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Tesla, cybertruck and reality

 I rode a cybertruck a year ago, while in Los Angeles.   It was fine, as far as it was, the road noise was a pain, and I thought that $120,000 was a bit much, but it was not my money.   A few things have emerged, first, the craze for electric vehicles has died down, I suspect that it's temporary, with Trump's stupid games there are stupid prizes and higher energy costs are a given.   Buying a Tesla 3 or Y when gasoline costs 8 dollars is easier to swallow.

The one killer for the Tesla cybertruck was how hard and expensive it was to repair.   According to everyone I spoke to (and I spoke to two people who own one) the time and cost are much higher than for regular vehicles.   So few places specialize in dealing with electric vehicles.

The impact of all this on Tesla has been epic from $450 a share to $350 in less than 45 days.   However, year on year the stock is still up nearly 75%, so stories of the demise of Tesla are greatly exaggerated.  Not only that but 100% of the components in a Tesla are manufactured and assembled in the US, unlike Ford, and GM.

The truth is that Tesla is a very volatile stock, in the last 12 months price range has been $193/$436.  P/e had gone all the way down to 95 to 200 in the time.  Considering its "competitors" GM p/e is below 10.  and Ford is below 7.   

The reality is that Tesla remains the only US car manufacturer that is profitable.   Considering the trade war that Trump is engaging with Canada and Mexico, it's only going to get worse for GM and Ford (Stellanis aka Chrysler is out of the game).

As a fund manager, there is no way you can hold Ford or GM.   Their flow will be severely affected by the coming trade war.   US car prices which have already risen by more than 50% in four years, will go up by another 50% by the end of the decade.   That is baked in the cake.   

Tesla is hated by the MAGA gang yet it's the most American car manufacturer out there, and its 9% net profit margin is unassailable.  Tariffs will ensure that Tesla ]is probably the most attractive feature.



 

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