Tesla becomes "Risky" buy and won't reach $300.
When you talk about electric vehicle (EV), immediately $Tesla Motors(TSLA)$ will pop into one’s mind.
It is the world’s first commercially successful EV maker.
For that, Tesla has creamed the biggest margin in its earlier days, propelling mr musk to multi-billion status.
Helmed by the South African borne elon musk, who has been described by many as a visionary entrepreneur & innovator (accolades that are subjective and deserves a separate refute, someday).
Tesla has come a long way to get to where it is today.
Challenges it encounters:
Production delays. Cybertruck 5 years delayed delivery. Tesla’s full service driving (FSD) announced in 2016. Seven years later it remains at level 2 only.
Quality issues,
Legal disputes.
Labour conflicts.
Flip thru the newspapers and the challenges are in full view. (see below)
Tesla's fading Clout & Influence
Tesla's EV has no rental value due to high maintenance costs !
Tesla owner mr musk is losing his midas touch !
Tesla owner is still caught up in Legal Issues
Tesla's sliding popularity
Personally, I feel the issues are getting out of control, and won’t be going anywhere, any time soon.
Latest news on Thu, 14 Dec 2023, reported that Tesla recalled >2 Million EVs (in the US) due to its self-driving autopilot software error. (see below)
The more pressing issue on hand, is the Scandinavian labour strike that demanded Tesla signs a collective bargaining agreement and better working conditions.
The strike that began on 27 Oct 2023 in Sweden, has bled into neighboring countries (Denmark, Norway, & Finland) whose labour unions showed solidarity and joined in the boycott.
I have covered this growing strike to death. Click here! to read the details.
Despite the recent doom & gloom, Tesla has generated some positive news in the media as well. (see below)
On Wed, 13 Dec 2023, Elon Musk unveiled "Optimus Gen 2", a revamped version of its humanoid robot, on Twitter.
The robot is designed to perform tasks that are boring, repetitive, or dangerous for humans. The latest generation robot has even proved that it could squat and pick up an egg (how skilful!)
Mr musk even claimed that a working model will be available come 2024, taking it at face value (LOL!).
Although, the latest Optimus incarnation is only a prototype, it is generating buzz around its capabilities, igniting excitement for all things Tesla and its future technology.
And just like that, on Thu, 14 Dec 2023, Tesla stock price rose +5%, in tandem with the broader market’s rally.
My viewpoints.
Disruptions in Europe will affect sales. It will cause Tesla to report weaker Q4 2023 earnings overall.
Headwind hitting Tesla in the US is that Model 3 will lose its $7,500 tax credit earlier than expected. (see below).
Similarly, that will affect its (a) sales, (b) revenue and ultimately (c) profits.
This might become the opportunity for EVs from $General Motors(GM)$ and $Stellantis NV(STLA)$ to capitalize on
On EV sales in China, Tesla has lost its #1 position to $BYD Co., Ltd.(BYDDY)$.
On EV sales in US, Tesla has lost its #1 position to $Ford(F)$ . (see above)
With elon musk being tightly coupled to its companies, may not be a good when times are bad ti. Case in point, see below.
On Thu, 14 Dec 2023, a federal judge ruled that Elon Musk must testify again for the US Securities and Exchange Commission's probe of his $44 Billion Twitter takeover back in October 2022.
The agency is (a) examining whether Musk followed the law when filing the required paperwork with SEC about his purchases in Twitter stock, and whether (b) his statements in relation to the deal were misleading.
Bad press like these will not endear investors to Tesla and instead erodes its brand equity.
Stock price forecast.
Based on the 30 stock analysts, the average 12-month stock price forecast for Tesla stock is $238.87, which predicts an increase of 0.78%.
The lowest target is $85 and the highest is $380.
On average, analysts rate Tesla stock as a “Hold”.
Tesla stock price has been falling since 11 Dec 2023.
The Fed’s decision to (a) halt interest hike in December 2023 and (b) confirm interest rate reduction in 2024, helped the markets to rally.
In the process, that broke Tesla’s downwards momentum.
Taking all above into consideration, it does not take a mathematician to figure out that Tesla will present a faltering Q4 2023 earnings in less than 6 weeks’ time.
Do you think that Tesla is a “Hold” or “Buy” or “Sell” ?
Do you think Tesla will end 2023, reaching $300 per share?
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