$Tesla (TSLA.US)$Over the past year, the decline has still been over 30%, far behindThe recent shareholder approval did not restore the judge's decision that Musk's 2018 compensation plan was invalid. Therefore, investors must continue to pay attention to legal developments, as Tesla may appeal the court's ruling. Nevertheless, investors should be reassured that Musk's attention should still be on Tesla. Musk emphasized that he "can't give up, and doesn't want to," because Musk must "hold his stock options for five years.". In terms of controversial issues, Tesla's long-term valuation depends on whether Elon Musk can go further on the basis of Tesla's stunning success. However, as car manufacturers compete for market share while dealing with difficult economic conditions, the electric vehicle market is becoming increasingly crowded. Even Tesla has not been spared; the leading electric vehicle manufacturer reported negative free cash flow in the first quarter. Tesla investors understand that the market is highly concerned about whether Musk can realize Tesla's ambitious self-driving. According to Ark Invest, Tesla's basic scenario target price for 2029 is $2,600: "By 2029, nearly 90% of Tesla's enterprise value and revenue is expected to come from the robot taxi business." Despite this, Musk is also trying to hype Tesla's growth opportunities in Robotaxi and Optimus robots as electric car growth slows. Therefore, investors may still be evaluating Musk's potential to re-evaluate TSLA at the Robotaxi Day to be held on August 8th.$S&P 500 Index (.SPX.US)$.
Recently, the shareholder approval did not restore the judge's decision that Musk's 2018 compensation plan was invalid. Therefore, investors must continue to pay attention to legal developments, as Tesla may appeal the court's ruling. Nevertheless, investors should be reassured that Musk's attention should still be on Tesla. Musk emphasized that he "can't give up, and doesn't want to," because Musk must "hold his stock options for five years.".
As a controversial note, Tesla's long-term valuation depends on whether Elon Musk can take Tesla further on the basis of its stunning success. However, as car manufacturers compete for market share while dealing with difficult economic conditions, the electric vehicle market is becoming increasingly crowded. Even Tesla has not been spared; the leading electric vehicle manufacturer reported negative free cash flow in the first quarter.
Tesla investors understand that the market is highly concerned about whether Musk can realize Tesla's ambitious self-driving. According to Ark Invest, Tesla's basic scenario target price for 2029 is $2,600: "By 2029, nearly 90% of Tesla's enterprise value and revenue is expected to come from the robot taxi business." Despite this, Musk is also trying to hype Tesla's growth opportunities in Robotaxi and Optimus robots as electric car growth slows. Therefore, investors may still be evaluating Musk's potential to re-evaluate TSLA at the Robotaxi Day to be held on August 8th.
Wedbush's Dan Ives emphasized that this key event is a "crucial moment in the history" of Elon Musk and his team. However, investors should not take it lightly because Tesla has not yet focused on solving Tesla's pure vision FSD self-driving technology. It should be noted that Tesla believes its pure vision approach is superior and provides the "lowest cost, strongest scalability path ahead."
Expected smart driving receives negative reviews?
Despite Tesla's optimism, the American Highway Safety Insurance Association recently gave Tesla's ADAS system a poor rating in a March ranking. Only Toyota Motor Corporation's Lexus ADAS received an "acceptable" rating, while General Motors Company and Nissan Motor Co.'s systems received a "minimal" rating. Eleven other companies (including Tesla) received a "poor" rating.
Therefore, this study highlights the shortcomings of the current platform in addressing the complexity of real-world autonomous driving. The IIHS bluntly stated that the independent organization said: "Given the fast speed at which vehicles equipped with these partially automated systems are traveling on the road, these results are concerning."
Therefore, as Tesla's Robotaxi Day approaches, investors should be cautious about buying stocks that Musk and Ark are trying to promote. Musk is very clever and knows that Tesla needs investors to stand with him because Tesla is facing huge challenges in order to solve and realize Ark's basic assumptions for Tesla in 2029. However, investors should note that Ark Invest and Wall Street are increasingly at odds with Tesla's price targets. Investors must also evaluate Tesla's ability to achieve a turning point in growth from 2025, which is crucial for reviving Tesla's bullish momentum.
However, investors should note that Ark Invest and Wall Street are increasingly at odds with Tesla's price targets. Investors must also evaluate Tesla's ability to achieve a turning point in growth from 2025, which is crucial for reviving Tesla's bullish momentum.
As shown above, Tesla's profit margin is expected to hit bottom in 2024. Therefore, Wall Street may have already considered a stronger recovery after 2025.
However, Tesla's valuation has been lowered, highlighting the challenges faced by Tesla and its electric vehicle peers. Given that General Motors' stock outperformed Tesla's in 2024, the market may have reassigned traditional OEMs as they have a more diversified product line in ICE, hybrid and electric vehicles.
BloombergNEF has lowered its expectations for electric vehicle growth in 2026, indicating that challenges are expected to remain. In addition, the uncertainty of Tesla's $25,000 electric car plan may be too aggressive for a major valuation reassessment of Tesla.
Tesla's PEG ratio after expected adjustments to its valuation is 6.6, far higher than the industry median of 1.51. Therefore, Tesla investors must be willing to bet on Elon Musk's ability to realize his ambitions for self-driving and Robotaxi. However, even Ajit Jain of Berkshire Hathaway believes that Tesla investors may be too optimistic. He emphasized that "Tesla's automation efforts have not yet been successful."
Tesla's long-term valuation depends on whether Elon Musk can take Tesla further on the basis of its stunning success. However, as car manufacturers compete for market share while dealing with difficult economic conditions, the electric vehicle market is becoming increasingly crowded. Even Tesla has not been spared; the leading electric vehicle manufacturer reported negative free cash flow in the first quarter.$Berkshire Hathaway-A (BRK.A.US)$Ajit Jain also believes that Tesla investors may be overly optimistic. He emphasized that "Tesla's automation efforts have not yet been successful."
Tesla's price chart shows mixed signals. A closer look suggests that a downward trend signal appears to be forming. However, buyers who buy Tesla on dips have kept its recent lows above the key $150 area, creating higher lows than the January 2023 low point.
However, Tesla has entered a downward trend, indicating that the bearish trend is getting stronger. Short sellers who hope to short sell Tesla need to be cautious because Musk may spark more speculation among investors in the upcoming Robotaxi Day.
Given the sustained resistance faced by the electric car industry, investors who are bullish on Tesla must be cautious in their expectations of a significant increase in valuation from current levels. Analysts believe it is increasingly difficult to expect Tesla to outperform the large cap in the next 12 to 18 months.
Edited by Jeffrey