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Speaker 1: Braille and Bread which see Tesla's share price is a

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Speaker 1: rollercoaster and one to watch. It took off massively after

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Speaker 1: Trump was elected over in the US, but has since

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Speaker 1: fallen back almost just as far. Sam Dickey from Fisher

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Speaker 1: Funds has done a deep dive for US is hen Now, Hey,

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Speaker 1: Sam Ran, good to have you on. So why did

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Speaker 1: Tesla's share price shoot up one hundred percent in just

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Speaker 1: a few short months and then why has it come

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Speaker 1: back down fifty percent in a few short weeks?

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Speaker 2: Yeah, a heck of a wild ride there, Ryan, So

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Speaker 2: it has round trip right back to where it started.

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Speaker 2: It went up for three reasons. So the first one

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Speaker 2: was at the time there was a lot of emerging

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Speaker 2: height about Tesla's autonomous vehicle or robotaxi business and it's

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Speaker 2: humanoid business actually, which we talked about before. But for example,

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Speaker 2: Google and Weimo reached key milestones they'd done forty five

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Speaker 2: million rides, and then Musk himself promised to launch his

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Speaker 2: robotaxi in twenty twenty six, claiming ride costs of as

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Speaker 2: low as twenty cents a kilometer, so pretty exciting stuff.

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Speaker 2: The second thing is the extraordinary animal spirits we've talked

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Speaker 2: about a few times or that retail irrational exuberance generally,

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Speaker 2: and posted children for that with things like meme stocks

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Speaker 2: like game Stock stop We're Ripping Again and robin Hood

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Speaker 2: the retail training platform were up over one hundred percent,

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Speaker 2: so animal spirits generally, and Tesla was caught up in that.

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Speaker 2: And the third thing was, of course, the Trump romance

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Speaker 2: and it's perceived raverified positions sitting inside the federal government's

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Speaker 2: coffers via the Department of Government Efficient Department of Government efficiency.

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Speaker 2: So those are the three reasons that went up. Then

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Speaker 2: reality set in, and it's a reminder that despite this

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Speaker 2: excitement about its future prospects around our thonomous vehicles, ninety

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Speaker 2: percent of its profits still come from its core business

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Speaker 2: of selling electric vehicles, and its electric vehicle business had

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Speaker 2: been going backwards. At the same time as its share

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Speaker 2: price went up one hundred percent, its earnings were being

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Speaker 2: cut by about thirty percent. So that sort of unsustainable

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Speaker 2: equation saw the share price sorry. The the price to

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Speaker 2: earnings ratio, a key valuation metric, on one hundred and

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Speaker 2: fifty times PE, which for context, the Ford Motor Company

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Speaker 2: trades on about seven times PE. So the whole bubble pop,

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Speaker 2: the irrational exuberance from retail event investors hit the skids,

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Speaker 2: and the stock price round trip right back to where

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Speaker 2: it was before Trump got elected.

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Speaker 3: Fascinating, right, isn't it? What's what's going on with the

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Speaker 3: electric vehicle take up?

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Speaker 1: More broadly, I saw numbers they were down I think

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Speaker 1: year today, down forty five percent Tesla sales in Europe,

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Speaker 1: you know, thirty percent or something in China.

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Speaker 3: It's not been a great ride.

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Speaker 2: Yeah, not being a great ride for Tesla, and they're

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Speaker 2: definitely losing market share. I mean, more broadly, EV sales

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Speaker 2: are doing a little bit better. So you and I

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Speaker 2: checked in about a year ago on electric vehicles generally globally,

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Speaker 2: and at that point in time they were growing about

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Speaker 2: ten percent. Now electric vehicle sales sort of month of

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Speaker 2: the year and year growing about twenty percent, So pretty healthy.

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Speaker 2: But a couple of things. Their first of Tesla's losing

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Speaker 2: market share, partly because of the blowback against against the

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Speaker 2: sort of Trump mask romance, but also generally speaking, the

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Speaker 2: penetration of electric vehicles are sort of plateaued in places

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Speaker 2: like China, Europe, and southern United States. So I'd say

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Speaker 2: generally speaking, evs are going okay, but Tessa's losing market share.

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Speaker 3: And what about you mentioned earlier the autonomous vehicles. What's

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Speaker 3: happening with them? Are they taking off? Are they you know,

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Speaker 3: sort of a thing of the past now or like

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Speaker 3: back to the future that never happened. What's going on?

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Speaker 2: Well, I mean, it's one hundred and fifty billion dollar

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Speaker 2: industry and it's still expected to be about a trillion

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Speaker 2: dollar industry by the end of the decade, so people

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Speaker 2: are still pretty bullish. I think there's a few hurdles,

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Speaker 2: of course. So Tesla, for example, is trying to go

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Speaker 2: the cheap route by solving full service driver sorry, full

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Speaker 2: fully autonomous driving in a cost efficient manner with cameras only,

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Speaker 2: which of course have some safety drawbacks, whereas companies like Weymo,

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Speaker 2: spun It or out of Google are using radars and lighters,

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Speaker 2: which are much more expensive. So weimo autonomous vehicle costs

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Speaker 2: about two hundred thousand dollars, whereas Tesla's proposing to sell

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Speaker 2: these for about thirty thousand. However, is a very unclear

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Speaker 2: regulatory framework globally, so the UK peered back Tesla's camera

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Speaker 2: only full service autonomous driving to highways only and favored

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Speaker 2: WEAIMO and half of the US states only permit autonomous

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Speaker 2: vehicle testing. So and then of course we've got the

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Speaker 2: very high profile crashes that we've all heard about, despite

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Speaker 2: the stats around significantly lower accident rates and death rates.

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Speaker 2: So still expected to be a huge growth industry, but

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Speaker 2: a few hurdles right now.

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Speaker 3: Yeah, interesting, I suppose they're going to overcome those regulatory problems.

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Speaker 2: What is it?

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Speaker 3: What does all this mean for investors?

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Speaker 2: I think the whole thing's a super interesting lesson, which is,

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Speaker 2: don't believe the hype and focus on the core fundamental

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Speaker 2: So you know, occasionally if the fundam the medals of

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Speaker 2: a company going well, you can understand why, you know,

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Speaker 2: the share price gets a bit over inflated. But when

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Speaker 2: the hype's going in one direction and that the core fundamentals,

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Speaker 2: as was the case with Teessler, were going in the

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Speaker 2: opposite direction, I think that's something you should take note of.

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Speaker 2: But I would say for the brave, there was far

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Speaker 2: too much hype and Tessler at the peak. But if

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Speaker 2: you are a believer and a long term believer in

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Speaker 2: autonomous vehicles, and there I say, ad humanoids well, then,

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Speaker 2: as the dust settles the stocks on his knees, now

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Speaker 2: it might be worth another look.

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Speaker 3: Nice one, Sam, Thank you for that. Sam. Dicky Fisher

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Speaker 3: funds with us.

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Speaker 1: For more from Hither Duplessy Allen Drive.

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Speaker 3: Listen live to news talks.

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