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27 Apr 2024  (2047 Views) 
Tan Kin Lian - Investment Journey

Review of Tesla stock
I now hold 1 share of Tesla. At the peak, I held 6,000 shares worth about S$1.5 million. 

I now hold a negative view of the Tesla stock for the next six months, maybe longer. 

a) The demand for electric vehicles have dropped in China and America, which are the two key markets for Tesla. 
b) Tesla now have strong competition from several EV manufacturers in China, notably BYD (Build Your Dreams). Xiaomi can also pose a big challenge in the future. 
c)  The cybertruck had been disappointing. The production ramp is slow and this model had met with several technical issues. 
d) The results for 1Q 2024 had been worse than expected. The revenue, earnings and profit margin had been worse than analyst forecast. 
e) Two senior executives have resigned, including the head of power train and battery production. This suggests that there were technical problems with the production of the 4680 battery, which is critical to Tesla's competitiveness.
f) The CEO's compensation package had been rejected by the Delaware court. A new package had not been sorted out. 
g) Several analysts that were bullish on Tesla previously are now not so enthusiastic about the stock. 

At the release of the disappointing 1Q 2024 results, the CEO announced that the low cost model (with a speculated price of $25,000 and commonly referred to as model 2) will be launched earlier than planned. The stock price of Tesla jumped from $145 to $170 in 2 trading sessions. 

In my opinion, this price jump is overdone, and the stock price will fall back towards $100 to $130. 

Tesla have the following products that may contribute to its future success:

a) The self driving software (called Full Self Driving or FSD) 
b) The humanoid robot  
c) The energy storage business 

However, these products could take be delayed, or may not be as successful as speculated. 

I prefer to wait for greater clarity on the new products, before I reinvest in this stock. 

Tan Kin Lian 

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