Would You Ever Drive A Tesla?

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Here’s the Scoop

Tesla’s recent underwhelming performance has raised a few eyebrows, including those of Per Lekander, a hedge fund manager who’s been shorting Musk’s electric car company since 2020.

According to Lekander, this could well be the “beginning of the end of the Tesla bubble,” citing the company’s disappointing first quarter vehicle deliveries as a significant indication. He even went as far as to say that Tesla could potentially go bust!

Lekander has a history of making accurate predictions, having successfully called a 2018 rally in carbon prices. His firm, Clean Energy Transition, has been shorting Tesla’s stock, meaning they stand to profit if Tesla’s shares fall. And fall they have, closing at $166.63 recently from $233.94 in March 2021.

Lekander has taken his bearish stance a step further, predicting that Tesla’s stock could plunge to a mere $14 per share. His argument: Tesla is essentially a “no growth” stock, and it should be valued on 10 times forward earnings, significantly less than the current 58 times forward earnings.

Tesla’s business model, which is highly dependent on strong revenue growth, vertical integration, and direct-to-consumer sales, is brilliant when the company grows. But when sales fall, this model goes into reverse, according to Lekander. He asserts that Tesla’s first quarter problems were more about demand than supply chain disruption, indicating a more fundamental problem with the business.

While there are still those bullish on Tesla, we can’t ignore the chorus of negative voices that have emerged, especially after their disappointing delivery numbers. As the reality of delivering on electric vehicle propositions becomes more apparent, it seems the road ahead for Tesla may be bumpier than anticipated.

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