Elon's Biggest FSD Lie Just Got Exposed
In a Nutshell
Tesla's stock dropped 7% post-earnings despite beating expectations, as Elon Musk admitted HW3 hardware cannot achieve unsupervised Full Self-Driving (FSD), backpedaling on 2019 promises and offering HW3 FSD buyers discounts or upgrades—impacting millions of vehicles and billions in liability. The company's sky-high 380x earnings valuation hinges on unproven dreams like Optimus robots and robo-taxis, amid rising capex over $25B in 2026 and flat car sales growth. Investors face premium risk from repeated broken promises, but holding may pay off if tolerant of volatility.
These notes were generated by AI and may contain inaccuracies.
Tesla investors are questioning why Elon lied. Ricky from Techbut Solutions live streamed Tesla's earnings, warning beginners to play it safe. Market rallied on positive earnings, but warned Elon's earnings call talk could shift sentiment negatively, leading to sell-off, which happened. Tesla stock dropped from highs of 406 to lows of 377, a 7% downturn. Overall, barely in the red, but upsetting compared to past highs.
Tesla reported better than expected earnings, revenue, earnings, gross margins not bad. Trades at high premium, over 380 times earnings, viewed as overvalued as car company. Dream factor from Optimus Robot, robo taxi keeps premium; just needs to meet or beat expectations minimally.
Total cash flow nearly $45 billion, the most ever.
Tesla confirmed HW3 cannot achieve unsupervised full self-driving (FSD) from Elon Musk. Offering HW3 FSD buyers discount trade-in for AI4 cars or upgrade computer and cameras. Backpedaling on 2019 Q1/Q2 earnings call promise of full autonomy in one year.
Elon overpromises almost all the time, one of greatest minds but talks a lot. Tesla not cheap stock, enormous valuation as car company, higher than all other public car companies combined due to FSD, Optimus, not just cars.
Optimus no major concerns, but 2026 capex guided over $25 billion amid low consumer spending projections. Paying for six factories in various stages. Free cash flow expected negative rest of year, up from $8 billion capex last year. Building world's biggest chip manufacturing plants.
Sold 3 million Teslas with HW3, repeatedly promised robo taxi earnings, now backpedaling years later while Elon made hundreds of billions. Ross on X.com: "Not a good conference call for current Tesla owners. Basically, HW3 customers are screwed." Sold ~285,000 with FSD, billions in liability. Offering refunds, discounts, or camera upgrades.
At premium valuation, breaking promises makes it unrealistic. Less hope, more doubt Elon can deliver.
Not end of world. Stock down from $500 highs to 337 lows, still elevated over 380x earnings, $3.8 billion net income, $1.45 trillion valuation. Easier to poke holes in dream. Notorious for huge rallies and sell-offs; been at 480 before crashing to 200. Fundamentals: no longer growing as car company, flat margins, no revenue growth past three years.
Do you believe in Optimus Robot dream? Not yet in net income, justifies premium beyond car company. But kicking can down road: 2019 robo taxi promise for 2020, 2026 still not here.
If stomach to tolerate recovery time, hold. Explained quick sell-off despite earnings beat due to broken promise. Tune into live trading session tomorrow for more.
Lives trade every morning for beginners, focus on risks. Links in description for access and software.
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