Do you think Tesla is an excellent company?
Tesla raises so many emotions, love it or hate it. Tesla is a different beast than we used to have. My emotions have also changed along the way, wow, it is so undervalued, and Musk is genuinely a genius (2018/2019). So in one year: it is overvalued, and Musk is a risk factor and an idiot (2020). I let my emotions take control and missed a colossal run-up. Lesson learned I rebought Tesla 108 when everybody was screaming it is going to zero. Tesla has made everybody look stupid and genius, whether bears or bulls.
It also takes a lot longer when the great majority gets it. Currently, electric vehicles (EVs) are increasingly seen as the future of consumer transportation, and there are fewer and fewer people who are opposed to them. With Tesla's EV production, it took a very long time for legacy automakers to catch up and start their own production. Many did not believe in the EV revolution, but here we are. It is a reality.
I was never a car guy, I go by bike whenever possible. However, cars are usually the second largest purchase after home, so is that the reason why so many emotions? Tesla also has a lot more going than just producing cars.
Elon Musk (Steve Jobs on steroid?) Love or Hate.
Disruption of the transportation industry. Love (Revolutionary) or Hate (Hype/scam).
Hard to value the business. Love it (undervalued) or Hate it (overvalued hype, a bubble waiting to burst.)
Hard to price anything in the current world. Retail wants to invest more in disruptive stocks and innovation?
Investors day example:
Then fanboys loved it, but others hated it
Is Tesla growing too fast?
Like a shark in an aquarium, is it growing too fast?
Subaru was a tiny manufacturer, and then it suddenly became popular:
Margins went from industry leader to low. Too much quantitative growth and sacrificing quality (Subaru was very reliable). They are honest, at least. Now they focus on quality. Nothing compares to Tesla, hence the shitty example. “TESLA IS NOT AN AUTOMOTIVE COMPANY”, Tesla manufactures many transportation vehicles...
Tesla
These numbers and charts are impressive.
EU approves effective ban on new fossil fuel cars from 2035
January 2023:
Finland after price cut: 37 cars last year and now 437. I sometimes jog close to the Tesla shop in Finland and have never seen such a bustle. This is impressive, considering we have the lowest consumer confidence in 30 years. People who buy Teslas aren't that affected by the recession. The doomsday preachers forget this, yes, recession sucks, but many are bearly affected.
Tesla's growth is sustainable, or it poses a risk?
The gigafactories are money furnaces
What if you have a strain on resources? Some major supply chain issues? The giant factories producing nothing? Thats expensive.
I have minimal experience with Tesla, having never even driven one. My friends who have it praise it, but when I ask taxi drivers whether they like it or not, they love to drive it but hate to manage it; if there are any issues, it takes a very long time to get fixed (Similarities to Subaru).
Competition
Korean manufacturers (Hyundai/Kia) are improving, but can they compete with Tesla? Volkswagen? Mercedez-Benz? BMW? Great to have options, but they are behind Tesla. But, on the other hand, they could come at compelling prices and efficient platforms.
Tesla wipes competition in efficiency.
Tesla wipes competition in Prices.
Will the demand for electric vehicles plummet? Unlikely:
In Europe, excellent incentives to buy electric cars, tax credits, and subsidies. Hard to see that we would quickly revert back. Our governments have placed massive incentives for companies and implemented coherent climate policies.
Conclusion
Is Tesla a nice business? Yes.
Will Tesla grow? Yes.
Retail investors are currently rooting for Tesla, and it seems the analyst and wall street don’t like Tesla. I root for retail and hope that retail is right.
Hope is a shit strategy.
It always comes down to the price of Tesla stock, is it fairly valued? Overvalued? Undervalued? I don’t see the volatility vanishing anytime soon. Tesla is up 1200% from 2019 lows and almost 100% up from the lows in 2023 - also down -50% from 52-week highs. If you liked Tesla at nearly 400, you should love it at 187. Take advantage of the volatility if you truly understand what you own.
Stocks are not lottery tickets - Peter Lynch.
Bulls scream for a 1k price in three years, and bears want to see 2-digit numbers.
Does retail have the edge here? What do you do if Tesla goes under 100 or if it goes to 1000?
Sources:
https://www.youtube.com/live/3zgJqmhjXKo?feature=share
https://www.annualreports.com/HostedData/AnnualReports/PDF/OTC_FUJHY_2020.pdf
https://www.subaru.co.jp/en/ir/library/pdf/Ir/Ir2022e.pdf
https://www.tesmanian.com/
https://www.youtube.com/live/3zgJqmhjXKo?feature=share