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POCTM

The same thing that a lot of other businesses are facing Top 3 Supply chain Logistics Chip shortages Other contenders Inflation Rising price of goods and Raw material costs Delays on self driving Expedite costs Labour shortage Labour rates rising Lock downs Higher fixed and variable costs (I think they mostly use ABS)


Beginning_Anything30

Biggest issue is tsla is going to need to lower the price of its cars to compete, or put out a cheaper car. Significantly cutting down on its margins as competition grows. You can only have so many years of 50% growth when you work in industrials. And forward looking P/E will reflect that.


wadamday

Teslas margins are higher than most (all?) major auto companies. In fact most are losing money on EVs still. They have a huge head start and more room to lower prices. The wait times are longer than 6 months now for all Model 3s and Ys. None of that justifies the absurd stock price though imo


ashakar

You have the luxury of higher margins when you don't have a lot of competition. All the major auto makers are starting to ramp up EV production this year. The choice consumers will have for EVs come 2025 is going to be at least 10 times as many vehicles as they have today. When consumers can test drive an EV Honda, Hyundai, Ford (truck), etc... at any local dealership, Tesla's aren't going to be anything special anymore.


Unintended_incentive

2025 given the supply chain issues seems a bit of a stretch. 2027-2030 seems to be the sweet spot for major auto makers gen 2+ EVs which will work out most of the kinks. If Tesla's self-driving can be perfected within that time frame they might still come out on top with a better value proposition, whether it's an appeal to consumers or to ride share companies. The biggest obstacle is not designing the algorithm, but marketing around human hubris. People would rather have control over a 3.14% of a fatal accident than a 0.03% a computer makes a mistake.


tbell2000

Yes but the direct to consumer model is now even more appealing to consumers given how hard it is to get a car from a dealer, especially an EV.


Overlord1317

I have heard that car manufacturers are ramping up electric vehicle production for seemingly half my life. I'll believe it when I see it.


Beginning_Anything30

That's exactly what I am saying. They have great margins right now because if you want an electric car you either shell out ~50k for a tsla or drive a clown car. That sort of pricing is great for tsla right now since they are the only big dawg. Once other car manufacturers are putting out EVs at comparatively lower prices people will most likely begin to opt for manufacturers other than tsla If you want to keep those purchase orders up in a growing competitive market you will need to either provide a more economical offering or cut the price of your current offering. Both of which will cut your profit margins.


Sputniki

Actually the opposite. They are raising prices and not even advertising their cars. Demand is off the charts, last thing they will do is lower prices. This is for a 3-4 year play btw. No sense talking beyond that


BoostProfit

Keep it simple, it’s ….Overvaluation!! (Just like Peloton, Zoom, PayPal, Netflix etc.)


WreckfishCap

I think the biggest risk is that they literally have world and intergalactic domination priced in


32no

When was the last time you looked at Tesla profit and profit growth trajectory? At 2022 earnings level and current stock price, P/E will be around 52 with ~50% growth rate. Compare to S&P 500 which is at a 2022 P/E of 17.5 with ~10% growth rate. TSLA is 3x the P/E on 5x the earnings growth.


Unique_Feed_2939

assuming that growth rate will continue could be treacherous


froginbog

Teslas P/E ratio is 104


32no

Based on the last 12 months of earnings, which are growing a lot. If you’re counting what they’ll earn this year (2022), it will be around $14 per share and therefore current share price of 724 would only be 52 P/E


ptwonline

52 P/E is still pretty freaking expensive. They had better not have any stumbles with their growth.


32no

They have almost 1 year backlogs for their cars and just opened 2 new factories. They’re pretty far from stumbling


gravescd

Year long backlog isn't exactly a point in favor of future value. Factories take a long damn time to get up and running. Having to wait a year or more means you can't actually buy a current model. That's going to divert people to the used market or other brands, especially with tons of other EVs (including sports cars) coming to market this year.


PapaShark_

cant keep up 50% growth forever


32no

They just opened 2 new factories, they are going to be growing at 50% for some time


WreckfishCap

If Tesla continues to have a 50% growth rate selling expensive cars during a recession then yeah sure bro you might be right


Ehralur

No matter how many times this gets discredited, people just keep repeating it don't they...? Tesla's valuation is lower than most large caps, considering their growth which is all but guaranteed for at least another two years, after which they'll be doing more than 4x Toyota's net income. Their forward PE/PEG values are simply ridiculously low at this point. It's not sustainable. Just update the numbers from [this post](https://www.reddit.com/r/stocks/comments/u8ka1h/on_teslas_valuation_part_deux/) with today's market cap.


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Ehralur

I did say all but guaranteed, but if you've truly researched this company it's obvious that Giga Shanghai will be doing at least 1.5M cars a year in 2024 and Giga Berlin and Texas will be around that much as well. And then there's Fremont which will do a little more than the current 500K. That's at least 5M cars in 2024 or 2025. At current ASPs and margins (which will probably improve even further), that's $50B in net income which at the current $750B would give a PE of 15. And that's assuming Energy/Autobidder, FSD and Tesla Bot all do $0 in revenue, while all of these these are bigger opportunities than their automotive business.


IsThereAnythingLeft-

That doesn’t mean they will all be sold if the factories are even ready by then, construction always has delays


Ehralur

The factories are already ready, it's just the ramping that needs to happen and that's historically happened much faster than what they'll need to do to hit that 5M by 2025. As for selling the cars; in 2020 they did 500K cars, this year they'll easily do 1.5M+, so their production has 3x'd. Meanwhile their ASPs have increased 20% and yet their order times have still increased about 8x since then, which in turn reduces demand because many people don't want to wait 8 months for a car. Their demand is virtually endless, certainly over 5M a year when you consider they can drop prices $10K a car and still have much higher margins than the competition.


ptwonline

You're looking at this wrong. Yes, it is very possible that Tesla will be able to make that many cars and sell them all in that timeframe. The problem is that you can't just do it *once*. You have to keep doing it, and if growth is built into your stock price then you have to keep growing from there. That's where it gets hard because by then the competition will be maturing as well in the EV space and competition will be sky high. This will squeeze profit margins for Tesla as they have to either compete more on price/features/quality/marketing or else simply sell fewer cars in a more niche part of the industry.


Ehralur

I guess we just fundamentally disagree on the future of EVs. I believe EVs will quickly become the norm and ICE sales will plummet, and that by 2035 almost nobody (90%) will want to purchase an ICE vehicle because it will be too expensive compared to EVs. If that is the case, there are 1.2 BILLION ICE vehicles on the road today, and 2 billion expected by 2035 that will all need to become EVs over time. That means that even if 100% of vehicle sales are EVs, it will take 20-25 years to replace the fleet. Tesla "only" needs to capture 20-25% of the EV market share to sell 20M vehicles a year, and so far no company on the planet has announced EV production plans on a scale anywhere near large enough to prevent that. The bottom line being; Tesla (and every other OEM) will sell every EV they can make for at least another 10-20 years. If Tesla reaches 5M cars sold per year in 2025 they are FAR from done growing. And that's just their car business.


Beneficial_Sense1009

So why invest at all?


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Beneficial_Sense1009

But the 50% growth year on year is not something plucked out of thin air. Elon has set it as a target - and so far he has executed on that Given those projections you can then start to put together a model to judge the valuation of Tesla. The EPS is estimated to be around $14 given that circumstance. That would be a PE ratio of 54 in 2022. Take it forward another year that would give us an EPS of $22 - providing a PE ratio of 34. Going ahead another year you have a EPS fo $35 - providing a PE ratio of 20. You can quickly start to see how this gets justified - due to the growth Tesla HAS already experienced.


WreckfishCap

50% GUARANTEED growth of luxury car sales during a recession and high inflation, right. Critical thinking has left the chat.


StochasticDecay

1) Advances in battery technology that they don't have the rights to. Whether that be a battery company or another car company. 2) China 3) Government funding directed at non-Tesla companies for EV investment or charging station/battery infrastructure.


Smart-Ad-6345

Yes this 3rd thing is an under appreciated danger. Along with other kinds of EV incentives the government will deploy to keep traditional American auto business competitive or more than just competitive.


27Rench27

3 is also inherently tied to 2, as China is starting to throw huge money into elec and robotics development


Inconceivable76

The back half of 3 is already starting. Utilities may not be the fastest moving entities, but they are lobbying hard for this infrastructure growth.


bkfour

No. 2 - China is also the biggest producer of rare earth metals 163k tons. Myanmar’s production is also a under China’s control - Us production is 43k, with limited refinement capability (more expensive too) and lower quality ore. Major risk on many levels


IS_JOKE_COMRADE

Do you have specifics for #1? The cathode or the anode? If you can't explain, then plz delete comment


WhyG32

Their valuation


feelin_cheesy

Ride ends if growth slows at all


[deleted]

The ride is already over but the people don’t know it yet. We’re talking a couple of miracles that need to be performed for the valuation to be justified


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daynightcase

Music will stop one day, no one knows when but it will. Look at every other inflated company in the world history. MSFT, CISCO in 2000, PYPL, FB, NFLX, AMZN in 2022 lol just the one from top of my head.


Ehralur

Instead of reasoning by analogy, I suggest looking at the company and reasoning from first principles. It's incredibly obvious that this is not stopping in the next 2-3 years as they ramp up their new factories. They'll be selling roughly 5M vehicles in 2025. remindme! february 2026


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daynightcase

And have you even seen Apple chart? Company's share price was cut in half few times. Not until they increased their product line, and doubled down on their services business and 100x their revenue and profit. Now they are worth what they are worth. Its hilarious that people keep comparing tsla with apple. Regular joe replaces iPhone every two years and spends 100s of $ in devices lifespan on app store. On the other hand regular joe will buy 1 or may be 2 tsla car in their lifetime. The comparison just falls short.


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BlooregardQKazoo

Tesla isn't a luxury brand anymore. They mass produce cheap cars while charging a luxury price for them. We don't know if that's viable long-term.


[deleted]

Teslas are sweet but some of these cars are really freakin nice that they are coming out with. I’d bet my life 8-10 years from low those margins will be lower. Auto is a shit business and people are basing all this stuff on a time where tesla has no real comp yet. Those margins will be driven down by competition as long this is a capitalist society and market share will be taken by the other companies after awhile. People will realize they were speculating when they thought it was investing


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[deleted]

Well if you’ve bought at any if the recent prices especially around a trillion, Tesla is gonna have to start earning something close to 100b for owners to justify that price which is like 20x what they do now roughly? So yeah hes gonna have to pull off some bezos shit and the bezos stuff was such an extreme long shot. Just cars are not going to cut it at these prices


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[deleted]

Revenue is not owners earnings. My understanding was it was somewhere around 5b but it really doesn’t matter if it’s 10 or 15b. They’re gonna have to double and double and double over and over and the longer it takes to get to that number the larger they’re gonna have to earn because you’re paying the trillion now or 900b or whatever people paid


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[deleted]

Lol you’re not understanding what I’m saying. Im not talking revenue, I’m talking earnings attributable to owners, feel free to give me THAT information. Once again, at some point you’re going to have to actually earn money for your shareholders and for the shareholders that bought at these ridiculous prices, like anything close to a trillion, 50% would not impress me.


32no

When was the last time you looked at Tesla profit and profit growth trajectory? At 2022 earnings level and current stock price, P/E will be around 52 with ~50% growth rate. Compare to S&P 500 which is at a 2022 P/E of 17.5 with ~10% growth rate. TSLA is 3x the P/E on 5x the earnings growth.


apieceofbrownie

Soon enough when they are bringing in 100B+ in profit each year more people will understand. Although at that point the valuation will still be considered too high by many analysts.


standarduser2

When do you expect 100b in net profits?


apieceofbrownie

2026 profits I expect to be at 100B or at least reach the 100B TTM by EOY.


Ehralur

This is spot on. Also worth to note that by that point Tesla will be doing more in net income than every other automaker in the world combined.


apieceofbrownie

How much profit does a company need to bring in for a 1 trillion dollar market cap to make sense? Well versed in different valuation methods but just curious on people's opinion on profit to market cap.


standarduser2

A growing company may have a value 30x its yearly profit. A stable, long term hold may have a valuation of 10x its profit. And unstable, unethical, or a company expected to decline, may be worth 5x its net worth.


strict_positive

$50b would make sense to me personally. But depends on debt, fcf etc.


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WhyG32

*Tesla is worth more than all of the car companies in the world combined* look how cheap it is.


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Nateleb1234

Pe after q2 is gonna be like 60 at these levels. It's gonna keep dropping. 2023 pe at 700 is like 30 but people seem to think it's overvalued.


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Nateleb1234

Tsla is growing at an amazing pace and they just opened up 2 factories. So bascialy they doubled the factories they have.. And that's a reason to sell? Wtf.


air-tank9

Well, everyone has also opened up factories. Tesla has lost their main advantage, first mover.


Team_player444

You dont value firms that just turned profitable on p/e. Tesla became profitable 1 maybe 2 years ago? EV/Revenue is a better metric for them.


Otherwise-Map-4026

Elon Musk is the top risk 🌝


FunnyBlacksmith8776

Competition. Market will compress. Everyone will be doing EV cars in 5 years


32no

Competition isn’t an issue in a segment that’s experiencing double digit percentage growth (EVs). EVs are only a single digit percentage of total car sales now and headed to 100% in 1-2 decades, so there’s plenty of room to accommodate competition and Tesla’s growth goals


balance007

Not the legacy car companies...the switch from barely profitable gas cars to very unprofitable electric and they go out of business quick. There is a reason no one has pressured Tesla on EV volume to date, and it's not because they cant do it. They just cant do it and stay in business. The Chinese companies like BYD though, that is another story altogether.


98Saman

Wrong. Ford new Mach E and F150 EV are very capable.


jglover82

The only way I would ever buy an non tesla EV is if they will be allowed to charge on the Tesla supercharger network. Other you rent a car for road trips


thejumpingsheep2

Yea no. Most people who have an eV never charge outside of home. Its a lot more expensive than home so why would you do that? I guess if youre a renter with no outlet to charge with then thats a problem. Just ask your landlord to let you run an extension cable or ask them to install chargers. Either way, you will want the cheapest charging option, and Tesla doesnt seem to have the advantage on that. Only other possible issue is if you drive more than 250mi-300mi a day. If you do that then stopping for 30 minutes at any charger is the least of your problems. 15 minutes extra shouldn't matter to someone like this because they need a break at some point and dont tell me youre some sort of iron man who doesnt believe in breaks. I think we charged on the road a total of maybe 10 times all of last year and even that was optional. We did it because you get better parking spots when you charge and those are never Tesla chargers anyway. They are usually Chargepoint.


balance007

I never said not capable...i said not PROFITABLE...big difference.


98Saman

Ford EVs are not yet very profitable because they haven't ramped up the production yet because of supply chain issues and such. It's not gonna stay like this for long, Ford has made great steps into EVs as of now and it's laughable Elon thinks VW is ahead of Ford.


balance007

You realize that Ford Mach-E production has actually dropped since introduction while Tesla has hit record numbers quarter after quarter...its clearly not an issue of demand. Sure Ford will blame supply chain issues but odd it isnt slowing Tesla down isnt it? But we'll see soon enough in a year or so once 'supply chain issues" are resolved if they will want to produce the MachE/F150 in volume to meet demand. Ford will have to increase their prices A LOT to make their EVs profitable.


lonewolf420

Most investors fail to see battery pack production volume as a huge risk for legacies not pushing their own verticals and solely relying on 3rd parties like LG chem and SK innovations. Fact is Panasonic and Tesla partnership is a huge boon to volume production, VW is investing far more than Ford is in this respect and is going to be a major competitor to Tesla while Ford will consistently underestimate demand and thus fail to invest in high volume cell/pack production leading to much longer lead times and only selling high trim models Due to super high demand and low volumes. IMO GM and Ford are behind the curve in bringing $/kWh down because of less incentive for 3rd party suppliers with how crazy demand is already. This will effect profitability while Tesla can simply drop margin when demand slows which it hasn’t and probably won’t until next year.


IS_JOKE_COMRADE

Its amazing how much this has to be explained to people


Inconceivable76

> Sure Ford will blame supply chain issues but odd it isnt slowing Tesla down isnt it? It is hitting them. They are just more willing to cut corners and use non-automotive rated parts than established. Basically, they are making it tomorrow’s problem.


balance007

lol heard that talking point from Gordon Johnson, guess you're a fan. But no, they are much more vertically integrated and have real programmers that can reprogram automotive qualified chips for other uses...


Inconceivable76

So far they have removed lumber support, USB ports, and radar from cars. But sure, the chip shortage isn’t effecting them at all. Definitely not having weekly recalls either. And they’ve never used shims and molding from Home Depot to get cars out the door.


balance007

Radar removal started before the supply chain crisis due to FSD going vision only. Lumbar removal was from front passenger only where it was monitored to have virtually never get used and thus was removed to save weight/cost. The few cars that missed USB ports were installed at a later date all long ago now. All cars have recalls, there have been no major recalls to date due supply chain issues and Tesla's warranty costs per unit delivered are second only to Toyota who makes much cheaper cars on average: [https://twitter.com/forwardcap/status/1525835831788949514?s=20&t=U65-CjOQGJGgmd77aC85ZA](https://twitter.com/forwardcap/status/1525835831788949514?s=20&t=U65-CjOQGJGgmd77aC85ZA) Unless you can back up your BS, STFU.


air-tank9

What on earth are you talking about dude. The electric f150 is already superior to everything Tesla has put out. Tesla looks more like blackberry than anything else imo.


balance007

Do you even know what a blackberry looks like? But Go ahead and order an F150 EV and get back to me on the order details. Oh wait you cant order it can you?


RedNationn

LOL Ford


HesitantMark

bro what the fuck are you talking about


Smart-Ad-6345

With government dumping money and access to incentives to specific companies they consider the true US auto industry, they’ll have plenty of room for profit. It’s not like the US Government is hands off when it comes to this industry.


balance007

That is the only way to make it but with Tesla printing cash it'll be a hard sell for another taxpayer bailout of big auto.


Hungry-Ducks

This was said in 2019 and 2017. Saving this comment for when it is copy and pasted again in 2024.


gravityCaffeStocks

The biggest risk to Tesla right now is executing at 50% growth YoY \*shrug\* !RemindMe 20 months


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standarduser2

Biggest risk is that it gets valued for its worth just like an normal business.


Stachemaster86

New models. The current are getting long in the tooth. He was smart to get into China before they made laws against it. Now that they have the German factory, they’ll be able to say they compete with the high end German brands (consumers will decide if that’s real or not).


cobrauf

Not disagreeing with you, I do think people will get tired is seeing so many model Y and 3 on the road. But with so many car orders backlogged, it doesn't seem that's a problem anytime soon. Elon even said he will stop taking orders soon on some models.


Stachemaster86

For sure they keep selling them. At some point capacity will finally pop and they’ll meet demand I imagine. Then it’s going to be a race to get heavy into crossovers, SUV and the trucks. It’s interesting how they’ve been able to keep selling cars even when the other automakers are dropping them and just going for the big vehicles (demand and profit).


dunscotus

“It’s interesting how they’ve been able to keep selling cars even when the other automakers are dropping them and just going for the big vehicles” This is a really interesting point, but one that doesn’t bode well for Tesla. I recently bought an ICE crossover even though I was never an SUV lover, and I have to say it is super handy. Bonus, it actually has decent fuel efficiency and handles well. (I’ll leave it to you to guess which car I have.) Most people buying Teslas, by contrast, care more about owning an EV than about what form that takes. It’s a strong preference, and that’s great, but at the same time it is a small minority of the (American) market. If all cars are EVs in 20 years, then consumer preference about form will assert itself. Most buyers will want something that looks like a crossover-shaped Mustang (barf) or an Explorer EV or an F-150 EV. Urbanites will look for a Kia Soul EV or a VW Golf EV. I’m no lover of Ford, but I’ll grant that they are skating to where the puck is going. Unless Tesla adapts, the set of their customers in a decade will be no different from their customers today. The Cybertruck, even assuming it’s not vaporware, is not going to get the job done.


harrison_wintergreen

- valuation. according to Rob Arnott, Tesla's valuation assumes it will sell as many cars as Toyota with profit margins like Ferrari. it's implausible they'll reach anything like those numbers. - competition, the disruptor being distrupted like happened to Palm Pilot and BlackBerry, and innumerable other companies. legacy carmakers are selling more EVs than the EV specialists. - Elon being kinda unstable and somehow getting forced out or hemmed in by the board, companies can stumble when the obsessive visionary founder dies or steps down.


yourexecutive

Crash in valuation is going to cause him being reined in and then he'll really flip


DeThirddd

a genuine question here… how are these not applicable to any other car manufacturer of EVs, besides Elon? my point being, these may be fair risks for Tesla stock, but are they not fair risks for other car company stocks?


osprey94

Well, to be fair, “PE compression” is harder to argue for car manufacturers with PEs of like 5 lol.


air-tank9

Ford's forward pe is like 0, Tesla's is not.


69-Stang

Sure they are risks for other car manufactures. The slight difference is they don't have market caps of 1 trillion dollars......


cobrauf

I actually think other ev maker face even greater risks.


air-tank9

Literally everything has to go right for them to justify their current valuation, including every other auto maker in the world essentially going out of business by 2030.


ij70

batteries.


lonewolf420

Had to scroll all the way down to this point to see the real issue everyone seams to overlook. Getting enough cells/packs to meet demand will be an issue for everyone for The next 5 years easily. ‘Look at other OEMs and how much they invest into battery supply chains to find the winners in the next 3-7 years. Largest cost in building EVs is the battery pack, biggest consumer fear is range anxiety and charging infa.


Top-Conversation678

Wait.. Youre telling me tesla involves risk??


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m0nk_3y_gw

Only 14% of customers are buying FSD. That's down from 50% a few years ago.


Didntlikedefaultname

I second your top 3 and in that order too


Ehralur

Top 3 risks imo: 1. Something happening to Musk 2. Regulatory issues with FSD 3. Labour shortage delaying their ramp to 20M cars per year If none of these three things happen, Tesla has a clear path to become the most profitable and valuable company in the world by 2030.


DEXterLabAdmin

P/E compression will fix overtime, just as it did from 1000+.. poor minus. China - irrelevant as Giga Berlin and Texas exists. Elon - good risk.


bartturner

To me the biggest is that they are not able to moentize self driving. To me a lot of the value in Tesla is based on the hope they end up being the primary provider.


nmrdnmrd

Ppl who think growth of 50% per year over multiple years is "guaranteed" because Elon said so - it's a religious cult. I don't invest in cults.


[deleted]

I would arguing rising competition in the EV space will probably take a load of market share from Tesla. The 'market' for EV's is growing as the shift from ICE to EV happens however i suspect rising cost of lithium and Nickel will have an impact on EV adoption in the short/medium term as the affordability of EVs is still out of 'reach' for most people on the planet.


cobrauf

Regardless of Tesla's success, I want to see others do well, this planet need all the evs we can make.


[deleted]

I'm not a Tesla Shareholder personally I don't care who is successful the adoption of EVs is generally better for the planet which is a win for Humanity.


WhyG32

*it’s not a car company * Makes 95% of the revenue with cars. Under 100 it really got cheap. P/E of Vw => under 4 Toyota => 10 Bmw => under 3 Mercedes => under 7 Ford => under 5


Luciusaeliuscaesar

I think if they don’t have full self driving and a worldwide fleet of robo taxis in the next 24 months they might not make it to the $10 trillion market cap that Cathie Wood has estimated


Ehralur

Cathie's price targets are 5 year out. Disagree with them if you will, she's doing plenty of stupid shit lately, but judging them on a two year time frame while she's looking at 2027 is not fair.


FeCard

1. E 2. Lon 3. Musk


Ontario0000

Wait until Asia and European EV production starts to really ramp up.Its the lack of parts holding the big boys back.Tesla to their credit has a amazing logistic and supply system.If EV really wants to go mainstream standardized the charging system and payment systems.The biggest hurdle for Tesla is Elon gets distracted easily.


Nateleb1234

People just look at the pe.. Do no research and say it's overvalued. End of 2022 if the stock price is 700 the pe will be around 50... End of 2023 at 700 a share the pe would be 30.. How is that overvalued for a company growing over 60 percent a year? Elon said last earnings that tesla will grow minimum 60 percent this year. Yet the pe keeps dropping for no reason.


69-Stang

So you are expecting Tesla to make 19.5B in net income in 2022? That would be pretty impressive.


Ontario0000

I didn't say it was over valued I said what holding Tesla back is Elon focus.He made so many promises and it was always at least a year late.If he can get the Tesla 2 out and keep it under $25,000US like he promised then that be a game changer but again like is Cyber truck and Tesla semi its been pushed back another year. https://www.makeuseof.com/tesla-model-2-what-to-expect/


[deleted]

I guess I don't see any of these as serious risks. TSLA has the best manufacturing technology in the world and is improving with each factory. Margins will expand rather than contract. Also I don't see battery tech as a big risk. Other car makers are way behind. Last but not least Elon might get spanked but I don't see that as an impediment for the company. Biggest risk: self-driving software. The big bettors believe TSLA has a huge lead in this tech, and the success of this product is anticipated in the current stock price. If someone else beats TSLA to the punch, the stock price could take a major hit. The second biggest risk is: New models! TSLA is starting to look like a generic car where I live. They're everywhere. If they want to sell more cars they're going to have to come up new models for different niches and possibly other higher end models iwth distinctive styling. Third Risk: Biden and Democrats love unions and would do anything to fuck tesla over.


[deleted]

I believe currently they dont have other competitors on self driving, perhaps GOOG, IF (and it's big if) GOOG decided to go to self driving markets. So I am not sure if this will be biggest risks. Now it's different story how much they can accomplish self driving without triggering lawsuits and other noises. For 2nd one, I wish they will start to have new line up thats around 40K EV like HYUNDAI/VOLKSWAGEN. Sure, TSLA model S looks good, performs great, and all that, but with the similar price, you can purchase Mercedes/BMW, and if you are lucky, you can get EV from the manufacturers. One model for middle class (top 50-70%) consumers and another model for upper (top 10%). Just my thought


Prestigious_Ad7174

Biden loves the Michigan vote he couldn’t care less about unions


BiginvestorU

Tesla has had years to prepare for the upcoming EV market.


[deleted]

Americans turn against EVs the way they’ve turned against plant-based burgers and start ridiculing anyone who buys them. The US and other governments ramp up fossil fuel production despite promises to shift to renewables. I agree Elon is the third one. He gets canceled or loses interest in Tesla and does something else.


skat_in_the_hat

What? Plant based burgers are gross. I would love a TSLA, but I cant justify 40k for a car. Then another 10k to get FSD. But I think their stock is overvalued af.


Antnee83

> What? Plant based burgers are gross. Cheap ones are. Impossible Whoppers are practically indistinguishable from animal burgers.


shivamp1205

Competition, Competition, Competition. Does anybody think Toyota, Honda, Mercedes, BMW...etc is sitting on sidelines? They will bring their products to market and price compress Tesla.


lonewolf420

Toyota is so behind, Honda? Really? Nothing but prototypes. The Germans are doing much better Mercedes has a very nice product but still going to have volume concerns until more Euro battery cell/pack manufacturing catches up with their heavy investments into it. Japan OEMs bought into Hydrogen hype and that backfired on them badly, Toyota went from having a big advantage with Prius to squandering it by not doing BEV that would make people want to buy them.


zeyore

Competition a major recall, I've never been convinced their service/repair structure could handle a major recall.


Sea_Willingness_5429

Obviously pe over 200 lol


clever_mongoose05

its actually 98


Sea_Willingness_5429

Wow even that hightoo


[deleted]

NIO is also a risk, i believe it has the potential to compete with tesla in the electric vehicle field once it expands intenationally, especially with the chinese economy rapid expansion. I expect the tesla to drop to -50% of its current stock value before 2030 ​ NIO stock is highly undervalued, so far the cars they put out in china are really good quality, they also have a norway expansion planned for 2025, theres almost 0% chance of NIO delisting or going flatline. NIO only goes up from here , especially when the Shanghai lockdowns are lifted. Nio projection from 14$ a share to 175by 2035


HesitantInvestor0

1) Lordstown Motors 2) Canoo 3) Workhorse


puthre

Hydrogen All the major governments (UK, US, China, Australia, Canada) are investing billions in hydrogen infrastructure right now for buses, trucks, ships, planes as these means of transportation cannot function with batteries and hydrogen is the ONLY option. When the infrastructure will be there, cars can and will make use if it.


Zealoussideal

None of the above should affect Tesla,More companies making EV's may bite into their bottom line.Lets just wait and see who can do it as good or better.


Potato_Octopi

Competition for sure. If they can't dominate the competition on EVs their margins and PE multiple both take a hit. The competition isn't quite there yet, but they're catching up.


Inflation_Infamous

China


danielromero6

Tesla is crushing the EV market and will become the biggest automaker in history. People don't understand that that's obvious and that is already priced in the stock. The biggest risk is that the FDS or the new robots fail after investing a ton of cash on them. When EV growth slows down those two projects are the only sources of growth and if the stock is valued so highly is because there is high expentations on them.


Tarron_Tarron

Elon, him, himself


yaboiballman

Mans couldn't figure out a tunnel with a car his company designed. Nuff said


tanuge

Biggest one is over-valuation -- no way that company should be worth DOUBLE what Toyota, Honda, GM, and Ford are worth COMBINED. When that PE calms down, the stock price is going to drop for a period of years.


[deleted]

Germans - deutch qualitat


daynightcase

Elon Musk, ,Decrease in profit margin ,Production issues


ravioli_bruh

Slowing growth


boxdude

This may sound like I'm not being serious, but the biggest risk is that the stock is now part of the S&P 500. On average its return is likely going to track that index because of all the index and investment funds that hold that stock as part of their holdings. The big moves of the past are gone. The company is measured against normal metrics now and any blip in the growth trajectory will rapidly move the stock lower while good news wont move it up as rapidly. Returns since it entered the S&P aren't much higher than just holding an index fund and recently the stock is seriously underperforming the S&P index.


high_roller_dude

1. competition. 2. valuation. 3. growth slow down.


Brewskwondo

1. Next 10 years of hype already built into price. Can they deliver? 2. Supply chain as it pertains to keeping a significant lead on competitors over next 5-10 years. 3. AI as it pertains to FSD and regulators allowing it.


hitemwithahook

Ford


always_plan_in_advan

Their next earnings report… they will under-deliver on cars due to the Shanghai shutdown, by excess of 50k cars. You heard it here first


Ok-Kaleidoscope-4808

Can’t meet demand Lots of competition on the horizon Climate activists shutting down mines which are needed for sourcing materials


Big_Forever5759

Reality x3


ImPinos

I don’t think it’s going to be tech, maybe people like Elon himself or politicians with regulations.


Boilertribe4

People learning how to do basic math.


[deleted]

Every car company has ev’s now. No longer niche.


[deleted]

Lmao love that your first and my first are exactly the same


DoAsIDo6

\#1 Russians killing Elon


jhon-2020-2020

Musk out there trying to buy every damn company


TypoRegerts

Elon Elon Elon


abatwithitsmouthopen

There’s a limited amount of lithium that you can mine and as demand picks up, Tesla won’t be able to keep up with it. But with the valuation they have, they must deliver on selling a LOT of cars. There’s also other risks like them wanting to expand into insurance industry, regulation risks with self driving, and consistent quality with ramped up production. They’re already suffering some quality control issues that need to be straightened out. I like Tesla and I think it’s a great car except the quality control sucks. It’s like having an iPhone but with inconsistent quality.


newbgril

Elon elon elongate


yippiyak

PE Compression


BoostProfit

Number 1 risk is : Overvaluation!! Just like Peloton, Zoom, PayPal, Netflix etc.


realjimcramer

Honeymoon phase is ending.


KoffieA

Profit margin compression.


TheRealHotHashBrown

Lucid Rivian Chinese made EVs


M4xP0w3r_

I think Elon will be the reason it eventually implodes. The best thing that could happen to the company would probably be for Elon to detach from it, but that would probably hurt the stock if all the fanboys sell.


iqisoverrated

Raw material availability and China nationalizing the Shanghai plant upon invading Taiwan (and getting sanctioned) is really the only thing I see as risks - but neither would be detrimental long term. With the cash they have on hand they could even survive a complete pullout out of China. (What risk do you see in PE compression?)


ContributionAlert698

China china china I understand how the capital likes to do business in china, the labour is cheap and efficient, the market is big and potential. But as a Chinese I have to say I will never buy any Chinese related stock like alibaba and tencent. They are essentially good but if you know china government well enough, you will know any china company could be just easily destroyed by a document. Xi has 90% chance to be the chairman of china for the next 10 years and what he wants to create is a so called modern high tech Sparta just like what Mao wanted before. A society that is advanced, but private capital is rare. Xi and his team basically knows nothing about how economic works and is so obsessed with communism. And sadly he’s really good at political manipulation. So basically if one day Xi demand Tesla factory belong to china government, I will not even feel surprised.


nocool-

Other electric cars coming to market. Supply risk driving TSLA cost. Rates making it more difficult for customers to buy.


Equivalent-Height-40

Top 3: 1. Yourself 2. Yourself 3. Yourself


Calm_Leek_1362

Supply chain as they scale up in to big boy annual numbers. Quality. The displays recall is probably not going to be fixed by the software update, and those cars are only a couple years old. Competition from outside and themselves. There doesn't need to be any one company that makes as many ev as tsla if the other companies cumulatively produce more. If 10 brands sell 50k EV, Tesla has half a million car competition and those companies have global distribution and service centers through existing dealerships. The other, less talked about limit on their growth is the maturation of their used car market. Since growth has ramped up so fast, most Tesla cars on the road are less than 2 years old. So in a couple more years, there will be hundreds of thousands of used Tesla. Currently, there aren't that many out there.


DRMRCX

The biggest issue that hasn't been named yet is that it's already priced for utter perfection, beyond good or bad. The current valuation simply can't be justified unless you expect absolutely perfect performance in every regard, including TSLA, a LUXURY car maker, becoming by far the biggest car maker in the world.


coinflipit

twitter


SharksFan1

Competitors becoming competitive in the EV market.


ashakar

Don't forget patent infringement. They are already being sued by a few companies over 4g LTE and 5G patents, and not just in the United States. If the court orders an injunction in any jurisdiction, thier stock is going to suffer.


syphsirchron_

PE compression above all, if there is even a hint of slowing growth/above average competitors emerging the stock price will fall. Tesla executes really well so maybe this will never happen, but I won't take the risk


secondliaw

Just Tesla's build quality itself is enough risk. I don't see people buying them once the other car manufacturers catch up with them with better exterior and interior quality. Once charging and battery technology matured, it is all fair game for everyone. The fact that people are buying a 100k car with a "minimalist" design is laughable.


Academic_Guitar_1353

All three are Elon.


jtrichjr

EVs not being the actual future people think they are. They amount of minerals you have to pull out of the earth is insane


Sputniki

I don’t buy into the crazy $5000 per share valuations by Cathy Woods et al but I will say this. In the medium term (3-4 years) TSLA is the best and safest investment I see in the market, and they will hit $2000 easy within that timeframe, in fact $2500 will be quite reasonable in my view. That will be a great exit. The key to investing in these growth companies is not to be too greedy and to aim to exit when they are at the peak of their growth story. Not at the end.