I'm Very Concerned about Tesla Stock.

I hate to say it but I'm concerned about

Tesla very concerned I'm going to give

you my thoughts in this video and uh

just because I'm coming across as a

dirty ugly nasty gross bare

flip-flopper I'll go ahead and put it

on all right folks I'm concerned and I'm

going to go through these concerns one

by one let's start first first I'm

concerned that uh Elon musk's Q2 push to

generate an incredible quarter 2 to

maximize his stock comp artificially

reduced interest rates at Tesla and

pulled substantial Tesla demand forward

this will make it harder for us to prove

to Wall Street that we justify the

valuation that we have today there's

much more to this we're going to hit

Robo taxi we're going to hit Optimus

we're going to hit energy we're going to

hit a lot of research here so buckle

up 99% in May

in my opinion probably pushed anyone on

the edge of wanting to buy a Tesla into

to buying a Tesla the problem is now

we're finding that 50% of buyers who

have owned a Tesla and then end up

selling that Tesla this is uh research

via Edmonds end up going back to

purchasing an ice vehicle this is a

little bit problematic because that

aligns with research that suggests the

first phase of Enthusiast electric

vehicle buyers are very different from

the next phase of electric vehicle

buyers you have sort of the first 10 to

15% of electric vehicle buyers who say

yes I want to own an EV it's sustainable

it's fast it's wonderful the control is

better the traction is better everything

about it is cleaner the maintenance is

better I love it I am one of those

people but the problem is the other 85%

of Americans have mostly unfounded

concerns but they have concerns whether

it's range anxiety

fires Elon Musk whatever it might be and

that makes the next phase of

unfortunately Eevee adoption harder but

it's also resale value a lot of people

look at buying let's say a Toyota or a

hybrid or another vehicle and they look

at resale values and they see hm used

vehicles dropped on average 6%

year-over-year

for typical ice Vehicles it's actually

6.8% I thought it'd be funny if it was 6

9 but it wasn't it was 6.8%

unfortunately electric vehicles in the

last 2 years are down 39% in the last

year they're down 21% which is roughly

three times the depreciation of

non-electric vehicles that makes it

really hard to sell new electric

vehicles when people are basically

buying into a sinking

ship that's not good you want to sell a

product that seems like it would at

least hold up its resale value like FSD

should hold up its resale value but it

probably doesn't and frankly they should

in my opinion I've made this clear many

times already they should really be

plummeting the price of full

self-driving to really motivate growth

because Wall Street will reward growth

even if margins are slightly lower we

want the network effects of more Tesla

which then drives people to more energy

which in the future drives people to

more Optimus which in the future drives

people to more Tesla Robo taxi through

the Tesla app you want the network

effects you want more people in Tesla

you want expanding factories so get

people to buy Teslas but

unfortunately you know that's not what

Tesla's doing at the moment instead

we've positioned at Tesla for f quite

frankly low growth fired a substantial

amount of service and sales reps limited

the expansion uh for our existing

capacity at Giga Texas or elsewhere this

is obviously for vehicles because

frankly our growth rate is petering now

let's understand this before we talk

valuation and growth rates and pegs yes

Shanghai shipments are doing very well

they're up 15% year-over-year and so

it's not all bad news it's worth noting

as well that lithium prices are

plummeting even though commodity prices

have started recently Rising we contined

to see lithium prices fall and this is a

really good thing because even though

commodity prices are up about 3 or 4% we

haven't actually seen a bottom yet in

lithium prices and this really helps us

with margin as we can manufacture those

batteries less expensively or quite

frankly just buy them from catl less

expensively depending on which batteries

we're talking cybertruck 4680 is or the

LiPO batteries but before we hit more

good we got to understand where we sit

in terms of valuation and positioning

right now Wall Street consensus

estimates for 2025 forward growth for

the next 4 years on Revenue average

18.9% that's actually surprisingly low

considering the enthusiasm for Tesla

energy so I thought to myself man Tesla

energy is blowing up why is revenue

guide only

18.9% for consensus and then I looked at

EPS guide earnings per share that's

bottom line and that guide is

33.8% which is substantially better it's

like 50% better than Topline Revenue

guide and so I thought why is revenue

growing at 18.9 and earnings per share

expected to grow by 50% more

33.8% well it's because Wall Street is

already pricing in energy growth because

frankly Wall Street is looking at the

vehicle business as one that's petered

out in terms of growth and yes that

spectacular mega pack and home battery

high margin energy business is growing

but that's the only thing actually

contributing to the EPS valuation that's

all already being priced into Wall

Street consensus estimates keep in mind

Optimus doesn't really get much in way

of consensus estimates because we don't

really actually expect frankly Optimus

to be commercially viable to the point

where it provides a positive return on

your investment in an Optimus probably

for another 3 or four years or more and

there is a lot of robot competition it's

not like this is you know the only robot

out there with full self-driving kind of

like the Tesla car in 2017 to really now

was

it's frankly that oh oopsy doopsy we

actually have a product that will

probably end up becoming a commodity a

commoditized robot which so you know I'm

not very optimistic about at least today

pricing an Optimus unless I could see

that we're way ahead of the competition

with Optimus do keep in mind I do

believe that Tesla has phenomenal

manufacturing progress but you know so

do other countries okay China not to

mentioning names or even Taiwan okay

there's a lot of competition for this

but consider this at today's price let's

just go ahead and take roughly

$210 uh and go ahead and divide that by

the earnings per share we're expecting

of $232 for the year end we're sitting

at about a 90.5 PE ratio that's really

high that's a

2.67 Peg going forward four years and I

personally think for a manufacturing

company we should be closer to

1.67 keep in mind Tesla doesn't just

design the vehicles they also Manu

facture the vehicles this is different

than Nvidia or a software company a

software company or a designer of chips

could justify a higher PEG ratio because

they don't have the burdens of

manufacturing especially in a recession

manufacturing is extremely Capital

intensive which means I don't really

love it but that's why I give it a 1.67

peg which if we sat at a 167 Peg today

unfortunately a 167 Peg today is only

going to give us a valuation of this

sounds terrible $131 right now which

unfortunately means we have a downside

of somewhere around 79 bucks at today's

valuations if we wanted to align with

that Peg now then if we go forward and

say but Kevin let's go ahead and use

next year's earnings per share because

maybe this year's EPS is bad or whatever

we want to say okay so then let's go

with next year's consensus and go with

$316

at a 1.67 peg at

$316 unfortunately we're still a stock

that is worth less than

$180 which represents still a 14%

downside not as bad as the 37% downside

I just talked about but still a downside

making the risk reward for investing in

Tesla right now at these levels

relatively low for me now I know this is

where then people say but Kevin you said

buy at low volatility at the beginning

of June and this is is true this is

exactly what I did the research that I

found said that historically when

Tesla's volatility has fallen to the low

it did which was under a historic V of

17 on the 10day Tesla tends to move up

1.49% per day for the next 45 days what

actually happened was Tesla Rose 47%

from my pitch of low volatility to both

course members and people on the channel

you can go back and watch it the video

is still there and we rose that level in

32 days before before we peaked out

thanks to Elon delaying the 88 event

which represented our Peak that meant we

actually got a

1.47% return per calendar day

unfortunately then I suggested since we

were delaying the 88 event and we were

going to be closer to having to price in

Q3 and Q4 pain which are the quarters

that unfortunately we're going to have

to deal with higher capex uh since we

had low capex in Q2 and potentially not

great growth rates on well

sales and a potentially negative

year-over-year deliveries count which is

the current consensus estimate and even

Troy Tesla like thinks we're sitting

around that level as well I'm not very

enthused about Q3 Q4 especially since if

you add to that valuation pressure the

capex increase the deliveries challenges

you add in election risk and you add in

Federal Reserve risk a 25 basis point

cut just isn't going to do much for

Tesla because they're already

advertising lower rates you're not going

to get more demand when Tesla or when um

the Federal Reserve Cuts rates 25 or 50

basis points you're going to get maybe

slightly higher margins for Tesla but

that doesn't create more sales and we

need to network effects of sales here so

it's not a surprise to me that you have

companies like Morgan Stanley cutting

Tesla now due to a quote continued

slowdown in the Auto industry intense

competition amongst electric vehicle

manufacturers and reduced consumer

preferences for electric vehicles and

this is where I'd like to just bring up

that I'm kind of concerned that Tesla

keeps trying to dangle this carrot in

front of our face that says hey but

don't worry we'll be able to license

full self-driving to other companies

honestly the fact that the Cyber truck

has been out for many months now and the

cyberu Cyber truck still does not have

full self-driving to me indicates that

no full self driving is not portable to

different types of vehicles

and that makes me very very sad now yes

maybe the Cyber truck is just a niche

product and so they're not prioritizing

it which also makes me sad because I

really want to love the cybertruck but

let's just be real if we can't even get

FSD for the Cyber truck what makes any

of us believe that we're actually going

to get full self-driving for some other

company be it a Ford or a GM or

otherwise especially when you have

people like Jim Farley saying hey whoa

whoa hey you know we can make a lot of

money in software so why don't we do our

own software yeah that's where the money

is okay so now the

more advances occur in artificial

intelligence-based chips like a

Blackwell when that eventually comes out

for NVIDIA I'm not too optimistic about

earnings but that's really a topic for a

different video when that eventually

comes out it becomes easier for people

to come up with their own artificial

intelligence technology maybe using the

Nvidia Orin Drive platform people can

basically make their own full

self-driving what you've really done is

you've narrowed Tesla's moat from maybe

a 5-year moat to a 2-year moat and

honestly the better chip technology gets

the more that moat compresses and

compresses and compresses so in the face

of valuation this High valuation going

into Q3 Q4 going into election and

recession fears I am more concerned for

Tesla than I ever have been before it's

also worth noting that I have previously

said that I thought that Tesla would be

recession resilient and I believe that

it would have been 2022 recession

resilient which is when you have white

collar workers who still have their jobs

and they're not losing their jobs and

they're not going BK because well

they're losing their jobs uh I think

people in 2022 would have had plenty of

excess cash and the white collar workers

would have had their jobs they would

have been able to continue to buy Teslas

and instead they would have been able to

do so in a recession at super low

interest rates and so you would have

driven up demand I was pretty optimistic

about that form of recession resilience

unfortunately this type of recession

that we might be facing is a lot nastier

the recession that we might be facing

right now is a recession that says oh no

what happens when all of a sudden white

collar workers are the ones losing their

jobs and they can't afford Teslas

anymore and then all of a sudden at the

same time you get consumer preferences

that change and you get an Elon that's a

little bit more Pro right leaning who

wants an ice vehicle and less left

leaning who wants an EV well now you're

aligning to the wrong demographic at the

same time as potentially the New York

Times and I know they lean left but just

put out a hit piece again on X

suggesting that advertising revenues are

down 86% and we might be facing elon's

selling pressure soon remember Elon

promised at the end of 2022 that he

wouldn't sell in 2023 and that he might

not sell in 2024 if things go well at X

well now it looks like advertising

hasn't recovered and instead X has

resorted to suing past advertisers for

boycotting X and I mean I hate to say it

but I pay for x premium th000 bucks a

month I it doesn't give me anything more

than a little Vandy yellow little check

mark nobody really cares about that

anyway it does just not like it makes

lick of a difference to what we're doing

but it's sort of my way of just saying

like hey I'm here to support you Elon

okay I love you man but uh like you know

when we ran ads at least what my team's

telling me the conversion wasn't as good

as what you could get on like a Google

or Facebook and I mean we rarely run ads

so you know consider it just an anecdote

take it for what it's worth you know but

uh these are just just things that are

at the top of my head these are just

things I'm thinking of uh so you know I

I personally am a fan of looking at the

1010 event as

really probably as well by the rumor

selda news we've seen those plenty of

times before and on top of that it's

worth KN that remember my biggest risk

for robotaxi is with Robo taxi you need

people to have to open up an app and say

I want the fastest ride available well

starting now in Phoenix you can actually

book your next Uber with wh because

they've partnered and UMO Uber I think

is now partnering with uh GM Cruz as

well which don't get me wrong I think

Tesla's way ahead of Cruz but I think wh

I mean they're on the streets driver

list so at bare minimum even though if

they're gofen they are a step further

than Tesla in that sense uh because we

still need a driver for those Edge case

scenarios but let's just sa for a moment

that we do have driverless Teslas we

need people to pull up an app be it the

Tesla or Uber or whatever and the Tesla

has to show up a Tesla has to show up if

a Tesla doesn't show up Tesla doesn't

win the way a Tesla shows up is you have

to have enough Teslas on the road or

they have to be integrated into an app

that people are used to like an Uber

oryt getting people to go to the Tesla

app and download another app make

another account is a barrier it's a

friction a pain of paying issue and then

if you open up the app and then all of a

sudden it's like oh okay you're going to

have to wait 20 minutes for a Tesla or

you can wait 2 minutes for a a regular

Uber yes enthusiasts will wait the 20

minutes because people love Tesla and

that's what enthusiasts do I would wait

for the Tesla but the vast majority of

normal people they just won't they're

just going to say you know what no

thanks I'll take the fastest vehicle so

that makes me also less enthused once

again about Tesla robotaxi and I'm not

trying to sound like a bear I'm just

trying to look at realistic limitations

that we have on a potential widespread

Robo taxi Advance weo by the way is now

starting to do rides in Santa Monica

again I understand Geo fenced it's not

as robust or potentially functional as

Tesla uh in in Dynamic scenarios you

still have people uh sitting and

intervening remotely into these vehicles

I get it but you're going to need that

probably with Tesla as well and don't

get me wrong the latest versions of FSD

they're great I love them and I'm a big

fan of FSD I just think we should drop

the price of FSD get more people buying

Teslas include some of these features

standard and let's expand the network

effects of Tesla you need ubiquity you

want everybody using Tesla and loving

Tesla this probably comes with a balance

of some more neutral political

commentary as

well but we'll put that aside for right

now so let's just be clear in 2022 Elon

Musk dumped between 25 to $40 billion of

Tesla stock and it really really hurt to

fund X that may happen again especially

with the pain that we're seeing over at

X now yes energy is a win is a win for

Tesla the energy division but

unfortunately I think the energy

business is already being priced in on

top of that if you haven't yet seen it

we had yet another VP leave Tesla this

is a person who's been with Tesla since

2013 and she just quit which is a little

surprising to me that somebody who's

been there for 11 years as a VP of

finance and business operator

just quit not ideal for Tesla I don't

like to see executive staff leaving

especially as we go into Q3 Q4 so for

those reasons unfortunately I cannot be

in Tesla at the moment would I consider

buying Tesla right before the election

or going into uh q1 of next year like

maybe at the end of January or right

before the election if there's a big

sale absolutely I love the company

longterm I love where the company is in

terms of positioning I do think there

are some execution issues that could be

cleaned up I'm not optimistic on the

robotaxi event and I do think our Tesla

mode on FSD is shrinking and that's why

I think we need to get as many people as

possible into Teslas and actually bring

the company back to vehicle growth and

energy growth because remember vehicle

growth will also contribute to energy

growth and that way you can get the

flywheels of both businesses moving yes

in the short term could reducing FSD to

let's say fre or $2,000 or whatever hurt

margins yes but I think it would drive

Tesla back to growth it was it it in my

opinion is one of the best uh driver

assistance Adas platforms that exists

everybody should use it it is

fantastic but I don't think it's being

marketed as uh that and unfortunately

for the failure to expand FSD and to to

attract demand to really promote this

demand at this company versus hurting

demand at the company with uh politics

or hurting the share price of the

company which demoralizes staff by

unfortunately selling it to fund X which

could happen

again I'm out that's on top of the fact

that the valuation is very high right

now in 90p and over 2.67 Peg it's too

high right now I think the downside is

at least 14 to 38% if not more if we go

into into a recession uh and uh yes

there was a moment where we had some

excellent volatility analysis we were

able to take advantage of but today

volatility is pretty much mid-range so

I'm not as enthusiastic about volatility

now obviously because that volatility

plays over it's happened now instead we

have the bad news of potentially Q3 Q4 a

Fed that walks us into a recession and

an election coming up so I'm not looking

forward to it uh and I feel really sad

because I really like Tesla but it's

just the way way it is anyway thanks so

much for

watching that's all I got I just wish

you the best out there goodbye good luck

and uh i' with the exception of like one

retirement account I have reduced my

exposure to Tesla to like zero uh and

I'm not sure I just have very very

little exposure to Tesla right now

advertise these things that you told us

here I feel like nobody else knows about

this we'll we'll try a little

advertising and see how it goes

congratulations man you have done so

much people love you people look up to

you Kevin PA there financial analy and

YouTuber meet Kevin always great to get

your

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