Research archive for TSLA

On Wednesday, Tesla released their third quarter results. There is a lot going on underneath that hood, which is funny because the mechanics underneath the hood of a Tesla car are pretty simple.

Do you remember Tesla's semi-truck announced back in 2017? It was an exciting launch, and was meant to be the start of a new era in heavy-load transportation. Since then, Tesla has delivered a handful of trucks, but that project seems largely forgotten.

For a product to be successful, it needs a very compelling answer to the question of 'why' does it exist. Early hybrid vehicles were built to offer better fuel consumption, but manufacturers quickly realised that their core customer was someone who wanted to drive a more environmentally friendly car. The vehicle price didn't really matter.

Tesla unveiled lower-cost versions of its Model Y and Model 3 yesterday, priced at $39 990 and $36 990 in North America, aiming to offset the loss of the $7 500 US electric vehicle tax credit and fend off intensifying global competition.

Rivian makes fantastic trucks. Anyone who's seen one up close can't help but admire the engineering. But here's the rub: since listing, the share price has collapsed by almost 90%. That's the lesson small-cap EVs like Rivian (and Lucid, for that matter) keep teaching us, a great product is not the same thing as a great investment.

Tesla recently applied to supply electricity to British homes. In the UK, power is generated by certain companies, the grid is owned by another company, and then many more companies sell the power to customers. Tesla is applying to be part of the final leg of the journey. It could take the regulator around 9 months to approve the application.

Tesla may be under pressure trying to sell cars but they certainly have a lot of other things on the go. Self driving cars, robots, renewable energy and robotaxis are well-publicised but did you know that they recently opened a diner in West Hollywood?

Houston, we have a problem. One of our recommended portfolio stocks is in trouble. We own Tesla because it's an iconic company that pioneered modern electric vehicles and is run by one of the most innovative people alive, Elon Musk. Unfortunately, it's down over 30% from its December 2024 peak, while the broader market is smashing through all-time highs.

Elon Musk and Donald Trump have gone from being BFFs to enemies. Musk has been very critical of Trump's pending tax bill, which will add trillions of extra debt to the already large US debt pile. If I were Musk, I would also be bleak. He gave up months of his life to run DOGE, to reduce US spending, and with one bloated budget proposal, all that work gets undone. Over the last few days, Musk's posts have become increasingly vocal, prompting Trump to respond. Things got personal.

Depreciation is the silent cost of owning a car. The day you take ownership, there is a 20% loss in value due to VAT. Over time, the value of the vehicle also decreases with age, mileage and people's perception of long-term maintenance costs.

Tesla delivered some horrible numbers on Tuesday night, but the stock still closed up 5.4% yesterday. The jump higher was solely based on Elon Musk saying that he will pull back from his role at DOGE and focus more time on Tesla. You can see how closely Musk is tied to the company's forecast for the future.

Last week Tesla released some underwhelming numbers. For the whole of 2024, revenue rose just 1% to $97.7 billion. For the fourth quarter, Tesla reported revenue of $25.7 billion, only 2% higher than the same quarter the year before. The automotive division went backwards by 8%. All the heavy lifting was done by the energy generation and storage division, which grew by 113%, and services, which grew by 31%.

After Trump won back the presidency last week, markets shot higher. But some shares did better than others. Tesla surged 15% on the day. Elon Musk was a very visible supporter of Trump's campaign, but does that justify a $120 billion plus increase in Tesla's market cap? Perhaps not, but there are various theories as to how the Trump administration could be beneficial to Tesla.

Take a look at the image below from the latest Tesla shareholder deck. It shows the cumulative number of miles driven by Tesla owners using the FSD (full self-driving) software under supervision. The red section is what was driven using the new version 12 software. They crossed 2 billion miles in September.

On Wednesday after the close, Tesla released their third-quarter results. After a muted reaction to their Robotaxi launch, expectations weren't exactly peaking. Fortunately, the numbers impressed, and the stock initially shot up 12% in after-market trade and pushed higher during the day to a 22% gain!