Some $Tesla(TSLA.US) bulls are hilarious. No worries if the new more affordable vehicle isn’t a new form factor - just cut costs and price and make it another Model Y trim and it will sell like hotcakes. Too bad any new volume will cannibalize higher-priced Model Y trims rather than add incremental volume. Remember what happened in 2023-2024 when TSLA cut prices: Volumes stagnated as competitors all matched the price cuts, avg price per unit sank 15-20% and earnings were decimated. I know, let’s not confuse everyone with numbers.
On autonomy, TSLA stock has performed poorly since the Austin robotaxi launch (TSLA -5.2%, NDX +7.4%), even before last night’s earnings disaster. The Austin robotaxi launch has been more Kabuki theater than actual launch. From the safety driver in the front passenger seat, armed with a kill switch on the door if the robotaxi got in trouble, to the hand selected social influencers who became the testimonial first riders, Austin has not been “selling fully autonomous rides” as promised on TSLA’s 1Q conference call - certainly not that can be leveraged to new markets at the flip of a switch, as was alluded. As even Elon acknowledged on the call last night, “[Tesla] will get to autonomy at scale in the second half of next year, certainly by the end of next year” which is a far cry from the perception of immediacy used to describe how robotaxi would be rolled out nationally in prior calls.Finally, there’s the thorny issue of valuation which $Tesla(TSLA.US) uberbulls don’t even try to explain. Most high quality growth stocks ( $NVIDIA(NVDA.US), $Amazon(AMZN.US), $Alphabet - C(GOOG.US), $Microsoft(MSFT.US), $Meta Platforms(META.US)) trade at 1.8x-2.2x forward PEGs - forward P/E divided by 5-year forward EPS growth. $Tesla(TSLA.US) is off the charts at around 5x PEG (2025 P/E of 160x vs 2025-2030 EPS growth of 30% CGR. Now I’m not married to P/E ratios even when adjusted for growth. But with so many other high quality growth stories around where revs and earnings are actually rising by 15-20% per year rather than falling, I’d rather pass on TSLA until it finds its growth path again.The copyright of this article belongs to the original author/organization.
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