Trump's Auto Tariffs Are A Clear Positive For Tesla (TSLA)

Please start out by reading the Morning Capsule, ‘FANTASY HOPIUM OF THE MOMO CROWD COMES CRASHING DOWN, EU WARNS CITIZENS TO STOCKPILE FOOD‘.

The just announced tariffs are positive for TSLA.  The reason is that TSLA is doing its manufacturing in the United States.  However, it is not all clear for TSLA for the following reasons:

• Many TSLA parts are foreign made. As a result, there is a significant negative impact on TSLA.
• Musk is acknowledging that TSLA is not unscathed.
• At its recent high, TSLA stock approached the resistance zone.
• TSLA's business of selling cars is worth less than $100 a share.
• The only way to justify TSLA’s valuation is good outcomes in the following:
  • Robotaxis
  • Humanoid Robots
  • Energy Storage
• The Chinese company BYD (BYDDF) developing a five minute car charging system also poses a risk if TSLA is not able to quickly catch up.
• Backlash from Musk's politics.

Zones

As full disclosure, TSLA is in The Arora Report’s Core Model Portfolio in ZYX Buy.

Consider scaling in on a dip in the buy zone.

TSLA is suitable only for aggressive investors as a wide range of outcomes are possible.

The target zone is $683 – $712 in the base case, assuming some success with robotaxis and robots.  In the optimistic case, the target zone is $2300 – $2600.  In the pessimistic case, the target zone is $56 – $83.

What To Do Now

Those in TSLA stock may consider continuing to hold.

Those not in TSLA stock may consider following the parameters given above.