Morgan Stanley & Bernstein Analysts Sounding More Bearish on $TSLA in China and Elsewhere

I’ve been noticing the bull snorts turning into bear growls from some of Tesla’s former pumpers on Wall Street. Check out this language concerning China from former perm-bull on $TSLA, Adam Jonas:

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Then there’s this from Bernstein’s Tony Saconagghi about addressable market share:
This is the most bearish this guy has ever been on $TSLA:


Tesla plans to report earnings next time abt Apr 20. Meanwhile the nay sayers will do their usual speculation. Let’s hope Tesla continues to deliver the growth it is famous for. Production capacity continues to increase. Can they sell all the cars they can produce?

Meanwhile Yahoo Finance has decided to show Tesla’s PE as 52. Using 4X last quarter’s earnings plus 30% (increased production) I get a forward PE of 29.18. A very solid number for a growth company. Tesla is worth its present number and can do very well as it continues to grow earnings.


Tesla’s price war is starting to backfire

The price cuts aimed to undercut rivals and boost the automaker’s market share, which fell from 79.4% of the EV market in 2020 to 65.4% last year, as others launch more EV products. Tesla, however, continues to attract brand converts.

Still, Tesla’s moves had some negative consequences in the US, too. Some recent Tesla buyers felt duped that they just missed out on the cuts. Other Tesla owners petitioned for free trials of Full Self-Driving software or free Supercharging miles to make up for it.

Meanwhile, owners of used Teslas saw their vehicle values fall substantially.

Ford Mustang Mach-E beats Tesla Model Y, other SUVs in latest crash tests

The electric Ford Mustang Mach-E received the highest crash safety scores of 13 midsize SUVs recently tested by the Insurance Institute for Highway Safety (IIHS) for injury protection in a “moderate overlap front” collision.

The tests included second row passenger safety ratings for and the Mustang Mach-E was the only model to receive a perfect score in the test, which simulates a vehicle being struck in the front off-center.

“All these vehicles provide excellent protection for the driver,” said IIHS President David Harkey, “but only a handful extend that level of safety to the back seat.”

I don’t know about this call. I’ve seen evidence of two fleets of 100 Teslas being sold to cab companies or ride-share companies in the EU. Never underestimate the machinations of Ole Sparky late in any quarter.

Still, I believe Tesla will not see 50% growth this year as pumped by certain bulls on Twitter, such as Woods, Black, and Gerber.

That is standard response to even a sale price. Some recent buyers ask for a rebate considering the sale price. Most companies cover that in the boiler plate legalese.

Not a big deal. Routine business practice covers it.

Tesla Faces Stiff Competition in China. America Is Next.

The Chinese dynamic is what U.S. auto investors will have to deal with as EV capacity grows and EV models proliferate in America. There were less than 20 all-electric car models on sale in the U.S. in 2019. There were more than 40 in 2022. More are arriving in 2023 including Tesla’s Cybertruck.

Tesla’s market share will fall in the U.S., but if the Chinese experience is a guide Tesla will be a winner as long as it’s a low-cost producer of EVs.

For now, Tesla is a cost leader. It’s operating profit margin in 2022 was almost 17%. Operating profit margins at GM and Ford Motor (F) came in at about 9% and 7%, respectively.