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Uh, we still think it's way underestimated. Our bear case for this stock has been 1,500. Now, that's a five-year price target. Okay. That assumed that Tesla would lose market share. We first made this analysis in 2018. 2018, Tesla had uh 17% share of the global EV market, including China. Last year, uh I think I've got this number right, they had 23% share.
We assumed for our bear case that Tesla would lose market share from that 17% and go down to in our base case 11% and in our bear case 6%. Instead, what has happened, it went up to 23% last year, and now I think we're up to this is rough uh as of mid-year uh about 26%. So, it's still increasing. Has 78% to 80% share in the United States.
And even in China, where I think there are 150 electric vehicle manufacturers, Wow. crazy, crazy, um Tesla has 21 had in June 21% of that market. Think about that. 150 and Tesla is 21%. Now, That's incredible, yeah. It is incredible. What's really interesting is Pinduoduo, Yeah. which is a social commerce company, Yeah.
It uh basically is giving away a Tesla or there's some or selling a Tesla, selling, selling Tesla on its network for a discount. And Tesla has had uh has had to go to them and say, "Wait a minute, the customer is ours, not yours." So, they but think about that. Pinduoduo thinks this is so important in China is going to be such a business getter Yeah.
uh or driver for that it So that's that's the first thing. So it's not losing share, it's gaining share. And in that bare case we have nothing for autonomous at all and nothing for ride hailing. Ride hailing we do think they're going to start a ride hailing service this year. They're going to compete against Uber and Lyft.
We believe if they do that and and again we think they will. [snorts] We think that the bare case is history. Our base case will also go up if they do launch this ride hailing network cuz we have not included that and in our base case we have simply assumed that they keep their share from last year not lose it.
So I believe I'm right. We may assume we may be assuming it that it does go back to 17%. I'll have to check on that. But but nonetheless our minimum hurdle rate of return for any stock in our portfolio is 15% at a compound annual rate over the next five years. That means a doubling over five years. We believe it will drive more performance than most stocks in our portfolio even Little Now with the legislation or with in California and obviously Uber's been affected with it having to have full-time employees, would a Tesla be affected by that?
Would their ride hail network be affected by that or it's just these are Tesla drivers and and they're just taking advantage of their Tesla car and connecting with other drivers and and driving to from one location to the other? Well even well Tesla could actually hire these people, make them full-time employees because the the total cost of ownership for a Model 3 today Mhm.
is about 30% less than a Toyota Camry. Mostly because of the residual value. In fact, I've seen some Model S's selling for 90% of what people bought them for. And we think Model 3's will be even better if those become the ride hailing network cars. So, what's going to happen? You'll be shocked at how perfect the small details are.
So, why not? Make sure to get yours from the official website because they guarantee you can resell it at a much higher price in the future. Tesla will say to person, "Join us and for $5,000 down or $7,000, buy well, we'll let you buy a Model 3. You can work the rest of the price off. And oh, by the way, it's going to be cheaper for you than a Toyota Camry." So, they will do that.
And then what does that do? If they if they drive for 50% or 60% of the day compared to the 5% of the day that I drive and less than that now that I'm not driving to the train station, they're going to be delivering real miles data, real miles traveled to Tesla to feed its autonomous network. So, we think they have somewhere between 14 and 15 billion miles worth of data.
The just like what I mentioned with the genomic space data invite, same is true in the autonomous taxi network. The winner is going to be that company with the most data and the highest quality data and the best AI deep learning neural network expertise. Little can justify Tesla's high stock price as its margins are on par with lower valued competing automakers is what an analyst Bernstein wrote on Tuesday.
And what's more, the electric vehicle firm offers no obvious catalyst to spark growth down the road, is what the analyst said, cutting their price target on Tesla to $120 a share from $150. And that implies a 33% drop from where the stock traded on Wednesday. And Tesla's stock price remains high on almost every valuation metric compared to both traditional and higher-growth auto OEMs.
And also looks expensive relative to its reduced growth expectations when you measure it against tech companies, is what the analyst led by Tony and already the EV maker has slumped aggressively year-to-date with missed Q4 earnings spurring on the route. The stock has shed around 30% since the year's start.
And but despite its underperformance, Tesla still holds a massive premium against other auto firms with a valuation that is sixfold higher than other manufacturers. And that is because Tesla historically held a much higher growth rate, but that's less the case today. And with that being said, today Tesla's margins are in line with our US and some cases lower than US, Japanese, and US OEMs.
And its And its forward growth rate is more comparable to Toyota and Honda and lower than that of BYD. And while Tesla commands premium multiples above large-cap tech firms, its margins are significantly lower among this cohort as well. And according to the notes, softer demand is chipping away at Tesla's production volumes as EV adoption decelerates in Europe and the US, while the launch of Highland model in China failed to showcase a step change in demand.
And Bernstein lowered its production forecast to 1.98 million for the year against the consensus of 2.06 million. And tepid growth will continue into 2025. However, Tesla is still forecast to become the highest world's volume auto maker and bullish investor may point to Tesla's full self-driving technology as a transformative venture that should justify with stock price over time.
But Bernstein notes that other manufacturers are also competing in the space and it's also unlikely that Tesla makes makes ground as a robot taxi service as Waymo already dominates this field. They have also pointed out Tesla's venture into robotics and AI including the Optimus and Dojo announcements.
But as with self-driving, the firm is already behind with CEO Elon Musk downplaying Dojo as a long shot is what Bernstein said. And Tesla is the worst performing stock in the S&P 500 index and Apple has had its own struggles to start 2024. And the so-called magnif- magnificent seven stock had a good run, but Apple and Tesla's continued misfortunes means they've underperformed their big tech rivals.
And analyst at Jonas Trading who claims he coined the moniker representing Google, Meta, Nvidia, Amazon, Apple, and Tesla said at the end of Feb that the cohort of tech brands is no more even as the others continue to affec- affectionately use the magnificent seven title. And Apple and Tesla shares are down year to down year to date, while the four others continue to show gains.
Tesla is the worst performer of the group showing both a 30% year-to-date stock decline and a year-over-year slump of 7%. And in fact, Tesla is the worst performing stock in the S&P 500 as the company faces slowing EV demand and rising competition in China. And meanwhile, Apple is still up year-over-year 9% despite the fact that it's down in 2024 so far.
And the Tim Cook held the company is dealing with blowback from regulators both at home and abroad over its anti-competitive practices. And coming back to Tesla, Wedbush analysts slashed its price target for Tesla stock warning of a difficult period ahead for the electric vehicle maker following a terrible first quarter for deliveries, and analysts have cut their price target for Tesla to $300 a share, which was down from $315 a share.
And that still implies a 66% upside for the stock, but the firm said in a note on Wednesday that the outlook for Tesla was uncertain, evidenced by difficult first quarter. And the Wedbush analyst estimated that deliveries in China were most likely down 3% to 4% year per year per year, and that's setting the stage for Tesla to hit only 2 million in deliveries for the whole year.
They projected down from the originally expected 2.1 million deliveries. And let's call it like it is. Quarter one deliveries have been a nightmare quarter for Tesla as China demands China demand remains very soft coming out of the gate for 2024, while supply issues like the factory downtimes, the Berlin fire has impacted the supply.
There is no denying that this has been a quarter to forget for Elon Musk and Tesla is what the Wedbush analyst said. And for Elon Musk, this is a fork in the road. Time to get Tesla through this turbulent period, otherwise darker days could be ahead. And the sagging demand is exacerbated by the fact that investors are growing tired of ongoing issues within Tesla's leadership and with Elon Musk.
Elon Musk caused a firestorm earlier this year stating that he might move artificial intelligence projects outside of Tesla. And a Delaware court also recently struck down his 55.8 billion pay package, leading Elon Musk to say he'd start shifting Tesla's state of incorporation from Delaware to Texas.
And Wedbush still has a high level of confidence in in Tesla's full self-driving technology, as well as its AI software growth, but the company's challenges are creating a bleaker near-term outlook. And while Tesla right now is caught between two waves of growth, patience is starting to wear very thin among investors, is what the analyst said.
And there are a handful of things Elon Musk and Tesla can do to reset the trajectory of the EV maker, is what the Wedbush analyst said. Corrective measures include offering more guidance on deliveries and profits in 2024, building a strategy to address demand issues in China, and Elon Musk's trading is full commitment to being Tesla CEO for the next 3 to 5 years including its AI projects.
Now, this will make Tesla stock very stable and the investors will also be like, "Okay, everything is going fine with Tesla." And according to Wedbush analyst, what Tesla stock needs to show right now is a little bit of stability and unified front and present a unified front. And we remain bullish on Tesla over the next few years despite the near-term dark storm demand clouds forming with China.
However, getting through this white-knuckle period will be a defining chapter for Elon Musk and Co. and the future of Tesla. And other Wall Street analysts have also slashed their price targets for Tesla. The stock is down 27% this year diverging sharply from the performance of other Magnificent Seven names such as Nvidia and Microsoft.
Well, right now Elon Musk wants you to stop thinking of Tesla as just a car company. Yes, electric vehicle maker does indeed make electric vehicles, but the CEO is hoping people will look beyond that at a particular point. Elon Musk has said that Tesla should really be thought of as a roughly a dozen technological startups, many of which have little to no correlation with traditional automotive companies.
Tesla is currently between two major growth waves. Tesla told analysts during the company's January's earnings call. We're focusing on making sure that our next growth wave driven by next generation vehicle, energy storage, full self-driving, and other projects is executed as well as possible. And full self-driving or FSD came into focus earlier this week when Elon Musk told Tesla employees that it would be mandatory for its North American operations to install and activate the software in new Tesla vehicles and to take customers on a short test drive before handing over the car.
And almost no one actually realizes how well the FSD works is what Elon Musk said. And I know this will slow down the delivery process, but it is nonetheless a very hard requirement. So, that's it guys for m, and I hope you all have a good day.
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