Editor's Note: Our Industrials analyst Jay Van Sciver is hosting a data oriented and narrative targeted update to his team's Tesla (TSLA) short thesis this Thursday, June 21, at 2:00pm ET. Email firstname.lastname@example.org for access to the call.
With so many critical challenges hanging over Tesla shares, how does the narrative fit the data? We see increasing evidence that the deep pool of demand that Tesla longs rely on is drying up, as product quality problems, competitive entry, and regulatory changes take their toll on a financially vulnerable manufacturer.
The recent short squeeze (we look to short squeezes in crowded names) gives us another shot at the largest alpha opportunity in our coverage.
While Mr. Musk may prefer author Iain Banks, we think reading some non-science fiction Faulkner would serve him well. Perhaps As I Lay Dying, in which a character named Cash is slowly building a coffin. Recently, Musk has been terminating employees like the Red Queen, and behaving a bit more like Max on twitter and conference calls. Business pressures look to be driving extreme behavior.
- New Data On Demand: Trends in our data collection, test drive, and surveys, focusing on a potential demand inflection
- Regulatory Changes: Carpool lane access, state tax credits, and the impact on residual values
- Manufacturing Capacity, Production: Identifying ongoing challenges, misleading commentary
- Federal Tax Credit Expiration: Price sensitivity of buyers, competitive impact, recognition
- Other Bull Story Elements: Falling component prices, credit sales, software/data, later models
- Catalyst Calendar, Reflexive: Crowded catalysts schedule in next few quarters, break points in share price
- Tesla Likely Has Little Equity Value: If Tesla shares slide far enough, they are likely just to keep falling, given the need for access to capital markets and the CEOs pledged shares, among other factors
Hedgeye Industrials subscribers will be sent the dial-in information and the presentation slides on Thursday before the call. We hope you can join us live, but if not, a replay can be sent on request shortly after the call. Please feel free to send questions or topics in advance.
On request, we will also distribute our updated excel Tesla EQM Model/Dataset following the call with the presentation data and appendices.