Thread by @heydave7

1/ Tesla’s surprise Q1 report (185k vehicles delivered) removes much uncertainty many investors had, namely poor Q1 earnings could lead to a depressed stock price that could last multiple quarters.

This is a big opportunity for sentiment to turn positive.

2/ Tesla smashed expectations despite Q1 being seasonally weakest quarter and no refreshed S/X deliveries

Q2 will only get better with Shanghai continuing to ramp Model Y production and Tesla able to deliver refreshed S/X.

3/ Q1’s blowout deliveries also means that Tesla might post record Q1 earnings and profits.

As Tesla increases deliveries EVERY quarter this year, revenue & profit increase every quarter especially because revenue & gross profit will increase much faster than operating expenses.

4/ As long as there aren’t major operational hiccups, Tesla has a clear path to increase revenue AND profits every quarter for at least the next few years. This is not being talked about and something that those betting against Tesla don’t understand.

5/ This week is an opportunity for smart shorts to exit and close their positions. Smart ones will. Lots won’t though and they might get trapped, especially when Tesla posts record Q1 earnings in a few weeks.

6/ A lot of TSLA’s price action though will be impacted by the macro environment (ie., interest rates and investor appetite for growth stocks). Poor macro environment could weight on TSLA. But if macro environment cooperates, could be very good next several months for TSLA.

7/ And the momentum could likely continue into 2022 as Berlin and Austin kick off production in mid-late 2021 and Shanghai fully ramps Model Y production.

And then, you could see Tesla announced the $25k (perhaps in first half of 2022?).

8/ Also Tesla FSD will go into wide release and likely increase take-rate and improve Tesla margins.

Tesla also will start a SaaS (software as a service) business by opening up a monthly subscription for FSD.

9/ On top of all this, around mid-2021 we might see the Biden EV tax credit/rebate get passed and Tesla will likely be a huge beneficiary. Depending on the details, Tesla could see huge uptake in demand for all their products in the U.S.

10/ All of this above likely gives confidence to Tesla’s management that they ought to push hard and be aggressive with production and delivery targets.

It’s a fine line to play - give conservative guidance, but have aggressive goals.

11/ All investments have their risks and short-term price movements are always hard to predict, thus each person should make their own judgment and assessment always.

Best of luck as always. 👍