11 ms·

TSLA continues its years-long trend of not only defying fundamentals. Here are, off the top of my head, the current, serious risks to Tesla: - Brand damage don

by jmyeet 1y ago

TSLA continues its years-long trend of not only defying fundamentals. Here are, off the top of my head, the current, serious risks to Tesla: - Brand damage done to typical Tesla buyers and in countries that subsidize EVs; - Downturn in sales in Q1 and likely future continued declines; - Likely loss of the EV tax credit in the US; - A likely upcoming recession with (currently) one quarter of negative GDP growth; - Tariff risks; - Competition, particularly from Chinese automakers; - Supply chain risks; and - Risks to the Tesla business in China as political and tariff fallout as the administration seeks to ratchet up a trade war with China. Yet Tesla still trades at a P/# of 173. TSLA is a bet on Elon. That's it. But it won't be because of any fundamental success in the business. It'll be a question of how much looting of government coffers it can do. Elon has realized he needs to diversify the business, hence the robotaxis. My bet is that will never go GA and likely will kill or seriously wound someone and get sued out of existence.

k8sToGo 1y ago
You forgot the software risks. Other companies already passed them.
rickydroll 1y ago
If Tesla's board of directors had any cojones, they would dump Musk and distance themselves from him and his actions.
- baggachipz 1y ago
  He owns them all, they would never even consider firing him.
- marcusverus 1y ago
  As the parent said, Tesla's PE ratio indicates that investors are betting on massive future growth, obviously because of Elon's track record of delivering on his promises of new tech (....eventually). If getting rid of Elon caused Tesla to be priced like other car companies, the price would go down by 90+%. No sane board member would consider that a serious option.
  - sokoloff 1y ago
    Board members are also significant shareholders, so they’d be tanking their own position (and would be hard to argue if they sold out shortly before distancing him that they had no insider knowledge of it).
- darth_avocado 1y ago
  They are in a tough spot re:Elon. While long term, distancing Tesla from Elon and focusing on developing better EVs that out compete BYD, Xiaomi and other Chinese competitors would be the healthy move, they also realize that the company’s unreal valuation is completely tied to Elon and his made up storylines that never get delivered (FSD, Semi, Roadster 2, 4680 battery etc.). Dumping Elon would wipe out hundreds of Billions in shareholder value and the lawsuits would be brutal.
  - rickydroll 1y ago
    What do they say in most commercials about investing? Oh yes, "Investing in securities carries the risk of loss." They could sideline him, perhaps put him in an oubliette for a while, then make some serious improvements to the current product line and start cultivating a culture of working without Musk.
    - darth_avocado 1y ago
      I agree with the sentiment, however the board has fiduciary responsibilities towards the shareholders. If they make decisions that materially affect the company, in this case by destroying the valuation, then the shareholders can sue. It will be extremely difficult for the board to justify that having Elon and letting him do whatever he wants is more damaging for the stock than kicking him out.
  - tayo42 1y ago
    > his made up storylines that never get delivered I don't get who is still out there believes him enough to put their own money into this company. But the stock keeps going up. I just don't get it?
    - XorNot 1y ago
      It's a memestock. People are just gambling not investing. You see TSLA in the news, the news is bad so you know a bunch of people are rushing off to bet it goes up anyway...so you do too.
- LightBug1 1y ago
  That's the only way I'd even have a second thought about Tesla ... but this is the cost of being all-powerful ... the inability to give up that power. Even then, Tesla's duck is cooked. They're facing strong winds, reputational and otherwise, at the exact same time as the competition have come of age. The perfect storm. It will take time, but Tesla are done.
- deleted 1y ago
  [deleted]
- brohee 1y ago
  If they do so Tesla is a regular company and should trade at a regular automotive sector P/E ratio, so what, one fifteenth of its current valuation ? That's a hard sell to investors. They are likely better off keeping that plane flying as long as possible hoping for a miracle, then crash, than soft landing, so are Tesla insiders, each quarter passing means more stocks dumped. https://www.nasdaq.com/market-activity/stocks/tsla/insider-activity https://www.nasdaq.com/market-activity/stocks/tsla/insider-a...
lovich 1y ago
you're forgetting domestic political risks as he has chosen to fight the admin now
- nirav72 1y ago
  I'm not sure what Elon stands to gain by taking on the admin. Sure Elon has piles of cash to dump on various congressional races. But that's about it. On the other side, Trump currently has the full power of the U.S government to take apart Elon's empire. Including Elon. He is better off making amends and focus on his businesses. Even if he does lose out because of the BBB.
lemoncucumber 1y ago
Also the risk of their unproven approach of not using lidar for self driving, unlike every competing self-driving system.
- simondotau 1y ago
  What’s your definition of “unproven” which doesn’t cover what Tesla has achieved, but does cover what Waymo has achieved? Hint: one of those has driven at least two if not three orders of magnitude more miles unaided by humans. Just to be clear, because a lot of people who don’t follow this closely may not appreciate it, the 3-D spatial awareness component of Tesla’s stack has been solved problem for a couple of years now. The long tail problem is path planning and decision-making. LIDAR doesn’t make that any easier, even in theory.
  - gamblor956 1y ago
    Hint: one of those has driven at least two if not three orders of magnitude more miles unaided by humans. Yes we all know that Waymo has done this but this thread is about Tesla. 3-D spatial awareness component of Tesla’s stack has been solved problem for a couple of years now A lot of people have died because their self driving Teslas did not have spatial awareness and crashed into stationary objects at full speed. Clearly we have different definitions of construction "solved".
    - simondotau 1y ago
      It's critical to note that Autopilot is not FSD, and has nothing in common with FSD, other than running on the same physical hardware. Autopilot is a brand name for lane centering / adaptive cruise control, similar to Nissan ProPilot and Ford Co-Pilot. Deaths attributed to the misuse of lane centering / adaptive cruise control features are commonplace among all makes of car, but deaths in Fords and Toyotas rarely make media reports, because the media is in the business of generating clicks. A lot of people have died because their self driving Teslas Two is not "a lot". In the USA in 2023, the fatality rate of human drivers was 1.26 fatalities per 100 million vehicle miles in the USA. Over the 60 million miles driven by Waymo vehicles, the number of fatalities involving a Waymo is one. This is a fatality rate of 1.67 deaths per 100 million miles. (It should be noted that this isn't a statistically meaningful number because Waymo vehicles have driven so few miles.) Over the 3.8 billion miles driven by Tesla FSD, the number of fatalities involving a Tesla running the FSD software stack is two. This a fatality rate of 0.05 deaths per 100 million miles. If those 3.8 billion miles were driven by humans, you would expect 46 more deaths to have occurred.
standardUser 1y ago
> he needs to diversify the business, hence the robotaxis The robotaxis are the biggest risk of all. It's not a "hence" that can be relied on for a win and to change the conversation. It's a huge embarrassment and a reminder of Musk's repeated false promises.
- sneak 1y ago
  75% of the trips I take in my Model 3 across a standard US city (admittedly one without snow) are handled by FSD with no interventions on my part. Waymo has of course been operating for some time now. I think autonomous taxis are inevitable for Tesla and others.
  - martinpw 1y ago
    > 75% of the trips I take in my Model 3 across a standard US city (admittedly one without snow) are handled by FSD with no interventions on my part. Is that meant to be making a case for Tesla's robotaxis? Because 25% of trips requiring interventions sounds dismal for a service that is rolling out now.
    - tverbeure 1y ago
      I shortly tried FSD during their May and November freebie month last year. There were times when an intervention wasn't strictly required, just like you can't intervene when your angsty teenager with learning permit is at the wheel, but it was still shockingly bad. I have no doubt that there's a good percentage of FSD users out there who don't intervene to avoid lowering stats even if they rationally know that they should have.
      - sneak 1y ago
        Why would I care more about “stats” than my own car and my own safety? I am not penalized in any way for disabling FSD when the car does something dumb.
        1y ago

by jmyeet 1y ago

k8sToGo 1y ago

You forgot the software risks. Other companies already passed them.

rickydroll 1y ago

If Tesla's board of directors had any cojones, they would dump Musk and distance themselves from him and his actions.

baggachipz 1y ago
He owns them all, they would never even consider firing him.
marcusverus 1y ago
As the parent said, Tesla's PE ratio indicates that investors are betting on massive future growth, obviously because of Elon's track record of delivering on his promises of new tech (....eventually). If getting rid of Elon caused Tesla to be priced like other car companies, the price would go down by 90+%. No sane board member would consider that a serious option.
- sokoloff 1y ago
  Board members are also significant shareholders, so they’d be tanking their own position (and would be hard to argue if they sold out shortly before distancing him that they had no insider knowledge of it).
darth_avocado 1y ago
They are in a tough spot re:Elon. While long term, distancing Tesla from Elon and focusing on developing better EVs that out compete BYD, Xiaomi and other Chinese competitors would be the healthy move, they also realize that the company’s unreal valuation is completely tied to Elon and his made up storylines that never get delivered (FSD, Semi, Roadster 2, 4680 battery etc.). Dumping Elon would wipe out hundreds of Billions in shareholder value and the lawsuits would be brutal.
- rickydroll 1y ago
  What do they say in most commercials about investing? Oh yes, "Investing in securities carries the risk of loss." They could sideline him, perhaps put him in an oubliette for a while, then make some serious improvements to the current product line and start cultivating a culture of working without Musk.
  - darth_avocado 1y ago
    I agree with the sentiment, however the board has fiduciary responsibilities towards the shareholders. If they make decisions that materially affect the company, in this case by destroying the valuation, then the shareholders can sue. It will be extremely difficult for the board to justify that having Elon and letting him do whatever he wants is more damaging for the stock than kicking him out.
- tayo42 1y ago
  > his made up storylines that never get delivered I don't get who is still out there believes him enough to put their own money into this company. But the stock keeps going up. I just don't get it?
  - XorNot 1y ago
    It's a memestock. People are just gambling not investing. You see TSLA in the news, the news is bad so you know a bunch of people are rushing off to bet it goes up anyway...so you do too.
LightBug1 1y ago
That's the only way I'd even have a second thought about Tesla ... but this is the cost of being all-powerful ... the inability to give up that power. Even then, Tesla's duck is cooked. They're facing strong winds, reputational and otherwise, at the exact same time as the competition have come of age. The perfect storm. It will take time, but Tesla are done.
deleted 1y ago
[deleted]
brohee 1y ago
If they do so Tesla is a regular company and should trade at a regular automotive sector P/E ratio, so what, one fifteenth of its current valuation ? That's a hard sell to investors. They are likely better off keeping that plane flying as long as possible hoping for a miracle, then crash, than soft landing, so are Tesla insiders, each quarter passing means more stocks dumped. https://www.nasdaq.com/market-activity/stocks/tsla/insider-activity https://www.nasdaq.com/market-activity/stocks/tsla/insider-a...

lovich 1y ago

you're forgetting domestic political risks as he has chosen to fight the admin now

nirav72 1y ago
I'm not sure what Elon stands to gain by taking on the admin. Sure Elon has piles of cash to dump on various congressional races. But that's about it. On the other side, Trump currently has the full power of the U.S government to take apart Elon's empire. Including Elon. He is better off making amends and focus on his businesses. Even if he does lose out because of the BBB.

lemoncucumber 1y ago

Also the risk of their unproven approach of not using lidar for self driving, unlike every competing self-driving system.

simondotau 1y ago
What’s your definition of “unproven” which doesn’t cover what Tesla has achieved, but does cover what Waymo has achieved? Hint: one of those has driven at least two if not three orders of magnitude more miles unaided by humans. Just to be clear, because a lot of people who don’t follow this closely may not appreciate it, the 3-D spatial awareness component of Tesla’s stack has been solved problem for a couple of years now. The long tail problem is path planning and decision-making. LIDAR doesn’t make that any easier, even in theory.
- gamblor956 1y ago
  Hint: one of those has driven at least two if not three orders of magnitude more miles unaided by humans. Yes we all know that Waymo has done this but this thread is about Tesla. 3-D spatial awareness component of Tesla’s stack has been solved problem for a couple of years now A lot of people have died because their self driving Teslas did not have spatial awareness and crashed into stationary objects at full speed. Clearly we have different definitions of construction "solved".
  - simondotau 1y ago
    It's critical to note that Autopilot is not FSD, and has nothing in common with FSD, other than running on the same physical hardware. Autopilot is a brand name for lane centering / adaptive cruise control, similar to Nissan ProPilot and Ford Co-Pilot. Deaths attributed to the misuse of lane centering / adaptive cruise control features are commonplace among all makes of car, but deaths in Fords and Toyotas rarely make media reports, because the media is in the business of generating clicks. A lot of people have died because their self driving Teslas Two is not "a lot". In the USA in 2023, the fatality rate of human drivers was 1.26 fatalities per 100 million vehicle miles in the USA. Over the 60 million miles driven by Waymo vehicles, the number of fatalities involving a Waymo is one. This is a fatality rate of 1.67 deaths per 100 million miles. (It should be noted that this isn't a statistically meaningful number because Waymo vehicles have driven so few miles.) Over the 3.8 billion miles driven by Tesla FSD, the number of fatalities involving a Tesla running the FSD software stack is two. This a fatality rate of 0.05 deaths per 100 million miles. If those 3.8 billion miles were driven by humans, you would expect 46 more deaths to have occurred.

standardUser 1y ago

> he needs to diversify the business, hence the robotaxis The robotaxis are the biggest risk of all. It's not a "hence" that can be relied on for a win and to change the conversation. It's a huge embarrassment and a reminder of Musk's repeated false promises.

sneak 1y ago
75% of the trips I take in my Model 3 across a standard US city (admittedly one without snow) are handled by FSD with no interventions on my part. Waymo has of course been operating for some time now. I think autonomous taxis are inevitable for Tesla and others.
- martinpw 1y ago
  > 75% of the trips I take in my Model 3 across a standard US city (admittedly one without snow) are handled by FSD with no interventions on my part. Is that meant to be making a case for Tesla's robotaxis? Because 25% of trips requiring interventions sounds dismal for a service that is rolling out now.
  - tverbeure 1y ago
    I shortly tried FSD during their May and November freebie month last year. There were times when an intervention wasn't strictly required, just like you can't intervene when your angsty teenager with learning permit is at the wheel, but it was still shockingly bad. I have no doubt that there's a good percentage of FSD users out there who don't intervene to avoid lowering stats even if they rationally know that they should have.
    - sneak 1y ago
      Why would I care more about “stats” than my own car and my own safety? I am not penalized in any way for disabling FSD when the car does something dumb.
      - 1y ago