I’ve got Tesla on my mind this week. That’s because there are more of them on the streets of North Texas than I’ve ever seen. Yet, as I describe in the section below, there seem to be just as many of them parked in a retail parking lot near State Highway 121 just west of Frisco.
Regular readers are familiar with the fact that I look at what’s happening on the streets as much as I review price charts, which is why I’m leading this post with this observation.
As you can see by the photograph above, which I took in late August, there are lots of cars on this lot. They're all Teslas.
One thought is that these cars may be getting a software update via their OTA (over-the-air) software update system. But if that’s the case, why would they be parked in a retail area parking lot and not some sort of dealer lot.
And how long does it take to update software? These cars, or others like them have been on this lot for weeks.
Moreover, this isn’t a new thing as apparently it happened in 2018 as well. It certainly may be something harmless or just another Musk “made you look” publicity stunt. But when the economy is a skittish as it is currently, the most insignificant things often turn out to be meaningful.
There have been reports lately that EV sales are dropping, as I discuss below. But this seems to be present more in non-Tesla EVs than in Tesla cars, unless the parking lot situation I refer to above means that Tesla is having problems moving vehicles like the rest of the industry.
To be fair, Tesla is building a showroom in Plano, a few miles away from the parking lot. Thus, this could be short term storage spot for vehicles which they expect to sell via the showroom.
Still, that’s a lot of cars just sitting there in the hot Texas sun, in an empty parking lot.
What’s Musk Up To?
One thing that’s evident is that Elon Musk is trying to gobble up as much market share as he can in the EV market by routinely dropping prices on several Tesla models.
And why not? His competitors such as Ford (F), General Motors (GM) and Toyota are struggling to sell cars.
Despite claims that EV sales are on a record pace for 2023, there are also news reports that dealers are turning away new inventory as the cars are piling up on their lots.
According to Business Insider: “Electric-car inventory has been piling up on dealership lots this year as companies up their EV production, leading some dealers to say enough is enough. Some are telling automakers they don't want any more until they can sell what's sitting.”
In my travels, I rarely seen any other brand of EV’s beyond Teslas aside from the occasional Ford Mustang and Kia EV 6. Once in a while I spot a BMW or a Rivian SUV or pickup truck. Certainly Amazon’s delivery fleet is full of Rivians.
Otherwise, it’s almost all Teslas all the time.
Let the Market Do the Talking
Musk may be up to something. And given his record of successes, albeit with plenty of bumps along the way, the most recent action in Tesla (TSLA) suggests that, at least in the short term, the market has its concerns.
As the price chart shows, the stock recently registered a technical failure at the $260 area, which coincides with its 50-day moving average.
A deeper dive shows that investors, although having bought the stock after its recent decline, have been less than all-in on the shares. You can see that in the lack of pop in the On Balance Volume (OBV) line after the stock’s recent move to $300. Moreover, the Accumulation/Distribution line (ADI) has just rolled over, a sign that short sellers are positioning themselves for lower prices.
As things stand, it looks as if Tesla is headed for a possible test of the $200 area, and its 200-day moving average.
Bottom Line
Tesla is a tough stock to trade. Its current trading pattern suggests that the short term may be rocky.
Nevertheless, I don’t know what to make of this parking lot thing. If you have any thoughts on this or have any thoughts on the EV market, message me here, or send me an email at [email protected].