I’ve seen a lot of optimism on here about Tesla which I’m trying to understand. Full disclosure I do have a short position, but may close it out because I’m not sure if I have the stomach for the volatility.
Their deliveries are growing, but at the expense of massive discounts which should hurt their margins. China is their biggest growth market, but seems like they are in a price war with local companies which is a race to the bottom. Just today another company launched a big price cut which could make them the most popular EV in China: https://www.benzinga.com/news/large-cap/23/06/33081948/xpengs-suv-pricing-gambit-rattles-tesla-ahead-of-key-q2-deliveries
On top of that, we may or may not be heading to a potential recession, and interest rates will likely hike a couple more times making it harder to pay loans for a new car. Elon’s behavior isn’t doing Tesla any favors in the US and could be hurting his core consumer base of left-leaning car owners. And cutting corners to lower costs has started to give Tesla a reputation for poor quality/reliability. https://insideevs.com/news/622136/tesla-consumer-reports-reliability-2022/
I’ve heard the self-driving AI as a reason to be bullish, but according to this ranking Tesla is in last with their tech there:
Regarding the charging network, I’m not sure how much value others using it will add long term. Electricity is a commodity and eventually seems like charging stations will get added everywhere. And it will take away the exclusivity for current/futures owners, which was a big perk for buying a Tesla.
Finally, there is cybertruck on the horizon but that is still a question mark on how popular it will be. The design is polarizing, and companies like Rivian have already beaten Tesla to the punch here with some really popular designs.
It’s certainly impressive how far Tesla has come, but it’s hard to see how they are going to fill out their current valuation without some serious creativity.
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