Discussing the merits of $Tesla(TSLA.US) today in June 2025 on X is deja vu what we experienced in Feb 2021 when we last exited the stock. Back then, the TSLA faithful also attacked us personally for exiting our position on largely valuation grounds. Six months later we were able to buy back our TSLA position -30% lower. At 174x FY’25 adj earnings $Tesla(TSLA.US) again seems overvalued to us. We expect TSLA 2Q volumes to be down -14% YoY — worse than the -13% YoY decline in 1Q — and FY’25 adj eps estimates (already -42% YTD) to decline further.
Given the overly scripted manner in which the Austin robotaxi launch was structured — 10-20 vehicles, small geofenced footprint, 1 safety driver per vehicle, 14 hand-selected passengers well-known for their bullish posts on X — it’s clear why $Tesla(TSLA.US) has been weak since the robotaxi event (TSLA +1.4%, NDX +3.4%) and remains way below Nasdaq YTD (TSLA -19%, NDX +6%). We continue to post on $Tesla(TSLA.US) because many of our followers ask us daily what might be a good re-entry point. We would venture a TSLA re-entry price in the $250 range (-30% from our $358 exit) after the new more affordable TSLA is announced and turns out to be a lower cost model Y or model 3 and not a new form factor. If the 2023-2024 price-cutting experience repeats, a lower-priced, lower cost model won’t expand TSLA TAM or generate incremental volume since it will merely cannibalize the higher priced trims. On the other hand, a new TSLA form factor (e.g. hatchback, lower-priced traditional pickup) that attracts new customer segments to the brand would likely be accretive to volumes.
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