford one, but you can bet he's in the stock, hoping it rises 1,000% so he can afford one. Musk's deal seems to be "if you believe in me, I'll give you a luxury car".

That said, I've learned to pay attention to such people. I knew an Apple fanboy 15 years ago, who would absolutely monopolize group conversations to talk about how you could share contacts through bluetooth, or how you could do spreadsheets on your iPhone 6. I dismissed him, and lectured about diversification. Now he spends his early retirement sleeping with divorcees on cruise ships. Who knows how long it's been since he's had to do dishes or cook for himself?

I bet many Tesla fanboys have observed similar stories, which they hope to repeat through the magic of stock concentration and ignoring fundamentals.

[reeshau]

I bet many Tesla fanboys have observed similar stories, which they hope to repeat through the magic of stock concentration and ignoring fundamentals.

Different kind of lottery ticket.  Lots of Pets.com shareholders and Enron employees had the same idea, too.

[dragoncar]

10 years ago (when iPhone 6 was released) AAPL had a PE ratio of like 10

[ChpBstrd]

10 years ago (when iPhone 6 was released) AAPL had a PE ratio of like 10

We may see that opportunity again.

[41_swish]

So, what made Apple's stock price go insane and create a crazy high PE?

[reeshau]

So, what made Apple's stock price go insane and create a crazy high PE?

The first thing was the rise of the app store and Apple+.  Software made very little of Apple's revenues back in 2013.

Since 202, it's been Mag 7, and P/E expansion.  (I.e. without earnings growth)

[Kapyarn]

A good dose of unemployment and 145% tariffs causing a $2500 I-phone should fix that Apple PE right up.

[41_swish]

Republicans want $2,500 iPhones? wild

[Retire-Canada]

Republicans want $2,500 iPhones? wild

They don't. The handful of people pulling the levers causing the tariffs are dealing with various levels of alternate facts/reality. They can ignore reality for a while, but eventually enough people get fed up with higher costs, lost jobs and failed businesses to make them change course. Unfortunately they can do a lot of damage before they take any corrective action.

[ChpBstrd]

Republicans want $2,500 iPhones? wild

I like it.
Millions would switch to cheaper ($750) flip phones.
Social media would lose its grasp on them.
People would start calling each other again.
The lack of distractions and ads would drive up productivity and individual prosperity.
We'd get our brains back, and the collective IQ would return to where it was before we outsourced thinking.
Of course, millions more would pay $2500. They'd be like the left-behind in the apocalypse of positivity.

[neo von retorch]

Republicans want $2,500 iPhones? wild

Details of U.S.A. phones
How a $2,000 'Made in the USA' Phone Is Manufactured

[Kapyarn]

There is something to be said for NOT bringing industrial manufacturing back to the USA...

[FireLane]

Here's a story I saw today: Tesla is being sued for allegedly inflating odometer readings to get out of its warranty obligations.

According to the lawsuit, Tesla cars' odometers aren't a simple measurement of distance traveled. Instead, they're an estimate generated by predictive algorithms based on driver behavior and energy usage (this part is apparently undisputed, Tesla has a patent on technology that does this).

The plaintiff claims that his car's odometer created artificially high mileage readings, showing that he drove as much as 72 miles per day on days when he drove no more than 20. He alleges that Tesla does this deliberately to push their cars over the 50,000-mile limit so they go out of warranty and Tesla no longer has to pay for repairs.

[41_swish]

@FireLane This feels so scummy, but I am not shocked. This seems like a nasty fine from the DOT or NHTSA

[dragoncar]

What’s the supposed advantage of this weird odometer algorithm?  Like does it save them from having to have a wheel rotation sensor?

[41_swish]

It has to be some sort of cost savings.

I know that auto makers will actually want speedometers to always read a little fast, because the fine for having them be slow and having people speed is pretty hefty

[FireLane]

Two more stories today:

First, the Cybertruck is one of the worst flops in automotive history. It's selling less than the Ford Edsel, an infamous disaster:

Judged solely on sales, Musk’s Cybertruck is actually doing a lot worse than Edsel, a name that’s become synonymous with a disastrous product misfire. Ford hoped to sell 200,000 Edsels a year when it hit the market in 1958, but managed just 63,000. Sales plunged in 1959 and the brand was dumped in 1960. Musk predicted that Cybertruck might see 250,000 annual sales. Tesla sold just under 40,000 in 2024, its first full year. There’s no sign that volume is rising this year, with sales trending lower in January and February, according to Cox Automotive.

...In anticipation of high sales, Tesla even modified its Austin Gigafactory so it could produce up to 250,000 Cybertrucks a year, capacity investments that aren’t likely to be recouped.

Musk boasted that he did "zero market research" before designing the Cybertruck. Those words will come back to haunt him.

Second, this report that millions of Teslas on the road don't have the hardware necessary to support "full self-driving" mode, contrary to Musk's claims. Fixing this would potentially require an enormous recall:

Musk and Tesla not only made promises to those who bought the FSD package, but they promised anyone buying Tesla vehicles since 2016 had “all the hardware necessary for full self-driving capability.”

As we previously reported, Tesla removed the claim from its website last year and changed the language around the FSD package, which was likely aimed at weakening claims for Tesla HW4 owners, but the case for HW3 owners is more straightforward.

In 2019, Musk claimed “Tesla vehicles are now appreciating assets” because of their future self-driving capabilities. Of course, this proved to be completely wrong.

Tesla cars built prior to 2019 have a built-in computer called HW2.5. That one wasn't powerful enough to handle the computations needed for the self-driving capacity Tesla wanted, so in April 2019, they switched to a new computer, HW3.

Unfortunately for Tesla, it turns out HW3 also isn't powerful enough for robotaxi mode:

In 2024, we started to report that Tesla was reaching the limits of the HW3 computer, while the capabilities were nowhere near the promised unsupervised robotaxi-level autonomous driving.

It took another 6 months, but in January 2025, Musk finally admitted that HW3 computers are not powerful enough to achieve unsupervised self-driving capability.

New Teslas are using HW4, but there are about 4 million Teslas with earlier generations of hardware. Upgrading the hardware in all of them would be a colossally expensive endeavor. The company has been sued for false advertising by people who bought those Teslas based on the promise of "full self-driving" and then found out the car isn't capable of that.

[GuitarStv]

Truly, the man is a genius.

[Wolfpack Mustachian]

Truly, the man is a genius.

You all just need to lay off. You're not giving the man enough time. It'll all be ready in one or two or some amount of years decades.... Or just whenever. Leave the Stephen Hawking of the automobile industry alone!

[neo von retorch]

Tesla won’t take your Cybertruck trade-in as lots fill with unsold EVs (motorbiscuit.com)

Unsold stockpiles of Tesla Cybertrucks have reached all-time highs, with nearly $200 million in idle vehicles sitting on lots. To keep that number from creeping ever higher, Tesla is refusing trade-in requests from current Cybertruck owners.

Tesla is sitting on $200 million worth of Cybertruck inventory (electrek.co)

In the meantime, Tesla finds itself holding more Cybertruck inventory than ever, with almost 2,400 Cybertrucks in new inventory available (via Tesla-Info)

I didn't "math" the $200m at first, but realizing it's only 2400 Cybertrucks, that doesn't seem so bad. They seem to be selling roughly that many each month, so it's something like a 30 day supply. Many manufacturers have much larger inventories (though often held by dealerships).