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Date | For | Estimate | Reported | Surprise | surprise % |
---|---|---|---|---|---|
2024-07-23 | 2024-06 | 0.62 | N/A | N/A | N/A |
2024-04-23 | 2024-03 | 0.46 | 0.45 | -0.01 | -2.17% |
2024-01-24 | 2023-12 | 0.75 | 0.71 | -0.04 | -5.33% |
2023-10-18 | 2023-09 | 0.72 | 0.66 | -0.06 | -8.33% |
2023-07-19 | 2023-06 | 0.83 | 0.91 | 0.08 | 9.64% |
2023-04-19 | 2023-03 | 0.83 | 0.85 | 0.02 | 2.41% |
Date | Firm | Action | From | To |
---|---|---|---|---|
2023-10-18 | Wells Fargo | Upgrade | Equal-Weight | Equal-Weight |
2023-10-18 | Morgan Stanley | Upgrade | Overweight | Overweight |
2023-10-18 | Wedbush | Upgrade | Outperform | Outperform |
2023-10-18 | Citigroup | Upgrade | Neutral | Neutral |
2023-10-18 | Roth MKM | Upgrade | Neutral | Neutral |
2023-10-18 | Guggenheim | Upgrade | Sell | Sell |
Date | Name | Relation | Quantity | Description |
---|---|---|---|---|
2024-03-31 | BAGLINO ANDREW D | Officer | 31.23K | Sale |
2024-05-05 | DENHOLM ROBYN M | Director | 15.00K | Sale |
2021-10-26 | EHRENPREIS IRA MATTHEW | Director | 205.73K | Sale |
2023-08-03 | KIRKHORN ZACHARY | Chief Financial Officer | 193.79K | Sale |
2024-06-02 | MURDOCH JAMES RUPERT | Director | 407.30K | Conversion of Exercise of derivative security |
2023-03-07 | MUSK ELON REEVE | Chief Executive Officer | 0.00 | Conversion of Exercise of derivative security |
Report Date | Organization | Position | Value | Percentage |
---|---|---|---|---|
2023-06-29 | Vanguard Group Inc | 222.49M | 58.24B | 7.01% |
2023-06-29 | Blackrock Inc. | 185.89M | 48.66B | 5.86% |
2023-06-29 | State Street Corporation | 104.12M | 27.25B | 3.28% |
2023-06-29 | Geode Capital Management, LLC | 51.66M | 13.52B | 1.63% |
2023-06-29 | Capital World Investors | 42.27M | 11.07B | 1.33% |
2023-06-29 | FMR, LLC | 28.77M | 7.53B | 0.91% |
Report Date | Organization | Position | Value | Percentage |
---|---|---|---|---|
2023-06-29 | Vanguard Total Stock Market Index Fund | 84.02M | 21.99B | 2.65% |
2023-06-29 | Vanguard 500 Index Fund | 64.14M | 16.79B | 2.02% |
2023-05-30 | Fidelity 500 Index Fund | 30.10M | 6.14B | 0.95% |
2023-08-30 | SPDR S&P 500 ETF Trust | 29.68M | 7.66B | 0.94% |
2023-08-30 | Invesco ETF Tr-Invesco QQQ Tr, Series 1 ETF | 25.05M | 6.46B | 0.79% |
2023-08-30 | iShares Core S&P 500 ETF | 25.20M | 6.50B | 0.79% |
Split | Date |
---|---|
3 : 1 | 2022-08-25 |
5 : 1 | 2020-08-31 |
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This report shows investors of all types just how extreme the risk in TSLA is based on:
Overstated earnings from short-term regulatory credits
Overlooked, but huge, EV market share that incumbent automakers will take
Doing the math: the revenue, profit and production increases implied by the current valuation are highly unrealistic. Not even the most bullish analysts have forecasted the growth baked into the current price.
The Most Valuable Car Company in the World, or Most Overvalued?In July 2020, Tesla became the most valuable car company in the world when it eclipsed the market cap of Toyota Motors (TM).
Figure 1 compares the market share and market caps per car sold for Tesla, Toyota, Honda Motors (HMC), General Motors (GM), Ford (F), and Fiat Chrysler (FCAU). Of the incumbent automakers, Toyota’s market cap per car sold is the highest at ~$19.7k. Tesla’s market cap per car sold over the TTM period is $880.2k, or more than 44 times higher than Toyota.
Is Tesla, with less than 1% of the global automotive market, worth that much more than Toyota, with ~12% of the market in 2019? Even if Tesla warrants this huge valuation premium now, how much upside is left from here?
Figure 1: Market Cap per Car Sold: Tesla vs. Peers – TTM
Sources: New Constructs, LLC, and company filings
Tesla Turns a Profit Selling Regulatory Credits, Not Vehicles
Tesla’s recently reported profits are based on sales of free regulatory credits to gasoline automakers, whose fleets, on average, don’t meet regulatory required emissions levels.
Tesla enjoys a 100% profit margin on these credits since the company gets them as a free byproduct of being an all-electric vehicle maker. In 2Q20 alone, Tesla sold $428 million in regulatory credits on its way to reporting GAAP net income of $104 million. When we remove these credits, Tesla’s GAAP net income would have been negative in each of the past three quarters, per Figure 2.
Figure 2: GAAP Profits with and Without Regulatory Credits: 3Q18 – 2Q20
Sources: New Constructs, LLC, and company filings
Selling credits isn’t a viable long-term strategy. As other firms ramp up production of EVs and earn more credits, they purchase less from Tesla. For example, Fiat Chrysler CEO Mike Manley noted in the firm’s 1Q19 earnings call that it expects to be compliant without the help of credits from Tesla by 2022. Without the profits from selling free regulatory credits, Tesla will have trouble increasing its already overstated profits.
Market Share Will Drop Precipitously as Incumbents Enter the EV Market
Tesla bulls tend to overlook the slow, but deliberate and large, entrance that incumbent automakers will make in the EV market. By 2025, these firms are expected to sell ~3.1 million EVs, which is significantly more than even the most optimistic estimates for Tesla sales in 2025. For comparison, Tesla sold ~368,000 cars in 2019 and expects to sell 500,000 in 2020.
Volkswagen plans to produce 1.5 million EVs in 2025.
General Motors plans to sell 1 million EVs by 2025.
Toyota plans to produce 500,000 EVs and ~5.3 million electrified vehicles (EVs and hybrids), or half its global sales in 2025.
Ford is expected to sell ~332,000 EVs in 2025.
Figure 3 illustrates how the incumbent automakers will dominate, relative to Tesla, the EV market by 2025. Projections for Tesla’s vehicle sales in 2025 vary widely: 2 million from the Trefis Team, 1.3 million from Clean Technica, and 413,000 from LMC Automotive. We have not found an estimate for Tesla sales that is not well below the incumbents expected EV sales of ~3.1 million EVs in 2025.Both Volkswagen and Renault-Nissan-Mitsubishi are expected to sell more cars, individually, than Tesla by 2025.
Figure 3: Past & Projected Electric Vehicle Sales by Manufacturer: 2018 & 2025
Sources: New Constructs, LLC, and LMC Automotive, Clean Technica and Trefis Team
Unable to Match Incumbents’ Investment in EVs
After investing heavily in its operations for years, Tesla has reversed course, presumably to meet profit goals and reduce dependence on outside capital. Tesla’s capex in 2019 ($1.3 billion) represented just 62% of its depreciation, amortization, and impairment ($2.2 billion). In other words, net investment was -$827 million.
Over the TTM period, depreciation, amortization, and impairment remains higher than capex and net investment is -$429 million, per Figure 4.
Tesla is ramping down spending as competitors are ramping up.
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This report shows investors of all types just how extreme the risk in TSLA is based on:
Overstated earnings from short-term regulatory credits
Overlooked, but huge, EV market share that incumbent automakers will take
Doing the math: the revenue, profit and production increases implied by the current valuation are highly unrealistic. Not even the most bullish analysts have forecasted the growth baked into the current price.
The Most Valuable Car Company in the World, or Most Overvalued?In July 2020, Tesla became the most valuable car company in the world when it eclipsed the market cap of Toyota Motors (TM).
Figure 1 compares the market share and market caps per car sold for Tesla, Toyota, Honda Motors (HMC), General Motors (GM), Ford (F), and Fiat Chrysler (FCAU). Of the incumbent automakers, Toyota’s market cap per car sold is the highest at ~$19.7k. Tesla’s market cap per car sold over the TTM period is $880.2k, or more than 44 times higher than Toyota.
Is Tesla, with less than 1% of the global automotive market, worth that much more than Toyota, with ~12% of the market in 2019? Even if Tesla warrants this huge valuation premium now, how much upside is left from here?
Figure 1: Market Cap per Car Sold: Tesla vs. Peers – TTM
Sources: New Constructs, LLC, and company filings
Tesla Turns a Profit Selling Regulatory Credits, Not Vehicles
Tesla’s recently reported profits are based on sales of free regulatory credits to gasoline automakers, whose fleets, on average, don’t meet regulatory required emissions levels.
Tesla enjoys a 100% profit margin on these credits since the company gets them as a free byproduct of being an all-electric vehicle maker. In 2Q20 alone, Tesla sold $428 million in regulatory credits on its way to reporting GAAP net income of $104 million. When we remove these credits, Tesla’s GAAP net income would have been negative in each of the past three quarters, per Figure 2.
Figure 2: GAAP Profits with and Without Regulatory Credits: 3Q18 – 2Q20
Sources: New Constructs, LLC, and company filings
Selling credits isn’t a viable long-term strategy. As other firms ramp up production of EVs and earn more credits, they purchase less from Tesla. For example, Fiat Chrysler CEO Mike Manley noted in the firm’s 1Q19 earnings call that it expects to be compliant without the help of credits from Tesla by 2022. Without the profits from selling free regulatory credits, Tesla will have trouble increasing its already overstated profits.
Market Share Will Drop Precipitously as Incumbents Enter the EV Market
Tesla bulls tend to overlook the slow, but deliberate and large, entrance that incumbent automakers will make in the EV market. By 2025, these firms are expected to sell ~3.1 million EVs, which is significantly more than even the most optimistic estimates for Tesla sales in 2025. For comparison, Tesla sold ~368,000 cars in 2019 and expects to sell 500,000 in 2020.
Volkswagen plans to produce 1.5 million EVs in 2025.
General Motors plans to sell 1 million EVs by 2025.
Toyota plans to produce 500,000 EVs and ~5.3 million electrified vehicles (EVs and hybrids), or half its global sales in 2025.
Ford is expected to sell ~332,000 EVs in 2025.
Figure 3 illustrates how the incumbent automakers will dominate, relative to Tesla, the EV market by 2025. Projections for Tesla’s vehicle sales in 2025 vary widely: 2 million from the Trefis Team, 1.3 million from Clean Technica, and 413,000 from LMC Automotive. We have not found an estimate for Tesla sales that is not well below the incumbents expected EV sales of ~3.1 million EVs in 2025.Both Volkswagen and Renault-Nissan-Mitsubishi are expected to sell more cars, individually, than Tesla by 2025.
Figure 3: Past & Projected Electric Vehicle Sales by Manufacturer: 2018 & 2025
Sources: New Constructs, LLC, and LMC Automotive, Clean Technica and Trefis Team
Unable to Match Incumbents’ Investment in EVs
After investing heavily in its operations for years, Tesla has reversed course, presumably to meet profit goals and reduce dependence on outside capital. Tesla’s capex in 2019 ($1.3 billion) represented just 62% of its depreciation, amortization, and impairment ($2.2 billion). In other words, net investment was -$827 million.
Over the TTM period, depreciation, amortization, and impairment remains higher than capex and net investment is -$429 million, per Figure 4.
Tesla is ramping down spending as competitors are ramping up.
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I just don’t know if this reverse split is going to hurt Tesla but it’s better than being delisted
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But when Tesla goes down to $50 like they all say it is worth we might not even be too smart to buy then because they will reverse split to stay on the nasdaq
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I already sold my 85 Tesla shares and now I put all in Etsy because s&P is legit and Tesla is just boring.
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We should should sell everything and buy Etsy
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I own a Tesla and I know for a fact that battery day is not even something I care about as an investor and owner! Because the s&P is king and we are trash
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Battery day seems like a big scam to sucker in more peoples hard earned money
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Battery day doesn’t make me want to buy any more stocks what for ? So I can lose the money
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A battery that actually works properly isn’t going to save us from crashing I don’t think I’m so scared because really there is nothing happening on battery day that we don’t already know so people would by the stock already if battery day was going to help anything
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I’m not totally sure guys that battery day will save us because aren’t they just announcing the new body style and the battery that actually works and doesn’t brake down every year and cost a fortune to replace
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But I heard battery day will make it all better right
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I heard the stock is magic and will just like magically go back up right
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I want a to know if my stock I bought was 500 when does it turn into 1 million like how many years ? I’m counting on my investment here in such a great company
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How long does it take for my stock to make me a millionaires ? I need to fix my Tesla it went out of control and killed some old lady now I in jails
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I bet this stock will be 1,000,000 soon just wait dummy bear
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This thing will be 550 end of day Tuesday
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You would be quiet too if you lost over 100 billion in 2 days hahah
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