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Tesla: Global EV Adoption Underway, Buy

Nov. 01, 2022 3:27 AM ETTesla, Inc. (TSLA) Stock168 Comments


  • We are bullish on Tesla, despite revenue coming in below consensus.
  • While much noise exists around Tesla’s CEO, Elon Musk, we don’t believe this should overshadow the fact that Tesla is best positioned to take advantage of global EV adoption.
  • We expect Tesla to continue growing its automotive revenues as it ramps production and benefits from the increasing ASP.
  • Tesla stock has not been spared from the market downturn. The company is down 37% YTD, mainly on account of supply-chain issues with Shanghai, global chip shortage, and inflationary pressures.
  • While near-term concerns persist, we’re optimistic about Tesla as an EV leader. We expect it to benefit from increased gas prices and potential government regulations that could drive EV adoption.

Tesla Gigafactory 3, Shanghai


We are buy-rated on Tesla, Inc. (NASDAQ:TSLA). Our bullish sentiment is based on our belief that Tesla is the best-positioned automaker to take advantage of the global Electric Vehicle (EV) adoption. Tesla is the world's largest automaker by market value, with a

This article was written by

Tech Stock Pros profile picture

Tech Stock Pros is a team of three former technology sector engineers with a long history of investing in the tech sector.

They run Tech Contrarians, an investing group providing institutional-level company research to individual investors. Utilizing a live portfolio with quarterly updates, bi-weekly newsletters, and answering questions daily via chat, Tech Stock Pros aims to demystify investing in the technology sector. Learn more.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (168)


Tesla opened its German factory in March 2022, which should have caused a huge increase in European sales and market share for Q2.

Instead, Tesla’s European sales and market share fell by half in Q2, as if Tesla had closed its sole European factory.
Tesla’s European EV market share was 20% in 2019 but has since fallen. In Q2, it fell below 5%.

Counting only BEV (excluding PHEVs), Tesla’s European market share fell from 18% in Q1 2022 to 8% in Q2 2022.

@YO long-short When Tesla opened up it's china factory, sales temporarily slowed as the first cars came out of teh factory, and then as soon as it started pumping out Model 3's, Chinese sales went up 4x. It takes a little time to ramp up, and locals are willing to wait for the local car. This is expected behavior and no reason for a sad trombone. In fact, I see upside.
@YO long-short who cares about ev share? Tesla best selling in U.K. in September. www.autocar.co.uk/...
somedata1 profile picture

China factory seems to ramp up a lot faster than German and American factories. I've no idea why such a disappointment for Austin and Berlin factories. The slowness in Germany and Austin is not acceptable. Maybe Elon Musk should be thinking more about the Tesla business rather than Twitter???
somedata1 profile picture
Folks we are still in a bear market. Any rebound is an opportunity to sell or short. Inflation is sticky and what choices does the Fed has. Either way we are heading into a recession. Long term chart looks very unsettling.
EV_supporter profile picture
Anyone who wants to value Tesla properly should at least look into year 2027, preferably 2032.

Focusing on the next year will miss the long term potential. This is the reason why Elon can see Tesla's market cap growing larger than 4.4 Trillion dollars, yet many people don't have any clue.
@EV_supporter Tesla will not be in business in 2032 - enjoy the ride down.
Tech Stock Pros profile picture
@julianbook LOOOL. Why do you think so?
@EV_supporter I will look at 2027 in 2026. I only trade 6-18 months out. I have no idea what the market and world will be even in 2024---In 2023 I see a small worldwide recession and Fed rates at 5%. What do you see in 2027?
Sam DNA profile picture
Then you should be even more bullish on
beautiful coal. Without coal EVs would
be missing one of the main ingredients that
provide the electricity to allow Teslas, etc, to
be called "EVS".
Should be much more bullish.
Coal is the fuel for everything "E".
Peabody ENERGY has enough coal to fuel
the "E" stuff for 100 years. COAL: the
other lithium.
@Sam DNA Should solve global warming.
@Sam DNA

US coal use peaked in 2007 and has nosedived since (in spite of an uptick in 2021). More US coal plants are expected to close this year and coming years.

2022 Energy production - (EIA)
Gigawatts Retiring Coal - 12.6

Gigawatts Coming online solar - 21.5
Gigawatts Coming online wind - 7.6
Gigawatts Coming online battery storage - 5.1
Gigawatts Coming online natural gas - 9.1, retiring 1.2
Gigawatts Coming online nuclear - 1.1, retiring 0.8
Just took a Tesla 3 Uber.
What's with the large ipad sticking out from the dash?
Interior designs matter - Long GM and volkswagon
@Colorado Oilman While it might not be for your generation, those spartan interiors actually got voted in the top 3. I guess the younger generation doesnt like plastic buttons.
The simplest reason Tesla will sell more, vehicles and products and software than others is that their standards and objectives are superior.
Why did Toyota outsell American automakers? Because they made their cars just a bit better than U.S. cars.
Tesla's autos are significantly better despite any complaints. They have less complaints than BYD (that some so admire, including E. Musk).
I drive M3, four yrs. and less than $400.00 of maintenance.
The planned obsolescence mentality, standard in most current manufacturing not just autos, is a burden so prevalent in executive decisions that Tesla's products will be the better VALUE for years. Decades?
The support for this argument can be seen if you CHOOSE to look objectively.
The percent of customer satisfaction tells the story. Why are so many owners so happy to talk about their car, no advertising needed? Why such a small percentage of complaints? Also what are those complaints today?
The confederacy of dunces and haters are no better than the blind followers (of E. Musk) that are dreaming or can not see the mistakes made.
Make a list of achievements and blunders. Invest... or not.
I started supporting TSLA in 2016, it just keeps gettin' better!
Cybertruck will be under $45K---LIE
Cybertruck will be here in 2019 2020 2021 2022 early 2023 and today LATE 2023...LOL@BAGHOLDERS
@YO long-short while we make our lists and lol about Tesla bag holders add the poor bag holders only saw a 1000% return.

We are all very disappointed it’s not more so you can rejoice in our meager rewards:|
@EV_Tom in 2022 you have gotten about a 40% DOWNTURN ---I started my large short this year---you are talking about the PAST
@YO long-short you been peaking in my transactions or just guessing I have diamond hands or some meme hodl. Don’t worry about me. I’m doing great.
TESLA margins are shrinking---

The price cuts also follows Tesla Chief Executive Elon Musk's comment last week that "a recession of sorts" was under way in China and Europe, and Tesla said it would miss its vehicle delivery target this year.
Are you super-excited that MARGINS are shrinking QoQ? How about the BIG price cuts in Asia and Europe in which the strong $$ will also shrink margins even IF TSLA wont put it inb their earnings call and reports...weird huh?
dmce profile picture
@YO long-short - Stock spreading misinformation. There have been no Tesla price cuts in Europe. The only price cut in Asia was in China. The earnings report called out a $250M foreign exchange impact on profits.

Here's a link to the Q3 Shareholder Deck on the Tesla IR site. You should read it and get educated about Tesla.
@dmce ---Stop lying--

Prices have been reduced for the Tesla Model 3 in several European countries. The largest price reduction has been given in France, where the Standard Range+ variant dropped by 6,190 euros from 49,990 euros to 43,800 euros.

----PRICE CUTS in EUROPE and CHINA because of SOFT demand
@YO long-short I'd like to believe you and look into this, but your credibility has kinda been shot.
Djreef1966 profile picture
Way, too soon. We’re still in the second inning here.
TOO BAD that BYD is eating their lunch in China and now competition is winning in Europe. TSLA has had to LOWER prices and SQUEEZE their Q4 profit margins to try and ramp up demand...This happened to Peloton in 2021
Author has obviously never been in a Tesla, driven a Tesla or toured a Tesla factory. TINA
I read somewhere that EV penetration peaked at 28% a century ago, but it's not going to get that far. Teslas probably will be recalled due to phantom braking and other things that meke them unsafe at any speed.
@Tech Stock Pros

Is it possible Asp may go down as costs of scaling Berlin and Austin improve operating margins? Cost reductions from scaling 4680 in USA combined with Ira may also be favorable to hold or reduce prices?

Energy seems poised to breakout now and be a good contributor to the 2023 growth story.
@EV_Tom -TOO bad that 4680 has problems...And price cuts in Europe and Asia means lower smaller profit margins...
dmce profile picture
@YO long-short - For the record, there have been no Tesla price cuts in Europe. And the only Tesla price cut in Asia was in China, not in any other Asian country.
@dmce WANNA BET? Prices have been reduced for the Tesla Model 3 in several European countries. The largest price reduction has been given in France, where the Standard Range+ variant dropped by 6,190 euros from 49,990 euros to 43,800 euros.

I LOVE IT when the people opposite my stock dont know basic facts
NaturalBornSceptic profile picture
Tesla remains ridiculously over valued by traditional growth metrics, yes even for a growth company, its failure to dominant is well illustrated by the author. Tesla remains priced for global domination in the car industry, which it clearly is never going to do.
DrWhy profile picture
You're not looking at Tesla clearly enough.
You're not looking at Tesla clearly at all.
NaturalBornSceptic profile picture
@DrWhy Been looking at Tesla for over a decade thanks.

Please play something other than the usual tech or energy violin. Tesla still does not sell any tech to business, unlike for example NVidia, Intel, Infineon, etc.

The fictional hype around Tesla remains strong, but is waning. I see the Musk adoration continues. ONly Musk could pull 50 top staff from Tesla, a publicly owned company of which he stewards, to work on his own private company and lemming shareholders not mutter a word.
DrWhy profile picture
"The fictional hype around Tesla remains strong"
What fictional hype?
That's what I mean, you don't look at Tesla clearly. And apparently haven't for over a decade.
captainccs profile picture
@Tech Stock Pros "The company is down 37% YTD, mainly on account of supply-chain issues with Shanghai, global chip shortage, and inflationary pressures."

No, the stock is down in sync with the market. BTW, $TSLA is up 15% from the 52 week low ($198.59), up 17% pre market.
NaturalBornSceptic profile picture
@captainccs no, the stock is down because Tesla investors gave truck loads of capital to Elon Musk who then leveraged it up to buy Twitter and now has to sell down even more Tesla shares....
01 Nov. 2022
Tesla stock.
1. Believers. Stock will go +300.
2. Non-believerd. Stock will go far -150.
Both have arguments.
I believe them selling all they can produce is very positive.
Cybertruck should start in Q2 2023. Please, not later.
Semi will boost stock in december.

They really need a "small" car for Europe, Japan and many other countries in the world. Tesla's are US-size. The rest of the world drives smaller cars.
Maybe for new factory in Mexico.
@Josco Besides the fact the cybertruck looks like a trashcan on wheels with bulletproof windows that can't stop a baseball, it'll probably sell really well.
DrWhy profile picture
Tesla is on the road to becoming the most valuable company in the world.
And for good measure, Elon the first trillionaire.
Managing profile picture
@DrWhy As a shareholder DrWhy, on a scale of 1 to 10, how appropriate do you feel it is to use TSLA engineers as data monkeys working for TWTR?

And, do you feel it is in the best interests of TSLA for Musk to be posting obviously malicious lies about Speaker Pelosi's husband on his new toy?
somedata1 profile picture

This is a major conflict of interest.
DrWhy profile picture
"how appropriate do you feel it is to use TSLA engineers as data monkeys working for TWTR?"
How appropriate it is, is very little.
It's the same amount that I care.

"do you feel it is in the best interests of TSLA for Musk to be posting obviously malicious lies about Speaker Pelosi's husband on his new toy?"
The fact is, I sometimes wish that Elon would just shut up.
But, in this case, all he said was, "There may be a small chance that there might be something else to it." He then quickly deleted it.
Hardly an Alex Jones moment.

Why don't you look at the great things that Elon has done for the world, instead of throwing hissy fits over things that amount to nothing?
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