1x Tsla Discussion Threads

[hosede] 08/7/2024 12:02

Simon
Lets wait til the earnings report. Any fool can sell stuff! - its (a) making a profit and (b) getting paid that are the difficult things

[simon gordon] 08/7/2024 11:48

Bloomberg - 7/7/24

Hedge Funds That Piled Into Big Tesla Short Stung by Huge Rally

Growing number of hedge funds shorted Tesla through June

Hedge funds piled into short bets against Tesla Inc. right before the electric vehicle maker unveiled a set of numbers that triggered a hefty share-price rally.

About 18% of the 500-plus hedge funds tracked by data provider Hazeltree had an overall short position on Tesla at the end of June, the highest percentage in more than a year, according to figures shared with Bloomberg. That compares with just under 15% at the end of March.

Those contrarian bets now threaten to saddle the hedge funds behind them with losses. Tesla’s latest vehicle-sales results, published on July 2, revealed second-quarter deliveries figures that beat average analyst estimates, even though sales were down. Investors pounced on the news, driving the company’s shares to a six-month high. Since the beginning of June, Tesla’s share price has now soared about 40%.

Tesla is likely to see its profit margins improve, helped by lower production and raw material costs, according to Morningstar Inc.’s Seth Goldstein, one of the top three analysts covering the stock in a Bloomberg ranking that tracks price recommendations.

The company will likely “return to profit growth” next year, he said in a note to clients. But how Tesla handles the market’s intensifying focus on affordable EVs will be key, he added.

The development feeds into an ongoing sense of uncertainty around how to treat the wider EV market, amid a sea of conflicting dynamics. The industry — a key plank in the global race to reach net zero emissions by 2050 — benefits from generous tax credits. Yet it’s also contending with significant hurdles in the form of tariff wars and even identity politics, with some consumers rejecting EVs as a form of “woke” transport.

In the US, Donald Trump has said that if he becomes president again after November’s election, he’ll undo existing laws supporting battery-powered vehicles, calling them “crazy.” That said, Trump is a “huge fan” of Tesla’s Cybertruck, according to Elon Musk, the EV giant’s chief executive officer.

Meanwhile, the list of internal disruptions at Tesla is long. In April, Musk told staff to brace for major job cuts, with sales roles among those affected. And the Cybertruck, Tesla’s first new consumer model in years, has been slow to ramp up.

For that reason, some hedge fund managers have decided the stock is off bounds altogether. Tesla is “very difficult for us to position,” said Fabio Pecce, chief investment officer at Ambienta where he oversees $700 million, including managing the Ambienta x Alpha hedge fund.

Basically, it’s not clear whether investors are dealing with “a top company with a great management team” or whether it’s “a challenged franchise with deficient corporate governance,” he said.

However, “if Trump wins, it is truly going to be very positive” for Tesla, though “obviously not amazing for EVs and renewables in general,” he said. That’s because Trump is expected to impose “massive tariffs towards the Chinese players,” which would be “beneficial221; to Tesla, Pecce said.

Investors ended 2023 declaring they’d likely retreat further from green stocks in general, and EVs specifically, according to a Bloomberg Markets Live Pulse survey. Almost two-thirds of the 620 respondents said they planned to stay away from the EV sector, with close to 60% expecting the iShares Global Clean Energy exchange-traded fund to extend its slide in 2024. The ETF has lost 13% so far this year after sinking more than 20% in 2023.

The Bloomberg Electric Vehicles Price Return Index, whose members include BYD Co., Tesla and Rivian Automotive Inc., is down about 22% so far in 2024. At the same time, the metals and minerals needed to produce batteries are at the mercy of wildly volatile commodities markets, with speculators regularly trying to make a quick buck on shifts in supply and demand. Price volatility means some battery manufacturers are having to adjust to a market in which their profit margins have been getting badly squeezed.

Against that backdrop, more traditional automakers are finding themselves under pressure from shareholders to slow down their capital expenditure on EVs, with recent examples including Porsche AG. Polestar Automotive Holding UK Plc, a high-end EV manufacturer, has lost almost 95% of its value since being spun out of Volvo Car AB two years ago. Fisker Inc., another luxury EV maker, saw its value wiped out starting last year and has since filed for Chapter 11 bankruptcy protection.

Soren Aandahl, founder and CIO of Texas-based Blue Orca Capital, said “valuations in the EV space are so beat up” that he’s now avoiding shorting the sector. It’s no longer an obvious contrarian bet, because those tend to do best if investors enter “when things are a little bit higher,” he said. But at this point, “a lot of the air’s already come out of the balloon.”

But Eirik Hogner, deputy portfolio manager at $2.7 billion hedge fund Clean Energy Transition, suggests there may be more pain to come for the wider EV industry. There are still “way too many” startups that remain “sub-scaleR21; and with gross margins that are simply “too low,” he said. As a result, the supply-demand dynamic of the EV market “is still very negative.”

“Ultimately, I think you need to see more bankruptcies” before the market starts to look healthier, Hogner said.

[hosede] 07/7/2024 10:34

Cfb.
Yes but that sort of Pharma is NOT a near trn dollar Co. and is never a major part of a portfolio.
The energy storage is fine but doesn't deserve a 3 figure PE.
Are you aware that No-one has EVER made money buying a Co. with a PE above 30: except of course by selling to a greater fool - though there are plenty of those around at the moment :-0
If there are Robotaxis, new Cos. will emerge to run them (like Waymo) and while one might be a Tesla subsidiary, others might use its competitor's cars. Far too much uncertainty at the moment.
Anyway the top of the market is looking very near - all the usual signs are there

[cfb2] 06/7/2024 18:46

hosede: Valuing based on certainty is the approach of a value investor. If you apply that to the pharmaceutical or IT sector you will come up short on the valuation. My valuations are based around a percentage likelihood of it happening, a discounted cash flow which allows future revenues to be accounted for.

One thing worth considering is the revenue from their energy storage business is equivalent to the sale of 100K vehicles and it doubled in the last quarter.

Something nobody seems to have picked up on yet is the cost for Tesla to roll out their robotaxis and their self cleaning huts. To get the volumes and make the most of their market lead in autonomy I think they may decide to raise money to accelerate it. Their free cash flow is good but with their spend on AI and mining/refining they have a lot going on.

[johnwise] 06/7/2024 05:38

“The Information Is Essentially Fictional”

Net Zero Watch Director Net Zero Plans

VIDEO



Video: Mark Levin sussed the government scam
The truth about global warming


If Zero CO2 was ever achieved every tree on the planet would die
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[johnwise] 06/7/2024 05:34

VIDEO

Owners Sending EVs to Junkyards After the First Breakdown: "Not Worth Fixing!"

[hosede] 03/7/2024 23:18

cfb :-0
Saved me from crypto too - very similar..
I don't think Maths changes much over the years - though today's very low interest rates do make a significant difference. In those days you could get 6.5% on an A grade bond. The point is that Tesla should be valued on what it's going to achieve almost for certain - not on what might be.
Anyway - regardless of math, the chart looks very bearish to me. the price has shot up over the trendline in what looks like a throwover. It should return to that trendline very soon if it doesn't we shall have to reassess. Musk sold more cars than many people expected in Q2. In a few weeks we shall discover how much it cost him!

[cfb2] 03/7/2024 22:20

hosede: Your criteria would have saved you from the 1637 Tulip mania. Not suggesting you are old or your ideas are dated. Ahem.

[hosede] 03/7/2024 19:57

time will tell Dominic - but when I was.a lad I was reluctant to pay more than ten times historic earnings or 1.3 x book value for any company - which would give Tesla price around $ 25 - 30

[dominiccummings] 03/7/2024 19:34

Or.... it's you that is wrong hosede?

[hosede] 03/7/2024 15:48

Ridiculous - now at 246 whereas even analysts - who always err on the long side average is 185 .I was long briefly - but it can't go on!
It's left three juicy looking gaps above 200

[hosede] 03/7/2024 12:07

Cfb
Perhaps a Robotaxi that arrived (robo)at your door, allowed you to drive it to wherever you wanted, and then drove itself home would be more attractive. (particularly for those of a nervous disposition:-0)

[cfb2] 03/7/2024 11:51

hosede: The authorisation to run robotaxis will be state by state in the US, as demonstrated by Waymo. Tesla are collecting billions of miles of data to demonstrate how safe their cars are.

There will be accidents and each one will be investigated but it won't stop robotaxis. There are hundreds of thousands of people injured in cars every year, as long as this number decreases as the number of automated cars increase there won't be a problem.

Once the public perceive the cost savings of using Robotaxis over owning a car I think they will be well received. Robotaxis are a paradigm shift rather than just competitors to taxis.

Maybe the fastest roll out will be in China? China's public have been faster to adopt EVs and are more tolerant of changes and new technology. Xi is smart enough to realise the edge automated cars can give them.

[hosede] 03/7/2024 11:04

CFb
Robotaxis - even if they work - will take time to take off. A lot of people (me included) would be far too terrified to use them, and taxi drivers will do everything they can to disrupt their operation.
Every country will of course be different, but I can visualise long delays before they are given the go ahead - and a single serious accident killing them off .

[cfb2] 03/7/2024 10:42

P/E is 96 with their EPS of $2.42. This is NVIDIA range.

Their car deliveries beat analyst estimates by a small margin but in comparison to the same quarter last year this was down ~5%. There were pauses in Cybertruck deliveries due to wiper and panel issues but hpcg is correct that this does not justify the market's share price reaction.

So what caused it? Two things: The increase in battery storage, doubled from the previous quarter and the margin increase from lower battery costs caused by a huge surplus in China. My estimate is a gross profit of $1.3Bn. On their last call Tesla said the Lathrop plant was expected to ramp from 20GWh to 40GWh by end of year.

The second was progress with robotaxis (plan update due 8th August) and the anticipation caused by a new release of FSD software.

I'm also expecting take up rate from FSD software to have substantially increased due to improvements in software and a month of free trial to all users.

Robotaxis will need to start generating revenue in the next 2-3 years.

[hosede] 03/7/2024 10:26

Dominic
The Debt crisis is gong to destroy almost everything - think a financial GAZA (just like last time). Clearly you are not a chemist, or you would realise that we are ABSOLUTELY CERTAIN to repeat the mistakes of the past.
Nitroglycerine doesn't learn not to explode
Read Rheinhart and Rogoff - "This time is different"

[blusteradjuster] 03/7/2024 06:26

Good to see those energy storage numbers.

AUSTIN, Texas, July 2, 2024 – In the second quarter, we produced approximately 411,000 vehicles and delivered approximately 444,000 vehicles.

We deployed 9.4 GWh of energy storage products in Q2, the highest quarterly deployment yet.

[dominiccummings] 02/7/2024 22:02

One fine day hosede you'll realise it is YOU that is out of step with the world.

[hosede] 02/7/2024 21:32

You keep buying Julie :-)
Yes - truly awful results - a bit like celebrating a three nil defeat - well it could have been Seven nil

[juliemara] 02/7/2024 20:17

And still the resident know-it-alls here keep trying to persuade themselves that they're right and the rest of the world is wrong.

[hpcg] 02/7/2024 18:44

bizzare reaction to today's deliveries. Numbers are declining YoY even if not as bad as Q1 and even if higher than market expectations. I would think gross margins will be heading down like a ski slope in China.

[hosede] 02/7/2024 17:25

free stock charts from uk.advfn.com

Nice trend line - Will take some amazing news to break far above that. Potential PE already looking over 100

[dominiccummings] 01/7/2024 20:07

#10923 Tesla Model 3 battery warranty is EIGHT Years.

[hosede] 01/7/2024 19:49

Simon
Is China a very sunny country?
Meanwhile Tesla seems to be becoming a meme share: up 40 in the last month - why?
All this Robotaxi nonense from Cathy . If Robotaxis ever take off - and there will be vast opposition from a few million unemployed taxi drivers - why should it just be Tesla that benefits - and not every other car manufacturer..
It seems to be trying to reinvent itself as an AI company

[simon gordon] 01/7/2024 16:05

Hosede,

If you live in a sunny country an electric car and solar panels are a no-brainer. BYD are offering the whole package from car to van to lorry to bus.