Investor's Corner
Tesla investor who predicted 2020 stock surge unloads shares
Tesla investor Gary Black, a former Bernstein analyst, has decided to offload his Tesla shares after accurately predicting the over 700% surge in the automaker’s stock price in 2020. Black announced this morning that the “absence of clear FY’21 delivery guidance,” and other factors were the reason for his decision.
Black posted a Tweet on Monday morning announcing that he has exited his TSLA positions after being a long-term shareholder since August 2019. In addition to Tesla’s undefined delivery guidance for 2021, “increased odds of a 1Q miss, and a more risky capital allocation policy/higher earnings variability were the primary factors,” he said.
Disclosure: I have exited my $TSLA positions after being long since August 2019. The absence of clear FY’21 delivery guidance, increased odds of a 1Q miss, and a more risky capital allocation policy/higher earnings variability were the primary factors.
— Gary Black (@garyblack00) February 8, 2021
In other tweets, Black explained his distaste of the company’s decision to invest in Bitcoin. “It’s a small risk from a valuation standpoint,” he said. “On the other hand, it adds more volatility to TSLA’s earnings stream, and may highlight a change in risk tolerance within $TSLA.”
I have to think about it and will try to speak with the company. At a $1.5B maximum loss ($1.30/share), it’s a small risk from a valuation standpoint. On the other hand, it adds more volatility to TSLA’s earnings stream, and may highlight a change in risk tolerance within $TSLA.
— Gary Black (@garyblack00) February 8, 2021
Black bought Tesla shares in August 2019 due to the expanding electric vehicle market, and Tesla had proven itself to be the most likely company to dominate the sector. With new vehicles that expanded across different segments, like the Cybertruck, Model Y crossover, and the Semi, along with the company’s expanding focus on battery production and affordability, it seemed like an ideal investment for Black to get involved with. He was right, as 2020 proved to be the company’s biggest year yet. It delivered just shy of 500,000 vehicles, produced over 509,000, and recorded profits in all four quarters.
Walking away with a tasty profit, Black says that he will look for a lower entry point to become a shareholder again. However, the lack of delivery guidance from Tesla during its Q4 2020 Earnings Call was something that didn’t sit well with some investors, Black being one of them.
Tesla is currently in the process of building two new production facilities: One in Germany and one in Texas. While both production plants are set to begin production in mid-2021, Tesla does not have a definitive start date for manufacturing or deliveries for either facility. Therefore, it is difficult for the company to outline an exact production or delivery rate.
The only concrete numbers Tesla offered during the Q4 Earnings session were located in its Shareholder Deck. It outlined Fremont and Giga Shanghai’s production of the Model S, Model 3, Model X, and Model Y, with a combined rate of 1,050,000 cars per year.
Credit: Tesla
But, this does not mean that Tesla will deliver that many cars. The production rate can be looked at as a “best-case scenario,” meaning if there are no production halts, malfunctions in equipment, or revisions to production lines, Tesla would likely produce 1,050,000 cars. Some analysts, like Bill Selesky of Argus, have estimated what Tesla will produce and deliver in 2021. Argus said in a note to investors that it expects Tesla to produce 952,000 cars this year.
Black added more comments regarding the company’s decision to invest in Bitcoin, and wrote:
“I go back to my criticism of $TSLA earnings calls, which already stood out for their vagueness, lack of detail, and non-discussion of strategic priorities. If $TSLA purchased $1.5B in #bitcoin in January, why not share the logic with shareholders on the earnings call?”
2/ I go back to my criticism of $TSLA earnings calls, which already stood out for their vagueness, lack of detail, and non-discussion of strategic priorities. If $TSLA purchased $1.5B in #bitcoin in January, why not share the logic with shareholders on the earnings call?
— Gary Black (@garyblack00) February 8, 2021
Disclosure: Joey Klender is a TSLA shareholder.
Investor's Corner
Tesla is ‘better-positioned’ as a company and as a stock as tariff situation escalates
Tesla is “better-positioned” as a company and as a stock as the tariff situation between the United States, Mexico, and Canada continues to escalate as President Donald Trump announced sanctions against those countries.
Analysts at Piper Sandler are unconcerned regarding Tesla’s position as a high-level stock holding as the tariff drama continues to unfold. This is mostly due to its reputation as a vehicle manufacturer in the domestic market, especially as it holds a distinct advantage of having some of the most American-made vehicles in the country.
Analysts at the firm, led by Alexander Potter, said Tesla is “one of the most defensive stocks” in the automotive sector as the tariff situation continues.
The defensive play comes from the nature of the stock, which should not be too impacted from a U.S. standpoint because of its focus on building vehicles and sourcing parts from manufacturers and companies based in the United States. Tesla has held the distinct title of having several of the most American-made cars, based on annual studies from Cars.com.
Its most recent study, released in June 2024, showed that the Model Y, Model S, and Model X are three of the top ten vehicles with the most U.S.-based manufacturing.
Tesla captures three spots in Cars.com’s American-Made Index, only U.S. manufacturer in list
The year prior, Tesla swept the top four spots of the study.
Piper Sandler analysts highlighted this point in a new note on Monday morning amidst increasing tension between the U.S. and Canada, as Mexico has already started to work with the Trump Administration on a solution:
“Tesla assembles five vehicles in the U.S., and all five rank among the most American-made cars.”
However, with that being said, there is certainly the potential for things to get tougher. The analysts believe that Tesla, while potentially impacted, will be in a better position than most companies because of their domestic position:
“If nothing changes in the next few days, tariffs will almost certainly deal a crippling blow to automotive supply chains in North America. [There is a possibility that] Trump capitulates in some way (perhaps he’ll delay implementation, in an effort to save face).”
There is no evidence that Tesla will be completely bulletproof when it comes to these potential impacts. However, it is definitely better insulated than other companies.
Need accessories for your Tesla? Check out the Teslarati Marketplace:
- https://shop.teslarati.com/collections/tesla-cybertruck-accessories
- https://shop.teslarati.com/collections/tesla-model-y-accessories
- https://shop.teslarati.com/collections/tesla-model-3-accessories
Please email me with questions and comments at joey@teslarati.com. I’d love to chat! You can also reach me on Twitter @KlenderJoey, or if you have news tips, you can email us at tips@teslarati.com.
Tesla (NASDAQ: TSLA) received a price target boost from analysts at Truist Securities, but it came with some criticisms based on a lack of information on several things that investors were excited to hear about regarding future vehicles and AI achievements.
Last night, Tesla reported its earnings from the fourth quarter of 2024, and while it had a very tempered financial showing, missing most of the Wall Street targets that were set for it, the stock was up after hours and on Thursday due to the details the company released regarding its plans for 2025.
CEO Elon Musk stunned listeners last night by revealing plans to launch unsupervised Full Self-Driving as a service in Austin in June 2025. It will be the first time Tesla will offer driverless FSD rides in public, something it has been working with the City of Austin on since December.
Tesla to launch unsupervised Full Self-Driving as a service in Austin in June
It also reiterated plans for affordable models to be launched this year, potentially catalyzing annual growth in deliveries, something it said it expects to resume in 2025.
Tesla was flat on deliveries in 2024 compared to 2023.
The positives during the call were enough for Truist Securities analyst William Stein to raise the company’s price target to $373 from $351. However, Stein’s note to investors showed there was something to be desired despite all the good that was revealed during the call:
Stein said there was “not enough ground-truth” during the call and too much of a focus on “cheerleading” the company’s potential releases this year:
“Too much cheerleading; not enough ground-truth. In Q4, TSLA’s ASP weakness drive revenue, GPM, OPM, & EPS below consensus.”
As previously mentioned, Tesla did report weak financials that missed consensus estimates. What saved the call and perhaps the stock from plummeting on these missed metrics was the other details that Musk revealed, especially the FSD launch in Austin in June.
There were also plenty of things related to the affordable models and other vehicles, like the fact that Tesla plans to include things like Steer by Wire, Adaptive Air Suspension, and Rear Wheel Steering, that helped offset negatives.
Stein saw this as a distraction from what should have been reported:
“While CEO Elon Musk played the role of cheerleader, calling for TSLA’s path to massive market cap by leading in autonomy, management was remarkably short on two critical details: (1) info about new vehicles in 2025 and (2) milestones for AI acheivements, especially FSD. We continue to ask ourselves ‘where’s the beef?’ CY26 EPS to $3.99 (from $4.87). DCF-derived PT to $373 (from $351).”
Tesla did detail some AI milestones, like its record-breaking miles per accident on Autopilot, which was a Q4-best of 5.94 million miles. The Shareholder Deck also outlined major upgrades to AI:
“In Q4, we completed the deployment of Cortex, a ~50k H100 training cluster at Gigafactory Texas. Cortex helped enable V13 of FSD (Supervised)1, which boasts major improvements in safety and comfort thanks to 4.2x increase in data, higher resolution video inputs, 2x reduction in photon-to-control latency and redesigned controller, among other enhancements.”
Tesla shares are up 2.11 percent on Thursday as of 12:05 p.m. on the East Coast.
Need accessories for your Tesla? Check out the Teslarati Marketplace:
- https://shop.teslarati.com/collections/tesla-cybertruck-accessories
- https://shop.teslarati.com/collections/tesla-model-y-accessories
- https://shop.teslarati.com/collections/tesla-model-3-accessories
Please email me with questions and comments at joey@teslarati.com. I’d love to chat! You can also reach me on Twitter @KlenderJoey, or if you have news tips, you can email us at tips@teslarati.com.
Tesla has released its Q4 2024 vehicle safety report. Similar to data from previous quarters, vehicles that were operating with Autopilot technology proved notably safer.
The Q4 2024 report:
- As per Tesla, it recorded one crash for every 5.94 million miles driven in which drivers were using Autopilot technology.
- The company also recorded one crash for every 1.08 million miles driven for drivers who were not using Autopilot technology.
- For comparison, the most recent data available from the NHTSA and FHWA (from 2023) showed that there was one automobile crash every 702,000 miles in the United States.
Previous safety reports:
- In Q3 2024, Tesla recorded one crash for every 7.08 million miles driven in which drivers were using Autopilot technology and one crash for every 1.29 million miles driven by drivers not using Autopilot technology.
- In Q2 2024, Tesla recorded one crash for every 6.88 million miles driven in which drivers were using Autopilot technology, and one crash for every 1.45 million miles driven for drivers not using Autopilot technology.
- In Q1 2024, Tesla recorded one crash for every 7.63 million miles driven in which drivers were using Autopilot technology, and one crash for every 955,000 million miles driven for drivers not using Autopilot technology.
Year-over-Year Comparison:
- In Q4 2023, Tesla recorded one crash for every 5.39 million miles driven in which drivers were using Autopilot technology and one crash for every 1.00 million miles driven for drivers not using Autopilot technology.
Key background:
- Tesla began voluntarily releasing quarterly safety reports in October 2018 to provide critical safety information about our vehicles to the public.
- On July 2019, Tesla started voluntarily releasing annual updated data about vehicle fires as well.
- It should be noted that accident rates among all vehicles on the road can vary from quarter to quarter and can be affected by seasonality, such as reduced daylight and inclement weather conditions.
Don’t hesitate to contact us with news tips. Just send a message to simon@teslarati.com to give us a heads up.
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