Posted by Hải Âu (73..162.32) on December 22, 2022 at 13:47:58:
Tesla could sink another 80%
Tesla’s headwinds
Johnson outlined three key problems that he believes Tesla is facing at the moment: demand, competition, and valuation.
In terms of valuation, investors still put a premium on Tesla compared with its peers in the automotive industry. The EV giant is currently trading at roughly 40 times earnings, while Ford, GM, and Toyota trade at just five, six, and 10 times earnings, respectively.
And in terms of market capitalization, Tesla is head and shoulders above the competition as well, even after its 67% stock price drop this year.
“Tesla is currently valued at more than the next three largest automakers combined, despite selling just 5% of the cars that those automakers sold in 2021,” Johnson noted.
Johnson said that in order to be valued so highly by the market, Tesla needs to show that it is rapidly and sustainably growing. But he believes that demand has become an issue, pointing to price cuts in China, the U.S., and Europe in the fourth quarter.
Companies don’t cut prices when demand is strong, Johnson said, arguing Tesla is using price cuts to help fend off rising competition.
While Tesla has been the EV leader in the U.S. for years, Johnson believes that the company has lost its technological edge.
“There’s a ton of other cars out there now with equal or better real-world range, better interior, faster charging…so you have to think about the competition,” he said.
Finally, Johnson argued that Elon Musk has hurt Tesla’s stock by selling $40 billion worth of shares and creating drama in the media.
“Musk is espousing all these far right-wing conspiracies on Twitter,” he said. “He’s alienating his key constituency of buyers…liberals who think EVs are going to save the world.”