Apparently Tesla is going to buy back some stock. So will they do another stock split to bring the price to retail levels? Bob Wilson
Buy-backs are done when you can't find a better investment for the money. Is that a comment on the future investment ideas/needs of the corporation just when other EV wanna-bees are investing? Just when their inventory management is being questioned and is changing. Things I'd worry about Competition. Seems every week a new competitor springs up. If only half are mildly successful what does that do to Tesla? China sales prices recently cut. Margins reduced in one of the countries that provides the most revenue. CEO distraction with other ventures and lawsuits. How many industries and issues can one man spread himself over successfully? China production and Covid's potential impact in light of the regime's continuing zero Covid policy. Could the factory get shut down? Or just slowed? EU energy availability/costs and their impact Germany's factory production. The glitterati tiring of driving the same old styled car as their neighbor. Switching to another shiny new thing. Will the learn to drive your so different vehicle by watching you-tube work and reduce the number of people necessary to deliver the same or higher volumes just as more mainstream buyers are buying and perhaps needing more handholding? Impact of the China and US trade policies. With China pumping subsidies into domestic makers can margins and even sales remain as robust? What happens if there is war over Taiwan? To the China factory? To the parts and materials from China? The Mexico plant and perhaps a two year plan for lower cost versions and its impact on higher margin Tesla product lines. China EV makers pricing in the US. They are here. Battery technology. What happens if Tesla misses on some emerging game changing technology? What happened to volume production and use of their new form factor battery in all new cars? The lawsuits over prior sales and promises of self driving? Future regulation of self driving. Backlog reduction. The price of gas and its ability to cause people to change their plans to move to an EV. Inflation and recession. Financed cars costs reduce number of buyers that can afford pricier vehicles. The potential political change in the US. Will the '23 congress keep the same policies in place? Elon's health. Any of the above could have an impact. Any two could ... On the good side the Semi seems to be about ready for limited production and there are are even signs of the pickup inching closer. But with GM and Ford able to sell every EV pickup they can produce, is the backlog of orders for the Tesla pickup still as large? Will corporations be as tolerant of early production issue on the semi as consumers are on the cars.
Adding my understanding: Competition. Seems every week a new competitor springs up. If only half are mildly successful what does that do to Tesla? (Some competition like Nichola have turned out to be frauds. Others appear to lack the depth of employee skills needed to succeed in this new technology. Elon's ability to attract the best and brightest has more long term effects than him being the single, lead engineer.) China sales prices recently cut. Margins reduced in one of the countries that provides the most revenue. (China recently went down for production improvements. The higher rate and improved efficiency leads to maintaining margin.) CEO distraction with other ventures and lawsuits. How many industries and issues can one man spread himself over successfully? (I was never a fan of the Twitter acquisition because it is dependent on customers and not applied technology. Regardless, bright people need entertainment that they enjoy even if others don't see it. I'm in the 'don't see Twitter' crowd. As for lawsuits, having wealth seems to attract lawsuits like poo attracts files or lottery jackpots attract ticket buyers.) China production and Covid's potential impact in light of the regime's continuing zero Covid policy. Could the factory get shut down? Or just slowed? (Not just the factory but critical suppliers. It is just another risk the living face.) EU energy availability/costs and their impact Germany's factory production. (It has accelerated the movement to renewables. Regardless, transmission from fossil fuels to renewables will teach lessons that must be learned.) The glitterati tiring of driving the same old styled car as their neighbor. Switching to another shiny new thing. (How many years did the VW Beatle sell? How about the Corvette or 911? Tesla keeps improving the drivetrain and operations much faster than the sheet metal art.) Will the learn to drive your so different vehicle by watching you-tube work and reduce the number of people necessary to deliver the same or higher volumes just as more mainstream buyers are buying and perhaps needing more handholding? (Geriactics and aging will turnover the hardcore skeptics soon enough.) Impact of the China and US trade policies. With China pumping subsidies into domestic makers can margins and even sales remain as robust? (Not something I spend a lot of time worrying about. After all, the previous President once said 'Trade wars are easy to win' and gutted the biggest USA agricultural market.) What happens if there is war over Taiwan? To the China factory? To the parts and materials from China? (Not a whole lot we can do about it except hope the Ukraine lessons are being learned without replicating Putin's mistake.) The Mexico plant and perhaps a two year plan for lower cost versions and its impact on higher margin Tesla product lines. (The best margins are maintained by the most efficient production methods that reduce labor per product.) China EV makers pricing in the US. They are here. (My first car was a VW MicroBus. If the product is superior cost-performance, buy it.) Battery technology. What happens if Tesla misses on some emerging game changing technology? (I am reminded that the Prius NiMH battery technology was deliberately suppressed for EVs by a patent purchase. Then there are the drug purchases that have inflated critical meds to 10 times the cost of production. Patent abuse is common but can lead to better technology like LiON batteries.) What happened to volume production and use of their new form factor battery in all new cars? (At least one Texas Model Y has been analyzed by Munro. Then there's adoption of LiFP batteries in China. Tesla remains exceptionally flexible in changing the drivetrain and manufacturing to reduce cost while preserving and even improving performance.) The lawsuits over prior sales and promises of self driving? (Elon once called these a 'lottery'. Regardless, having nothing to do with having the excess cash to buy back stock.) Future regulation of self driving. (Today's cash will have no effect on regulators.) Backlog reduction. (Reports are that the Chinese backlog has significantly dropped and EU customers are seeing more product. Then the two new factories continue to ramp up.) The price of gas and its ability to cause people to change their plans to move to an EV. (They aren't making more fossil fuel which is becoming harder to find and extract over time. It remains a finite resource that gets burned up.) Inflation and recession. Financed cars costs reduce number of buyers that can afford pricier vehicles. (It is a common problem all manufacturers face regardless of their product. It is not specific to just EVs.) The potential political change in the US. Will the '23 congress keep the same policies in place? (No effect on the excess cash needing a better use.) Elon's health. (How about mine? How about yours?) Many times we make choices between the 'lead bad' option. Stock buy back is one such choice that may change with the next sunrise ... or not. Being a TSLA stock owner, I may be biased. Bob Wilson
Do you know how long Tesla critics have been raising most of these ‘concerns’? Since TSLA stock was abou $1.50 (adjusted for splits). The competition has been right around the corner for a decade. Hasn’t slowed down Tesla yet. And the EV market size is growing faster than Tesla can build. So yes, their market share is shrinking even though they are growing over 50%.
Then we will each place our bets and see what happens. Good thing the Prius and Toyota never had similar skeptical claims. <GRINS> Bob Wilson
I first raised concerns about a year ago. Google tesla stock and select the YTD or 1 year options for a display. BTW https://www.autoblog.com/2022/10/27/elon-musk-tesla-50-billion-pay-justified-lawyers-say-investor-lawsuit/ Somehow awarding 1% to a CEO in a startup doesn't sound like an obscene amount and the fact that the stock went wild that your is to his credit. But what is his compensation package like now? No salary. All compensation profit based. Sounds more than fair to me.
