Latest / Best of Business / Sam Dickie: Fisher Funds expert on Tesla's share price taking a hit

Transcript

Sam Dickie: Fisher Funds expert on Tesla's share price taking a hit · Best of Business

• 0:09
  Speaker 1: You're listening to a podcast from News Talk sed B.
• 0:12
  Speaker 1: Follow this and our Wide Ranger podcasts now on iHeartRadio,
• 0:16
  Speaker 1: Bright Iron Bread Rich See.
• 0:18
  Speaker 2: Tesla's share price is a rollercoaster and one to watch.
• 0:21
  Speaker 2: It took off massively after Trump was elected over in
• 0:24
  Speaker 2: the US, but has since fallen back almost just as far.
• 0:27
  Speaker 2: Sam Dickey from Fisher Funds has done a deep dive
• 0:29
  Speaker 2: for US is here now. Hey Sam, Ryan, Good to
• 0:33
  Speaker 2: have you on. So why did Tesla's share price shoot
• 0:36
  Speaker 2: up one hundred percent in just a few short months
• 0:39
  Speaker 2: and then why has it come back down fifty percent
• 0:41
  Speaker 2: in a few short weeks?
• 0:43
  Speaker 3: Yeah, A heck of a wild ride there, Ryan, So
• 0:46
  Speaker 3: it has round trip right back to where it started.
• 0:48
  Speaker 4: It went up for three reasons.
• 0:50
  Speaker 3: So the first one was at the time there was
• 0:52
  Speaker 3: a lot of emerging hype about Tesla's autonomous vehicle or
• 0:57
  Speaker 3: robotaxi business, and it's humanoid business actually, which we talked
• 1:00
  Speaker 3: about before. But for example, Google and Weymo reached key
• 1:04
  Speaker 3: milestones they'd done forty five million rides, and then Musk
• 1:06
  Speaker 3: himself almost to launch his robotaxi in twenty twenty six,
• 1:10
  Speaker 3: claiming ride costs of as low as twenty cents a kilometer,
• 1:15
  Speaker 3: so pretty exciting stuff. The second thing is the extraordinary
• 1:20
  Speaker 3: animal spirits we've talked about a few times, or that
• 1:23
  Speaker 3: retail irrational exuberance generally, and posted children for that with
• 1:28
  Speaker 3: things like meme stocks like game Stock stop We're ripping
• 1:31
  Speaker 3: Again and robin Hood the retail training platform were up
• 1:34
  Speaker 3: over one hundred percent, so animal spirits generally, and Tesla
• 1:37
  Speaker 3: was caught up on that.
• 1:38
  Speaker 4: And the third thing was, of course, the Trump romance
• 1:41
  Speaker 4: and is.
• 1:42
  Speaker 3: Perceived raverified positions sitting inside the federal government's coffers via
• 1:45
  Speaker 3: the Department of Government Efficient, Department of Government Efficiency.
• 1:49
  Speaker 4: So those are the three reasons that went up.
• 1:50
  Speaker 3: Then reality set in, and it's a reminder that despite
• 1:53
  Speaker 3: this excitement about its future prospects around autonomous vehicles, ninety
• 1:57
  Speaker 3: percent of its profits still come from its core business
• 2:00
  Speaker 3: of selling electric vehicles, and its electric vehicle business had
• 2:05
  Speaker 3: been going backwards. At the same time as its sheared
• 2:08
  Speaker 3: price went up one hundred percent, its earnings were being
• 2:11
  Speaker 3: cut by about thirty percent.
• 2:13
  Speaker 4: So that sort of unsustainable equation saw the share price sorry.
• 2:16
  Speaker 3: The price to earnings ratio a key evaluation metric on
• 2:21
  Speaker 3: one hundred and fifty times PE, which for context, the
• 2:24
  Speaker 3: Ford Motor Company trades on about seven times PE. So
• 2:28
  Speaker 3: the whole bubble pop, the irrational exuberance from retail event
• 2:32
  Speaker 3: investors hit the skids, and the stock price round trip
• 2:36
  Speaker 3: right back to where it was before Trump got elected.
• 2:38
  Speaker 2: Fascinating, right, isn't it. What's what's going on with the
• 2:41
  Speaker 2: electric vehicle take up? More broadly, I saw numbers. They
• 2:44
  Speaker 2: were down, I think year to date down forty five
• 2:46
  Speaker 2: percent Tesla sales in Europe, you know, thirty percent or
• 2:49
  Speaker 2: something in China. It's not been a great ride.
• 2:52
  Speaker 3: Yeah, not being a great ride for Tesla, and they're
• 2:54
  Speaker 3: definitely losing market share.
• 2:56
  Speaker 4: I mean, more broadly, EV sales are doing a little
• 2:59
  Speaker 4: bit better.
• 3:00
  Speaker 3: So you and I checked in about a year ago
• 3:02
  Speaker 3: on electric vehicles generally globally, and at that point in
• 3:05
  Speaker 3: time they were growing about ten percent. Now electric vehicle
• 3:09
  Speaker 3: sales sort of monthly year and year growing about twenty percent.
• 3:11
  Speaker 4: Are pretty healthy, But a couple of things.
• 3:15
  Speaker 3: Their first of Tesla's losing market share, partly because of
• 3:18
  Speaker 3: the blowback against against the sort of Trump mask romance,
• 3:25
  Speaker 3: but also generally speaking, the penetration of electric vehicles are
• 3:29
  Speaker 3: sort of plateaued in places like China, Europe and southern
• 3:36
  Speaker 3: United States. So I'd say, generally speaking, evs are going okay,
• 3:40
  Speaker 3: but Tessla's losing market share.
• 3:43
  Speaker 2: And what about you mentioned earlier the autonomous vehicles. What's
• 3:46
  Speaker 2: happening with them? Are they taking off? Are they you know,
• 3:49
  Speaker 2: sort of a thing of the past now or like
• 3:50
  Speaker 2: a back to the future that never happened. What's going on?
• 3:54
  Speaker 3: Well, I mean, it's one hundred and fifty billion dollar
• 3:56
  Speaker 3: industry and it's still expected to be about a trillion
• 3:58
  Speaker 3: dollar industry by the end of the decade, so people
• 4:01
  Speaker 3: are still pretty bullish. I think there's a few hurdles,
• 4:03
  Speaker 3: of course. So Tesla, for example, is trying to go
• 4:06
  Speaker 3: the cheap route by solving full service driver sorry, full
• 4:13
  Speaker 3: fully autonomous driving in a cost efficient manner with cameras only,
• 4:18
  Speaker 3: which of course have some safety drawbacks. Whereas companies like Weymo,
• 4:22
  Speaker 3: spun It or out of Google, they are using radars
• 4:24
  Speaker 3: and lighters, which.
• 4:25
  Speaker 4: Are much more expensive.
• 4:26
  Speaker 3: So Weimo autonomous vehicle costs about two hundred thousand dollars,
• 4:30
  Speaker 3: whereas Tesla's proposing to sell these for about thirty thousand however,
• 4:35
  Speaker 3: is a very unclear regulatory framework globally, So the UK
• 4:38
  Speaker 3: peered back Tesla's camera only full service autonomous driving to
• 4:43
  Speaker 3: highways only and favored WEIMO, and half of the US
• 4:46
  Speaker 3: states only permit autonomous vehicle testing. So and then of
• 4:49
  Speaker 3: course we've got the very high profile crashes that we've
• 4:52
  Speaker 3: all heard about, despite the stats around significantly lower accident
• 4:56
  Speaker 3: rates and death rates. So still expected to be a
• 4:58
  Speaker 3: huge growth industry, but a few hurdles right now.
• 5:01
  Speaker 2: Yeah, interesting, I suppose they've going to overcome those regulatory problems.
• 5:04
  Speaker 2: Is what does all this mean for investors?
• 5:08
  Speaker 3: The whole thing's a super interesting lesson, which is, don't
• 5:11
  Speaker 3: believe the hype and focus on the core fundamentals. So,
• 5:15
  Speaker 3: you know, occasionally if the fundamentals of a company are
• 5:17
  Speaker 3: going well, you can understand why, you know, the share
• 5:20
  Speaker 3: price gets a bit over inflated. But when the hype's
• 5:23
  Speaker 3: going in one direction and that the core fundamentals, as
• 5:27
  Speaker 3: was the case with Teessler, were going in the opposite direction,
• 5:29
  Speaker 3: I think that's something should take take note of. But
• 5:33
  Speaker 3: I would say for the brave there was far too
• 5:35
  Speaker 3: much hype and Tesler at the peak. But if you
• 5:38
  Speaker 3: are a believer and a long term believer in autonomous vehicles.
• 5:41
  Speaker 4: And there I say a humanoids.
• 5:43
  Speaker 3: Well then as that does settles the stocks on his knees,
• 5:46
  Speaker 3: now it might be worth another.
• 5:47
  Speaker 2: Look, nice one, Sam, Thank you for that, Sam. Dicky
• 5:50
  Speaker 2: Fisher funds with.
• 5:51
  Speaker 1: Us for more from News Talks B Listen live on
• 5:57
  Speaker 1: air or online, and keep our shows with you wherever
• 6:00
  Speaker 1: you go with our podcasts on iart Radio