Tesla is Negative — the only fully-worked rejection in the February run, and one of the few explicit "we're not buying" verdicts in the archive. The three named competitors are Neutral: each is described as a genuine competitive threat in one of Tesla's three end markets, but none is analysed or rated. Research legend: QT Qualtrim · SA Seeking Alpha · STK Stock Analysis; foreign rows point QT/SA at the US OTC/ADR symbol where one exists. Written post with no timestamps — the At link opens the article.
| Ticker | Name | Research | View | What he said | At |
|---|---|---|---|---|---|
| GOOGL | Alphabet (Waymo) | QT · SA · STK · FA | Neutral | Named as the incumbent in Tesla's most-hyped end market. "Waymo (Google): The leader in Robotaxis, with driverless cars already picking up passengers in cities like Phoenix and San Francisco." The framing matters — the robotaxi option embedded in Tesla's 201.2x multiple is up against a competitor already carrying paying passengers. No stance on Alphabet itself here; the standalone case is made on 21 April. | read ↗ |
| 1211.HK | BYD Company | QT · SA · STK | Neutral | Named as the volume leader Tesla is losing on price to. "BYD (China): They sell more electric cars than anyone else in the world and make their own batteries at a very cheap price." It appears twice — as a competitor in the EV market and in the risk list — and it is the reason Tesla's margins are depressed by choice: Tesla "reduced the car prices and engaged in a price war with Chinese EV companies." No thesis or valuation offered. | read ↗ |
| 300750.SZ | Contemporary Amperex Technology (CATL) | STK | Neutral | Named for the sharpest structural point in the competition section. "CATL: They supply Tesla with batteries, but they also supply everyone else, giving competitors the same great technology." A supplier that sells the same input to every rival converts what looks like a Tesla advantage into an industry commodity — the argument that undercuts the "low production costs" moat claim made two sections earlier. No stance on the shares. | read ↗ |
| TSLA | Tesla, Inc. | QT · SA · STK · FA | Negative | A full 15-step analysis ending in an explicit rejection: "We're not buying Tesla. I don't think it's a quality stock and the company looks very expensive. There are way better companies available on the stock market today." Total Quality Score 6.8/10 at a $417.3 price and $1.3trn market cap. What passes: growth (revenue +37.1% ten-year CAGR, EPS +38.8% five-year, a 41.3% long-term EPS estimate), a net cash balance sheet, and a +42.7% CAGR since the 2010 IPO. What fails: gross margin 18.0% (bar 40%), net margin 4.1% (bar 10%), ROIC and ROE both 4.9% (bars 15% and 20%), CAPEX/Sales 9.0% and CAPEX/Operating CF 57.8% — still failing at 6.5% and 41.7% after the maintenance-capex adjustment — and stock-based compensation at 74.5% of net income (67.7% five-year average) against a 10% bar: "This is not something you want to see as a quality investor." Valuation fails all three tests: 201.2x forward against a 104.8x five-year average, still 101.6x on 2028 expected EPS ("This is just ridiculous if you ask me"); a 6.5% expected return even assuming 15% EPS growth for a decade; and a reverse DCF requiring 54.5% annual free-cash-flow growth for ten years. Risks named include Musk himself — "He's a genius and a wildcard. His tweets move the stock, his politics alienate buyers, and he runs 5 companies at once." | read ↗ |
Stance = how each name is framed in this post. Xiaomi and legacy automakers are named in the risk list without description; SpaceX, X (Twitter) and xAI appear only as Musk's other commitments; Nvidia is mentioned as the chip supplier for Tesla's AI training; McKinsey and Grand View Research are cited as forecast sources. All are left to the talking points. Tom Zhu (Senior VP of Automotive) is named as the operational manager.
A jargon-free summary of the thesis behind each argued name. (Renders on each name's consolidated page.)
Tesla sells electric cars (about three-quarters of revenue), batteries and solar for homes, cities and data centres (its fastest-growing line), and services like repairs, charging and self-driving subscriptions. Slegers gives the bull case a fair hearing: Musk owns 24.9% of the company and that stake is nearly half his wealth, so his interests and yours point the same way; the factories cast large parts in single pieces, which is genuinely cheaper; the cars collect driving data that trains the software; and all three end markets are growing fast.
Then the business is measured, and it does not look like a quality company. Of every dollar of sales, only 18 cents survive the cost of building the car (his bar is 40) and only 4 cents reach profit (his bar is 10). The return on the money invested in the business is 4.9% — a bank-deposit sort of number, against a 15% bar. And stock-based pay consumes 74.5% of profit: shareholders are handing three-quarters of the earnings to employees in newly issued shares. The counter-argument is that all of this is temporary, because Tesla is spending ahead of the robotaxi and robot era. That may be true. It is also what every capital-hungry business says.
The valuation is where the case ends. The shares cost 201 times next year's expected profit — and still 102 times profits expected in 2028, three years out. Run it forward generously: assume Tesla grows earnings 15% a year for a decade and the multiple falls to a still-rich 30 times, and you earn 6.5% a year, less than a boring index fund. Run it backwards and the price today already assumes free cash flow grows 54.5% every year for ten years. Nothing at this scale has ever done that. Hence the verdict, which is unusually blunt for this newsletter: "We're not buying Tesla… There are way better companies available on the stock market today."
CATL is the world's largest maker of electric-vehicle batteries, and it appears in this write-up in one sentence that does more damage to the Tesla case than any of the valuation maths: "They supply Tesla with batteries, but they also supply everyone else, giving competitors the same great technology."
That is the test of whether a supplier relationship is a moat. If the critical component comes from an outside vendor who will sell the identical part to every rival, then any advantage it confers is rented rather than owned — and it disappears the moment a competitor places an order. No view is offered on CATL as an investment; it is cited to show where Tesla's cost advantage does and does not come from.
BYD is the Chinese manufacturer that now sells more electric cars than anyone in the world, and — unlike Tesla — makes its own batteries very cheaply. It is named twice: once as the leading competitor in Tesla's largest market, and again in the risk list.
Its significance to the analysis is indirect but important. Tesla's gross margin has fallen to 18%, and one of the two stated reasons is that Tesla "reduced the car prices and engaged in a price war with Chinese EV companies." So BYD is not only taking volume; it is setting the price at which Tesla can sell. Slegers offers no view on BYD's own shares.
Waymo is Alphabet's self-driving subsidiary, and it is named here as "the leader in Robotaxis, with driverless cars already picking up passengers in cities like Phoenix and San Francisco."
That single fact bears directly on the Tesla valuation. A large part of the 201-times multiple rests on robotaxis becoming a real business for Tesla in the future — while a rival is already running the service commercially today. No stance is taken on Alphabet in this issue; the standalone case for it is made in the April shopping-list series.
Summary derived from the archived Compounding Quality post (text in transcript.txt) for personal study. Not investment advice. © Compounding Quality / Pieter Slegers for source material.