Has the demand for a Tesla gone down so much or what is driving the stock?
FUD is driving the stock right now. Such as the major media publishing select portions of the CR report on NoAP. Great time to buy though.
Stock price has never been a representation of anything other than BS opinion of the company.
According to Bank of America, short sellers are attacking TSLA in droves.
The overall decline in the market as a whole isn't helping.
Musk claims Tesla is on track to equal sales in Q4 2018. If he's right then this could set up a classic short squeeze after 2Q 2019 sales numbers are announced in early July.
The bear case is Tesla will remain unprofitable and quickly burn through the cash it recently raised.
If Tesla has to secure more funding next year, it could be extremely dilutive to existing shareholders and/or very expensive in the debt market.
Current business model still requires massive investment to achieve sustainability which appears to outstrip profitability even if demand remains strong.
Tesla likely has to tweak it’s business model to survive which could include jettisoning the weak solar business, licensing their battery and technology to other vehicle makers, equity partner, or something else. Status quo looks unsustainable.
Bear case for "unsustainable business" and "Tesla is burning through the cash - and can't raise more money" is fundamentally flawed.
Because Tesla has $2 Billion (thats right 2 Billion dollars in Euros - worth about 2.2 Billion in US Dollars) worth of cash coming to it from FCA (Fiat/Chrysler) during the next 18 months to cover off the definite shortfall in EU ZEV credits that FCA knows it will have. And which, if FCA don't buy such credits from Tesla will cost them multiples of $2 Billions in EU nonj compliance fines.
That cash won't arrive in a single tranche of money at end of Q4 2020 either. It will be delivered in multiple tranches. And that's actually the same amount of moola that Tesla raised this month.
The clearly obvious point from this is that Tesla won't need a capital raise for the next 18 months or more.
And the same will be happening as well in 2021 for Europe as well.
And the same "show us the credits or pay fines" thing is happening this year and next in China too. Two of the biggest car markets combined are getting seriously serious about EVs. Introducing ongoing stiff fines for car makers who don't have enough EVs in their sales - to cover their ICE vehicles and reduce overall emissions.
Those EU ZEV (and Chinese NEV) Credits are all "free money" - not loans - and don't need to be paid back - ever - i.e. they are "cash in the hand" - for doing nothing more than what Tesla are already doing.
In Europe, that is - selling cars as fast as they can make and ship them.
In China, getting on with a factory for building and selling Model 3s as fast as they can.
And Tesla did just acquire for a song Maxwell's battery Tech. You can bet that this will reduce the cell (and this pack) costs for all Tesla cells going forward from later this year. This means: either the same range as now from smaller packs, or same sized packs as now will get much longer range. And either way, you can bet that costs for making them will reduce even faster than predicted. Further entrenching Tesla's cost advantage.
And with EU and Chinese NEV credits in play, Tesla doesn't actually have to make huge money selling cars in those markets. They could simply sell SRs at "cost" if they choose and still make money on the credits from the ICE makers.
So if Tesla *ever* had a demand problem (which again is not the facts but if they ever did have a future demand problem) then selling cars cheaper than the competition, even at near cost in their largest markets will put demand through the roof - ICE makers can't do that as no matter how cheap they make their ICEs they can't escape the EU and Chinese rules around fleet emissions. So more ICEs = more credits needed.
And no one will have more batteries and packs manufactured, for less cost, of top quality anywhere in the planet than Tesla will. Period. Yeah other makers will have lessor quantity and quality battery products available - but good luck getting your hands on them for your EVs.
The bears simply ignore all this information because they do not ever look ahead more than one quarter at a time and even if they do it doesn't jibe with their "Tesla is broke/going broke" argument so its ignored.
And we're ignoring here the storage, Robotaxi and half a hundred other markets and products Tesla is involved in. Just the current making and selling EVs business which they are doing.
Bears only see the small clouds currently obscuring the sun and assume [hope?] its going to remain gloomy forever.
They do not see the fact that the rest of the sky where the prevailing wind is blowing from, is in fact perfectly cloud free and will remain so for some time. So the future is brighter than they pretend. By a good long way.
And the telling part about the Bears - usually lead by Wall Street Analysts is that while they prognosticate a length about how bad things are and going to get. And at the same time their parent companies are busy buying up Tesla bonds knowing they'll worth a lot more money as stock - when they come due.
Seems clear - the FUDsters and Bears all speak with forked tongues.
It is raining knives in Tesla land.
Personally I have way too may old scars from playing the stock lottery to be interested in catching any myself.
Starting out Manufactiring cars is extremely expensive which demands huge amounts of cash and credit. Tesla sales continue to rise, that’s a good thing, profit margin per car is higher than anyone other mainline manufacturer. Elon is banking on volume. His goals are taking much longer than he predicted. Time is money. Plain and simple.
Now add in production COST of a new Model Y, a new Semi truck, a new pick up truck, and a new Roadster. Cash / credit needs are huge.
Give him credit for trimming costs in management, sales people, under performing showrooms etc...
He’s proven that Tesla is a viable producer of great cars, but monumental challenges still exist with cash neccesary moving forward.
Wall Street has been negative towards Tesla from day one and continues today because Tesla and Elon are “different “, they do not fit the typical business model that Wall Street is familiar with, but the one issue that every business needs is cash. It’s taken almost 11 years but we have now arrived at that point. I’ve been invested in Tesla for years and although these are legitimate serious concerns, I’m sticking it out. The past has proven that it is not wise to bet against Elon.
Demand can't be talked up or down. There must be leading indicators. And those if anything are of rising demand.not falling. I don't understand what drives markets up or down. But I do know Tesla is years ahead of any other car company. The only reason others sell millions of cars is because Tesla can't make them.
Tesla is also ahead of Uber or Lyft. I don't quite understand how those companies make money. Oh wait they don't. But their valuation is more than Tesla's.
Uber & Lyft make money but screwing over their employees--um... "contractors".