Tesla (TSLA)
Death of the Auto Moat
TLDR Snapshot
The market priced Tesla for a funeral; management delivered a $1.4 billion free cash flow surprise. While the Street obsessed over a 7% delivery dip, the real signal was the 19.2% automotive gross margin (excluding credits) and a 51% surge in Full Self Driving subscriptions to 1.28 million users. But that doesn’t change our view. We are short, and we will continue to be short.
The binary choice: you either believe Tesla’s $25 billion+ 2026 Capex spend buys a “Physical AI” monopoly, or you believe it’s a $5 trillion capital trap. The math follows.
