Tesla clears a key China FSD Hurdle after unveiling plans to proceed with its cheaper EV. Two game changers. Expect analysts upgrades
Tesla $Tesla(TSLA.US$ yesterday cleared a key hurdle to sell full self-driving in China, after expanding its partnering with Baidu for mapping and navigational functions. We were one of the first to break the news on X. But also recall, I said I expected Tesla short sellers to crumble... and that started too. All in all, clearing the FSD hurdle in China is just one of the many wildcards that will likely see Tesla shares rev up and turn a corner, with Tesla's $25k EVs in 2025 to also likely cause feathers to fall from other EV players.
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But first, how did the market react to Tesla clearing the FSD hurdle in China?
Tesla Direxion Daily TSLA Bull 2 X leveraged $Direxion Daily TSLA Bull 2X Shares(TSLL.US$ rose by 30.91%.
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FSD - is a game changer for Tesla's China sales to rev up
FSD - is a game changer for Tesla's China sales to rev up
Tesla should now be able to deploy autonomous driving services in China, on the basis of having lane-level navigation and mapping provided by Baidu.Tesla has already been working with Baidu since 2020 for in-car mapping and navigation in China. But, the new partnership addresses mapping concerns for more advanced SD features.
The suite of FSD features require constant supervision and don't make Tesla's fully 'autonomous'. Tesla charges $8,000 to buy FSD outright in the US, or $99 a month for a subscription.
This is just one of the last wildcards that Tesla has pulled to turn the EV giant around.
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Cheaper EVs - the wildcard that will change the EV game now for Tesla - expect feathers to fall from other EV players
Cheaper EVs - the wildcard that will change the EV game now for Tesla - expect feathers to fall from other EV players
Elon Musk also recently pledged to accelerate cheaper models EVs, with a plan to start production before the end of 2025. This will change the set up for and force a lot of short sellers to probably lose a chunk of cash. I wrote on April 24 that I expected shorts to close.
Pushing ahead with cheaper EVs is a GAME changer wildcard, that I wrote about will likely change the set up for Tesla. As it means Tesla can now compete with Chinese EVs at a time when it’s offering 0% finance there.
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On April 24 I also mentioned Tesla was oversold from a technical analysis perspective and short interest spiked to its highest level since 2021, so those shorts needed to probably close, which also supports the bounce up as well. I also posed the question that history could repeat itself. As the last time Tesla was this oversold its shares rallied 38% to a new high.
All this comes at a time when the IEA's expects EV sales to hit 17 million this year and half of China’s car sales to be EVs, ¼ of the cars sold in EU will be EVS and 1 in 10 in the US will be EVs. By 2023 every second car sold will be an EV. For more see X
And now, it seems Tesla could recoup some lost market share with its cheaper EV and FSD.
Either way I expected investment banks to upgrade Tesla.
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How is Tesla's revenue looking right now?
In 2024 Tesla makes $73,000 every 27 seconds
In 2020: Tesla made $73,000 every minute
In 2015: Tesla made $73,000 every 9 minutes
In 2010: Tesla made $73,000 every 5 hours
In 2007: Tesla made $73,000 for the year
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Moomoo Official Market Strategist
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