Brand and demand deterioration at Tesla?
Yes.
Institutional investors are invited to join Hedgeye Industrials analyst Jay Van Sciver for a black book call today at 12:30PM ET where he will discuss the latest developments. Email sales@hedgeye.com for access to the call.
Van Sciver's data are showing a clear deterioration in the Tesla brand, a potentially lethal development for many institutional long investment theses. Delivery, quality, and service issues for Tesla vehicles have likely negatively impacted demand, while management departures, Musk’s problematic behavior, and SEC/DOJ investigations add to the negative attention. While we continue to look to short squeezes, the local highs may trend lower into our 1H19 catalyst period.
Some Highlights
- Test Drive, Survey, Other Demand Data Hitting Proverbial Fire Truck: We have near real-time indicators of demand, and the results look…interesting
- Has The SEC, DOJ Even Driven A Model 3? We’ll discuss our understanding of the investigations, exposures, and likely outcomes including the ability to raise cash
- Craving High Margins? Pipe In A Rich Mix: How Tesla is moving forward with incentives, mix, inventory, and production in our data sets
- Less Affordable While Pursuing Affordability: Falling used vehicle values, expensive and prolonged repairs, use of appreciated TSLA shares to buy vehicles, changes to incentives, and other factors are likely decreasing affordability
- When Will Then Be Now? Catalysts: We see a number of underappreciated downside catalysts clustered in 1H19, although shorts may not be out of the woods just yet
- Ludacris Downside Remains: While Tesla shares have weakened, we still see a reflexive decline underway that is likely to take the share price far lower over the next six to nine months