TSLA
🚀 Potential catalysts like the Model 2 launch ($25k-$30k vehicle), FSD advancements (licensing to other OEMs, unsupervised commercialization), robotaxi progress (Austin trial), and Optimus robot production could significantly boost the stock.
⚖️ Political factors present a mixed bag: a potential Trump presidency might streamline federal robotaxi approval but could also remove EV tax credits, impacting demand and margins.
📉 Major risks loom, including potential delays in the Model 2 or robotaxi rollout, flat delivery growth expectations (contrary to Wall Street’s >2.5% growth forecast), and a persistently high valuation (Forward P/E over 100).
@bernardodegarcia:
“Ladies and gentlemen, Tesla shares are somewhat nowhere again, but the truth is they are quite interesting, and we know that in less than a couple of days we will have their quarterly results. In fact, we will have them next Tuesday. And with all that, we ask ourselves, is now the time to buy Tesla shares? In this video, we will talk about seven positive and five negative catalysts that may indicate that, well, perhaps Tesla shares could be a very interesting purchase right now. We even ask, hey, but would it be interesting to buy ASML or Nvidia? Or perhaps it would be better anyway to buy more Tesla. Why do we want to buy ASML or Nvidia when we can buy more Tesla? As always, I hope you are ready and hit that blue like button because here we go. Just as we were doing this introduction, news came out today that first-quarter Tesla registrations in California fell by 15%. This obviously speaks a bit about the anti-Musk sentiment because Musk has positioned himself quite aggressively with Donald Trump. So, all the hardcore Democrats are simply burning their electric vehicles, and who knows what else they are doing. Anyway, I won’t put this as a negative catalyst, as I think it’s temporary. This is something that Elon Musk will be here for a while, I don’t know if 6 more months, 3 more months, a year, 2 more years, but he is a vocal CEO, and we know this is both very positive and negative. The fact that Elon Musk is Elon Musk is a positive and negative catalyst, but I don’t take it too much into account. Ultimately, Tesla, the Optimus vehicles, Robotaxi, and so on go far beyond what Elon Musk does or doesn’t do. So, well, let’s go then with these positive and negative catalysts for Tesla shares. As always, well, we like to start with the positive, right? Okay, let’s begin. Trump will expedite the federal process for Tesla or rather, for robotaxis, so that Tesla can effectively obtain a general unsupervised autonomy license nationwide. Can you imagine how simple it would be if, effectively, the President of the United States, given how well he gets along, at least for now, with Elon Musk, simply signs a law saying, ‘I consider that these brands can launch,’ or ‘I consider that the robotaxi laws will be made at the federal level and not at the state level.’ This would greatly smooth the path. We also know, and we’ll talk about it now, that in June, we have the Austin robotaxis; we also have robotaxis in California, and many other positive news items we will cover, but I think this will be the ‘boom shakalaka’ for Tesla shares. When will we see it? This is something that catches my attention because we won’t see this in an announcement from Tesla, like the quarterly results next Tuesday. Perhaps we will see something like the launch or more news about the Tesla Model 2, from $30,000 to $25,000. They will probably start manufacturing it. It was confirmed by Elon Musk. We’ll see confirmations and deconfirmations also with some speed for the end of this 2025. This will expand Tesla’s total addressable market, and obviously, it will be something very positive that the markets will greet with extreme positivity, like everything with Tesla, and I think it could end up launching the shares upwards. We might hear about this, as we said, in their quarterly results. The previous news will come directly from Donald Trump; when, we don’t know. We also know that the new Model Y is accelerating Tesla’s sales growth again. We had problems with sales in China, also sales in Europe, etc. From now on, starting this April, when China has begun mass production, so to speak, of these new Model Y vehicles, because these Model Y vehicles don’t go to the United States, so there are no tariff problems, at least for now. We do have tariff problems with the Cybertruck, but that might still be a bit far off. China does want to negotiate with the United States. Anyway, we do see that now, again, the sales of the Tesla Model Y will increase. Why would you buy a vehicle in November, December, or January when you know that in February, a new version of that vehicle will come out? It’s like, why would you buy an iPhone in August or October when you know that perhaps in September, or I don’t know if it’s November, I don’t remember now, but anyway. Why buy a new iPhone in the summer when you know that if you wait a couple of months, you’ll have the brand new iPhone or even the previous new iPhone at, not half price, but a much lower price? Obviously, this is something companies consider a lot, and we should too. When you launch a new product, sales soar because, let’s say, there are sales being postponed, sales being held back to effectively buy this new vehicle. We also have an FSD licensing agreement with one or more manufacturers. Tesla to license FSD to other OEMs. These are news we’ve been expecting for quite some time, but as FSD continues to advance, the truth is that it simply makes it more and more possible. Although it’s also true that we are kind of waiting for, hey, are you going to announce it already in these quarterly results? Because this was, as you are seeing, in July 2023, Elon Musk confirmed on Wednesday, in their quarterly results, that Tesla is in discussions with OEMs, like Ford, GM, Stellantis companies, Honda, Hyundai, whatever, to use Tesla’s FSD. This would be a new revenue stream, and honestly, my opinion is not if it will happen, but when it will happen. So, we are seeing that suddenly we will start having new and new revenue streams, and obviously, this is not being factored into Tesla’s shares right now despite all the negatives, because we will obviously talk about those too, as there are quite a few. Continuing on. Tesla will probably be the first to commercialize a generalized unsupervised FSD by this year. What does this mean? Tesla will be the first company to commercialize your FSD, your full self-driving, not robotaxi because it’s something different, but quite similar. It’s simply your car; you get inside and tell it ‘Lugo,’ boom, and it takes you to Lugo, and you tell it ‘Soria,’ boom, and it takes you to Soria, and you are doing nothing. Obviously, it will have to charge along the way because, well, it depends on the range and where you are starting from. Imagine you are in California and tell it to go to San Diego, or you are in Florida and tell it to go to another neighborhood. I don’t know, in Miami, not Florida. Anyway, there is no other company for now that is getting close to Tesla regarding FSD. It’s true that we’ve spent years factoring these future revenues and profits into the company’s valuation. They are still there, they’ve been lowered quite a bit, but well, we’ll see how it goes. I seriously think the Model 2 will end up lifting the shares a lot because right now, as we’ll see in the negatives, total sales for this year will be a bit complicated. We will also talk, obviously, about the progress of Optimus, which will become transparent. Production will start in fiscal year 2026, that’s very soon, for next year. And well, some people are a bit skeptical about Optimus, generally skeptical about everything Elon Musk says. In the end, he’s the rocket crazy guy, and he is making these things possible. It’s true that often he pushes, he’s too ambitious with timelines, but I also think that over time, he has become a bit more measured. He still has what are called ‘Demon Stages,’ if you’ve read his biography, or ‘Hell Week,’ whatever. It sounds like we’re talking about the Navy Seals, but it’s true that sometimes he gets too intense and starts firing people simply because people are starting to fail, getting too comfortable, not delivering enough, etc. And well, this sometimes leaves us with, hey, we wanted robotaxis two years ago, and we are here, and we still don’t have robotaxis, but now the line is drawn in the sand. We have it in June in Austin, in California, and by the end of this year, we will have it in the United States and perhaps other countries. Lastly, although not very important, the Delaware Supreme Court will overturn the 2018 compensation ruling by Chancellor McCormick by the end of 2025, and this will obviously allow Musk to collect his bonus, which is a crazy bonus, but well, the Tesla company has also ranked among the Mag 7 for about 5 years now, and this wasn’t the case before. This is all the positive, and I honestly think it’s enough to launch the stock, I won’t say by 2x, but 1.5x wouldn’t be hard for me to believe at all. Okay, so when talking about that, we have to think, hey, could Nvidia reach 150? Honestly, it could, but we need to see, let’s say, I don’t know, at least we would need to see more certainty regarding China, I don’t know how far it will go, etc. Same with ASML, we’ll talk about it this weekend. Could it rise 50%? We’d be talking about 900, yes, but I don’t think it will rise as fast as Tesla might. Now, if you tell me Tesla 250, approximately 50% could be 125, so 375. We’d be talking about Tesla needing to reach approximately this zone. It doesn’t seem so crazy, right? I don’t know if you see it, but with a new Model 2, with FSD news, with robotaxi news, with more Optimus news. Well, and then Trump also helping to catalyze these positive news items. It could be possible. So, there I pose the question to you, right? Let me know in the comments. Would you be buying Nvidia and ASML shares right now, or perhaps rethinking buying more Tesla shares, as it has more potential, maybe also more risk? Now let’s talk about that. Negative catalysts. Obviously, Trump is removing the EV tax credit. This is obviously not helping buyers purchase their electric vehicles, but on the other hand, it’s also crushing the competition, especially the competition within the United States, because Chinese cars won’t be sold within the United States, at least for now, and it leaves, let’s say, more space for Tesla. It’s true that perhaps margins might suffer a bit because Tesla will have to lower prices because other vehicle companies will lower them too. However, Ford, GM, and others lose money with every electric vehicle sold, and Tesla can afford to lower prices and adjust margins a bit more. We also have potential negative news, because this could happen, okay? Tesla might not introduce a new affordable car in the first half of 2025, meaning very soon. And instead, reduces prices and costs similarly to what it did in 2023. What does this mean? Elon Musk might say, ‘Well, now is not the time, perhaps anticipating a global crisis with everything happening, to introduce a Model 2, a $20,000-$30,000 model.’ And so what we’ll do is, well, lower the prices of the Model Y, Model 3 to make them more affordable and thus perhaps compensate for the $7,500 we previously had in EV Tax Credit in the United States. It could be, honestly. It would be hard for me to believe, but well, anything is possible in the vineyard of our Lord. Okay. Certainties are death and taxes. I don’t think so, but it’s a possibility, and honestly, it could be a problem. As Musk said with the arrival of the Cybertruck, a $25,000 electric vehicle doesn’t make much sense right now. But well, let’s continue with the third negative point: the robotaxi test market in Austin for this third quarter could remain somewhat inconclusive or even be postponed until 2026. This is not a negative catalyst; it’s not a catalyst, it’s a cataclysm. This would be, let’s say, something that could happen, just like the Model 2 issue. Something we don’t know. What we do know is that Trump will remove the $7,500 benefits for buying an electric vehicle. Okay? These two are assumptions, but they are somewhat up in the air. In principle, we have confirmation that yes, we will have the Model 2, and we will have it in this first half, and we will also have robotaxi also in this first half, in June in Austin. However, well, as my father says, ‘until the tail, it’s all bull,’ meaning until time runs out, until we get there and what we see announced is confirmed, everything is up in the air. Something that does hurt us a lot, quote-unquote, hurts the shares, are the year-over-year delivery expectations for fiscal year 2025. For Wall Street, most analysts are still seeing growth of more than 2.5% annually. Personally, I see them flat again. I see them flat just like last year, I don’t know if you remember, but we analyzed up, down, how many they could deliver, etc., very likely they will end up flat. We would need to see a small miracle called Model 2, and that they start producing it exceptionally and in extraordinary volumes during, well, right now, meaning before June, because otherwise, deliveries will be significantly affected. And if this happens, and we see a Model 2 that they start delivering quite exaggeratedly with very, very good figures, with many Model 2 vehicles sold, that’s what I mean. Ah, we will probably see margins suffer a bit. In the end, it probably doesn’t matter much either because this model will likely also help us with all the data for FSD, robotaxis, etc. But well, what I mean is that Wall Street is still seeing year-over-year growth in Tesla vehicle deliveries of more than 2.5%, and I am not seeing it anywhere unless we have the Model 2 confirmed as soon as possible. Okay? Ah, and finally, well, Tesla’s valuations, as I have noted here, Tesla Valuations, as you can understand, well, a stock with a forward P/E of 102, no matter how much growth and future possibilities it has, is risky. A stock trading at eight times sales, perhaps not so much. 102 times future earnings is very high, especially compared to the earnings per share growth for the fiscal years to come between 2025, this year, and 2030. Approximately, we can estimate that earnings per share could grow at a 30% CAGR, talking about with Optimus and Robotaxis and Model 2 and FSD, and licensing the FSD. Energy is also performing exceptionally well. Well, as you see, Tesla doesn’t just sell vehicles; Tesla has too many things flying. And then we also have Elon Musk within the Trump administration, and this ends up being a bit negative. Well, as you see, it’s somewhat complicated. However, given how the shares are, how the company is executing, and how Wall Street is also a bit scared, it seems quite interesting to me. My biggest problem is that it could still fall approximately back towards 200, meaning we’d be talking about a 15% drop. Yes, if we have news that Tesla is struggling with deliveries, that the Model Y isn’t taking off in sales, that we are still seeing that demand for Tesla vehicles isn’t there. If we cancel the Model 2. But if, on the other hand, positive news starts coming out, well, it wouldn’t be hard for me to see Tesla shares above 350, perhaps 375. But now I’d like to ask you all, what do you think? Do you believe Tesla shares can effectively reach 375 this year? Perhaps during the next few quarters, depending on what it effectively announces in its quarterly results, if it will announce Model 2, if it will announce robotaxi, etc. As always, let me know in the comments, besides whether you are buying shares of ASML, Nvidia, Micron, Tesla right now, or what you are buying, which one seems more interesting to you now and why, let me know in the comments. Thank you very much for reaching this point, I hope you enjoyed it, and we, as always, sign off wishing you the best. Until the next video.”
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