$Tesla Motors(TSLA)$ 

TESLA stock price has dropped from a recent high of $488 18th Dec 2024 post election results when Trump won to $419 on Trump's inauguration on 20th Jan. Post earnings, Tesla continue it's downtrend to $361 7th Feb.

Why I was bearish from $488 and continue to believe that Tesla will revisit the $300 level soon.

Fundamentally, a lot has changed, Tesla late release of new cheaper models, Model 2 expected in Mar this year and a $5,000 price increase for Model X are just the beginning of a slew of negatives. Trump's rollback of green energy initiatives will continue to hurt and give reprieve to Ford and GM.

A dramatic 11% drop in China's EV sales was not unexpected given the fiercely competitive Chinese EV market and a slowing consumer economy, however, the plummeting sales of 59% in EU amid rising demand for EVs brings fresh challenges.

Tesla's big bet on robotaxis and potential global rollout globally will keep the wheel spinning but I see two major flaws which could be catastrophic for robotaxis. 

The lack of LiDAR which is becoming mainstream for FSD (full self driving) due to lower costs, wider range and streamlined size $HSAI Hesai Technology means Tesla's reliance on cameras alone risk collision with high speed vehicles outside the range of it's cameras especially in the dark. 

Waymo's self driving taxis rollout in limited cities shows that LiDAR is a crucial component of FSD. 

The all in on deploying unsupervised FSD technology without the use of LiDAR will be an interesting experiment. Not having steering wheel at the helm makes it impossible to pivot to supervised FSD in the event of teething problems with the initial rollout. If successful, it could herald a shift away from LiDAR for FSD and hasten the deployment of AI at the edge.  

The launch of Cybercab is another exciting milestone for Tesla's drive to disrupt all land transportation but it's rollout will be limited by rollback of green energy incentives and Trump's endorsement of greater use of gasoline powered vehicles. 

Elon's forecast of millions of Optimus humanoid robots in 2025 and 2026 is both exciting and disturbing, heralding a new era where humanoid robots will finally be amongst us not unlike a Terminator movie where jobs will be lost even as Musk.D.O.G.E. cleansing already threatens millions of government jobs. Furthermore, the distractions of D. O. G. E, Space X and Twitter means Tesla will not get the pressing attention it needs at a crucial time. 

All these could lead to massive job displacements as the unemployment rates rise, Uber drivers are out of a job, migrant labor leaves, straining consumption. 

All in all, the dawn of a new era in AI and robotics will likely increase Tesla's valuation for 2026 and beyond but for now I am betting on a retracement to the $300 level which present buying opportunities for the stock.