It's been another week, and Elon Musk's remarks during Tesla's earnings call have raised a few eyebrows amongst its bears and bulls. Also, Rivian has positive news, while a Chinese EV CEO has a heck of a eulogy for Canoo.
A Tesla Model 3 charges at a Tesla Supercharger station in Selinsgrove, Pennsylvania.SOPA Images/Getty Images
The Bull and Bear Case for Tesla
On Wednesday, January 29, Tesla (TSLA) released its earnings results for Q4 2024, which revealed a net year-over-year sales decline and weak earnings results, including a dip in net income of about 71% to $2.3 billion.
Though the numbers around its core business exposed some fragility, the tunes that Tesla CEO Elon Musk played fiddle were not about how its EVs were going to compete with much stronger rivals in North America and China but rather how the company's future depended on its artificial intelligence, robotaxis, and autonomous vehicle moonshot.
In fact, during the earnings call, he called out those who previously thought he was "crying wolf" about self-driving cars and set a hard date for an ambitious project: launching what he described as an "unsupervised full self-driving as a paid service" in June.
According to Musk, this pilot program of "unsupervised" Teslas will be deployed as an autonomous-ride-hailing service.
"Teslas will be in the wild with no one in them, in June in Austin," Musk said during Tesla's Q4 2024 earnings call. "This is not some far-off mythical situation, it's five, six months away."
Musk's attitude on the call triggered a mixed response from Tesla bears and bulls, further strengthening their respective support and skepticism.
On the bull's side, Cantor Fitzgerald and Roth MKM raised their price targets by $60 and $70, respectively. In a recent analyst note, Roth MKM analyst Craig Irwin maintained a Buy rating on Tesla. He set a price target of $450.00 based on the unsupervised FSD announcement, the beginning of production of lower-priced models within the first half of 2025, and the launch of CyberCab, which he states is set to deliver multiple positive trading catalysts.
Though he maintained his $550 price target and "outperform" rating on Tesla stock, Wedbush's Dan Ives wrote in his note following Tesla earnings that the bull's focus would rest on unsupervised FSD coming by the end of 2025, as well as other "growth drivers" that include a "lower cost next generation vehicle," and "Optimus volume production in 2026 with bullish commentary from Musk."
"If you are bull and believer in the AI autonomous vision for Tesla this morning those investors feel even more confident in their thesis. For the bears/skeptics solely focused on numbers and margins with no attention to the autonomous narrative they will also feel more confident in their negative thesis," Ives wrote. "Thus the Game of Thrones elongated battle continues between the bulls and bears on Tesla although we believe the autonomous/AI piece is 90% of the Tesla story today and thus speaks to our $2 trillion valuation thesis for Tesla over the coming 12 to 18 months."
"The Elon Premium"
Though Barclays analyst Dan Levy raised his price target on Tesla stock to $325 from $270 and maintained an Equal-weight rating in a note on January 30, he warned that Tesla's stock is now "untethered from fundamentals" and marked by speculative enthusiasm that he calls the "Elon premium."
In an appearance on CNBC's The Exchange, () he expressed some skepticism in the fact that Tesla's stock price did not go down after it reported financial results that showed an explicit miss on earnings expectations. Levy explained that aside from its Bitcoin gains, Tesla's earnings were "much worse."
"Why is the stock itself not down? Simply, this is a stock that is disconnected from fundamentals. [The stock] is trading at 125 times earnings. That tells you that near term earnings don't matter, what matters is narrative right now. This is a supercharged narrative benefitting from both autonomous and their efforts in humanoid robots.
Analyst Ryan Brinkmann of JPMorgan also expressed skepticism about Tesla's stock price rise on January 30. In a research note published that day, he stuck to his $135 price target on Tesla stock, citing, "It's not clear to us why Tesla shares traded as much as 5% higher in the aftermarket Wednesday."
The analyst took special consideration to one statement that Musk made, specifically where he "identified an achievable path to becoming worth more than the world's five most valuable companies taken together (i.e., more than the $14.8 trillion combined market capitalizations of Apple, Microsoft, NVIDIA, Amazon, & Alphabet)."
"I see a path. I'm not saying it's an easy path but I see a path of Tesla being the most valuable company in the world by far," Musk said at the beginning of his opening remarks during the call. "Not even close, like maybe several times more than — I mean, there is a path where Tesla is worth more than the next top five companies combined. There's a path to that."
"Or maybe it was management's belief that just one of its products has by itself the potential to generate 'north of $10 trillion in revenue'," he also raised. "It may have even related to management guidance for 2026 (no financial targets were provided, but it was said to be 'epic') and for 2027 and 2028 ('ridiculously good')"
"What does seem clear is that the move higher in Tesla shares bore no relation whatsoever to the company's financial performance in the quarter just completed or to its outlook for growth in the coming year."
Rivian CEO Robert "RJ" Scaringe speaks at the launch of the Rivian R2 electric vehicle at the Rivian South Coast Theater in Laguna Beach, California, on March 7, 2024. PATRICK T. FALLON/Getty Images
The Rivian R2, on schedule.
It is only the second week into President Trump's second term in the Oval Office, but his promise to rescind "Biden's EV Mandate" has been chugging along without any interruption.
Though these measures are making big automakers like General Motors and Stellantis shift around its EV strategy to promote more hybrid vehicles and such, one manufacturer that seems to be resilient about the news is EV-exclusive manufacturer Rivian.
In an interview with Automotive News on January 27, Rivian (RIVN) CEO RJ Scaringe said that the company expects President Trump to repeal the $7,500 EV tax incentive and end the automaker tax credit program for battery production.
"I don't think we're particularly worried about any of it because whatever happens will be equally applied to all. I started the company with the view of making highly compelling products and none of my decision to start Rivian had anything to do with what the policy was going to look like," he said.
"I think in the end it's sort of like there's small speed bumps along the way and it's on us to respond to whatever that environment is."
In addition, he pointed out that one cause-effect of the loss of the EV tax breaks is EV technology regression by legacy brands. While Scaringe believes it can covertly benefit EV-exclusive companies like Rivian and Tesla, he doesn't see anything relatively positive from an existential point of view.
"The challenge with some of these short-term changes, for the world and for the U.S. leadership in technology, is that it will cause some manufacturers to invest less in electrification," Scaringe said. "And I think that's probably good for Rivian from a competitive landscape, but bad for the world."
While manufacturers like GM have gas cars to rely on, he says their ability to take advantage of legislation and maximize short-term profits is a sword that kills the long-term picture.
"If you're optimizing purely for profitability in the next 2 to 3 years and you're a traditional legacy manufacturer, you can see how you can very easily make a spreadsheet case of 'Let's double down on combustion or hybrids,'" Scaringe said. "I think that is a big miscalculation for the long term."
Trump's policy doesn't seem to be slowing down Rivian. In a post on X (formerly known as Twitter) on January 31, he denoted that "R2 expansion moving quickly!" above a picture of the company's Illinois factory, which is being expanded to accommodate production of its new R2, a car that it aims to sell at about $45,000—about the same price range as Tesla's best-selling Model Y SUV and leagues cheaper than its current R1 series offerings, which start closer to $70,000.
A video image of LeEco Founder and CEO YT Jia is shown as he unveils Faraday Future's FF 91 prototype electric crossover vehicle during a press event for CES 2017 at The Pavilions at Las Vegas Market on January 3, 2017 in Las Vegas, Nevada. Ethan Miller/Getty Images
Faraday Future's CEO is beating a dead horse.
On January 17, Texas-based electric vehicle startup Canoo filed for Chapter 7 bankruptcy and ceased operations after it failed to secure "foreign sources of capital " and funding from the U.S. Department of Energy's Loan Program Office.
Furthermore, in a statement, Canoo Chairman and CEO Tony Aquila thanked its workers, companies, and government agencies that have contracted with the startup throughout its checkered history.
"We would like to thank the company's employees for their dedication and hard work. We know that you believed in our company as we did. We are truly disappointed that things turned out as they did," Aquila said in a statement.
"We would also like to thank NASA, the Department of Defense, The United States Postal Service ("USPS"), the State of Oklahoma and Walmart for their belief in our products and our company. This means a lot to everyone in the company."
However, in a four-minute video posted on January 25 on X by YT Jia, the founder and CEO of Faraday Future (FFIE) , an EV firm with an equally shady history, he commented on Canoo's bankruptcy, calling it "inevitable from the start," as he accused its founding partners of starting Canoo off the back of 'stolen' FF data.
In the video, Jia accused the Canoo's founding team of stealing concepts, strategies, and other 'relevant materials' when departing from Faraday Future, noting that its success in 2017 "drew interest from the wrong people," adding that Canoo's founding team "were still executives at FF" when they started Canoo.
This part is true; the Canoo team, led by former Deutsche Bank exec Stefan Krause and former BMW exec Ulrich Kranz, were both former FF execs. In 2017, Faraday Future issued a statement that claimed Krause and Kranz were fired for "malfeasance and dereliction of duty." In previous statements to the public and the media, they state that their story was much different from what FF brought up, but still, this didn't stop Jia from rehashing old drama.
"Later that year, while still employed, they began secretly plotting their departure," Jia stated. "When they eventually left, they took with them an extensive amount of FF's product data, technical files, strategies, concepts, and even critical financing networks and relevant materials."
Additionally, Jia claimed that the Canoo founders "emptied out" Faraday, adding that it pushed the company "into its second major crisis."
"Even though we took legal action later, the damage was done, and it left us struggling to move forward for a while," Jia said. "As entrepreneurs, being betrayed and backstabbed by former teammates undermined by a backdoor play in the U.S., where intellectual property is generally so well protected, was one of our toughest pains."
Furthermore, Jia stated that Canoo's Chapter 7 ending "seemed inevitable from the start," adding that Canoo "was built on stealing intellectual property and technological achievements from others, which set the company up with fundamentally 'flawed DNA.'"
"The founders of Canoo came from backgrounds as professional managers, not entrepreneurs. As a result, their sense of mission was weak. They were focused on shortcuts and quick wins," he also said.
Despite the social media spit roasting, Jia noted that Canoo had some "competitive edge in its products and technology," specifically what he sees as "futuristic symmetrical design, exceptional space-optimized interiors, next-generation innovative architecture, and a comparably advanced skateboard chassis."
