Tesla's Complete Disaster | Why $TSLA Stock CRASHED.

oh man have the fundamentals of Tesla

changed after all Tesla down over 8.6

percent while the NASDAQ 100 up 2.27

leading a lot of folks especially retail

traders who were a big support for Tesla

stock like physically they underlie a

lot of the volume for Tesla stock

helping prop up Tesla prices and until

recently helping Tesla actually

outperform the NASDAQ 100 index year to

date well folks that has all shifted and

there are three major reasons why this

has occurred now none of my three

reasons are likely things in my opinion

at least that you've heard of before at

least not with my perspective see by now

you already know that a Tesla deliveries

missed consensus Expectations by about

five percent but that's not actually my

first reason in terms of why Tesla fell

it has to do with something different an

expectation that I think the market has

for Tesla that could be entirely wrong

let's see if that's true because if it

is it could create an opportunity for

Tesla and towards the end I'll talk

about was this a by the dip opportunity

or is this time to just sell forget the

fomo that is Tesla and move on well

first in order to understand issue

number one that I believe the market is

seeing we have to understand that

there's a ratio that Tesla has known as

delivereds to produced it's very simple

just go to Q3 2021 for example divide

240 000 delivered units divided by how

many units were produced that means you

delivered 240 000 Vehicles which is

actually more than you made of 238 000

units and you have a delivered to

produced ratio of 100.8 percent when the

number's over 100 it means you're

actually delivering more Vehicles than

you've produced in Q4 2021 that ratio

was 101 again you delivered more

Vehicles than you produced it actually

shows that uh manufacturing is behind

how many vehicles you're selling in q1

2022 we read

101.5 notice how in those three quarters

the numbers actually going up we are

delivering more Vehicles than we're

producing and production is actually

falling behind the deliveries that

signals at least to the markets not just

supply chain constraints but it also

signals potentially and well certainly a

lot of excess Demand right and this is

where it gets interesting watch this

when we go to Q2 we notice that we

produced 258

000 units which was obviously low

because of the Shanghai shutdowns but we

still produced more Vehicles 200 well

more we produce more Vehicles than we

delivered and that was actually a

reversal see in the quarter of the

Shanghai shutdowns we produced 258

000 Vehicles 500 plus 580 and we

delivered 254 695 that means we actually

produced more Vehicles than we delivered

in a month or in a quarter where

Shanghai was almost completely shut down

that's interesting now when we do the

ratio instead of being over a hundred

percent we're actually at 98.5

delivered to produced

now go to Q3 the numbers that just came

out we produced way more Vehicles than

we delivered we produced 365 923

vehicles and delivered only 343 like the

studio that makes Halo 343 830

000 vehicles

now what's interesting about that is

well 343 830 let me clarify my numbers

there sitting at the airport sometimes

the numbers just jarble together but

anyway what's interesting about that is

not only does the production represent a

53 growth weight rate in Q3 2022 to Q3

2021.

but it shows a substantial mismatch

between the number of vehicles that were

actually able to deliver and produce in

fact we only delivered 94 of what we

produced

this is a complete reversal from what

has consistently been a problem at Tesla

and the problem a Tesla has always been

that we're not able to produce enough

Vehicles compared to what we can deliver

now however markets just by looking at

this data I believe are concerned that

the excess demand for Tesla is over that

the delivery backlog is not just falling

that it's gone that now

Tesla is no longer a product that we

actually think can sell millions of

units per year sure maybe we can get to

a 1.5 million annual run rate of

vehicles but it's certainly not going to

be three four five six 10 million

vehicles and it's time to dump Tesla

stock

see the greatest fear for Wall Street

when it comes to Tesla is that not that

Tesla will produce the vehicles but that

nobody's going to be around to buy them

that's the concern especially in what's

likely a global recession

and these numbers this ratio

flip-flopping from last year being over

a hundred to now just 94 of of produced

Vehicles being delivered is a potential

red flag to markets now Tesla argues

that this is because of what they call a

logistic Nightmare and In fairness

they've produced more Vehicles than they

ever have before they produced again at

a 53 growth rate so maybe that makes

sense think about it you want to call up

a a company to deliver your Tesla from

manufacturing facility to distribution

facility and you're like hey I got

another 10 Teslas and they're like dude

we're already doing like 50 more Teslas

than you had for us last year at this

time we don't have as many trucks if you

want to pay us like double time to drive

your cars around sure we'll deliver all

of them but we're going to increase your

costs twofold for deliveries and Tesla

might look at that and go oh that

actually will cause even larger issues

to our numbers because that'll compress

our margin if we have to pay another say

thousand or fifteen hundred bucks just

to deliver these vehicles in this

quarter

or we just wait a week and still get the

same profit we would have otherwise it

just means we have a more disappointing

Q3 then we protect our margins so this

is actually a case in my opinion of

Tesla actually doing what is actually

good for shareholders which is reducing

cost and preserving margin

while at the same time unfortunately

disappointing Wall Street see even Elon

Musk went to Twitter yesterday and said

his job is not to pump the stock so that

leads to Temporary pain and a lot of

temporary selling at a time when there's

not a lot of extra cash and liquidity

around to be buying the dip in fact

retail buy orders have been trending

down over the last two months we used to

buy the dip at a rate of 1.1 to 1.3

billion dollars per day in in the market

in terms of retail Traders and and now

we're under a billion dollars a day in

buying the dip it's because the money's

running out and so we got less money to

to prop up Tesla stock so to speak but

this now is an argument that Wall Street

and Tesla are going to have and it's one

that only time will prove and it will

demand patience if you're a Tesla bull

you're going to say look there's plenty

of demand for Teslas we know that like

Tesla's doing the right thing here

they're preserving their margins

especially at a time they're probably

going to get whacked by currency

exchange uh fees I think that in Q3

we're going to probably see somewhere

around a billion dollar write down in

losses simply for currency exchanges

which is which is terrible but well

that's really problem number two we'll

get to that in just a moment uh and so

Tesla's decided you know what the last

thing we need is is more of an impact to

our margin because that's going to lead

to even more doubt for the company being

able to go forward and actually produce

vehicles at scale that'll actually

create more damage in the long term than

just shifting some of these deliveries

from a Q3 to Q4 basically

so regarding problem number one here's

my belief

according to at least what we can see on

Twitter and in financial news whether

it's Bloomberg or or you know Wall

Street expectations we believe that

Tesla still has an order backlog around

the world of somewhere around 300 000

Vehicles so we don't have a lack of

demand issue

and this is obviously evidenced or

hopefully evidenced by the fact that we

still have lead times for vehicles that

Rise Above and Beyond uh just supply

chain constraints or battery constraints

so I actually don't believe we have a

demand issue if Tesla actually has a

demand issue then it should rightfully

be down eight and a half percent in fact

it probably should be down more because

if Tesla's demand evaporates the stock

is screwed you do not want to be

anywhere near the stock

and remember the last time I confidently

said something like that was when a firm

was like 65 and I'm like you don't hold

this stock going into a recession

only some people listen to me but

whatever

um so problem number two is the currency

issue I don't want to just gloss over

that I want to make that very clear look

right now only 55 of Teslas are actually

sold within the United States based on

the Q2 report

we need that number to go up because you

do not have a U.S a strong U.S dollar

issue if more vehicles are sold in the

United States in fact it actually helps

you the strong dollar helps us if more

of the vehicles are sold in the United

States however if more vehicles are sold

in Europe or in Great Britain with a

weak pound or a weak Euro or or in China

with with a week you on uh even though

the Chinese are pulling back you know we

know that but even in other areas of

Asia their currencies are weakening

compared to the dollar then we end up

having to take an impairment for

currency a foreign exchange impairments

uh basically you know you sell a vehicle

for you know what should be forty five

thousand dollars in uh Chinese yen let's

say but by the time you convert it to

Dollars you're only left with 40 000

because the currency moved that much in

a quarter right that can happen that has

happened just look at Great Britain it's

a disaster look at the Euro it's a

disaster

so I think that's going to lead to a big

one billion dollar write down uh that's

gonna be temporary though we can work

that out of margin and see that

manufacturing is still scaling margin we

can make projections based on that which

I expect to be quite bullish

the third problem is AI day okay AI day

was was for the stock a disaster the

robot looked like an idiot

it was very hated on Twitter it was

compared to a robot that took millions

of dollars to develop from uh Honda uh

that that took 20 years to develop it

was compared to Boston Dynamics who

spent two decades uh manufacturing a

robot not at scale not with a brain but

a programmed robot

and what we got was a robot that looked

like it couldn't walk the new version

couldn't walk the new version looked

like it shot itself and quite frankly it

was a disaster now I covered all of my

thoughts on AI day in my Aid video

because what I actually saw was not a

disaster I saw a six-month prototype

with a brain and one that could be

produced at scale one that actually

makes me incredibly bullish and I don't

even have the Tesla bot in my valuation

that's just extra cream pie baby

or extra icing on the cake I I don't

know one of those anyway

the other thing is I was in full self

driving this weekend and finally I could

say this thing's actually driving a

little bit more like a human it doesn't

sit for 10 minutes at a red light on a

right turn lane waiting to turn right it

actually goes it moves it doesn't stop

at a stop sign when nobody's around I

mean it still stops at the stop sign but

what I mean like waiting forever it

actually like goes like a human in some

cases and it shouldn't do this but in

some cases it actually rolls the stop

sign which I actually think is quite

hilarious because it is driving like a

human and it's doing it in in a in a way

that a human would but it's actually

doing really well so I'm I personally

breaking apart these issues here

going backwards FSD massively bullish

more bullish than I've ever been and I

still don't have it myself I had to get

in somebody else's car thank you to the

person who let me drive with it or in it

AI Day Disaster for the stock phenomenal

for AI by the way did you notice their

labeling was just like the labeling that

we do for the house hack AI I got a lot

of hate for the househack AI for the

vision AI that we use for determining

wedge Deals they had the same radial

buttons that same old look it was great

it was such an honor I'm like damn

Tesla's labeling Vision just like

Kevin's labeling Vision I mean then they

also do Vision Video labeling which is

much more impressive I mean but that you

don't need to video label real estate

it's pretty static

um again going backwards the currency

issue will be a temporary hit that will

hurt us temporarily that'll hurt EPS

temporarily which means Tesla will look

more Rich valuation will rise

temporarily uh and honestly the the

delivery issues I I side with Tesla on

this I don't want them to spend more

money squeezing these into the last

minute uh you know delivery process save

the money on the deliveries take a

little longer to deliver them take your

time but I'm actually really impressed

by the production because I know the

demand is there the demand is there so

I'm not worried about the deliveries

even though that ratio is flipped that's

a Wall Street problem

but a 53 growth rate on production

holy so what did I do I bought the

dip all right I bought the dip I got

somewhere around 27k shares pre-split

still haven't divided it I don't know

what would that be let's just do it in

my head right now

that would be 81 000

25 times 3 is 75 3 times 2 is 6. yeah

like 81 000 shares-ish something like

that I don't know I need to actually

update it and do the math but anyway I

bought the dip today

and if we look at the valuation now it's

actually improved

so last time we did my spreadsheet if

you held Tesla for five years I believed

that we would get to a Target into the

500s it was like 580 or something like

that you'd have a compounded annual

return of like 19 well now because of

the sell-off if you held Tesla today for

five years in my opinion the compounded

annual return for Tesla would be closer

to 23 because you're getting it at a

lower price

my thoughts if you haven't heard this

stuff before let me know in the comments

down below I actually want to make sure

I continue to provide value that's

unique and I just I I don't want to just

rehash the garbage that other people say

or or tell you to go buy index funds or

you know something boring anyway thank

you bye