Short TESLA, Way overvalue. 13 reasons.
Bullet Points:
1. Slowed Automotive Growth and deteriorating margins.
Tesla's growth in the automotive sector has significantly slowed. While the company once enjoyed rapid expansion as the leader in the EV market, this growth is tapering off as new competition emerges and demand stabilizes. With increased competition from both traditional automakers and new entrants in the EV space, Tesla's first-mover advantage is eroding. We will see if rate cuts improve sales.
2. Increasing EV and Hybrid Competition
The EV landscape is no longer Tesla's sole domain. Major automakers like Toyota, KIA, BYD, ..., have launched competitive electric and hybrid vehicles, cutting into Tesla's market share. Even luxury brands like Mercedes-Benz and BMW are entering the EV space. This increased competition pressures Tesla’s sales and pricing power, making it difficult for the company to maintain its market dominance and their 15% net profit margin.
3. Full Self-Driving (FSD) Delays and Overpromises
Tesla has been touting its Full Self-Driving (FSD) technology since 2016, but it has yet to deliver a fully functional product. While improvements have been made, the system is far from achieving true autonomy. it's unlikely to be ready for widespread adoption within the next three years in my opinion, Tesla always brings the amount of data they have of all the teslas in the road but what people don´t undertand is as important to have lots of data as having cuality data and probably most of Tesla´s miles driven are low cuality data it takes time to filter thats way its not even close to ready.
4. Robotaxi
Tesla's robotaxi vision is still far from reality. The current Full Self-Driving (FSD) system remains at Level 2 autonomy, meaning it still requires human supervision. Achieving the fully autonomous capability needed for a robotaxi fleet, which requires Level 4 or 5 autonomy, is a complex challenge that Tesla has yet to solve.
In addition to technical limitations, regulatory hurdles are a major obstacle. Governments are cautious about approving fully autonomous vehicles, especially given Tesla's reliance on cameras without other sensors like LiDAR. Safety concerns and liability issues also complicate the timeline, making a near-term launch highly unlikely.
We will see what the october 10th presentations holds but I think it is just smoke like the promise Roaster. It will be a cool pruduct but with no real plan behind it.
5. Skepticism Around Optimus
Tesla’s humanoid robot project, in my opinion is stupid. It is similar to people that wanted to fly and copied bird, the human body is so complex it would be a nightmare to manufaucture, having a 300lb+ machine at home with all the batteries needed for it to last hourse doing things would be so impractical and unsave. Moreover, if you want to use it in factory you are compiting with factories around the world with much cheaper cost of labor. It is a coll concept but just that. robots are 20+ in the future.
6. Massive Capital Expenditure with Uncertain Returns
Tesla continues to invest heavily in infrastructure, including new data centers and Nvidia GPUs, in an effort to advance its Full Self-Driving (FSD) technology. However, there is concern that these substantial investments may not deliver the expected returns. Tesla's current approach appears to rely on brute force—massive data processing power—to solve FSD, but this may not be the ultimate solution. It’s possible that more advanced or optimized hardware inside the cars themselves is needed to achieve true autonomy.
While Tesla has made progress in reducing the error rates of its self-driving systems, achieving near-zero or fully error-free performance remains elusive. The complexities of real-world driving conditions may limit how far current AI and machine learning models can go, no matter how much data processing power they throw at the problem. If Tesla is unable to close this gap, the massive investment in infrastructure could ultimately prove to be a waste of resources. Only time will tell whether this approach will pay off or fall short of expectations.
7. Elon Musk’s Potentially sell to Cover X (formerly Twitter) Loans
Elon Musk’s acquisition of Twitter has brought new financial pressures. To finance the deal, Musk took on significant debt (13 billion) in a high interest rate enviroment, twitter revenue keeps falling, and some analysts think that he may need to sell Tesla stock to cover these loans. Any significant sell-off of Tesla stock (1-2%)by Musk could erode investor confidence and put downward pressure on the stock price.
8. Regulatory and Legal Risks
Tesla is facing increasing regulatory scrutiny, particularly regarding its self-driving features, especially in Europe and China. While China appears poised to grant Tesla limited permission to roll out FSD in certain cities, Europe is taking a much stricter stance. European regulators are likely to impose more stringent requirements, and there’s a possibility that FSD may never be approved for widespread use if the hardware is deemed insufficient for safe driving. Tesla’s reliance solely on cameras, without additional sensors like LiDAR or radar, could be a sticking point, as European authorities may view this approach as inadequate for ensuring the safety standards required on public roads.
9. Slowing Growth in China and Economic Uncertainty in the U.S.
China, one of Tesla's largest markets, is experiencing a slowdown in economic growth. This presents a significant risk to Tesla, as China has been a key driver of the company’s expansion. Additionally, while a U.S. recession is considered unlikely by some, any economic downturn in the U.S. could negatively impact consumer demand for high-priced electric vehicles, further straining Tesla's growth prospects.
10. Cybertruck’s Production and Demand Concerns
The much-anticipated Cybertruck is facing production delays, and there are concerns about its actual demand. While the vehicle has generated significant buzz, its unconventional design may limit its appeal to a niche market. Additionally, production challenges could prevent Tesla from meeting delivery targets, further hurting investor confidence.
11. Tesla Semi Faces Scalability and Demand Issues
Tesla’s foray into heavy-duty electric trucks with the Tesla Semi faces significant challenges. Scaling production of such a vehicle is far more complex than producing passenger EVs, and there is uncertainty around demand. Many potential customers in the freight industry are hesitant to switch to electric semis due to high costs and limited infrastructure for charging and servicing.
12. The “Elon Risk” Factor
Elon Musk’s leadership style and unpredictable behavior have increasingly become a risk for Tesla. While his vision and innovation were crucial in building Tesla, Musk's erratic tweets, controversial statements, and focus on non-core projects have raised concerns among investors. His distractions, including managing X and other ventures, pose risks to Tesla's long-term stability and focus.
13.Energy and other segments.
Tesla’s energy division is growing fast but remains a small part of the business. While the demand for products like the Powerwall, Megapack, and solar panels is increasing, energy generation and storage still account for less than 6.3% of Tesla’s total revenue. The automotive segment continues to dominate the company’s financials. And other ventures like into insurance, i believe is a loss of focus with little upside.
Conclusion.
Tesla remains a pioneering company in the EV space, but its future is clouded with risks that could hinder its growth. Slowing automotive sales, increased competition, delays in key projects like FSD, and distractions from side ventures all contribute to a more bearish outlook. Furthermore, the company faces significant financial and regulatory risks that, if not managed well, could lead to a significant correction in its stock price and market value.
Thanks the atencion let me know if i missed something, thanks.(open for discussion)
@Marcos_Camacho4
- Automotive growth has slowed significantly.
- A lot more competition in EV and hybrid market.
- FSD is a scam, and it has been promise since 2016, it has improve but it is not ready (not even in the next 3 years).
- Robotaxi is not ready for now and will not be for near future (3 years)
- Optimus is a joke.
- Huge capex in infrustacture with no end future result.
- Elon may have to sell tesla stock to cover twitter loans.
- Regulatory.
- China is slowing down, Europe weakness and possible US recession (unlikely).
- Cybertrck is having production and will have demand issues.
- Semi really hard to scale production and there is not that much demand.
- Elon risk in general.
- Energy and other segments.(not enough)
1. Slowed Automotive Growth and deteriorating margins.
Tesla's growth in the automotive sector has significantly slowed. While the company once enjoyed rapid expansion as the leader in the EV market, this growth is tapering off as new competition emerges and demand stabilizes. With increased competition from both traditional automakers and new entrants in the EV space, Tesla's first-mover advantage is eroding. We will see if rate cuts improve sales.
2. Increasing EV and Hybrid Competition
The EV landscape is no longer Tesla's sole domain. Major automakers like Toyota, KIA, BYD, ..., have launched competitive electric and hybrid vehicles, cutting into Tesla's market share. Even luxury brands like Mercedes-Benz and BMW are entering the EV space. This increased competition pressures Tesla’s sales and pricing power, making it difficult for the company to maintain its market dominance and their 15% net profit margin.
3. Full Self-Driving (FSD) Delays and Overpromises
Tesla has been touting its Full Self-Driving (FSD) technology since 2016, but it has yet to deliver a fully functional product. While improvements have been made, the system is far from achieving true autonomy. it's unlikely to be ready for widespread adoption within the next three years in my opinion, Tesla always brings the amount of data they have of all the teslas in the road but what people don´t undertand is as important to have lots of data as having cuality data and probably most of Tesla´s miles driven are low cuality data it takes time to filter thats way its not even close to ready.
4. Robotaxi
Tesla's robotaxi vision is still far from reality. The current Full Self-Driving (FSD) system remains at Level 2 autonomy, meaning it still requires human supervision. Achieving the fully autonomous capability needed for a robotaxi fleet, which requires Level 4 or 5 autonomy, is a complex challenge that Tesla has yet to solve.
In addition to technical limitations, regulatory hurdles are a major obstacle. Governments are cautious about approving fully autonomous vehicles, especially given Tesla's reliance on cameras without other sensors like LiDAR. Safety concerns and liability issues also complicate the timeline, making a near-term launch highly unlikely.
We will see what the october 10th presentations holds but I think it is just smoke like the promise Roaster. It will be a cool pruduct but with no real plan behind it.
5. Skepticism Around Optimus
Tesla’s humanoid robot project, in my opinion is stupid. It is similar to people that wanted to fly and copied bird, the human body is so complex it would be a nightmare to manufaucture, having a 300lb+ machine at home with all the batteries needed for it to last hourse doing things would be so impractical and unsave. Moreover, if you want to use it in factory you are compiting with factories around the world with much cheaper cost of labor. It is a coll concept but just that. robots are 20+ in the future.
6. Massive Capital Expenditure with Uncertain Returns
Tesla continues to invest heavily in infrastructure, including new data centers and Nvidia GPUs, in an effort to advance its Full Self-Driving (FSD) technology. However, there is concern that these substantial investments may not deliver the expected returns. Tesla's current approach appears to rely on brute force—massive data processing power—to solve FSD, but this may not be the ultimate solution. It’s possible that more advanced or optimized hardware inside the cars themselves is needed to achieve true autonomy.
While Tesla has made progress in reducing the error rates of its self-driving systems, achieving near-zero or fully error-free performance remains elusive. The complexities of real-world driving conditions may limit how far current AI and machine learning models can go, no matter how much data processing power they throw at the problem. If Tesla is unable to close this gap, the massive investment in infrastructure could ultimately prove to be a waste of resources. Only time will tell whether this approach will pay off or fall short of expectations.
7. Elon Musk’s Potentially sell to Cover X (formerly Twitter) Loans
Elon Musk’s acquisition of Twitter has brought new financial pressures. To finance the deal, Musk took on significant debt (13 billion) in a high interest rate enviroment, twitter revenue keeps falling, and some analysts think that he may need to sell Tesla stock to cover these loans. Any significant sell-off of Tesla stock (1-2%)by Musk could erode investor confidence and put downward pressure on the stock price.
8. Regulatory and Legal Risks
Tesla is facing increasing regulatory scrutiny, particularly regarding its self-driving features, especially in Europe and China. While China appears poised to grant Tesla limited permission to roll out FSD in certain cities, Europe is taking a much stricter stance. European regulators are likely to impose more stringent requirements, and there’s a possibility that FSD may never be approved for widespread use if the hardware is deemed insufficient for safe driving. Tesla’s reliance solely on cameras, without additional sensors like LiDAR or radar, could be a sticking point, as European authorities may view this approach as inadequate for ensuring the safety standards required on public roads.
9. Slowing Growth in China and Economic Uncertainty in the U.S.
China, one of Tesla's largest markets, is experiencing a slowdown in economic growth. This presents a significant risk to Tesla, as China has been a key driver of the company’s expansion. Additionally, while a U.S. recession is considered unlikely by some, any economic downturn in the U.S. could negatively impact consumer demand for high-priced electric vehicles, further straining Tesla's growth prospects.
10. Cybertruck’s Production and Demand Concerns
The much-anticipated Cybertruck is facing production delays, and there are concerns about its actual demand. While the vehicle has generated significant buzz, its unconventional design may limit its appeal to a niche market. Additionally, production challenges could prevent Tesla from meeting delivery targets, further hurting investor confidence.
11. Tesla Semi Faces Scalability and Demand Issues
Tesla’s foray into heavy-duty electric trucks with the Tesla Semi faces significant challenges. Scaling production of such a vehicle is far more complex than producing passenger EVs, and there is uncertainty around demand. Many potential customers in the freight industry are hesitant to switch to electric semis due to high costs and limited infrastructure for charging and servicing.
12. The “Elon Risk” Factor
Elon Musk’s leadership style and unpredictable behavior have increasingly become a risk for Tesla. While his vision and innovation were crucial in building Tesla, Musk's erratic tweets, controversial statements, and focus on non-core projects have raised concerns among investors. His distractions, including managing X and other ventures, pose risks to Tesla's long-term stability and focus.
13.Energy and other segments.
Tesla’s energy division is growing fast but remains a small part of the business. While the demand for products like the Powerwall, Megapack, and solar panels is increasing, energy generation and storage still account for less than 6.3% of Tesla’s total revenue. The automotive segment continues to dominate the company’s financials. And other ventures like into insurance, i believe is a loss of focus with little upside.
Conclusion.
Tesla remains a pioneering company in the EV space, but its future is clouded with risks that could hinder its growth. Slowing automotive sales, increased competition, delays in key projects like FSD, and distractions from side ventures all contribute to a more bearish outlook. Furthermore, the company faces significant financial and regulatory risks that, if not managed well, could lead to a significant correction in its stock price and market value.
Thanks the atencion let me know if i missed something, thanks.(open for discussion)
@Marcos_Camacho4
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