As if 2022 was not hard enough for many long-term equity investors, Elon Musk has made it even more challenging for Tesla ($TSLA
) shareholders with his messy Twitter acquisition and erratic tweets ranging from political conspiracies to personal attacks.
Never a dull moment
with Tesla. I am just glad the cage fight
between Elon Musk and Johnny Depp did not happen.
I have been listening to Tesla Daily podcast
since 2019. When Tesla share price started faltering in 2022, the host used to repeat how undervalued Tesla stock was at those levels. More recently, however, that sentiment has become less prominent on his show. Especially with Musk liquidating billions worth of Tesla stock on multiple occasions, even after assuring shareholders that no more would be sold after each disposal.
Current bearishness has spread to Tesla’s most ardent fans, except Cathie Wood
of ARK Invest. She has balls of steel.
With a worsening macro backdrop, higher financing costs, and more competition (Rivian, Lucid, Ford, GM, Stellantis, Volkswagen, BYD, Nio, Hyundai) from all corners of the world, Tesla is feeling the heat. In the last few months, Tesla has had to cut prices multiple times to stimulate demand, especially in China where prolonged lockdowns have further complicated purchasing behaviors. Q4 2022 delivery numbers still fell short: full year 2022 deliveries (1.37mn) grew 40% instead of the guided 50%.
Perhaps for the first time ever, Tesla is facing demand issues; Musk had previously always maintained that Tesla was supply constrained.
Where will Tesla go from here? Does Tesla as an institution possess sufficient structural advantages to work its way through the tough macro environment?