Tesla's Declining EV Revenue Raises Concerns Over Future Cash Flow

20 days ago

Speaker

"for investors that pay attention to actual information and investors that value a business based on the present value of the expected cash flow that's expected to be generated for the future, then of course that's information that suggests that this business is worth a lot less than what it's selling for today. And so if your cash flow is decreasing, which is what's happening with Tesla, as the EV sales decline, its cash flow will decline. And simultaneously, it's investing billions of dollars for the development of these new technologies, which are not likely to generate positive cash flow in 2026, not likely to generate positive cash flow in 2027, not likely to generate positive cash flow in 2028, and maybe starting 2029, the driverless car business will grow to sufficient levels where it can achieve positive cash flow for the business."

The speaker highlights that despite investor enthusiasm for Tesla's futuristic driverless and robotics segments, the company's core EV revenue is declining sharply, leading to deteriorating cash flow. This analysis suggests that when considering the present value of future cash flows, Tesla may be overvalued, especially as it invests heavily in new technologies that might not turn profitable for several years.

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