What does this mean? ELI5 pls
My understanding is that very likely—whatever green energy technologies win out—energy storage and load shifting will be a major issue.
The entities that can build energy and power storage effectively and at scale will have a new and large market opening before them.
Tesla is in a decent position—by being near the front-edge of battery production and scaling there's real room for Tesla to be a major player in the world energy market.
One (extreme) way of looking at it, is that it's a company that's enabling climate change, at a tiny scale (as they aren't really that big).
Regulatory credits, that are driving their profitability, is selling other car manufactures ability to produce gas-guzzling vehicles.
For Norway, in 2020, for all car sales, Model 3 is in the 6th place, and with 1-4th place occupied by BEV from "legacy" car companies [1]. Model S/X sales are basically gone. Their market share of EV went from over 30%, to well under 10% in just a year [2].
In Netherlands, their sales also plummeted. While model 3 is still best selling EV there [3], lead isn't wide, and they only have 13% of overall EV market, at mere ~2700 cars.
And this is HUGE drop from 2019. In 2019, they sold almost 30k cars [4]. Annualized that's over 80% drop.
[1] https://cleantechnica.com/2020/07/09/69-of-autos-sold-in-nor... [2] https://i.redd.it/amrtc9yhl9851.png [3] https://www.tesmanian.com/blogs/tesmanian-blog/tesla-model-3... [4] https://insideevs.com/news/391681/plugin-car-sales-netherlan...
Both the "n% of new cars are Teslas" and the "instant n% drop in Tesla sales" news stories are red herrings. They were both artificially caused by where Tesla allocated their production.
The only signal you can extract from this data is basically that the demand for Teslas well exceeds the company's capability to manufacture them, as whichever country or region they allocate more of their production towards will see a corresponding sales spike. This is mildly positive, but given how long it takes to expand production, I still don't think you can justify the share price on this. Right now, if Tesla had much more cars available, they'd be able to sell them. However, by the time they have ramped up production to match the demand, competitors might have something that matches them.
I fully agree that regulatory credits were big part of that growth and drop, in Netherlands. But the story that sticks to people is wrong one, that Tesla dominates Netherlands and demand for them is huge, and Tesla is posed to dominate all markets in the world. It was demand for free money from government. And while one can argue that other governments will have similar initiatives, that will allow Tesla to play this game for years, competition in EV space is growing, so they’re unlikely to get such a big piece of pie there.
There was no regulatory change in Norway. Tesla brand got pretty badly bruised, with lots of stories in Norway about subpar service. And, most importantly, real competition arrived, while their portfolio is aging (model 3 is 3 years old design, model y is model 3 with a lift kit, and model s/x are way way due for redesign).
But I do see your point, that this all can be attributed to Tesla being production constrained. Except, that Tesla keeps on dropping prices and offering initiatives to push more sales.
Why not push more cars to one of the wealthiest nation on earth (Norway), where EV are ridiculously competitive to ICE cars, due to taxes? Why instead keep on dropping prices, while company is pushing really hard to be profitable?
I’m not saying I agree with this. Even if achieved, the amount of future success being priced in today is extraordinary. Combine that with a stock that’s become “cool” to own with retail, and the huge short interest...and well it starts to make sense.
TSLA price action at the moment is really down to a lack of sellers. Shorts have been bent over in a way not seen at this scale since (ironically) VW. Simply put: everyone who has said TSLA is overbought has paid dearly. The bubble will burst, but it’s never shorts that pop bubbles.