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Rani Molla4/7/25

Ives: Tariffs are a “double whammy” for Tesla in the US and China

President Trump’s tariffs will hurt Tesla in America, since the electric vehicle maker sources components for its vehicles produced here from Canada and Mexico, according to a note Sunday from Wedbush analyst Dan Ives, who lowered his price target from $550 to $315. Even worse, tariffs will also hurt Tesla in one of its biggest markets: China, the “linchpin to the future success of Tesla,” which has recently announced its own retaliatory tariffs.

Per Ives:

“The backlash from Trump tariff policies in China and Musk’s association will be hard to understate and this will further drive Chinese consumers to buy domestic such as BYD, Nio, Xpeng, and others. Tesla has essentially become a political symbol globally... and that is a very bad thing for the future of this disruptive tech stalwart and the brand crisis tornado that has now turned into an F5 tornado. We now estimate Tesla has lost/destroyed at least 10% of its future customer base globally based on self created brand issues and this could be a conservative estimate. In Europe, this number could be 20% or higher... all self-inflicted by Musk.”

Nonetheless, Ives reiterated his firm’s “outperform” rating, adding that “Musk has been with his back against the wall many times and every time Tesla came out of it and was stronger on the other side.”

Tesla stock is trading down more than 40% this year, below where Commerce Secretary Howard Lutnick said last month it would “never be this cheap again.”

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Tesla sales continued to fall in Europe last month — but there were a few bright spots

Tesla’s self-proclaimed “weakest market” continued to look weak in November, as sales mostly kept dropping year over year across European countries, including Sweden, France, and Spain, Reuters reports.

However, there were a couple of notable bright spots for Tesla, which has suffered due to strong competition and an aging lineup. In Norway, as consumers face the end of certain EV subsidies, Tesla sales jumped 175% in November and about 35% for the first 11 months of 2025. Meanwhile, in Italy, sales increased 58% year on year after declining for six months. From January to November, Tesla sales fell 28% there.

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More AI startups are reportedly turning to free Chinese AI models

The biggest tech companies in the world, like OpenAI, Google, and Meta, are racing to build dozens of gigawatts of AI computing infrastructure to meet what they say is incredibly high demand.

But free, open-weight Chinese AI models like DeepSeek and Qwen have been rapidly catching up to the leading frontier models.

According to a report from NBC News, more AI startups are deciding that these Chinese models might be cheap enough and good enough to pass on the state-of-the-art offerings from OpenAI, Meta, and Google. This, of course, would be very bad news for the AI capex orgy that is currently consuming the tech sector.

As the huge, all-purpose models try to do it all, startups are taking advantage of these open-weight models, which can be distilled and customized for specific applications, and usually for a much lower cost.

More of Silicon Valley is building on free Chinese AI

More of Silicon Valley is building on free Chinese AI

According to a report from NBC News, more AI startups are deciding that these Chinese models might be cheap enough and good enough to pass on the state-of-the-art offerings from OpenAI, Meta, and Google. This, of course, would be very bad news for the AI capex orgy that is currently consuming the tech sector.

As the huge, all-purpose models try to do it all, startups are taking advantage of these open-weight models, which can be distilled and customized for specific applications, and usually for a much lower cost.

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“The Big Short” investor calls Tesla “ridiculously overvalued”

“The Big Short” investor Michael Burry says Tesla’s market cap has been “ridiculously overvalued” for “a good long time.” In his latest Substack post, he criticized what he calls the “tragic algebra” of stock-based compensation, arguing that companies like Tesla understate their true economic cost because, though stock-based comp is a noncash expense under GAAP, it still dilutes shareholders.

Burry wrote that CEO Elon Musk’s compensation package — which could reach $1 trillion — ensures that “dilution is certain to continue.” He estimated Tesla’s share count will expand by roughly 3.6% per year without buybacks — far higher than Amazon’s 1.3% and more comparable to Palantir’s 4.6%. In his view, failing to account for this compounding leaves investors with an overly generous picture of long-term profitability.

Tesla didn’t immediately respond to a request for comment.

Foundations: The Tragic Algebra of Stock-Based Compensation

Foundations: The Tragic Algebra of Stock-Based Compensation

Burry wrote that CEO Elon Musk’s compensation package — which could reach $1 trillion — ensures that “dilution is certain to continue.” He estimated Tesla’s share count will expand by roughly 3.6% per year without buybacks — far higher than Amazon’s 1.3% and more comparable to Palantir’s 4.6%. In his view, failing to account for this compounding leaves investors with an overly generous picture of long-term profitability.

Tesla didn’t immediately respond to a request for comment.

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Amazon AWS due to roll out its own updated AI models this week

This week in Las Vegas, Amazon AWS is sure to make some news at its re:Invent developer conference.

AWS is the current undisputed cloud computing leader, serving up AI computing services for many of the top players, but most importantly enterprise darling Anthropic.

Last quarter, Amazon reported that AWS revenue grew 20% year on year and it had a $200 billion backlog of contracted business it was racing to fulfill.

But AWS has greater ambitions than being just a cloud provider. Looking toward efficiency and lower costs, AWS has been developing its own AI models, named Nova. The Information reports that this week will see a significant update to Nova, which was described in the report as the company’s first real “all-in-one” multimodal model.

As AWS Preps New AI Models, Relations With Anthropic Get Complicated

As AWS Preps New AI Models, Relations With Anthropic Get Complicated

Last quarter, Amazon reported that AWS revenue grew 20% year on year and it had a $200 billion backlog of contracted business it was racing to fulfill.

But AWS has greater ambitions than being just a cloud provider. Looking toward efficiency and lower costs, AWS has been developing its own AI models, named Nova. The Information reports that this week will see a significant update to Nova, which was described in the report as the company’s first real “all-in-one” multimodal model.

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Tesla sold more cars in Norway this year than any automaker ever as buyers get ahead of tax hike

Norway is proving to be a rare bright spot in Europe, Tesla’s “weakest market,” with the EV company setting an annual car sales record in the country, Reuters reports. Tesla sales jumped 175% in Norway in November compared to the same month a year earlier, selling more than 6,000 new cars there as customers race to get ahead of what’s effectively a tax hike on EVs when the country rolls back subsidies.

That brings its year-to-date total sales to a record of 28,606 cars — higher than the previous record set by Volkswagen in 2016 — with a month to spare. Last month, fully electric vehicles made up 97.6% of all new cars sold in Norway.

Meanwhile, Tesla sales continue to languish across much of the rest of Europe. Early figures show double-digit declines in France, Sweden, and Denmark in November. Sales in Spain fell nearly 9% last month. Data from October saw sales halve in both the UK and Germany. Europe is Tesla’s third-biggest market after the US and China.

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