Elon Musk Figured It Out
A week ago, I said Elon Musk would "figure it out."
"It" was Tesla, and specifically Tesla's stock, which headed into Q1 earnings down more than 40% in 2024.
The issues are myriad, but the fundamental problem's straightforward: Tesla's a growth stock with no growth.
When the company reported on April 23, Tesla said revenue fell YoY last quarter, as tends to happen when you're selling less of your products at lower prices.
Who wants to pay an absurd multiple for negative growth? Isn't that
Yes you did (tell us so). I believed you but didn’t act…my mistake, my loss! Could have paid for several lifetime subscriptions…
But the day after the stock started to rise Must announced the Model 2, prospective low-price new model, is dead. No replacement announced. Today’s big jump is not about TSLA as much as it is about Baidu. We shall see. The last two days got the punters to take the plunge again. We shall see.
I’ll bet you had fun writing this.
Happy to say I bought a little on thurs and Friday and I’ll be staying a subscriber for a little while longer. Jk I was gonna be a subscriber anyway.
This is an interesting take on where Tesla might be headed.
https://www.theatlantic.com/technology/archive/2024/04/tesla-cars-batteries-power-company/678168/?gift=YwCmpcxUgNAYD-oV2wySqVQRWOKDQR_JHVxTtXMlkUc&utm_source=copy-link&utm_medium=social&utm_campaign=share
The oracle of Albuquerque strikes again!
There’s a bit of interpretation worth adding here. The FSD deal has been publicly in the works for a long time; the data security issues have been a negotiating factor for some years now, so media spin that “Elon suddenly flew to China and sorted it out” are a mischaracterization of long-term negotiations that have plodded along until the government decided (presumably) that Huawei, Xpeng, Baidu and others developing autonomous tech had had enough chance to catch up. China still stands to benefit from using Tesla as they have since the beginning – as a technology “rabbit” forcing a pace and direction for domestic competitors to pursue. Tesla gives China guardrails while they push a strategic industry forward and reduces the risks of major capital and policy messes (like the property sector, and recognizing that they managed to create a misincentivized EV production capacity mess anyway – it could have been worse). Second, I think China is looking forward to the pre-conditions necessary for access to the US market. Li Qiang referred to the deal as a successful example of US-China trade cooperation; that interpretation will be helpful whenever China thinks a political and economic deal on EV trade becomes reachable.
I note this not so much in response to H’s points as to a CNBC anchor asking a guest: “I don’t get it; why don’t the Chinese just crush Tesla domestically?”.
As one of the naysayers that doubted, I bow my head in shame….
California Tesla registrations fell 7.8% Q1. Alienating the Tesla buyer and the big manufacturers offer EV Hybrid ICE and way more models to choose from… he can pump by bootlicking China but that will only last so long until he’s forced to sell the brand
Folks, do note: The point of last week’s article was to say that Musk would almost surely engineer a rally. The point of today’s article was to say that he did. Whatever you want to say about Musk and Tesla, the stock’s up 30% in six days. Period. End of story.
Gloating complete…haha
Congrats on providing a concrete predictive example of “show me the incentives I’ll show you the outcome”… I guess Cathie Wood just needs to up her cult-of-personality game.
My difficulty (in investing in any Musk venture) is reconciling “freedom of speech” Musk and “Tesla will track you and definitely spy on you in China” Musk… Boring Co and Hyperloop Musk with SpaceX Musk. Whither X nee Twitter?