....the next big test for lithium stocks is the Tesla delivery...

....the next big test for lithium stocks is the Tesla delivery data in 8 days. It could reinforce the narrative that US EVs aren't growing- the Yanks don't care about all that growth in China.

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The next $TSLA data point is 2Q deliveries, due out in about 8 days. IMO WS remains way too high at 442K -5% YoY. My 2Q estimate is now 420K -10% YoY which would be worse than 1Q -8.5% YoY. WS 2Q delivery ests have been coming down in recent weeks but are likely to fall more between now and next week.

Perhaps a bigger potential negative is FY’24 delivery ests where WS is still predicting almost no YoY growth of 1,811K vs 1,809K in FY’23. I am now at 1,700K for FY’24 -6% YoY, which is likely to drop further if TSLA misses again with 2Q delivs.

Another delivs miss is likely to cause TSLA FY’24 EPS ests to fall further (currently $2.45 -36% YTD and vs my FY’24 Adj EPS estimate $2.20). $TSLA FY’24 P/E of 75x (was 50-55x in Jan) should come down as investors start discounting the risk of YoY volume declines beyond FY’24.

Absent EV advertising and launch of a $25K compact to expand TSLA TAM to the mass segment, we don’t see a compelling reason TSLA P/E should trade at 75x FY’24 Adj EPS when the company’s core EV business (which accounts for 86% of TSLA profits) is not growing.

While Robotaxi and Optimus could lead to TSLA upside revisions by 2026, uncertainty about future volume and eps growth could lead more investors to adopt a wait-and-see approach as FY’24 and FY’25 estimates continue to trend down.

https://x.com/garyblack00/status/1805163242387374562