Tesla's bearish sentiment

The “Full Self-Driving” update was supposed to roll out to 1,000 more Tesla owners Friday, so of course that didn’t happen with Musk’s track record of promises and delays.
Tesla’s latest release of their full self-driving (FSD) 10.2 beta software has been both highly anticipated and highly scrutinized by owners, investors, and regulatory organizations such as the National Transportation Safety Board (NTSB). It’s maddening if you are a Tesla investor who mistakenly thinks this is a technology company, and not just another car manufacturer.
Of course if you are a bullish about the Tesla thesis, you don’t even honestly question this assumption. Tesla has delayed the rollout of its Full Self-Driving (FSD) Beta 10.2 software rollout because of last-minute concerns, CEO Elon Musk tweeted early Saturday. Yes, Elon, we also have safety concerns about your products. Not to mention Tesla is also a big target for short squeeze by many retail investors, especially the ones on Reddit.
Musk, who has 61 million Twitter followers, sadly has a history of promises that don’t follow real world timelines. He’s made so much money for billionaires most people don’t care how overvalued Tesla’s stock price actually is as it’s symbolic of the pivot to EVs that many countries and companies have now embraced.
Tesla has been testing the beta version of its FSD software for about a year, and despite the head of the National Transportation Safety Board expressing serious concerns about the software’s safety, the carmaker began expanding FSD access to more drivers last month.
The company has required owners who opt in to the FSD beta to sign non-disclosure agreements, and asked that they refrain from sharing video clips online of the system’s mistakes. This is very problematic for regulation of new technologies as many of the mistakes are quite serious.
This is also very deceptive marketing and costly upgrades and a subscription revenue stream that’s, in part, very fraudulent. To reiterate: the FSD software doesn’t make Teslas fully autonomous; Musk himself has said he thinks the “feature complete” version of the software will only be “likely” to drive someone from their home to work without human intervention and will still require supervision.
But real autonomous smart cars are a huge TAM. Subscription pricing for Basic Autopilot to Full Self-Driving capability is $199 per month and $99 per month for Enhanced Autopilot to Full Self-Driving, which is only available in select markets, according to the Tesla website. So this is a fake cash cow for a company that’s not exactly going to be the world leader for long.
Musk on Thursday said at an annual shareholder meeting that the company will move its headquarters from Palo Alto to Austin, Texas. Tesla already has a factory in Austin, and Musk’s SpaceX company is based there. Musk has begun living in Texas as well. But all that moves to Austin does not end well. time will show, for Tesla.
Safety officials from the NTSB have been skeptical about the planned timing of FSD’s release, previously stating that Musk and Tesla should first address identified safety deficiencies related to the FSD technology. After years of delays it appears the technology is not yet fully safe for drivers or pedestrians. This is in part because Tesla owners have been deceived as to how smart the solution actually is.
Tesla’s intrinsic value is likely only one third of current stock prices or far less than that. Elon Musk has hyped up his product but it’s not even safe for consumers yet. Before a Tesla driver gets access to FSD, however, the company determines their “safety score,” using criteria that evaluate “the likelihood that your driving could result in a future collision.” The score is tabulated using data collected by sensors in the driver’s Tesla. It doesn’t matter how good drivers are if they are overly confident about the Tesla product.
Can you see the ethical problem of this? The sad reality is that FSD has been undergoing development, test, and refinement for several years. Tesla owners opting into the program have agreed to both having their driving habits monitored as well as signing Tesla-issued non-disclosure agreements (NDAs). So if you think Tesla is the rock star of smart cars, you could actually die for your allegiance.
Cathy Wood made a small fortune pumping up the company and the stock, backed by a gang of billionaire whales. The Fed’s QE gave unlimited support to the fraud. Suffice to say when researching the fundamentals and competition, I am very bearish on Tesla’s stock.
Despite the name, FSD is not intended to fully replace driver responsibility and should not be viewed as a hands-off autopilot setting. The problem is Elon Musk’s tweets don’t represent the truth in reality. So owners are being easily led into paying more for an imperfect product.
To be eligible for FSD Beta drivers were graded on five factors: forward-collision warnings per 1,000 miles, hard braking, aggressive turning, unsafe following, and forced autopilot disengagement, according to Tesla’s “safety score” guide. Did you make the cut? Elon Musk’s grades sadly don’t factor in how imperfect the product really is.
Tesla’s stock to me is one of the most overvalued major equities today. Its uncertainty in China and with competition from traditional car manufacturers is being underestimated in my opinion so tread carefully if you own the stock.