What could have caused the 11% drop of Tesla on 27Jan2022?




What caused ‌$Tesla Motors(TSLA)$‌stock to fall by over 11% after a record breaking quarterly earnings report?  Before we dive into details, let us not forget Elon the visionary.  From SpaceX, Starlink, the Boring Company and a future of autonomous, sustainable transport, he has seen the future that most of us cannot imagine.  With this backdrop, let us look into the various reasons for the fall of the stock price:


1.  The delay of the $25,000 Tesla


This was deemed by the news to be the main reason for the fall.  As per CNBC, Elon later explained that Tesla’s driverless tech should eventually be so advanced that it will drive sales of the company’s electric cars to the anticipated high volume of sales with or without adding new models at lower price points.  This did not sit well with the market.


Extract from findmyelectric.com about the prices of Tesla in USA for 2022 dated 1st Jan 2022:

The Tesla lineup for 2022 (Model S, Model 3, Model X, Model Y) ranges in cost from $44,990 – $129,990 before taxes, incentives, and specific options.

* Latest update - FSD has recently increased to $12,000 from $10,000.


As per the prices stated above, the $25,000 Tesla was viewed by market as a key piece as Tesla expand their vehicle offering into different segments.  This was viewed as the unit that would garner most mass interest and sales due to its affordability.  This was the "cash cow" that will help bring Tesla to the masses.  This delay has no doubt brought about "concerns" to investors, leading to the sell off.  In fact, some observers have mentioned that Tesla's stock price started to drop after this announcement was made by Elon.


2. Full Self Driving (FSD)


Elon is expecting FSD to be ready by 2022.  This will mean that Tesla will be able move up from SAE level 2 to SAE level 4 standard that denote "a car that could handle every aspect of driving in some conditions without any human intervention."  Elon advised that this could reduce the costs of transportation by 4-5x.  This implies that vehicle ownership will become less attractive - as FSD propelled Robotaxis will be able to provide cheaper and safer commute.   


Vehicular autonomy led by FSD and the robotaxi market can make commute affordable, thus reducing some demand on vehicular ownership.  This was something that did not fit into the "strategy" of the investors.  There are several who thought that Elon has lost his plot at this juncture after the delay of the $25,000 Tesla.


3.  Optimus Humanoid 


Subsequently, Elon mentioned that "Optimus can be bigger than the automotive division and even bigger than the robotaxi".


This was probably another item that investors could not comprehend.  Most of us have mentally tagged Tesla to their vehicles and could not comprehend the potential of other products that could surpass the cars.  At this point, we may need to recalibrate our lens, seeing Tesla as a "technology (AI) and innovative company that is committed to a better and sustainable future".  In fact, most of us have probably forgotten that Elon mentioned that the energy business (solar & storage) could potentially be bigger than the automotive division.  Currently, it could be hard for us to accept as the automotive are making bulk of the news.  However, there are not many times when Elon was wrong about such matters.


Conclusion

In conclusion, I think that Tesla's automotive business will continue to drive bulk of the revenue, profits and news coverage in the near future.  However, FSD and Optimus could well be game changers themselves.  It is exciting to learn that Tesla's innovation are changing lives for the better.  Tesla is not just another car maker but is also improving our lives in AI (Neural link, Optimus and FSD), safety (FSD), protection (insurance), sustainability (solar and energy storage) on top of other solutions that they are developing (Dojo, HVAC, 4680 batteries, etc).  This means that Tesla will have more than 1 source of income.  They are developing multiple solutions leading to more revenue, profits in a better & sustainable world.  


Please do your due diligence but this maybe another golden chance to load up on our Tesla shares.


@TigerStars


Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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  • fuzzcheek
    ·2022-02-03
    Just market reaction and bearish environment. I expect Tesla to hit $2k by mid year
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    • KYHBKO
      nice
      2022-02-03
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  • investforget
    ·2022-02-02
    I believe $Tesla Motors(TSLA)$ will hit 1600 by the end of the year
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    • KYHBKO
      that would be great.
      2022-02-03
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    • JamesArthur
      Yes!
      2022-02-02
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  • 我i168
    ·2022-02-07
    $Tesla Motors(TSLA)$...ultimatey TSLA is a bot and AI company! Car to EM is a bot, so is a humanoid.
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    • KYHBKO
      you have got it correct.
      2022-02-07
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  • StaQ
    ·2022-02-03
    in my opinion, Telsa stocks are traded speculatively and not based on traditional evaluations.
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    • KYHBKO
      you are right. using traditional evaluations, I did not consider Tesla previously until I changed the definition of value.
      2022-02-03
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  • mac0racle
    ·2022-02-09
    Sometimes could just be a knee jerk reaction to sell. Patience is needed.
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    • KYHBKO
      yes. market is prone to panic. should avoid allow emotions to run our trades
      2022-02-09
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  • 意11
    ·2022-02-03
    Time in market better than time the market
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    • KYHBKO
      agree
      2022-02-03
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  • Ahow3
    ·2022-02-02
    When can 7XX again?
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    • KYHBKO
      not sure about when but you can set an open limit order at your preferred price.
      2022-02-02
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  • MIe
    ·2022-02-14
    Tesla upside with patiEnce#
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    • KYHBKO
      yes. DCA
      2022-02-14
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  • Shieryl14
    ·2022-02-05
    Monitoring tesla😊
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    • KYHBKO
      good morning to you and may Tesla brings us many more good mornings.
      2022-02-05
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  • pete13
    ·2022-02-04
    Thanks for the article
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    • KYHBKO
      you are welcome Pete
      2022-02-04
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  • Huathuat23
    ·2022-02-04
    Their cars got recalled
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    • KYHBKO
      yes.
      2022-02-04
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  • ndreang
    ·2022-02-03
    With a lot of promise comes plenty of volatility
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    • KYHBKO
      well said
      2022-02-03
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  • thetarget
    ·2022-03-04
    Real car makers are making their EVs. Granted they are new to the tech, but they know how to sell cars What are the correct things to include and method to sell them (as oppose to subscription model)
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    • KYHBKO
      legacy auto makers should have their share in EV. I am glad for all to work towards a sustainable solution. unfortunately, not every auto maker will survive. let's monitor
      2022-03-04
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  • AngelNgo
    ·2022-02-03
    Tesla stock is always very fluid, many inpact factors
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  • TieTeckHoe
    ·2022-02-02
    Go tesla
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  • Novice2
    ·2022-02-02
    chips supply, logistics issue may contribute to the fall
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  • DexterLim
    ·2022-02-11
    Interest rate hike witch causes multiple compression
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  • StartSmall
    ·2022-02-07
    Adoption will remain its main headwinds worldwide. Product wise it remains impeccable.
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  • CT888
    ·2022-02-06
    Yes, Tesla is a futuristic comp. If people are grabing my BMW, why should I sell Toyota?
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  • AngelAw
    ·2022-02-06
    believe it will go up
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