Well no one should be too surprised with the deliveries result as that trend was portended in Troy's data.
What's interesting to me is pretzel logic to try to avoid admitting demand has been hurt. Not
why, just that is has.
Outside of list prices being cut heavily vs Q1 of last year while interest rates were not that different, we also have knowledge of the used car trends.
Yes, I'm going to bring up used car trends again. The average price of a used Model 3 and Model Y have dropped over $6000 in the past 5 months! There's no way that's not related to demand for new Tesla vehicles. If you drop the price of a lightly used 2023 Model 3 by $5000, less people are gonna pay a higher premium for a new one.
So no, it's not a surprise that we saw this trend in the data and then it would show up in less people wanting to buy new Teslas in Q1 unless prices were cut even further.
On the bright side, it seems the drop in prices is starting to slow down. Some of that is seasonality as you can see the CarGuru index turning up.
The main problem isn't one quarter of bad deliveries, it's about what will the market reasonably estimate will be growth in deliveries and operating margins over the next few years? I recently forecast $5 in 2025, but even that had some optimism built in. Operating margins might be in the 7% range for Q1. Getting them back to 10% would be a huge achievement, but at the same time not super high.
As for deliveries, now Tesla isn't likely to hit 2 million this year. 2025 might now be 2.2 to 2.3 million. With lower operating margins and deliveries than expected before, possible earnings are closer to $4.
5 million cars per year might take until 2028. We can't assume 20 million anymore. It's very clear any country that has tariff-free access to Chinese cars will receive a whole bunch of those and Tesla's margins will be competed down to (e.g. Tesla will NOT return to having big gross margins from Shanghai). Yes they may have better margins than competitors, but those competitiors will just go to breakeven).
5 million EVs at 10% operating margin will stil justify a higher share price than the current level. You can probably get $6 EPS from it. But it's gonna take 4 years or so to get there. With some discounting rate and PE of say 30-40, fair day current value of that pure automotive portion of the company is probably worth around $150.
The share price value above $150 in the next year can from (my guesses):
1) FSD (obviously)
2) Big margins and growth from Cybertruck
3) Big margins and growth from Energy (but hard to see this happening in next 12 months due to lag)
4) Unexpected news on next gen brought to production earlier than expected.