Well yeah, it's being shorted left and right. That's not because the intrinsic value has changed, except in the sense that people don't like Musk more and more every week.
That won't matter much next time Tesla releases some innovation that is 1 or 2 levels better than the rest of the market.
Musk's companies are the epitome of "be so good they can't ignore you, even if they hate you".
You are right that the intrinsic value hasn't changed, but wrong about the cause of the price movement. When an auto manufacturer trades at a 67 P/E ratio that's a sign that the stock is way overvalued. Competitors with far more successful and profitable operations trade at a much more reasonable 8-10 P/E. Plus the insane amount of debt that Tesla holds, and the inherent fragility of its financials (Tesla would not be profitable if not for Carbon Credits, which could be revoked by an act of government at any time), suggests that the valuation of Tesla is pure hype and hope. A correction was always inevitable.
Carbon credits might become a real problem for Tesla. They have all those credits to sell to other companies due to their own car sales. Fewer car sales, means fewer carbon credits, resulting in lower revenues.
Since they almost exclusively make money from auto sales and have never had substantial income from anything else, I sure do think they are an auto company.
A lot of tech companies make no money at all for the first years or even a decade of their existence. This one decided to make some money, giving themselves a longer runway to do very hard things (like building gigantic automated factories that can build automated things that can build automated things).
You’re right that a company that sells cars is a car company. But investors tend to invest in future prospects, and Tesla’s future is not as a car company.
The adage goes, “you can be right or you can be rich”.
I’m not saying Tesla will succeed or even that it’s a good bet.
I’m saying there’s a valid investment thesis that posits P/E for Tesla is a poor metric.
You assume they will innovate better than their competitors. Their cyber truck is shoddily built, can’t tow loads properly, can’t get certified for road worthiness in the UK or Europe and has a litany of safety problems.
In the meantime, BYD just announced an incredibly fast charge time on their new vehicles Tesla can’t match.
They just happen to have real problems to get profitable. The big difference is that other companies are expected to earn money while Musks somehow just don't have to.
Autonomous driving is being implemented with LIDA in many cars, Musk’s cars can’t see through fog.
Battery tech is now old news - every car company is doing this and making huge leaps in battery tech. Charging connectors are a dime a dozen now - at least BYDs don’t have flaws like the Cyber Truck where the plug literally gets stuck in the Tesla and majes it immobile.
Most car manufacturers have OTA updates in various models of cars now.
Ever tried to repair a “gigacasted” car?
But you were talking about recent innovations, which haven’t been taken up by other car companies. Could you name some?
I can list the opposite of innovation in Tesla cars: unreliable cars, unsafe features throughout the cars, no LIDA sensors and only cameras, large numbers of fatalities involving self driving Teslas, problems with sticking brakes, poorly fitting trim, wheels falling off at speed, tow bars that literally snap off taking out the back of the car, suspension and drive axle failures… want me to go on?
That won't matter much next time Tesla releases some innovation that is 1 or 2 levels better than the rest of the market.
Musk's companies are the epitome of "be so good they can't ignore you, even if they hate you".