Tesla: Stock Rising Despite Mounting Bad News

Model Y refresh sees $7,000 discounts in the US; PER is at record highs; & FSD competition heats up in the US.

• Figure 1 below is the most important chart I’ve seen recently. It shows historical Street estimates of 2025 EPS for Tesla plunging, while Tesla’s share price rises. At $260 yesterday, Tesla is now trading at 146x 2025 EPS estimates, which is where it traded at its all-time high of $480 in mid-December before plunging.

• While the bad Q1 results may have been met with a rally because Musk said he’d be spending more time at Tesla as of next month, Tesla’s 4% point outperformance vs the Nasdaq 100 is unheard of after such bad results. It could be another example of “buying fear” when Tesla gets sold down to 52-week lows.

• Tesla’s 2025 EPS estimates on the Street have dropped by 46% to $1.78 while the stock price has only dropped by 36% YTD. Tesla’s 2025 PER is now 146x, which is the same level as where it was when Tesla’s stock hit $480 on December 17th, the peak of the Trump rally post-election (see Figure 1). Toyota Motor, which had 11% pretax margins in 2024 versus Tesla’s 9%, has expanded its hybrid capacity to grow by double-digits in 2025 and 2026. Toyota trades at 9x my 2026 EPS estimates.

• The call options trading volumes were very high on April 23rd, the day after Tesla reported their 30% EPS miss for Q1 2025, but dropped the next day. The Vested Interests in Tesla were clearly active in the options market the day after the bad Q1 results (see Figure 3).

• While Tesla used the excuse of having idle lines in Q1 due to the retooling for the Model Y “refresh”, Tesla’s website shows that it’s already offering “new-car inventory” discounts for the new Model Y in the US at a 14% ($7,000) discount (see Figure 2). In China, they already offered 0% loan programs since mid-March.

• Despite Musk’s continued hype of FSD “Unsupervised” being launched in Austin in June, Waymo reported 250,000 paid rides per week yesterday (5x its level in May 2024), while Volkswagen announced an alliance with Uber to start a robotaxi fleet in Los Angeles from 2026 (see Figure 4).