Bottom line: Tesla has no actual product to justify the stock's sky high price.
GM, Ford, Toyota etc. all have a price to earning ratio (P/E) of less than 10.
Tesla has a P/E of 120.
But, but, but --- Tesla is more than just an auto manufacturer. Again, there is little in the way of actual product to justify this viewpoint. 90 percent of their income is from autos.
But, but, but --- Tesla is a "growth stock" with huge future potential. Again, the actual data shows otherwise. Sales in 2024 actually declined.
The only reason Tesla has a P/E of 120 is because the so called "smart money" (aka institutional investors) remain bought into Musk's fantasy in a big way.
Musk's best skill is con artistry and Wall Street is one of his biggest marks.
The best way to justify that high p/e would be for them to use it to buy out the competition.
It costs Tesla ~<6% of market cap (780b) to acquire Ford (40b) or GM (44b) (with a friendly ftc); so for 15% of their shares, that could become the only "American" manufacturer - then they'd probably strip those 2 for parts, end the dealer model, bust the unions, maybe keep a few of the popular models.
Some of this might be inevitable anyway, as autos become more expensive (tariffs, inflation, chips, unions), and more reliable (dealer maintenance model, fewer sales)
I don't know much about A&Ms or frankly business, but it seems kinda strange that this hasn't happened yet. We got the Stellantis Car borg before the Tesla car borg.
I believe this too, but I’m also pretty nervous about trying to cash in my beliefs by selling it short or buying put options. The old adage “the market can remain irrational longer than you can remain solvent” still holds true.
It’s expensive to hold a long term short position against Tesla. Options expire, leveraged ETFs decay, opportunity cost. I’m sure there are some Michael Burray types that are long on short positions but as a retail investor I can’t do it.
The stock has show amazing resilience in face of continuous bad news. To summarise just the recent bad news:
- Sales are down 15% in California
- Cybertruck production has been reduced in Texas due to poor demand
- Two models have been pulled from sale in China
- RoboTaxi delayed again, this will probably never ship
You can write put positions against a short position to have a positive carry short.
It's not an awful approach when a stock already has fear and high volatility. To step it up a notch you can check the ratio of recent implied to realized volatility, and look at option skew (often Puts are extra expensive relative to calls in times of stress) as well as volatility smile shape (far out of the money tail risks can run very expensive in times of stress). All of that is easy for a retail participant, or I should say, anyone expecting to make money from shorting should probably be able to do the "middle school" stuff like this (brokers like ThinkOrSwim will have this info a few clicks/15 seconds away from typing in the ticker).
If you truly know what you are doing, short shops will do things like amplify their exposure and then use software to precisely hedge correlations (short a bank? Long a precise basket of other financials to cancel most of the broad exposure out). For others, the approach above can be nice, because in the case where you are not right about your view but not especially wrong either, the position is just harvesting risk premia which is a proven, core source of return from trading inherent to markets. Of course, if you make a bad bet you're going to get bad results. No avoiding that.
Those institutional investors deserve to lose every penny if they truly believe AI and robotics are going to justify that valuation. Musk and the investors are just keeping up appearances to avoid losing their money. And he appears to be out of ideas for futuristic projects, judging by his recent, overly generic promise of “abundance”.
But, but, but --- AI and robotics. Again, Telsa has no real product to show that they can do AI and robotics any better than they do autos. It's pure wishful thinking at this point.
But, but, but --- robotaxis. Ditto --- same as above.
The really ominous "death cross" signal for Tesla --- their sales are declining (down 9% last quarter in the US) while EV sales overall continue to grow at a robust pace (up 11% last quarter in the US).
In other words, the competition is eating Tesla's lunch. But for some less than obvious reason, Wall Street continues to favor fantasy over facts.
Does Toyota, GM, Ford have an FSD that’s just as good?
Bad question --- Tesla doesn't actually have FSD. What they actually have is Level 2 automation that requires constant supervision just like the others.
Do they have charging stations all over the country?
Yes, they do. They are all adapting to use Tesla chargers.
There will be no 'Volkswagen' tesla, the model Y is going the way of the GT-R, and Tesla's other ideas are vaporware. Lidar is a superior approach. Refusing to use it, while claiming superiority, reminds me of how a child copes with losing at their favorite video game.
It doesn't need to be superior, it just needs to be good enough. It's something that has been proven in many technology battles. FSD has made an amazing progress over the last two years. If they solve last 1% of cases they will be in good position to beat Waymo on price as they scale. With ride sharing price is everything. People just go for cheapest rides. That's why cybercab is two-seater, they are trying to minimize cost per mile. Smaller car means cheaper car and less energy per mile.
I agree on your point about good enough. I don't see how they defeat foggy weather and the like with cameras alone however, so I'm wondering if they will ever get that last 1% as things stand. I think they need more sensors to stand a chance at that.
I'm disappointment how unrigorous that lawsuit is. Their argument basically relies on the fact there's a patent filing that vaguely mentions this, and that the odometer sped up even though the plaintiff's driving habits haven't changed. Those are certainly reasons to be suspicious, but aren't exactly smoking guns. Plenty of things are patented but aren't implemented in reality, and we only have the plaintiff's word that there's no other change in driving behavior that could have accounted for the extra mileage. If they're spending all this time drafting a legal complaint, surely they can do a carefully controlled empirical test?
The lawsuit has low chances of succeeding but not on the merits. It exposes a regulatory gray area, both in the US and in the EU. Existing laws focus on tampering, not manufacturer accuracy.
"...Besides the disappointing result in the range test, the Tesla Model 3 had quite an unusual issue–its onboard trip meter was way off and essentially lied about the distance covered...." - https://insideevs.com/news/747548/ev-winter-range-test-norwa...
This is just more of the same - vague anecdotes. Why dig up 2 year old reddit posts to try to prove your case, when you can definitively prove it with a day's worth of test drives?
>"...Besides the disappointing result in the range test, the Tesla Model 3 had quite an unusual issue–its onboard trip meter was way off and essentially lied about the distance covered...." - https://insideevs.com/news/747548/ev-winter-range-test-norwa...
Is "trip meter" referring to the odometer, or the "estimated range" meter that's also displayed?
Given this hinges entirely on what is meant by "trip meter", and the little tidbit is only mentioned in passing with no elaboration, I think it's fine to question what exactly the author meant. That quote works equally as well if they were complaining about the range meter rather than the odometer. If the range meter said there was 200 mi left, then said 100 mi left after only driving 60 mi, I'd be pretty miffed, and might even claimed that it "lied".
They're actively hiring teams to diversify away from the CATL dependency.
They've starting hiring teams in India [0] and Malaysia [1] to work with alternative LFP suppliers.
It's most likely Agratas in India (they manufacture the batteries used in Tata and JLR's EVs) and EVE Energy in Malaysia (they began an expansion outside Chin due to EU and US tariffs).
India and the US are about to announce a Bilateral Trade Agreement [0], which was already in the works during Trump 1. Musk visited Modi yesterday [1] and Vance is traveling to India in the next 2 days [2], so the BTA and sourcing from India is most likely the primary topic of conversation.
The Modi admin has also been cultivating Trump and Stephen Miller adjacent advisors [3][4][5] at the Heritage and Hudson Foundation for a couple years now too, by trying to use Walter Russell Mead the same way Graham Allison acted as a conduit between China and the US.
And besides that, the tariffs remain oriented as a de facto blockade against China, and as long as they remain at a rate above 60-70%, Chinese sourced suppliers remain price uncompetitive.
Yep. Everybody with a brain knows that. The richest man on the planet is a tech con man.
And yet, this post will get flagged and downvoted into oblivion.
How did we get there ?
As for those downvoting - nope, I'm not hating for him or anything like that. It's just that I like to tell my kids that good guys can win. And Elon is not that.
I was willing to forgive Elon some of his eccentricities.
Until he repeated, more than once, obviously egregious untruths of Trump's.
I will admit I was late to the realisation.
Elon will say whatever he feels will progress his agenda, no matter how far disconnected from reality. He's jumped the shark and is doing far more harm than good. He needs to shrink into obscurity for his own, and the rest of the world's, good.
Bottom line: Tesla has no actual product to justify the stock's sky high price.
GM, Ford, Toyota etc. all have a price to earning ratio (P/E) of less than 10.
Tesla has a P/E of 120.
But, but, but --- Tesla is more than just an auto manufacturer. Again, there is little in the way of actual product to justify this viewpoint. 90 percent of their income is from autos.
But, but, but --- Tesla is a "growth stock" with huge future potential. Again, the actual data shows otherwise. Sales in 2024 actually declined.
The only reason Tesla has a P/E of 120 is because the so called "smart money" (aka institutional investors) remain bought into Musk's fantasy in a big way.
Musk's best skill is con artistry and Wall Street is one of his biggest marks.
The best way to justify that high p/e would be for them to use it to buy out the competition.
It costs Tesla ~<6% of market cap (780b) to acquire Ford (40b) or GM (44b) (with a friendly ftc); so for 15% of their shares, that could become the only "American" manufacturer - then they'd probably strip those 2 for parts, end the dealer model, bust the unions, maybe keep a few of the popular models.
Some of this might be inevitable anyway, as autos become more expensive (tariffs, inflation, chips, unions), and more reliable (dealer maintenance model, fewer sales)
I don't know much about A&Ms or frankly business, but it seems kinda strange that this hasn't happened yet. We got the Stellantis Car borg before the Tesla car borg.
Wouldn't Big Auto have to be bankrupt for Tesla to not inherit all the contractual/regulatory baggage holding Big Auto back?
If the US hadn't bailed out Big Auto then maybe someone like Tesla would have been able to pick up the usable parts for pennies on the dollar.
But as things stand today, why would Tesla want Big Auto's problems?
If Tesla was priced based on how the company was doing, it would have been somewhere around 30-50$ per share. And I'm being very generous.
And this is before all the politics and crash in sales due to Elon's antics.
I believe this too, but I’m also pretty nervous about trying to cash in my beliefs by selling it short or buying put options. The old adage “the market can remain irrational longer than you can remain solvent” still holds true.
It’s expensive to hold a long term short position against Tesla. Options expire, leveraged ETFs decay, opportunity cost. I’m sure there are some Michael Burray types that are long on short positions but as a retail investor I can’t do it.
The stock has show amazing resilience in face of continuous bad news. To summarise just the recent bad news:
- Sales are down 15% in California
- Cybertruck production has been reduced in Texas due to poor demand
- Two models have been pulled from sale in China
- RoboTaxi delayed again, this will probably never ship
- Model Y remodel delayed
You can write put positions against a short position to have a positive carry short.
It's not an awful approach when a stock already has fear and high volatility. To step it up a notch you can check the ratio of recent implied to realized volatility, and look at option skew (often Puts are extra expensive relative to calls in times of stress) as well as volatility smile shape (far out of the money tail risks can run very expensive in times of stress). All of that is easy for a retail participant, or I should say, anyone expecting to make money from shorting should probably be able to do the "middle school" stuff like this (brokers like ThinkOrSwim will have this info a few clicks/15 seconds away from typing in the ticker).
If you truly know what you are doing, short shops will do things like amplify their exposure and then use software to precisely hedge correlations (short a bank? Long a precise basket of other financials to cancel most of the broad exposure out). For others, the approach above can be nice, because in the case where you are not right about your view but not especially wrong either, the position is just harvesting risk premia which is a proven, core source of return from trading inherent to markets. Of course, if you make a bad bet you're going to get bad results. No avoiding that.
Those institutional investors deserve to lose every penny if they truly believe AI and robotics are going to justify that valuation. Musk and the investors are just keeping up appearances to avoid losing their money. And he appears to be out of ideas for futuristic projects, judging by his recent, overly generic promise of “abundance”.
But, but, but --- AI and robotics. Again, Telsa has no real product to show that they can do AI and robotics any better than they do autos. It's pure wishful thinking at this point.
But, but, but --- robotaxis. Ditto --- same as above.
The really ominous "death cross" signal for Tesla --- their sales are declining (down 9% last quarter in the US) while EV sales overall continue to grow at a robust pace (up 11% last quarter in the US).
In other words, the competition is eating Tesla's lunch. But for some less than obvious reason, Wall Street continues to favor fantasy over facts.
https://www.businessinsider.com/tesla-sales-slump-automakers...
Does Toyota, GM, Ford have an FSD that’s just as good?
I’ll wait.
They don’t?
Do they have charging stations all over the country?
I’ll wait.
They don’t?
FSD, charging stations, and the upcoming CyberCabs are Tesla’s moat, hence the stonk price.
Does Toyota, GM, Ford have an FSD that’s just as good?
Bad question --- Tesla doesn't actually have FSD. What they actually have is Level 2 automation that requires constant supervision just like the others.
Do they have charging stations all over the country?
Yes, they do. They are all adapting to use Tesla chargers.
https://www.motortrend.com/features/tesla-nacs-charging-port...
FSD, charging stations, and the upcoming CyberCabs are Tesla’s moat, hence the stonk price.
FSD is fake news, charging stations are now open and Cybercabs are pure wishful thinking.
In other words, Tesla has no real moat --- and market data shows it.
There will be no 'Volkswagen' tesla, the model Y is going the way of the GT-R, and Tesla's other ideas are vaporware. Lidar is a superior approach. Refusing to use it, while claiming superiority, reminds me of how a child copes with losing at their favorite video game.
It doesn't need to be superior, it just needs to be good enough. It's something that has been proven in many technology battles. FSD has made an amazing progress over the last two years. If they solve last 1% of cases they will be in good position to beat Waymo on price as they scale. With ride sharing price is everything. People just go for cheapest rides. That's why cybercab is two-seater, they are trying to minimize cost per mile. Smaller car means cheaper car and less energy per mile.
I agree on your point about good enough. I don't see how they defeat foggy weather and the like with cameras alone however, so I'm wondering if they will ever get that last 1% as things stand. I think they need more sensors to stand a chance at that.
I’d argue “Good enough” is different when you’re selling to someone a life critical system.
Low price for used Teslas right now probably makes the “stripped down” Model Y an unlikely purchase.
The delay is more likely due to zero demand. Just reason 129th not to own a Tesla:
"Tesla speeds up odometers to avoid warranty repairs, US lawsuit claims" - https://news.ycombinator.com/item?id=43723865
I'm disappointment how unrigorous that lawsuit is. Their argument basically relies on the fact there's a patent filing that vaguely mentions this, and that the odometer sped up even though the plaintiff's driving habits haven't changed. Those are certainly reasons to be suspicious, but aren't exactly smoking guns. Plenty of things are patented but aren't implemented in reality, and we only have the plaintiff's word that there's no other change in driving behavior that could have accounted for the extra mileage. If they're spending all this time drafting a legal complaint, surely they can do a carefully controlled empirical test?
The lawsuit has low chances of succeeding but not on the merits. It exposes a regulatory gray area, both in the US and in the EU. Existing laws focus on tampering, not manufacturer accuracy.
"Tesla odometer mileage vs actual miles discrepancy" - https://www.reddit.com/r/ModelY/comments/106m2dz/tesla_odome...
"...Besides the disappointing result in the range test, the Tesla Model 3 had quite an unusual issue–its onboard trip meter was way off and essentially lied about the distance covered...." - https://insideevs.com/news/747548/ev-winter-range-test-norwa...
https://news.ycombinator.com/item?id=43736091
>"Tesla odometer mileage vs actual miles discrepancy" - https://www.reddit.com/r/ModelY/comments/106m2dz/tesla_odome...
This is just more of the same - vague anecdotes. Why dig up 2 year old reddit posts to try to prove your case, when you can definitively prove it with a day's worth of test drives?
>"...Besides the disappointing result in the range test, the Tesla Model 3 had quite an unusual issue–its onboard trip meter was way off and essentially lied about the distance covered...." - https://insideevs.com/news/747548/ev-winter-range-test-norwa...
Is "trip meter" referring to the odometer, or the "estimated range" meter that's also displayed?
Now interpret :-) "...lied about the distance covered...."
Given this hinges entirely on what is meant by "trip meter", and the little tidbit is only mentioned in passing with no elaboration, I think it's fine to question what exactly the author meant. That quote works equally as well if they were complaining about the range meter rather than the odometer. If the range meter said there was 200 mi left, then said 100 mi left after only driving 60 mi, I'd be pretty miffed, and might even claimed that it "lied".
Base model Teslas use LFP batteries from China.
They're actively hiring teams to diversify away from the CATL dependency.
They've starting hiring teams in India [0] and Malaysia [1] to work with alternative LFP suppliers.
It's most likely Agratas in India (they manufacture the batteries used in Tata and JLR's EVs) and EVE Energy in Malaysia (they began an expansion outside Chin due to EU and US tariffs).
[0] - https://hire-r1.mokahr.com/su/lsfouz
[1] - https://hire-r1.mokahr.com/su/avoumb
This works until Tariff Man suddenly alters the deal.
India and the US are about to announce a Bilateral Trade Agreement [0], which was already in the works during Trump 1. Musk visited Modi yesterday [1] and Vance is traveling to India in the next 2 days [2], so the BTA and sourcing from India is most likely the primary topic of conversation.
The Modi admin has also been cultivating Trump and Stephen Miller adjacent advisors [3][4][5] at the Heritage and Hudson Foundation for a couple years now too, by trying to use Walter Russell Mead the same way Graham Allison acted as a conduit between China and the US.
And besides that, the tariffs remain oriented as a de facto blockade against China, and as long as they remain at a rate above 60-70%, Chinese sourced suppliers remain price uncompetitive.
[0] - https://www.reuters.com/world/india/india-us-finalise-terms-...
[1] - https://www.reuters.com/world/india/musk-says-he-will-visit-...
[2] - https://asia.nikkei.com/Politics/International-relations/Van...
[3] - https://indiafoundation.in/event-reports/india-study-tour-of...
[4] - https://x.com/Scholars_Stage/status/1876079122994401438
[5] - https://nationalconservatism.org/natcon-4-2024/
The Tesla hate here just seems a reflection of Elon hate. Let's separate the man from the company. Tesla Model Y is the best selling car in the world.
> Tesla Model Y is the best selling car in the world.
That's just one model and other makers are selling more cars (ad they have more models).
>Tesla Model Y is the best selling car in the world.
In what way?
Isn't the Carolla the best selling car in the world?
I think I'm allowed to hate on a company that doesn't separate itself from Nazis.
Do you get your news exclusively from musk? [1] May I suggest you separate the man from the fiction
[1] https://www.autoweek.com/news/industry-news/a44600661/is-tes...
>Musk has believed that Tesla is on the verge of solving self-driving technology for the last few years
It's nowhere even close to solving it, and it's also no longer even the best at trying.
Elon Musk is a pathological liar.
Yep. Everybody with a brain knows that. The richest man on the planet is a tech con man.
And yet, this post will get flagged and downvoted into oblivion.
How did we get there ?
As for those downvoting - nope, I'm not hating for him or anything like that. It's just that I like to tell my kids that good guys can win. And Elon is not that.
I was willing to forgive Elon some of his eccentricities.
Until he repeated, more than once, obviously egregious untruths of Trump's.
I will admit I was late to the realisation.
Elon will say whatever he feels will progress his agenda, no matter how far disconnected from reality. He's jumped the shark and is doing far more harm than good. He needs to shrink into obscurity for his own, and the rest of the world's, good.
[dead]