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The Tesla Bubble Is Bursting

Summary

  • Recent news has painted a positive picture of Tesla, with the first orders of the Model X set to be delivered at the end of September.
  • However, the first orders of the Model X demonstrate continued production problems, exaggerated promises, and profligate spending that has led to dilution.
  • Looking at Tesla in the context of low oil prices and broader market changes highlights serious challenges in the months and years ahead.
  • Although Tesla bulls have helped its share price rally over the past few months, the Tesla bubble finally appears to be bursting.

Introduction

Tesla (NASDAQ:TSLA) is reporting what appears to be lots of good news as of late. CEO Elon Musk noted in a series of tweets that the first Model X deliveries will be on September 29th, Model 3 preorders will begin next March, and there are positive reports about the new 90-kWh battery for the Model S that allows the car to go into "ludicrous" mode, jumping from 0-60 in less than 3 seconds.


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