EXACTLY *Why* Tesla Stock is Plummeting [TSLA]

oh boy Tesla's absolutely getting reamed

in the stock market today and there are

a few catalysts as to why one of them

you're not going to want to hear about

I'm just going to start with

it remember what happened at the end of

last year wasn't good Tesla lost $100 in

the

span of 30 days yeah I kid you not and

that pain started guess what

date December 1st it literally happened

all in December look at this pain you

went from

$192 on Tesla down to

101 free fall into the end of the year

now there was a reason for that tax loss

harvesting will that happen again well

here's the thing now this is this is an

interesting one

okay in order to tax loss Harvest you

have to have gains somewhere else to

offset a lot of people are making the

argument that this year's tax loss

harvesting cycle for stocks that are

getting beat up at towards the end of

the year here won't be as bad because

people have less gains to offset

elsewhere or their income is lower

elsewhere so maybe the end of this year

won't actually be as painful as last

year we also have substantially fewer

inflation fears compared to the fears

that we had last year where we still

thought there was a reasonable

possibility of getting Paul

vulker fortunately those fears have

subsided and the hopeful reality is that

we won't revisit some of the pain of

last year however this is tax Lawless

harvesting time this is the time when

financial advisers call their clients

and when Bankers call their clients and

go hey uh want to do some loss

harvesting that way they can churn out

some commission if their Brokers or you

know do their job I mean either as a

broker or an investment adviser

suggesting hey here's a tax savings

opportunity for you that is the way the

world works so that is very common

fortunately it doesn't seem like we have

Elon selling pressure again this year

but what we do have is pessimism for

example HSBC today released their

bearish price target for Tesla

suggesting Tesla could go down to

$146 per share that's exactly the

opposite of what's happening with the

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at staff meetkevin.com but let's

understand this right here hsbc's 146

price Target uh is based on the

challenge of actually getting to 20

million Vehicles produced by the year

2030 now we're about to roll into

2024 and for 2024 we're looking at maybe

being able to get growth of about 35% on

vehicles delivered maybe we're lucky we

get to like 39% that would get us to

about 2.5 million vehicles for Tesla

okay 2.5 million vehicles per for Tesla

in 20124 is going to have to grow at a

pretty good rate to try to get to 20

million vehicles by the end of the year

if we do the math quickly together we go

we got 25 26 27

28 uh five six 7 8 yeah there we go one

two more if I compound 2.5 million

Vehicles by a 30% growth rate all the

way through 2030 I get you about 12

million Vehicles by 2030 that's at a 30%

growth rate now if we go at the current

growth rate of about 39 % so we go all

the way up to basically nearly 40% we're

getting to about 18 million vehicles and

that's about the trajectory we're on

right now to get to 20 million Vehicles

you really only have to grow by about

41% so I'm not entirely sure that hsbc's

argument is highly valid that that can't

be pulled off uh but I will say with

interest rates at this level it does

feel unlikely that Tesla would grow it

41% especially since Elon Musk in the

last earnings call reiterated that hey

you know our Target of growing 50% kager

compounded annual growth rate it gets

harder as the numbers get bigger and

bigger now we do have the facilities to

facilitate a lot of growth for Tesla

Giga Berlin and Texas just now really

scaling there's a lot of empty room

still to fill up we've got the permits

ready for Giga Mexico but Elon slow

walking that thanks to well how hard it

is to sell cars when interest rates are

as high as they are now the good news is

there's a belief that maybe these rates

have finally peaked out bonds right now

though every day we get fluctuation

we're not going straight down right

we're at 4555 right now we've been

sitting there for about 3 days now after

that jobs report been relatively stable

what else do we know well we know that

Adam Jones suggests that uh elon's

influence over investor sentiment is

pretty big and unfortunately elon's

attitude was slightly if not outright

pessimistic in the last earnings call

now maybe it's understandably just

realistic right that of course when

interest rates are high Tesla's going to

suffer it's an interest rate sensitive

sector unlike Nvidia which isn't now a

lot of folks have been hitting me up

saying Kevin why is NVIDIA Rising again

Nvidia is a fantastic stock it's a great

company but you have to think about the

customer base the customer base of an

Nvidia chip is a rich Corporation with

plenty of cash to invest they just move

their capex from one area to another and

they're milking money off of interest

rates the opposite is true for Tesla

Tesla customers are getting absolutely

reamed by higher rates it's kind of like

you look at people getting reamed over

at Disney and so Disney stock even

though it's doing fantastic today up 7%

Disney stock has been a complete cluster

F uh for really quite frankly the last

two years I mean we're at coid lows

essentially but what's it actually been

good for 50% of users now signing up for

the ad supported tier at Disney which is

surprising but it's great for a company

like tradesk which supports connected TV

advertising it's a platform for shopping

for connected TV advertising uh anyway

uh another thing that's hitting Tesla a

bit right now is this idea that oh what

about the Cyber truck uh expectations

for the Cyber truck are being reduced

you've got bearish news almost daily on

the Cyber truck people complaining about

prototypes having panel gaps and a lot

of this just straight nonsense but also

the idea that most of the profit from

Tesla and this is the bull argument will

come from SAS software FSD now Cruz just

had a very embarrassing failure

revealing that they use more drivers for

their driverless cars than Uber uses per

car which is kind of scary the New York

Times revealed in their reporting that

1.5 humans engage for every single

single cruise that's on roads so in

other words you have 1.5 workers working

on every single cruise that's driving at

any given time and that's why human

interventions occur every about four to

five miles that the car drives that's

not good that's not autonomous

technology on the flip side Tesla's

autopilot to say hey does it have some

quirks with some updates of course every

single time is it getting so much

substantially better over the last 3

years to where we justify the stock

price being flat probably not the stock

should be representing a substantially

more value but unfortunately it's very

difficult in this sort of environment

and it's just an easy short to take

interest rates up short the interest

rate sensitive sectors it's an easy

trade it's a rough time tax loss

harvesting time and you're getting these

price targets coming out from companies

that are really just jumping on the

bandwagon of a declining stock it's a

great time to increase position and

allocation potentially obviously not

personalized advice for you the problem

though with that is people are out of

money what are you going to sell what

are you get where are you going to get

more money to be able to buy and

increase your allocation to the stock so

that is something else that is hurting

Tesla stock in the near- term otherwise

it's worth looking at uh competition

fears briefly I mean first of all we

know there's virtually no competition

you look at U Volkswagen though

Volkswagen's talking about how they're

trying to come up with a $35,000 vehicle

within the next 3 to four years but

quite frankly every Legacy auto that has

suggested they're going to come up with

a an electric vehicle has either scaled

back their plans or has taken

substantial losses really your best

competition right now for Tesla is rivan

but I mean just Compare the numbers for

a moment Tesla produces 24 uh or I'm

sorry Tesla produces 15,000 cars per

month rivan's manufacturing 24,000 in a

6-month period which means you're

actually sitting at 4,000 vehicles per

month ouch wers uh uh you know reporting

that uh Volkswagen's $335,000 electric

vehicle could take 3 to four months and

be built in either the us or Mexico that

to me is actually a reiteration that

Tesla building in Mexico is a smart

decision because you're getting the

benefits of the inflation reduction act

but you're using Mexican labor which is

about 25% the cost you're prevailing

wage in nor Eastern Mexico is like $3.50

you go to California it's like 25 bucks

or or more uh and then on top of this

you also have more bearish commentary

about uh unionization uh for example

what do you have here Biden supports UAW

unionization at Tesla and Toyota that's

not great especially since Biden holds

the purse uh yes Biden carries a purse

of inflation reduction tax credits and

interpretations for uh electric vehicle

charging stations and otherwise problem

with this is it is possible that at some

point in the future the Biden

Administration could try to put the

screws to Tesla and say look if you want

keep getting credits we're going to

demand some unionization that's pure

speculation right now that's not

confirmed at all I just do think a lot

of people are going to be very fearful

about that potential happening

personally I actually don't think it's

that big of a deal uh that uh that that

unionization might be on its way I do

think it would be a short-term negative

Catalyst but what's more of an impact in

my opinion for Tesla is hands down

simply rates HSBC goes on to also call a

the Tesla problem a problem of the

single man risk I actually don't really

believe that I know HSBC is a big fan of

believing that elon's the best marketer

possible for Tesla which is true

especially when they don't really do ads

uh you know it's also their their uh

their Community but really what you have

with with Elon is somebody who has

inspired a in my opinion fantastic

company at Tesla and also even at

Twitter with going on you know I was

complaining about two weeks ago that uh

Community notes will Community Note One

video and go this is a fake video but

then 10,000 other people will retweet

the video and the community notes

doesn't carry over and just yesterday

Elon announced on Twitter that they are

now automatically matching Community

notes when the content IDs line up so

people retweet the same thing the same

Community note goes across like I do

actually strongly believe the people at

Tesla and Twitter listen to the the

community and you know I I know

sometimes people are like oh Kevin too

critical too critical or whatever one of

the reasons I shout or scream ideas that

I have is just to hopefully give some

perspective and then people uh working

at Twitter or Tesla could go bad idea

actually that's not a bad idea we'll

take that one don't like that don't like

that oh I like that one it's like go

pick ideas right and I think as a

community that's that's how we help

support uh the companies that we're fans

of but anyway in the meantime yeah look

it's a tough time it's a tough time

there's there's no sugar coating it it's

a tough time I do think that uh we are

at a place where inflation is is

substantially rolling over this is going

to take time for inflation expectations

to actually show that people have to

feel like the pain is ending before the

pain can truly end I know that's tough

though because it really takes you know

time to to get rid of the pain so in

other words I wouldn't go be going uh uh

with that with some short-term call

options anytime soon but am I a big fan

of holding firm on some of these stocks

and balancing some of the exposure the

way I like to balance it is I like to go

chips and I like to go interest rate

sensitive that way I have if one side of

the portfolio is doing well the other

side of portfolio uh might be doing

poorly but they somewhat balance each

other uh and I do think both of them as

rates come down ship sector continues to

blow up and then you get the interest

rate sensitive sector that blows up as

well that's personally one of the ways

that I'm setting up for the next really

decade it's very painful right now

though but that's just the nature of

buying closer to a bottom so that's my

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