Another crazy stock run from Tesla, at the time of this video up nearly 5% above $270.
One step closer to $300, just need about 3 more green days like that and we are there.
I even said back when the stock was around $160, that I think there is a 25% chance Tesla
could hit $300 this year.
I even bought options to back it up.
Which admittedly I sold far too early.
Obviously there is now a much higher chance than 25% that Tesla can reach $300 this year,
and it looks set to happen, as long as we don't face any scary macro issue in the market.
In fact many investors are thinking it may actually be the opposite and we get a bull
run for the rest of the year.
Of course plenty of other credible investors also still thinking a market crash is on the
way.
As a result there is still a lot of cash out of the markets.
And for good reason, its tempting to receive 5 to 7% interest or so on bonds right now,
especially if you expected the market to dip again.
Except it didn't dip, recovered and many stocks are at 52 week highs, who could have predicted
that?
Not only that, some of these investors who were waiting for the dip are getting FOMO,
and worried about missing this bull run, and starting to get back in.
It's a strange time in the world, we have demographics in play too.
Baby boomers have a substantial amount of wealth and they are retiring, and spending
this money.
Anyway, hard to predict and Tesla stock has been running an insane amount all year, almost
up 3 times from its low.
And there are plenty of investors out there trying to explain why this is the case.
And it was partly the economy, the end of last year, we saw a quick market crash, not
just Tesla, but the majors too, Google, Apple, Microsoft, Meta, Nvidia.
Of which have all recovered exceedingly well, in fact Tesla has recovered the least well
out of them all, implying there is still more potential there, as investors get their heads
around it better.
These stocks are also benefiting from the potential of AI, of which Tesla should also,
as according to Elon, no one else is further ahead when it comes to AI.
Of course Tesla was also under pressure from Twitter, which other stocks weren't feeling.
There was the demand drop, due to higher rates and the economy.
and before you interject and say, actually the demand didn't drop, it was the supply
that increased, and Tesla had to lower prices as there was so much supply, these are Elon's
words, explaining how cars just become more expensive when interest rates are higher.
Tesla definitely felt a drop in demand.
It just so happened that Tesla was also ramping up supply at the same time, which made it
even worse, and we eventually saw the inevitable price drops.
We think Twitter is past us now, and the prices are holding.
Investors are feeling more and more comfortable with Tesla stock at these prices.
And why not?
The stock was above 400 in the past, and Tesla has achieved so much more since.
Sure, we are still waiting for some areas of the business to get sorted, like FSD, but
it is improving.
And Tesla appear to have not given up on 4680 cells yet, implying they think they can also
be solved.
And right now in this market it wouldn't even surprise me if Tesla hits all time highs this
year.
Especially when we see the Cybertruck delivery event, and see those trucks come off the production
line.
Finally we get told the specificitions of this machine.
What will be the range, and drive train for the first version.
Will Tesla start at the top of the market with a quad or tri motor with over 400 miles,
or will they have to rely on the current energy density of the 4680 cells, and only offer
a dual motor with 250 to 300 miles of range.
I have said I think it might end up being likely Tesla run with 2170 cells at first,
as if you didn't know, the energy density is much higher than the current 4680 cells.
The technical analysts were saying if it breaks 270 then we should see 300.
And yes, I am aware that such analysis is as reliable as reading tea leaves, but often
they are right, when they say if it hits a certain level, then it could go to another.
The issue with them is the first if, but we just hit that.
There doesn't appear to be much resistance to 300 now.
And then we could get all sorts of FOMO buying into the stock.
The smart money waited on the sidelines for the potential crash, and didn't anticipate
this run, it wont want to miss out too much.
The institutions may very well start buying in again.
Also Rivian is the latest to join GM and Ford in using Tesla's charging network.
I mean it is a serious disadvantage of any EV OEM to not have ubiquitous charging.
As we always say, one of Tesla's competitive advantages is the charging network, and it
is of course still growing faster than any other.
And yes, it is a nice little business model for Tesla too, but when you compare the numbers
against the rest of the company, its hardly the make or break of the company.
It's more about other companies starting to admit how much further Tesla is ahead, and
realizing if they want a chance with EVs, then they need to team up with Tesla and admit
defeat.
The same will likely happen for Tesla's FSD, when we hear Ford say they are going to license
Tesla's FSD.
It will have the same effect for Tesla's stock.
Credible legacy companies acknowledging that Tesla is that much further ahead when it comes
to self driving.
It would also help Ford's stock, as investors realize Ford isn't going to miss out on the
future technology either.
The world realizes Tesla is the future, legacy autos look like dinosaurs, unless they can
partner with Tesla.
Of course they do have the slight issue of it costing about twice as much to make an
EV, as they actually sell for.
Not the best business model.
And they are working hard on trying to sort that, and investing 10s of billions of dollars
into their own cell and battery factories.
But they have a long way to go still.
And that is another part of why Tesla's stock is doing so well.
Sure Tesla's prices and margins are lower than they used to be.
But the market has somewhat forgiven that now we compare how much Ford are struggling
with costs of EVs, and we can only begin to imagine how much GM must be struggling.
I wonder what the cost of goods sold is for their hummer alone.
Making EVs is a tough game, and the number of times we have heard Elon say making them
at volume production is really hard, and at a profit too is near impossible.
The US government is even helping out about $10,000 per EV including subsidies and tax
credits, but its still not enough for legacy.
We are hearing more about Elon looking at manufacturing in India.
A lot of mixed views from investors on this one.
Also we aren't sure what kind of manufacutring, whether its going to be for megapacks or something
of similar size to what Mexico will be for vehicles.
How big is the market in India though for EVs?
Also think of the lack of charging infrastructure there, and also how much harder FSD is going
to be there, than almost any other nation in the world.
I would imagine if Tesla did build a factory for cars there, then obviously gen 3, but
it would possibly serve as an export hub for the gen 3 vehicles, similar to how Shanghai
is the export hub for Model Y and Model 3 rear wheel drive.
And perhaps it won't serve the domestic market quite so well.
But Tesla want to hedge their export facilities, rather than focusing it all from China.
India has low cost labor, and a local auto manufacturing industry.
Plenty of skilled labor to choose from.
And with Elon saying the cost of gen 3 is half of Model 3, I think part of that equation
may include the lower cost labor Tesla get in Mexico, when compared to Texas or California.
Seeing a second factory get announced this year, which is what Elon said, would give
a lot of confidence in growth.
Although I would like to also hear the accompanying cell and battery factories to support these
factories.
As cells are still a fundamental element to EV manufacturing.
Anyway, 300 certainly appears on the horizon, and with delivery numbers coming up in under
2 weeks now, and people speculating it might be around 450,000, it could be enough to tilt
it
in
that direction.