Tesla Stock Price And What Is Going On
Tesla's stock has been beaten up pretty good. Is this of concern?
In this video I idsucss how we are looking at something really developing with the compnay. Yet the sentiment out there is absurd. For this reason, people simply have to suffer through the bear.
▶️ 3Speak
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Summary:
In this video, Task discusses the current inflation situation and its implications for Tesla, emphasizing the recent market rebound driven by lower inflation expectations. He delves into the impact of falling commodity prices, particularly industrial metals, on the manufacturing sector, including Tesla. Task highlights Tesla's strong position with significant profit margins and the ability to control demand by adjusting prices due to its healthy profitability.
Detailed Article:
Task opens the video by addressing the recent market rebound, attributing it to a decrease in inflation expectations. He emphasizes the potential shift towards a deflationary environment due to weakening demand and economic challenges. Task highlights that energy prices, which often influence food prices, have been driving the fluctuation in commodity prices and advises viewers to consider this relationship when analyzing market trends.
He then delves into the specific impact of falling commodity prices, especially industrial metals, on companies like Tesla. While raw materials for batteries have not seen significant drops, materials for car production (excluding batteries) have returned to pre-COVID levels. Task notes reductions in prices of industrial metals like iron ore, lumber, and wheat, emphasizing the temporary reprieve this trend offers.
Task underlines Tesla's advantage of increasing production, leading to economies of scale and cost reductions per unit. He explains that higher production can lower fixed costs, subsequently reducing the total cost per unit and enhancing profitability. The discussion shifts to Tesla's profit margins, which surpass the industry average significantly, sparking questions about demand for Tesla vehicles.
Notably, Task addresses the crucial link between profit margins and demand, asserting that Tesla can influence demand by adjusting prices due to its high profitability. He explains that despite uncertainties around Tesla's demand, the company's ability to cut prices while maintaining healthy profit margins showcases its control over the demand-supply equation. Task illustrates how Tesla could reduce its gross profit by half and still outperform industry profit margins, highlighting the company's pricing power.
In conclusion, Task emphasizes the significance of understanding a company's flexibility and the power of pricing in influencing demand and profitability. He contrasts Tesla's strong position with other companies in the EV sector that typically operate at a loss per vehicle, stressing the unique advantage Tesla holds in the market. Task closes the video with a positive note, encouraging viewers to consider the dynamics of pricing and profitability in the evolving market landscape.