I sold Tesla right after the Reuters news that Tesla canceled the $25k car (Model 2). Later Elon Musk accused Reuters of lying without specifying details what part exactly was the lie. The consensus among Tesla investors appears to be that the Model 2 is indeed at least postponed and that Tesla for now focuses on the Robotaxi. Elon Musk later announced on X that the Robotaxi will be revealed on August 8. In sum, the Model 2 seems to be at the very least postponed for now.
Unfortunately canceling the Model 2, combined with the surprisingly very bad 2024 Q1 deliveries proved some key assumptions about my Tesla investment case wrong. I currently don’t see any possibility that the car business alone may be worth 2x today’s Tesla market cap anymore as I have assumed in my writeup. Solving FSD is now a condition for Tesla to provide superior returns. While I remain optimistic that Tesla can achieve FSD, it is still quite uncertain. I would place the odds at around 50%. At a $500b market cap, the upside of solving FSD is also not unlimited (I would argue 10x at best). Overall, Tesla is now clearly less attractive. I put Tesla back on my watchlist, but for now other opportunities provide better risk return.
From my 2024 Q2 Portfolio Update:
I sold Tesla right after the Reuters news that Tesla canceled the $25k car (Model 2). Later Elon Musk accused Reuters of lying without specifying details what part exactly was the lie. The consensus among Tesla investors appears to be that the Model 2 is indeed at least postponed and that Tesla for now focuses on the Robotaxi. Elon Musk later announced on X that the Robotaxi will be revealed on August 8. In sum, the Model 2 seems to be at the very least postponed for now.
Unfortunately canceling the Model 2, combined with the surprisingly very bad 2024 Q1 deliveries proved some key assumptions about my Tesla investment case wrong. I currently don’t see any possibility that the car business alone may be worth 2x today’s Tesla market cap anymore as I have assumed in my writeup. Solving FSD is now a condition for Tesla to provide superior returns. While I remain optimistic that Tesla can achieve FSD, it is still quite uncertain. I would place the odds at around 50%. At a $500b market cap, the upside of solving FSD is also not unlimited (I would argue 10x at best). Overall, Tesla is now clearly less attractive. I put Tesla back on my watchlist, but for now other opportunities provide better risk return.