Analyst: Tesla WILL miss deliveries & DROP to $150

Tesla's Future and Stock Price

In this section, Tony discusses his perspective on Tesla's future and stock price.

Tony's Perspective on Tesla's Stock Price

• Tony believes that Tesla will miss deliveries and the stock price will drop to $150.

• He thinks it is difficult to predict Tesla's stock due to upcoming numbers not being great.

• Tony expects limited chances for Tesla to exceed consensus expectations in terms of deliveries this quarter.

• He predicts that margins will be down sequentially due to incremental price cuts in the quarter.

• Tony mentions that everyone already saw the price cuts, so the impact on margins should already be priced into the stock.

• He highlights that Tesla has no new product offerings, which poses a challenge for creating incremental demand.

Concerns about Tesla's Growth

• Tony expresses concerns about Tesla's ability to sustain its growth without new products.

• He questions how Tesla can create incremental demand without anything new in its lineup.

• Tony mentions that the Cybertruck, despite being a pickup truck (which are popular in the US), may not sell well if it is not cheaper than the Model 3.

Comparison with Model Y Launch

• Gary Black presents data showing that when Tesla launched the Model Y, delivery volumes grew significantly despite some cannibalization of other models.

• However, Tony remains concerned that Tesla may fall short on deliveries or resort to continued price cuts to drive growth.

Potential Benefits of Price Cuts

• Personally, Tony prefers if Tesla cuts prices further instead of investing in advertising.

• He believes this would crush competition and benefit Tesla in the long run by solidifying its market dominance.

• Ford and GM are struggling with EV transition, and startups would also face challenges if they had to compete with lower-priced Teslas.

Advertising and Charging Network

In this section, Tony discusses the potential impact of advertising and Tesla's charging network on its market position.

Expectations for Advertising

• Tony expects that Tesla's commitment to advertising will lead to a backlog of orders or price increases, or possibly a combination of both.

• He believes that advertising can be effective in driving sales, especially when it is done for the first time.

• Tony suggests that even a bit of exposure through advertising can make a substantial difference for Tesla due to the quality of its products.

The Importance of Tesla's Charging Network

• Competitors have acknowledged that Tesla has a strong charging network and want their cars to be able to use it.

• Tony agrees that Tesla has many positives, including cost advantages and being a pioneer in electric vehicles (EVs).

• However, he believes these positives are already fully reflected in Tesla's valuation.

Valuation and Competitive Advantages

In this section, Tony discusses Tesla's valuation and competitive advantages.

Valuation Comparison with Auto Industry

• Tony highlights that despite making fewer cars than other companies in the auto industry, Tesla has an 800 billion dollar valuation.

• He points out that the entire auto industry outside of Tesla will produce about 78 million cars this year.

• Tony argues that none of these companies have a serious chance of solving full self-driving or deploying advanced technologies like Tesla's Dojo supercomputer and Megapacks.

Competitive Advantage for Full Self-Driving

• Tony emphasizes that while competitors may admit to some advantages held by Tesla, those advantages are already priced into the stock.

• He believes that even if there are near-term misses by Tesla, the perception of its charging network as superior helps support its market position.

The transcript provided does not cover all parts of the video.

New Section

This section discusses the valuations of automotive companies, the importance of reusability in rockets, and the market share of Tesla in North America.

Valuations and Reusability

• Many automotive companies are expected to shrink or go bankrupt, which is reflected in their valuations.

• Automotive CEOs have created reusable rockets for space launches.

• Tesla's reputation as a leader is not the main concern; it's about what investors are willing to pay.

Tesla's Market Share

• Tesla currently has about 80% of the electric vehicle (EV) installed base in the US.

• The addition of 20% more cars that can use Tesla's charging network is not significant compared to Tesla's future profits from Full Self Driving (FSD).

• However, it should be noted that Tesla's market share has already decreased below 80% outside of the US.

• Over time, more non-Tesla EVs are expected to enter the US market, but Tesla will continue to grow its deliveries each year.

Supercharging Revenues and Network Expansion

• Last year, Tesla's supercharging revenues were around $600 million, which is less than 1% of its total revenue.

• The number of EVs that can charge on Tesla's network is relatively small compared to the existing EV fleet.

• It may seem unfair to question fundamental drivers of a stock that appears driven by liquidity and momentum.

New Section

This section discusses potential regulatory actions related to full self-driving technology and their impact on Tesla.

Regulatory Concerns

• Regulators have not endorsed full self-driving technology and have pressured Tesla indirectly by requiring alerts for drivers to keep their hands on the wheel.

• While some states have approved early-level three autonomous driving from other manufacturers like Mercedes, regulators have generally been cautious.

• The speaker is not overly concerned about regulators, as there are already seven states in the US that do not require a driver behind the wheel for full self-driving.

• Tesla could focus on selling vehicles and launching robotaxis in these specific states first, while working with other states to gain regulatory approval.

Impact on Tesla's Value

• While potential regulatory actions could be a wild card, they may not make a significant difference to Tesla's stock in the near term.

• Full self-driving revenues for Tesla are currently small, with only about 5% of vehicle purchasers opting for it.

• As full self-driving technology improves over time, Tesla expects to see progress and an increase in software quality.

New Section

This section discusses the potential risks of false advertising and reprimands for Tesla related to full self-driving technology.

Risks of False Advertising

• False advertising is a potential risk for Tesla but may not have a significant impact on the stock in the short term.

• Full self-driving revenues are currently very small compared to overall revenue.

• The percentage of vehicles purchasing full self-driving is low but expected to improve as the technology advances.

Future Progress

• There is consistent progress in software improvement and full self-driving capabilities.

• It would be ideal if every state could approve full self-driving immediately, but it is not necessary for Tesla to create shareholder value.