To The Moon

$Tesla Motors(TSLA)$

Tesla in Anxiety Mode

Tesla’s Stock Collapse and Weakening Fundamentals

Tesla has been in a downward spiral ever since Elon Musk became an advisor to President Trump. The company’s stock price has plummeted by 33% year-to-date, wiping out a staggering $800 billion in market value. Despite this, Trump has been promoting Tesla, even purchasing one himself and showing it off at the White House. However, this decline is more than just a stock market fluctuation—it reflects weakening fundamentals within Tesla and the broader U.S. economy.

Profits are shrinking, sales are underwhelming, and JP Morgan has issued a grim forecast for Q1 deliveries, predicting a drop from 440,000 to just 355,000 vehicles—a 20% decline. Adding to the concerns, the bank has slashed Tesla’s stock price target to $120, far below its current trading price of over $200. If these predictions hold, Tesla could face another 30-40% decline, which would have devastating effects on the U.S. stock market.

Elon Musk’s Bold—but Unrealistic—Promises

Despite the crisis, Musk remains in damage control mode, making big claims about Tesla’s future. He recently announced that Tesla would double its U.S. vehicle production within two years, crediting Trump’s policies as a driving factor. However, this statement defies logic, given the company’s current struggles. Increasing production requires significant investments in infrastructure, labor, and raw materials—all of which have become more expensive. Musk’s optimism seems disconnected from reality.

BYD’s Stunning Rise and Tesla’s Competitive Weakness

While Tesla stumbles, its Chinese competitor BYD is surging ahead. Once dismissed by Musk, BYD’s stock has hit record highs, rising over 55% this year. Unlike Tesla, BYD’s growth is backed by solid fundamentals and groundbreaking technological advancements.

One of BYD’s biggest breakthroughs is its new EV lineup, which boasts ultra-fast charging capabilities. These vehicles can charge in just five minutes and provide a driving range of 250 miles—on par with gasoline refueling times. Even more impressive, BYD will begin selling these cars as early as next month, eliminating a major hurdle for EV adoption.

China’s automakers are no longer just copying Western designs—they are leading the charge in innovation. BYD’s fast-charging technology is the best in the world, offering 400 km of range in just five minutes. In contrast, Tesla lags far behind, with charging speeds twice as slow as BYD’s. The only real competition for BYD comes from another Chinese automaker, Li Auto, further proving that China’s EV market is years ahead of the West.

The Impact of U.S. Tariffs on Tesla and the Auto Industry

Musk’s problems don’t stop at competition—Trump’s trade policies are making things worse. The U.S. has confirmed that there will be no exemptions from the 25% steel and aluminum tariffs, a decision that could cripple the American auto industry.

Tesla relies heavily on aluminum, which is used for its vehicle bodies and battery components. Transportation alone accounts for 36% of U.S. aluminum consumption, meaning this tariff will significantly raise production costs. Other industries like construction, machinery, and electronics will also suffer, indirectly increasing costs for automakers.

The Reality of U.S. EV Production

Some argue that imposing high tariffs on Chinese EVs will protect American manufacturers. However, the reality is that consumers will bear the brunt of these policies. The U.S. auto industry lacks the capacity to immediately ramp up production and slash prices. Contrary to political rhetoric, supply and demand don’t work that way—protectionist tariffs won’t magically make American EVs more affordable.

Adding to the problem, the U.S. depends on imported aluminum for 82% of its total demand. With such a heavy reliance on foreign suppliers, the tariff policy only empowers those suppliers to raise prices, forcing American manufacturers to absorb higher costs. Instead of strengthening the U.S. auto industry, these tariffs could push it toward irrelevance.

The Future of Tesla

Tesla is at a critical juncture. Between its falling stock price, declining sales, increasing competition from China, and the impact of Trump’s tariffs, the company is facing a crisis unlike any before. Musk’s focus on politics and social media distractions isn’t helping—he needs to shift his attention back to Tesla before it’s too late. Can Tesla recover, or is BYD set to Dominate

Tesla Faces Foreign Demand Collapse

Short-Term Gains, Long-Term Pain

While Tesla’s domestic sales may see a temporary boost due to tariffs, the long-term outlook is far from promising. New car prices in the U.S. are projected to rise by at least $4,000—and in some cases, as much as $12,000. For EVs like Tesla, the cost increase could be even steeper. The company now faces a tough choice: absorb the tariffs and watch profit margins collapse or pass the cost onto consumers and risk crushing demand.

U.S. consumers aren’t exactly in a spending mood. Retail sales barely rose last month, missing expectations and showing a stark contrast to the much stronger growth seen a year ago. Whether due to financial strain or economic uncertainty, people are holding back. This is the fundamental flaw in Trump’s trade war—either he forces production back to the U.S. at great cost, or retaliatory measures from other countries drag the American economy down with them.

Global Backlash Against U.S. Goods

April is shaping up to be a critical month, as Trump has promised even harsher tariffs aimed at "taking back" wealth from other nations. But these policies come with serious consequences. If you’re a consumer in Canada, Europe, or Asia and your economy is being battered by U.S. tariffs, would you be eager to buy American products? Probably not.

Tesla is already feeling the heat. In February, its sales in Germany and Australia plummeted by over 70% year-over-year, while China saw a nearly 50% decline. Meanwhile, BYD—the Chinese automaker Musk once mocked—has seen a 90% surge in sales. The backlash against U.S. goods is real, and it’s only going to intensify as more people opt for local alternatives.

The Perfect Storm for the U.S. Auto Industry

Trump’s trade policies aren’t just making domestic production more expensive—they’re also fueling global resentment toward American-made products. While governments might hesitate to impose retaliatory tariffs, consumers have the power to simply stop buying U.S. goods. In markets from Turkey to Brazil and Thailand, Chinese EVs are rapidly gaining traction, doubling or even tripling their market share in just two years.

With Chinese automakers producing cheaper, technologically advanced cars, Tesla’s global market share is under serious threat. BYD and Li Auto continue to expand their reach, capitalizing on shifting consumer sentiment. As Tesla struggles, China’s EV sector is flourishing.

Economic Warning Signs and the "Clown Economy"

The U.S. economy is already showing cracks, and the worst may still be ahead. The Trump administration insists that higher prices are a necessary sacrifice, redefining the American Dream as something beyond access to cheap goods. But for everyday consumers, rising inflation and stagnant wages make that argument difficult to accept. If people can’t afford basic necessities, let alone big-ticket purchases like cars, how can they drive economic growth?

With April just around the corner, the situation looks increasingly dire for Tesla and the broader auto industry. The combination of rising production costs, declining foreign demand, and an economy on the brink could spell disaster.

What do you think? Is Tesla in serious trouble? Are we heading toward a U.S. recession? Let me know in the comments below. Stay safe, and don’t forget to like and subscribe as we navigate these turbulent times.

Disclaimer: I want to make it clear that I am not a financial advisor, and nothing I say is intended to be a recommendation to buy or sell any financial instrument. Additionally, it's important to remember that there are no guarantees or certainties in trading or investing, and you should never invest money that you can't afford to lose.

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