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Tesla’s 2020 Aftermath: A look at the shorts who said 500k was ‘absurd’
Tesla’s 2020 showing has created an aftermath of reflection from bulls and bears alike. Despite the company coming off of a record year with a massive 500,000 vehicle delivery and production rate, which was considered “absurd” by some short-sellers in years past, Tesla proved the doubters wrong once again.
Everyone knows that the stock market is really an unpredictable and unfathomably tough thing to read. Some of the world’s best analysts can misread even the slightest bit of data and be miles off of what a particular stock accomplishes. Tesla, which is one of the more polarizing stocks despite its 700% climb in 2020, has had doubters since day 1. The difference between doubters of Tesla and doubters of other companies is that Tesla shorts and bears are some of the most vocal on Wall Street because the company’s momentum and hype have been talked about for nearly a decade.
2020 was easily the toughest year for the U.S. automotive market since the Great Recession of 2008. Tesla was one of the few companies that accomplished the feat of sustaining growth through the year of the COVID-19 pandemic, which crippled many industries, not just the automotive one, for most of the year. However, doubts on Tesla set in way back when the company started in 2008. Six years after Tesla built the original Roadster, analysts were still curious about the automaker’s capabilities moving forward and doubted that it would be able to scale its production to half-a-million cars by 2020. The old saying goes, “hindsight is 2020,” and as Tesla reached its goal for the year, it is easy to sit back and judge those who were wrong. However, their reasoning for not reaching 500,000 vehicles was completely flawed, and everything Tesla said it would do years ago has been accomplished.
Mark Spiegel called 500,000 cars in 2020 “absurd”
Mark Spiegel is a notable Tesla short-seller and has been bearish on the automaker’s stock for years. In 2014, Spiegel posted an article to Seeking Alpha, titled, “Why Projections For Tesla To Sell 500,000 Cars In 2020 Are Absurd.”
Spiegel used data like the compound annual growth rate to support his evidence, stating, “If Tesla sells 35,000 cars this year, 500,000 sales in 2020 would imply a six-year CAGR of 56%.” Additionally, Spiegel did not believe that Tesla could scale growth at that rate in six years because “no complex product manufacturer has ever grown that quickly from a revenue base of $3 billion or more.” But hey, there is a first time for everything.
Microsoft was able to scale its CAGR by 32.1% from 1993 to 1999, which is a six-year time span and was identical to Tesla’s outlook that was challenged in the 2014 article. While Microsoft managed a remarkable 32.1% CAGR because of the evergrowing popularity of the computer and other technology, Tesla’s overwhelming growth throughout the same timespan was due to tech developments, industry influence, proving affordability of electric cars, and a consistent growth rate that proved the company was here to stay.
Spiegel’s outlook for 2020 was 186,000 cars sold by Tesla, but the company managed to nearly accomplish this figure in Q4 alone, as it delivered 180,570 cars in the final three months of the year. Spiegel was way off in his predictions, and Tesla’s domination in 2020 was just one of many examples of analysts getting it completely wrong.
Tesla wasn’t a prime candidate for scaling its products, according to Thomas Bartman
In an April 2015 article in the Harvard Business Review, Thomas Bartman wrote an opinionated piece called, “Why Tesla Won’t Be Able to Scale.” Bartman claimed that Tesla’s EVs were “not actually disruptive, which will likely cause it to struggle to scale.” Bartman didn’t have the Model 3 to use as a benchmark at the time, but he doubted that Tesla would be able to sell a vehicle for $35,000, which it did.
“Tesla plans to launch a ‘mainstream’ luxury car, the Model 3,” Bartman wrote, “which it estimates will cost $35,000, although analysts have begun to question the feasibility of reaching that price point.” Tesla did discontinue this variant in late 2020, but the Standard Range Model 3 was available for over three years. The Standard Range+ was only $2,770 more and was more popular because of the range. Also, the SR was not listed on Tesla’s website and had to be ordered in a showroom or over the phone.
Bartman believed that Tesla had launched two good vehicles in the Model S and Model X, but legacy auto would quickly catch up after a few years. However, this has been proven wrong repeatedly, as companies like Mercedes-Benz and Audi have failed to launch effective and competitive EVs that are comparable to Tesla’s models globally. The Model 3 continues to dominate in China and the U.S., and the Model Y is gaining plenty of momentum as it nears the one-year mark since its first deliveries.
Tesla China Model Y attracts flocks of customers in local showrooms
“As Tesla attempts to scale, it’s likely to discover that its internal impediments, combined with competitor responses, make it much harder than anticipated,” Bartman said. “The symptoms of these problems will manifest as product launch delays, cost overruns, and higher than expected prices.”
The only issue is that Tesla was able to internally combat production issues, even though Elon Musk has admitted many times that Model 3 manufacturing was “production hell.” The company has effectively beaten all of its competitors to launching an effective and cost-worthy electric car by launching four of them.
Hindsight is 2020
With 2020 over (thank God), Tesla and analysts are already looking forward to the new year. 2021 has plenty in store for Tesla: Two production facilities in the U.S. and Europe are set to begin manufacturing efforts, the launch of the Cybertruck at the tail-end of the year, and a possible refresh of the Model S and Model X. Moving forward, Tesla shorts may be more cautious, especially considering their traumatic $38 billion loss this year.
Elon Musk
SpaceX issues statement on Starship V3 Booster 18 anomaly
The incident unfolded during gas-system pressure testing at the company’s Massey facility in Starbase, Texas.
SpaceX has issued an initial statement about Starship Booster 18’s anomaly early Friday. The incident unfolded during gas-system pressure testing at the company’s Massey facility in Starbase, Texas.
SpaceX’s initial comment
As per SpaceX in a post on its official account on social media platform X, Booster 18 was undergoing gas system pressure tests when the anomaly happened. Despite the nature of the incident, the company emphasized that no propellant was loaded, no engines were installed, and personnel were kept at a safe distance from the booster, resulting in zero injuries.
“Booster 18 suffered an anomaly during gas system pressure testing that we were conducting in advance of structural proof testing. No propellant was on the vehicle, and engines were not yet installed. The teams need time to investigate before we are confident of the cause. No one was injured as we maintain a safe distance for personnel during this type of testing. The site remains clear and we are working plans to safely reenter the site,” SpaceX wrote in its post on X.
Incident and aftermath
Livestream footage from LabPadre showed Booster 18’s lower half crumpling around the liquid oxygen tank area at approximately 4:04 a.m. CT. Subsequent images posted by on-site observers revealed extensive deformation across the booster’s lower structure. Needless to say, spaceflight observers have noted that Booster 18 would likely be a complete loss due to its anomaly.
Booster 18 had rolled out only a day earlier and was one of the first vehicles in the Starship V3 program. The V3 series incorporates structural reinforcements and reliability upgrades intended to prepare Starship for rapid-reuse testing and eventual tower-catch operations. Elon Musk has been optimistic about Starship V3, previously noting on X that the spacecraft might be able to complete initial missions to Mars.
Investor's Corner
Tesla analyst maintains $500 PT, says FSD drives better than humans now
The team also met with Tesla leaders for more than an hour to discuss autonomy, chip development, and upcoming deployment plans.
Tesla (NASDAQ:TSLA) received fresh support from Piper Sandler this week after analysts toured the Fremont Factory and tested the company’s latest Full Self-Driving software. The firm reaffirmed its $500 price target, stating that FSD V14 delivered a notably smooth robotaxi demonstration and may already perform at levels comparable to, if not better than, average human drivers.
The team also met with Tesla leaders for more than an hour to discuss autonomy, chip development, and upcoming deployment plans.
Analysts highlight autonomy progress
During more than 75 minutes of focused discussions, analysts reportedly focused on FSD v14’s updates. Piper Sandler’s team pointed to meaningful strides in perception, object handling, and overall ride smoothness during the robotaxi demo.
The visit also included discussions on updates to Tesla’s in-house chip initiatives, its Optimus program, and the growth of the company’s battery storage business. Analysts noted that Tesla continues refining cost structures and capital expenditure expectations, which are key elements in future margin recovery, as noted in a Yahoo Finance report.
Analyst Alexander Potter noted that “we think FSD is a truly impressive product that is (probably) already better at driving than the average American.” This conclusion was strengthened by what he described as a “flawless robotaxi ride to the hotel.”
Street targets diverge on TSLA
While Piper Sandler stands by its $500 target, it is not the highest estimate on the Street. Wedbush, for one, has a $600 per share price target for TSLA stock.
Other institutions have also weighed in on TSLA stock as of late. HSBC reiterated a Reduce rating with a $131 target, citing a gap between earnings fundamentals and the company’s market value. By contrast, TD Cowen maintained a Buy rating and a $509 target, pointing to strong autonomous driving demonstrations in Austin and the pace of software-driven improvements.
Stifel analysts also lifted their price target for Tesla to $508 per share over the company’s ongoing robotaxi and FSD programs.
Elon Musk
SpaceX Starship Version 3 booster crumples in early testing
Photos of the incident’s aftermath suggest that Booster 18 will likely be retired.
SpaceX’s new Starship first-stage booster, Booster 18, suffered major damage early Friday during its first round of testing in Starbase, Texas, just one day after rolling out of the factory.
Based on videos of the incident, the lower section of the rocket booster appeared to crumple during a pressurization test. Photos of the incident’s aftermath suggest that Booster 18 will likely be retired.
Booster test failure
SpaceX began structural and propellant-system verification tests on Booster 18 Thursday night at the Massey’s Test Site, only a few miles from Starbase’s production facilities, as noted in an Ars Technica report. At 4:04 a.m. CT on Friday, a livestream from LabPadre Space captured the booster’s lower half experiencing a sudden destructive event around its liquid oxygen tank section. Post-incident images, shared on X by @StarshipGazer, showed notable deformation in the booster’s lower structure.
Neither SpaceX nor Elon Musk had commented as of Friday morning, but the vehicle’s condition suggests it is likely a complete loss. This is quite unfortunate, as Booster 18 is already part of the Starship V3 program, which includes design fixes and upgrades intended to improve reliability. While SpaceX maintains a rather rapid Starship production line in Starbase, Booster 18 was generally expected to validate the improvements implemented in the V3 program.
Tight deadlines
SpaceX needs Starship boosters and upper stages to begin demonstrating rapid reuse, tower catches, and early operational Starlink missions over the next two years. More critically, NASA’s Artemis program depends on an on-orbit refueling test in the second half of 2026, a requirement for the vehicle’s expected crewed lunar landing around 2028.
While SpaceX is known for diagnosing failures quickly and returning to testing at unmatched speed, losing the newest-generation booster at the very start of its campaign highlights the immense challenge involved in scaling Starship into a reliable, high-cadence launch system. SpaceX, however, is known for getting things done quickly, so it would not be a surprise if the company manages to figure out what happened to Booster 18 in the near future.
SpaceX issues statement on Starship V3 Booster 18 anomaly
Tesla analyst maintains $500 PT, says FSD drives better than humans now
