TSLA short pitch:
– Bulls incorrectly assume that Tesla will dominate the end-state auto market.
– That assumption is just wrong.
– Sub-$50 *valuation* for Tesla is not just a $TSLAQ fever dream.
– Two things that happened over the last six months cast doubt on the “dominance” forecast that underpins Tesla’s valuation:
(1) Order rates have started to collapse and this is negatively impacting Tesla’s margins.
(2) BYD has already overtaken Tesla as the leading EV car maker – sells almost 2x more cars and is growing faster and the company has global ambitions.
– Tesla’s auto valuation requires that the industry not be a competitive post-EV transition, but BYD is a fierce competitor now.
TSLA valuation:
– Market so far has been valuing Tesla by analogy – “The next Apple” was the anchoring theme for a while.
– Once investors start anchoring Tesla’s valuation to an auto industry comp, it’s game over.
Exp. gain: 75% to $50/share.
Full write-up (free guest account required):
https://www.valueinvestorsclub.com/idea/TESLA_INC/0514108270#description