[Music] all right let's take a look at shares of Tesla that stock is down over 45% from its record highs back in December stock here up about 4% to round out the week but again we were off 50% from those records uh just a couple of days ago when it comes to negative news for the company really has seen it all in the last few months tariffs we've got musks government roles EV competition and a sentiment wash out in the name joining us now to discuss is Tom Ryan he's the lead equity analyst of global
autos at RBC Capital markets so Tom uh you have a buy rating $440 price Target on the stock I'm just curious the questions that you've gotten you know from clients from colleagues from peers last couple weeks as you kind of look at this story which simply on the stock price has sort of come undone at the LA at this point yeah and I think we have to put things in context right I mean uh post election the stock doubled right I went from like what 700 billion market cap to 1.4 trillion it's basically back to
where it was pre-election um so let's put that all in context um now the questions I've been getting asked have to do with really two topics one is this new affordable car that's supposed to come in this semester right h125 what is that exactly also what's going on with deliveries why they've been so sluggish in January and February and the second one is about this June uh Robo taxi uh product that they're going to unveil in Austin and whether we'll have unsupervised FSD or not I think a lot of investors are looking at this move
in this stock and trying to see if it's time to start owning the name so Tom I want to follow up um on that first point uh thinking about a name that is this volatile especially this size I mean this is a company that was you know what 2 trillion at at its peak in terms of market value something close to that um just how you as an analyst handle that process you know it's it's a feature of Tesla's stock it makes the fundamental story perhaps more challenging but I'm just curious how you know over
the years you've managed you know with your team to I don't know make sense of or learn to understand that this is the kind of stock that's going to be moving 10 20 30% in a couple weeks or a couple months and there's just a lot of names in the market that won't do that in years yeah I mean we the answer is we we don't really worry about that so the way we look at it is we try to look at the fundamentals of the company and the stock we try to assess what the
individual peace parts are worth and you know if there's some news events like the election and what some you know some folks may think that could mean or not mean to the stock that maybe that's noise you know so the way we look at teson why we ABS you know our valuation the way it is is we look at the total addressable Market size of autonomy Robo taxis FSD and that's the Lion Share of our valuation we think that's a tremendous value we don't we don't only think Tesla's gonna dominate that there's other players it's
just we think Auto uh Mobility which you know cars Etc is going to expand to be much bigger than what it is today because autonomy effectively increases the uh value to Consumers so much more than what it is today so we're looking at things from that perspective and not really listening to all the noise Tom I know you call it noise and I and I get that but you're looking at a situation now where Elon Musk if you look at the latest poll numbers people hate the guy I I don't think it's an exaggeration to
say many Americans do it is affecting state you got people setting Teslas on fire in France for example so at what point does it become more than noise I would argue if you look at the sales it probably already is a little more than noise but at what point would that actually affect how you view the stock what would what would have to happen I guess for you to say maybe this is a risk well this is a question I get asked a lot um what I would say is let's say this was another car
company that had the numbers they posted in January and February and were doing the things they were doing in those months right so you had uh an an intentional shutdown for the model y changeover that was articulated to the market in the Q4 call we knew that was happening January and February are really weak months anyway um and sure you have some models that are very long in the tooth right model 3 Model y you also have this Osborne effect people seeing that there's going to be a model wide change over and the new affordable
car so folks could have been potentially waiting on that so there's a lot of reasons and I think the headlines that you saw in the Press no offense was a lot of uh you know car sales are down 45% in Europe right in in the month of uh was a febu or January um but that's going from like 14,000 to whatever 7,000 the company sold like 1.7 million cars right so they're looking at the percentage change but these are tiny numbers were talking about if this was another car company and all of these things were
happening I think I would understand okay this is what's happening now this extra component that's that's you know I think it's been talked about obviously in the media and everything it's probably getting a lot of attention I don't know honestly if that's what's driving uh the the weaker sales um I think a lot of folks look at a car purchase as I need to buy this for my family you know what is the best EV in the market today for the range and the price uh maybe if I was making a purchase of uh soda
in the grocery store you know that's a discretionary item that I can maybe boycott more easily but a car purchase uh I don't know I you know I I tend to think people are going to buy the best product what's best for them and looking at the data that we have I don't know there's enough to say that oh all of this is because of you know some of these some of these considerations we're hearing about and so then you know Tom we'll just finish looking forward for the company you mentioned um you know we
have these events uh thinking about you know the company's going to have you know not no Mobility day but something like that right which they had um I think it was last August um they'll have another one coming up later this year what are the the key things with that you mentioned um some of the FSD features you're looking for um how are you thinking about that kind of event and then you know real Pie in the Sky the Tesla robots personal assistant all these sorts of things um you know how how you look at
that product road map really for the company um over the next year so the main catalyst I would say is number one this um this new car this uh affordable car what exactly does it look like uh how robust is it how differentiated I is it and then number two your to your point this June roll out of their Robo taxi service in Austin what does that look like is there a driver in there is it completely driverless will it be unsupervised FS s d that would be an amazing breakthrough right because the only other
thing you have like that is weo which is pretty expensive vehicle it's like $200,000 something what if you could get it for $30,000 that changes the game so we have to see what happens that would be a pretty big Catalyst in terms of humanoid robot I don't know if we'll get anything meaningful this year on that I actually don't describe much of that in my valuation but certainly the robo tax use and something on the affordable car could be pretty important we shall see Tom thanks a lot for joining us appreciate it sure
