So here's my take. There's a difference between the question "is there a possibility that the stock will tank" and "is it more probable that it will go up or down in the long run." The answer to the first question is undeniably yes, but you need to look at the odds. Looking at the likelihood of that probability determines how much exposure to TSLA you're comfortable with given your risk tolerance, rather than whether to invest at all. Myself, I've got 5% of my investments in TSLA, which makes it my second largest individual stock (since the vast majority of my money is in indexed ETFs). In your list of doomsday scenarios you forgot one:
A major earthquake on the Hayward fault disrupts production for an extended period. There's a 30% chance of a major quake in the next 30 years, and the Fremont factory is less than 5 miles from the fault. While the odds of the factory being destroyed are very slim (it would probably take a huge fire for that), machinery could be damaged and production could need to be halted for some time (days? weeks?). Prior to the last offering I was worried that such a scenario could easily bankrupt Tesla. Now I think it could weather it, but a disruption like that in manufacturing would still be a major setback.
Now in terms of the second point I would separate near and far term risks. In the near term I don't see much likely downside. All the talk of electricity prices and chargers and stuff completely misses the point that the Model S is a fantastic car, and if you drive it you want to own it. I invested in Tesla right after my first test drive because I realized they had a major hit on their hands. The biggest concern then was their ability to manufacture it in volume and make a profit (this was almost a year ago), but I think that seems pretty settled. What markets it's most popular in and how fast it grows are interesting questions, but I firmly believe the demand will be there. Competition in the next 3 years doesn't exist, because cars don't just spring out of nowhere and there isn't a single car manufacturer working on anything remotely competitive.
When you get to the Gen III timeframe things are fuzzier. Another car manufacturer could come up with real competition, Tesla's offering might not be as great as we hope. Battery problems might constrain supply, etc. At this price the stock certainly isn't a surefire hit, but I believe shorting the stock is even riskier. My bet for Tesla in the long term is that I believe other car manufacturers still see electric as a niche offering and I don't see them coming up with a real competitor until after Tesla has a successful Gen III (and I think Tesla will be able to have a successful Gen III). It's a bet, and it isn't a sure thing, but I think there's a good chance and a nice upside to the stock if it happens. Although there are valid bear scenarios (as opposed to most of the nonsense you read) I think a scenario that increases the stock value over time is more likely. As a consumer I'd love to see real competition, I just haven't seen any signs of it yet.
A major earthquake on the Hayward fault disrupts production for an extended period. There's a 30% chance of a major quake in the next 30 years, and the Fremont factory is less than 5 miles from the fault. While the odds of the factory being destroyed are very slim (it would probably take a huge fire for that), machinery could be damaged and production could need to be halted for some time (days? weeks?). Prior to the last offering I was worried that such a scenario could easily bankrupt Tesla. Now I think it could weather it, but a disruption like that in manufacturing would still be a major setback.
Now in terms of the second point I would separate near and far term risks. In the near term I don't see much likely downside. All the talk of electricity prices and chargers and stuff completely misses the point that the Model S is a fantastic car, and if you drive it you want to own it. I invested in Tesla right after my first test drive because I realized they had a major hit on their hands. The biggest concern then was their ability to manufacture it in volume and make a profit (this was almost a year ago), but I think that seems pretty settled. What markets it's most popular in and how fast it grows are interesting questions, but I firmly believe the demand will be there. Competition in the next 3 years doesn't exist, because cars don't just spring out of nowhere and there isn't a single car manufacturer working on anything remotely competitive.
When you get to the Gen III timeframe things are fuzzier. Another car manufacturer could come up with real competition, Tesla's offering might not be as great as we hope. Battery problems might constrain supply, etc. At this price the stock certainly isn't a surefire hit, but I believe shorting the stock is even riskier. My bet for Tesla in the long term is that I believe other car manufacturers still see electric as a niche offering and I don't see them coming up with a real competitor until after Tesla has a successful Gen III (and I think Tesla will be able to have a successful Gen III). It's a bet, and it isn't a sure thing, but I think there's a good chance and a nice upside to the stock if it happens. Although there are valid bear scenarios (as opposed to most of the nonsense you read) I think a scenario that increases the stock value over time is more likely. As a consumer I'd love to see real competition, I just haven't seen any signs of it yet.
