Tesla's Future: Navigating Geopolitical Risks, Unionization, and the Crucial Need for New Products

Tesla's 76% share price growth since January contrasts sharply with flat auto sales, raising investor concerns.

### The Future of Electric Vehicles: Growth, Tariffs, and Market Dynamics
* 🚗 "One out of five of all cars sold globally in 2024 will be electric or hybrid," highlighting a significant shift in the automotive landscape with a **25% year-over-year growth**.
* 📊 In 2024, **17 million electric vehicles (EVs)** are expected to be sold globally, with the U.S. and Canada showing solid growth at about **12%**, while China is experiencing a remarkable **40% growth rate**.
* ⚖ The ongoing trade tensions between the U.S. and China raise concerns, especially with the U.S. imposing a **30% tariff on Chinese cars**, which could provoke **retaliatory measures from China**.
* 📈 Tesla's stock has **surged 76%** since the beginning of the year, but maintaining this growth will be challenging without introducing new products, as sales growth has **plateaued**.
* 🔍 Investors are closely watching for a potential **new sub-$30,000 Tesla model** expected in 2025, which could be **pivotal for the company's future**.
* ⚡ The energy division of Tesla is showing promise with a **75% year-over-year growth**, indicating that automakers are evolving into **energy companies** as well.
* 🤝 Labor dynamics are crucial in the EV space, with potential **unionization efforts at Rivian** and **rising labor costs** posing challenges for traditional automakers like GM and Ford.
* 🔄 Overall, the interplay of **market growth, tariffs, product innovation, and labor relations** will significantly shape the future of the electric vehicle industry.

How are you thinking?
The landscape changes come January 20th.
Well, let's look at the big picture first.
Some people are saying, 'If growth is slowing down,' nonsense!
One out of five of all cars sold globally in 2024 will be electric or hybrid.

So we're living in a TV world, and it's just moving faster. It's 25% year-over-year growth.
17 million EVs sold globally. U.S./Canada, solid growth, about 12%. China, red hot at 40%.
Are these big stories?

If you talked about Tesla versus BYD, who's going to be the global leader?
And then there's this other issue of U.S. versus China, and how are tariffs going to affect this?
And what people have to remember...

The U.S. has already slapped 30% tariffs on any Chinese car sold in the U.S., but that's virtually none. You've got to ask the question, what happens if the Chinese slap 100% tariffs on U.S. cars or automakers selling cars that...

...happen?
Do you think that's a high risk even for a Tesla?
Oh, look, whenever tariffs are slapped on by one country or another, you've got to expect the other country to respond.
The big question is, is it cars that are...

...already made in that country or just cars that come from the U.S. going to China?
But the punchline is the same. There are a lot more U.S. automakers selling cars into China than vice versa.
So the U.S.

Needs to be careful on this one. And yet we have seen vibes, or whether it be real political clout, driving Tesla's share price up ever since the election results. Has any of this China-U.S. tension been priced in, do you think, Steve?

Well, I think people don't have their arms around it quite yet. So you've got to look at the Tesla share price: 76% growth since January 1st of this year. That's astonishing. The big question is, can Tesla keep it up?

And I think it's going to be tough without getting some new products into the market. Tesla's auto growth this year, after roaring sales growth in 2021 and 2022 of 51% and 70%, is near flat. 

So Tesla's got to get this newer, lower-cost car into the market. There are new rumors that there's going to be a new sub-$30,000 model coming sometime in 2025. But we've got to make sure that's real. So investors have to look at it.

I think 2025 is going to be a make-or-break year. It could see new heights if they can get a lower-cost car out and full self-driving improves. But it also means that if they don't get a new car to market, and sales stay flat, that's going to scare people.

Now, as an investor, Steve, how hard has it been to read the tea leaves? Because we're trying to understand whether they're just going to cut costs of current models on the market and get...

us to some sort of sense of affordability, because Elon just signals time and time again he's more interested in the robotaxi side and the full self-driving side. It's incredibly hard. I mean, the share price going up 75% when sales are flat.

I don't think anybody's ever seen anything like that before. What's going on? Kind of a bet on full self-driving and probably a bigger bet on Musk's relationship with President Trump. What no one's talking about is, very quietly, the energy division looks like

the saving grace for Tesla, 75% year-over-year growth. The other thing investors have to get their arms around is auto companies aren't just auto companies anymore. They're also energy companies, too. And it's a whole new world. You've got to pay attention, got to pay

attention to the politics involved. This week, of course, we saw that again; California is really going to be focusing on ensuring EV adoption, Steve, where you sit. But also we've got a news story around the potential unionization, let's call it subtly, being done with Rivian.

We understand the UAW has reached a kind of secret deal with Rivian to make unionization easier as and when it becomes a profitable company. How much do you think that's a key area, the labor side of things for the EV

space?
Well, look at the labor sites. Huge, because labor costs are going up. This is one of the things that's plagued GM and Ford for years. And what's interesting is Musk is great at pulling out all the stops, making things go faster than any other

automaker, but it still has to deal with unions. And he may be the wealthiest guy in the world, but that's not going to impact how well he wins union battles. German workers potentially out on strike soon, precisely when he's trying to catch up for Q4 sales.

So it's going to be interesting to see if Tesla's auto sales can increase this year. It cannot show year-over-year growth. Gosh, that's going to be a tough one to sell to shareholders. We'll see.

Tesla Needs New Products: Westly Group

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Bloomberg Technology

Significant growth in electric and hybrid vehicle sales is projected, with one in five cars sold globally in 2024 expected to be electric or hybrid.

Year-over-year growth in EV sales is substantial, with global sales reaching 17 million units.

Regional growth varies, with strong performance in China (40%) and solid growth in the U.S./Canada (12%).

Competition between Tesla and BYD for global leadership is highlighted.

The impact of US-China trade tensions and tariffs on the automotive industry is discussed.

The US has imposed 30% tariffs on Chinese cars sold in the US, while the potential impact of Chinese tariffs on US cars is analyzed.

The potential for retaliatory tariffs and their impact on car manufacturers is discussed.

The US automotive industry's greater reliance on the Chinese market compared to vice-versa is noted.

The influence of political factors on Tesla's share price is examined.

Tesla's share price has seen significant growth (76% since January 1st), despite near-flat auto growth in 2024.

Tesla's sales growth slowed significantly compared to previous years (51% and 70% in 2021 and 2022, respectively).

The importance of launching a lower-cost car model (sub-$30,000) by 2025 is emphasized for Tesla's future success.

2025 is identified as a critical year for Tesla, depending on the success of the new car and full self-driving technology.

Tesla's Investment Landscape and Challenges

The difficulty of interpreting Tesla's market performance due to conflicting signals regarding cost-cutting and focus on other projects is discussed.

The disconnect between Tesla's flat sales and its rising share price is highlighted.

Tesla's energy division is presented as a potential saving grace, with 75% year-over-year growth.

The diversification of auto companies into energy companies is mentioned as a key trend.

California's focus on EV adoption and potential unionization efforts at Rivian are discussed.

The significance of labor costs and unionization in the EV industry is highlighted.

Tesla's approach to labor relations and the challenges it faces with unions are analyzed.

Potential strikes in Germany and their impact on Tesla's Q4 sales are mentioned.

The difficulty of Tesla demonstrating year-over-year growth in auto sales is highlighted.