Sam Dickie: Tesla is losing the EV battle with China

Fisher Funds' Sam Dickie explains how Tesla shares have dropped significantly.

He says the company is suffering from Elon Musk's alignment to Trump, and from Chinese brands making better products.

He says they need a CEO who's focused on the company, and not distracted with other ventures.

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Episode Transcript

Speaker 1 (00:00):
Right now, we're going to do Sam Dicky from Fisher
Funds for an update on Tesler. Sam is with us, now,
Hey Sam, Hey Ran.

Speaker 2 (00:07):
How's it going?

Speaker 1 (00:08):
Yeah good, thank you. So shares down twenty five percent
this year, the distracted CEO. How should investors be thinking
about Tesla at the moment?

Speaker 2 (00:18):
Yeah, well, I guess the first thing to think about
is it's traditional electric vehicle business. And how did it
lose its crown to China's BYD. So I guess seven
or eight years ago it used to sell two to
one to BYD electric vehicles. This year, BYD will sell
about five point two million vehicles and Teessler will sell

(00:40):
about one point seven, so more than three times as many.
And there's two reasons for that. The first reason is
just manufacturing expertise and scale. So Musk was always fanatical
about lowering the cost of an electric vehicle to produce,
because that would drive down the price you could sell

(01:01):
them at and that would lead to widespread adoption. But
if you even look at head to head in China,
so A Tesser's Shanghai gigafactory versus BYD, BYD is still
about twenty percent cheaper to produce. Per car. So that's
the first thing. The second thing is, of course brand,
AND's Tesler's brand was originally sort of super exciting, synonymous

(01:22):
with exceptional innovation and clean energy. Everyone wanted to have
a Tessler, and that's obviously swung sharply negatively. The brand
favorability is an all time low, and that's probably driven
by Musks often inflammatory comments, alignment and misalignment with Trump,
and plus, of course, other electric vehicle brands around the

(01:43):
world are really carefully building their precious brand value, whereas
Trump seems to be sort of flying by the seat
of his pants on that.

Speaker 1 (01:51):
Yeah, is that How big of a problem is that
having a personal brand like Musks tied up with the
value of a company.

Speaker 2 (02:01):
Well, I think it's. Yes, it's good if it goes well,
but it goes badly, and I think it's I look, normally,
any company should be bigger than one person. Musk is
obviously a genius. Here's obviously divides opinion, but he's definitely
a genius. And I think it's also that focus. Right,
So today's e CEO of Tesla, SpaceX, Neurlink, the boring

(02:24):
company Twitter or x xai, and he's dabbling in politics.
But when you look back at his golden run from
sort of twenty seventeen to twenty twenty one, when the
stock went up, you know, three thousand percent, he only
really had take Tesla and SpaceX. And I think that's
quite key, that divided attention of a CEO. Plus the fact,

(02:44):
as you said, that's his brand or his name, and
his brand is very synonymous with Tesla's brand.

Speaker 1 (02:53):
What do investors do you reckon need to believe to
buy or sell the company today?

Speaker 2 (03:00):
Well, that the simple mass is that the company's value
at a trillion dollars, and you know, we think the
electric vehicle business is may be worth quarter of a
trillion dollars or three hundred three hundred billion, so you know,
just to get today's share price, and you obviously want
to make a return on top of that, but just
to get today's share price, you need to believe that
the combination of robotaxis, you know, humanoids, that there's smaller

(03:26):
energy business and obviously Musk's genius to conjure up other
value drivers for Tesla worth at least three quarters of
a trillion dollars. And that's fine because they are quite
well positioned. But if you think about the fact that
those companies, those businesses are basically making zero earnings, you
really do need to take a leap of face. We've
set another way, the stocks trading on about one hundred

(03:47):
and fifty times priced to earnings, which is a standard
valuation metric, and for comparison that the US stop market
itself trading on about twenty times earning. So that's super expensive.
And to justify that huge valuation, you need a genius
that is, you know, singularly focused on your company. You
need that genius to be sleeping at the factory like

(04:07):
he used to be, and you need him to stop
poisoning the Tesla brand with his inflammatory tweets.

Speaker 1 (04:14):
Do you think in terms of the car sales This
is not so much a market question, but do you
think that you know who owns the company actually has
out a tangible result on sales?

Speaker 2 (04:29):
Yes, I think in terms of masks brand, yeah, I
do think that's the case. You know, they're shrinking this
year in terms of their sales. B WAYD is continuing
to grow. It's partly because of this cost thing. So
Tesler can't get the cost to produce down enough, so
they can't get that widespread adoption of electric vehicles because
it's just too expensive. But I do think the brand,

(04:50):
I mean everywhere you look, you know, the net promoter
scores and the brand favorability of plummeted over the last year,
and it's hard to believe that's just because Tesler are
a little bit too expensive. Sam.

Speaker 1 (05:02):
Appreciate your analysis tonight, Sam Dicky Fisher Funds for.

Speaker 2 (05:06):
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