Cracks In Tesla's Armor? Bearish Analyst Shares Value Investor's Take On Why Wall Street's 'More-Than-A-Car-Company' Thesis Is Flawed

Tesla's position as "more than a car company" is being challenged by analysts. Concerns include the departure of key members from Tesla's AI team, uncertain charging profits, eroding competitive edge, underwhelming Cybertruck prospects, and questions about Tesla's battery technology. These factors, along with competition from Chinese startups and market turbulence, could pose challenges for Tesla in the near to mid-term. Tesla's stock ended Thursday's session at a 10-month low.

As Wall Street raises concerns about Tesla Inc‘s (NASDAQ:TSLA) core automotive business, analysts are exploring other avenues for potential growth. A bearish analyst on Thursday argued against the notion of Tesla being “more than a car company.”

GLJ Research analyst Gordon Johnson shared a series of tweets outlining the views of Mark Spiegel, a value investor at Stanphyl Capital Partners. Spiegel argues against the “Tesla is more than a car company” thesis by highlighting several factors:

AI Team Departures: Three key members of Tesla’s AI team left in October 2023, raising questions about the company’s AI capabilities.
Uncertain Charging Profits: Profits from opening charging infrastructure to other car manufacturers may not be significant, as competitors are building their own networks. Spiegel argues that rivals adopting the open-sourced NACS protocol could cost Tesla more in lost car sales than any profits from charging. “Seeing as many people buy a $TSLA instead of a competing EV in order to access those chargers,…and seeing as all the competing charging networks will also adopt this protocol while paying $TSLA nothing ($TSLA open-sourced it), this will likely cost $TSLA far more in lost auto sale profits than the pennies per share it may gain from charging profits,” Speigel said, as per Johnson.
Competition Eroding Edge: Tesla’s advantage in terms of offered range is diminishing as competitors offer comparable or better features. Tesla ranked poorly in recent quality surveys, further highlighting competitive pressure.
Underwhelming Cybertruck: The Cybertruck is unlikely to be the growth engine the company had hoped for. By the time production ramps up meaningfully by late 2024, it will be in a “dogfight” with Ford's F-150 Lightning, GM's electric Silverado, the Dodge Ram REV and Rivian R1T.
Battery Hype: Speigel also countered the “Tesla hype story” around the “so-called proprietary battery tech.” Research suggests Tesla has nothing proprietary there and the company buys a majority of cells from Panasonic and LG. He said the 4680s Tesla is trying to make are a “manufacturing disaster” and even if the Musk-led company succeeds in making its own 4680 cells, other manufacturers can also make them and sell them to rival carmakers.

See Also: Everything You Need To Know About Tesla Stock

If Tesla were solely a car company, as Johnson and Speigel suggest, it could face challenges in the near to mid-term. The auto market, especially the EV segment, is experiencing turbulence due to slowing adoption caused by cost concerns and range limitations.

Tesla also faces competition from aggressive Chinese startups like BYD, offering a wider range of EVs at competitive prices. Tesla’s potential sub-$30,000 car is not expected before late 2025 or early 2026.

Tesla ended Thursday’s session down 4.10% at $162.50, marking a 10-month low, according to Benzinga Pro data

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