Tesla "Bitcoinization"! When you control the super narrative, who still cares about the fundamentals?

For a long time, Tesla's absurdly high valuation has been criticized by the capital markets. However, as the stock price rises to a level that leaves short sellers "desperate," the market has gradually abandoned pricing it based on fundamentals.

Barclays senior analyst Dan Levy released a latest research report on January 30, pointing out that although Tesla's performance in the fourth quarter of 2024 did not meet expectations, its grand blueprint in the fields of autonomous driving and artificial intelligence, along with its strong narrative ability, has made the market relatively tolerant of its poor short-term performance.

Levy noted that this phenomenon inevitably brings to mind Bitcoin; Tesla seems to be gradually moving towards "Bitcoinization," with its stock price becoming less correlated with fundamentals and more influenced by market sentiment and narrative.

Super Narrative Ability and 120 Times Price-to-Earnings Ratio

Tesla's performance in the fourth quarter of 2024 was not satisfactory. The report indicated that Tesla's automotive gross margin fell to its lowest level in seven years, far below market expectations. However, despite the poor performance, Tesla's stock price was not significantly affected. Barclays believes that this is mainly because Tesla's grand blueprint in the fields of autonomous driving and artificial intelligence has attracted widespread market attention, making investors relatively tolerant of its short-term performance fluctuations.

Barclays mentioned in the report, “Tesla's stock currently has a price-to-earnings ratio of 120 times, indicating investors' high expectations for its future growth.” This phenomenon suggests that Tesla's stock price largely depends on the influence of its founder Elon Musk and the company's narrative ability. Tesla currently resembles a "meme stock," with its stock price driven by various technical factors (such as options, quantitative trading, and momentum investing), showing similarities to Bitcoin's market performance.

Narrative 1: Robotaxi

Tesla's progress in the field of autonomous driving is one of the key focuses of the Barclays report. The report pointed out that Tesla plans to launch its autonomous Robotaxi service in Austin in June 2025 and aims to roll out its unsupervised FSD technology to multiple U.S. cities by the end of the year. This plan demonstrates Tesla's rapid advancement in the field of autonomous driving but also raises market concerns about its technological feasibility and regulatory challenges.

Barclays analyst Dan Levy stated, “Tesla's Robotaxi pilot project will use Tesla-owned vehicles to provide Uber-like autonomous driving services.” The successful implementation of this project will bring new revenue sources to Tesla and further consolidate its leading position in the field of autonomous driving. However, he also warned investors that the application of Tesla's unsupervised FSD technology in consumer vehicles may face more challenges, especially in regions with stricter regulatory environments.

In addition, Tesla plans to launch the "Model 2.5," a more affordable model, in 2025 to further expand its market share. Levy believes that this move will help Tesla maintain its advantage in the highly competitive electric vehicle market, but it may also put some pressure on its profit margins

Narrative 2: Optimus Robot

In addition to the autonomous driving sector, Tesla's Optimus robot project is also an important component of its future growth. The report indicates that Tesla plans to produce thousands of Optimus robots by 2025 and deploy them in Tesla factories to perform "tedious, dangerous, and repetitive" tasks. The successful implementation of this project will bring new revenue growth points for Tesla and further enhance its competitiveness in the field of artificial intelligence.

Barclays analyst Dan Levy stated, "The long-term potential of Optimus is enormous, but its commercialization path still has uncertainties." Although the production plan for Optimus has entered its first phase, large-scale production and market promotion still face many challenges. Tesla plans to launch the Optimus V2 version in 2026 and gradually expand its production scale. Levy expects that the ultimate goal for Optimus is to achieve a production volume of 100,000 units per month and promote it globally.

Grand Blueprint Brings Growth Potential

Barclays believes that Tesla's stock price largely depends on the influence of its founder Elon Musk and the company's narrative capabilities.

Tesla's market performance has similarities with Bitcoin. This phenomenon of "Bitcoinization" has gradually weakened the correlation between Tesla's stock price and its fundamentals, making it more influenced by market sentiment and narrative.

Levy stated, "When Tesla provides you with a super narrative, who cares about predictions?" This narrative capability makes the market relatively tolerant of Tesla's short-term performance fluctuations. Although Tesla's performance in the fourth quarter of 2024 was poor, its grand blueprint in the fields of autonomous driving and artificial intelligence has attracted widespread attention from the market, instilling confidence in investors about its future.

Levy stated, "Tesla's future plans are ambitious, but its technological breakthroughs and commercialization applications still face many uncertainties." Investors need to closely monitor Tesla's progress in autonomous driving and artificial intelligence, as well as its performance in market competition. Although Tesla's stock price is currently disconnected from its fundamentals, its strong narrative capability and technological innovation ability give it significant growth potential in the future.

Barclays believes that Tesla's continuous innovation and market leadership will allow it to maintain a competitive advantage in the future. Despite facing numerous challenges, Tesla's leading position in the electric vehicle and autonomous driving sectors equips it with the ability to respond to market changes. Investors should cautiously assess Tesla's short-term fluctuations and long-term potential to make informed investment decisions