Elon may have “skewered” the BBC journalist, James Clayton, the other day in his Twitter interview.


But Tesla shareholders look likely to get “skewered” today judging by the -8% pre-market move


Well unlike James who struggled to provide “one example” to back up his point

How many reasons do you want?

Revenue increased 24% but
COGS increased by 42%
Operating income fell 26%
And GAAP EPS fell 24%
Free Cash flow of $0.4bn is the lowest in 8 quarters
As inventory more than doubled over the past year

Now with that much inventory sloshing around, my bet is that the answer to the riddle in their sentence,

“We expect that our product pricing will continue to evolve, upwards or downwards depending on a number of factors”

is, “downwards”

Much like the share price, and

The NAV of anyone holding the company including the largest Passive funds in the world which all have big positions here, and

The reputation of the 26 broker analysts who still rate this company a Buy on 47 times historic earnings, and

The earnings estimates, and

Their Adjusted EBITDA margin – and you know you have a problem when not even Adjusting the EBITDA improves things…

In fact, the only things seemingly going up are:

Inventory, the number of shares in issue, and Tesla’s forward PE..

But don’t worry, because they continue to believe their,

“operating margin will remain among the highest in the industry”

Not “the highest”, just, “AMONG the highest”

So how does their 15% average operating margin over TTM compare to:
Mercedes’ 12.6%
BMW’s 10%
VW’s 8%
Toyota’s 7%
Ford’s 4%

Maybe “AMONG” means 10%?

Meaning operating income at flat revenue could fall by ~32%

Or even if they grow revenue,

growing earnings looks unlikely


You see the problem with “blue sky” investing, is that if earnings fall and
the PE on those lower earnings also fall,

the “blue sky” does actually fall on your head

turning your portfolio, “blood red”

Now you could cling to their “we continue to make progress on our next generation platform” comment

But getting a positive return on the share from here looks to me like it may take until YOUR next generation

Unless of course, the Cybertruck launch drives over you first