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Most stocks have a bull case and a bear case, but Tesla Inc. TSLA-Q shares have been driven by a bro case.

The astonishing rise in the company’s stock, particularly since the COVID-19 pandemic, could be seen as investors piling into the one company that will dominate the future automobile industry and use its technological innovation to vault into a leadership position in multiple markets.

But even that shouldn’t get you to a market value of more than US$1-trillion, which Tesla hit early last year. Instead, the true differentiator for Tesla is toxic masculinity: Dudebro investors’ muscular embrace of Tesla CEO Elon Musk, the alleged alpha male who’s brought so much alpha to the company’s shares.

You may recently have seen a fair amount of Mr. Musk in his new role of “Chief Twit” of Twitter, his little US$44-billion vanity project. It’s a fascinating real-time business experiment that, dare we say, may have dimmed some of the sheen of Mr. Musk’s halo. He’s brought to it a herky-jerk management style with plenty of jerk.

The continuing Twitter clown show – coupled with the recent vehicle price cuts at Tesla raises the question of what happens if membership in Mr. Musk’s cult of personality shrinks, and investors value Tesla like other carmakers? The answer, I’m afraid, is that Tesla shares could fall precipitously.

That analysis, of course, is coming from the reality-based community. That’s not where Tesla shareholders have hung their hats. Tesla is not an auto company; it’s the future of tech, they say. Adam Jonas, an analyst at Morgan Stanley, derives his current US$220 price target by putting a value of US$116 per share on the car operations, plus US$104 on Tesla businesses like “mobility,” “energy,” “insurance” and “network services,” none of which really exist today in any meaningful way.

Elon Musk’s mysterious ways on display in Tesla tweet trial

Elon Musk’s tweeting style seizes spotlight in Tesla trial

But US$116 for the U.S. auto business looks aggressive as well. Tesla automobiles are remarkable for being one of the few things in the inflationary global economy that cost less now than they did a year ago. Tesla cut prices on several models earlier this month, which also served to tank the used-Tesla market.

Tesla bull-bros argue that the price cuts are the next step in global domination, ensuring the cars’ affordability to even more consumers. (Tesla told shareholders last week “Improving affordability is necessary to become a multimillion vehicle producer,” noting it has reported expanding operating margins over the past five years despite past reductions in average selling prices, because of efficiencies.)

That works at early stages of rapidly increasing demand. But typically, with a mix of fixed costs and variable costs, cutting around 15 per cent from the average selling price – as it has just done – whacks the per-car operating profit. You have to sell a lot more cars to get back to your previous level of profitability.

The previous times I’ve written about Tesla, I conceded that it seemed to be a great product. Now, I’m not so sure of that, given the complaints I see about the cars’ quality and the company’s customer service (to say nothing of the liability issues around the alleged “full self-driving” mode). Meanwhile, major automakers such as Ford Motor Co. and Stellantis NV (owner of Dodge) are rolling out their own electric vehicles.

So while Tesla’s reported 2022 net income of US$3.62 per share was double that of the prior year, it’s worth asking what happens if that growth slows markedly, or even stalls. Tesla’s forward price-to-earnings ratio is roughly 45, according to S&P Global Market Intelligence; the average P/E for 10 global automakers with greater annual sales than Tesla is 5.9.

If you want to say Tesla deserves to be valued at a multiple twice its peers, rather than seven times, and its earnings will grow 50 per cent in 2023 despite the price cuts, you get a US$65 stock. If Tesla can maintain its earnings level of $3.62 despite the price cuts, and gets an industry multiple, that’s about 20 bucks.

All of this kind of talk has been irrelevant for years as Tesla has defied conventional analysis. Indeed, five years ago, at the time of Mr. Musk’s goofy US$420 “funding secured” attempt to take Tesla private, I wrote investors should avoid the company because Mr. Musk was wholly unsuited to be the CEO of a public company. The subsequent 1,650-per-cent(!) return, which made that some of my worst advice ever, suggested many investors thought Mr. Musk’s leadership was a big plus, not a minus.

But now we see the man behind the curtain, the emperor with no clothes, the man swimming with no shorts when the tide goes out – so many metaphors seem apt. One of the greatest dangers of owning Tesla, then, is the risk that it’s just another car company – and not a particularly good one, at that.