The Teslantic has hit an iceberg. When is it going to sink?
Tesla stock is complicated, because it is not an investment stock but instead a trillion dollar meme stock. Its value has been completely disconnected from financial value. Its value is now based on three incredibly dubious issues:
- $30k humanoid puppets masquerading as robots
- Autonomous driving without adequate sensor data
- Low-cost Tesla was completely jettisoned
- Sales predictions that are utterly laughable
Musk has turned Tesla into the next FTX, the key difference being only the indulgence of ketamine instead of amphetamines.
A get-payed-to-play board of insiders that are desperately selling their stock while still supporting the captain of the sinking ship.
And now $1.4B (yes, billion) of Tesla money has mysteriously disappeared off the books.
Looks like Madoff, Holmes, Ponzi, and SBF have a new associate.
Sales prediction
This is fun time of the year, the end of a quarter, when sales figures are predicted, adjusted downwards, and then finally verified. The current consensus for Q1’25 sales is still what Tesla absurdly projected: 418k vehicles. Yes, Tesla misleadingly predicted that they would sell more vehicles Q1’25 than they did in Q1’24 (387k) and in Q4’24. And that is what the stock price still seems to be based on. An utter fantasy.
Already some analysts have lowered their estimate to 350k vehicles, a 16% miss.
But preliminary sales figures for Europe, China, and the US show a much bigger cratering of sales. Therefore I’m going to stick my neck out and predict 335k vehicles for Q1’25, possibly even 310k. It is going to be ugly.
We will know soon, given that as a public company Tesla has to release figures in early April.
Why won’t the stock tank immediately
Keep in mind that Tesla is a meme stock. It has lots of cheerleaders like Dan Ives, who intentionally dresses as a clown to get attention. And Cathie Wood has found that saying absurd things like Tesla stock will go to $2,600 gets them attention.
And there are the legions of fanboys who are still propping up the stock price with several billion dollars recently (yes, several billion).
Memes have momentum. Since they are not based on anything solid they will simply continue on their merry way, until…
Why it will it tank in July
- Institutional investors, like retirement funds, will have had enough time to act on dumping stock associated with DOGE/Musk. This will be the crack, that starts the leak, that gets bigger and bigger.
- One quarter of horrible sales is just a bad quarter. But July will be just after Q2 numbers are released, indicating that horrible sales is now a trend.
- It will finally be absolutely clear that there is no low-cost Tesla, that the model-Y cost reductions are too little, too late. Meanwhile Chinese companies will leave Tesla in the dust.
- The market will be glutted with humanoid robot companies, all without an actual product. Finally it will be clear that there is no market nor technology for humanoid robots for the home. Oh, and it will be obvious that Tesla isn’t even trying to create actual robots, but instead, just some tele-operated puppets based on Tomorrowland/Jetsons kind of fantasies.
- There will be the usual announcement that Full-Self Driving version 13.x.x will be “mind blowing” and that full autonomy is just a year away. Given the sales problems that Tesla is having, investors will finally acknowledge that this is just most BS from Tesla.
- The June Austin robotaxi demo will of course be delayed. But this time everyone will understand that Tesla simply doesn’t have the ability to create a truly autonomous self-driving system.
- Elon Musk will be blamed by the Trump administration for everything that has gone wrong with the economy. The DOGE efforts will be completely discredited. Everyone will think that everything touched by Musk turns to crap.
tl;dr; – the 2nd sequential quarter of disaster sales without any progress on other businesses will finally show investors that it is time to jump ship. Musk, the master at rearranging the deck chairs, will finally have to jump ship. It can take a while, but once a ship has hit an iceberg, it is going down.
