But It’s Not a Stock Split.
By Wolf Richter for WOLF STREET.
Elon Musk, the CEO who walks on water, has been busy recently with his other interests and pranks, such as wanting to buy Twitter for $44 billion, and then, after having signed the binding merger agreement, it’s like forget it LOL, and then after he realized that the courts could embarrassingly force him to buy Twitter for $44 billion, it’s like, no problem, I’m going to buy it voluntarily and turn it into the next big thing, LOL, similar to the tweet, “Am considering taking Tesla private at $420. Funding secured,” which was weed joke, and no one held his feet to the fire. Or his tweet last year, “Am thinking of starting new university: Texas Institute of Technology & Sciences”: not MIT but TITS, get it?
And then, in addition to Twitter and tweets, there are SpaceX with its fancy rockets and Starlink satellite service, and his Burned Hair perfume, and what not. So the richest man in the world can afford to be funny with this stuff.
But he’s a lot less rich than he was in November last year. Because the one thing he hasn’t been able to do is keep Tesla’s stock [TSLA] levitated in the ionosphere. TSLA dropped 7.6% today, to close at $204.99.
So TSLA just got halved since the whole show started coming apart last November, from its intraday high on November 4 of $414.50, and from its closing high the same day of $409.97.
The share price is now back where it had first been in December 2020. Since November 4, something like $640 billion in market cap went up in smoke. Easy come, easy go (data via YCharts).
But even at this half-off price, Tesla is still ridiculously overvalued, a car company with a PE ratio of 74. Well, I apologize, for the true believers, Tesla is not a car company, it’s a religion.
Obviously, it’s been an all-around shitty period for tech stocks, if you want to call them that, ever since Microsoft CEO Satya Nadella dumped 50% of his Microsoft shares on November 22 in numerous trades, 838,584 shares for $285.3 million, on one heck of a busy day. This turns out to have been the peak for the Nasdaq Composite, which makes Nadella one of the best insider market timers ever. Since then, the Nasdaq Composite has plunged by 36%, including today’s 3% drop.
But Tesla had outdone the Nasdaq by a big margin on the way up, and so now it’s outdoing the Nasdaq on the way down.
During the dotcom bust, the Nasdaq Composite plunged 78%, and it took two-and-a-half years to get there, from March 2000 until September 2002. So today, we’re not even halfway there. But we did nail the huge summer bear-market rally, just as we did in the summer of 2000. So things are on track.
Tesla shares are the largest component of Cathie Wood’s Ark Innovation ETF [ARKK], accounting for nearly 10% of the fund, which is also a religion for true believers, and she remains an ardent fan – while also lambasting the Fed in an open letter for raising interest rates and mucking up her party.
So she told Yahoo Finance in an interview: “Certainly all stocks are experiencing difficulty in this environment as the market tries to understand how far the Fed is going to go and how deep this recession is going to be. So Tesla is a solution to the problem.”
Her ARK Innovation ETF, which has been a prominent component for over a year in my “Imploded Stocks” column, has collapsed by 79% from its peak in February 2021, which was the infamous month when many of these stocks she so fervently believes in began to collapse. At today’s close of $33.91, her ARKK ETF is back where it had been in September 2017. I mean, blame the Fed or whatever (data via YCharts):
But Tesla is the biggie. Unlike some of the other outfits whose stocks have imploded all the way by 90% or more, Tesla has real products – near luxury and luxury vehicles – that lots of people want to buy globally, and that Tesla cannot at this point make enough of. And it’s making money building those vehicles.
Musk has succeeded in forcing EVs on the legacy automakers, after they’d laughed him off for a decade. And they’re now all trying to make them, and they’re trying to build up their EV supply chains, and they’re trying to hire engineers, and they’re building plants and they’re making huge announcements on a daily basis, and they’re spending tens of billions of dollars, and they’re coming out with good products, but so far, they cannot make enough of them either.
That’s the competition, and they’re all running around wildly and shooting at Tesla. Tesla’s Cybertruck is still not out, but two automakers have electric pickups on the street right now that they cannot make enough of either: Ford and Rivian, and Tesla has fallen behind in what is one of the best-selling vehicle segments in the US.
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Wolf I fixed it for you..you’re welcome :)
“Well, I apologize, for the true believers, Tesla is not a car company, it’s a cult”
Am I the only person who thinks the cybertruck is the ugliest, stupidest looking thing ever? It looks like they designed it with graphics from the 1980s or something. Its look is even more bizarre given that Tesla has a reputation for good design and aesthetics.
Maybe when Elon approved the design is when he started going crazy.
I really do think they guy has a few screws loose.
NO to your first sentence/question EF.
Yes to your last.
(Just wanted you to know that, eh?)
DeLorian, 1981….
“Space: 1999”
Frank,
From page 41 of Adrain Newey’s ‘How To Build A Car’, 2017 Harper Collins:
Adrian is at the Lotus factory in 1980, I believe.
“…their big hit at the time was the Lotus Esprit, which I thought was an ugly, awful thing gaining unwarranted popularity thanks to its appearance in ‘The Spy Who Loved Me.’
Arriving for an interview I was struck by the fact that the factory was an utter pigsty. As well as the Esprit, bits of which I saw were made of thick, poorly contoured fibreglass, they were deep into research and design for the DeLorean, which had all the hallmarks of the design monstrosity it would later prove to be.”
Adrian Newey is the best automotive aerodynamicist in the world. His car just won another Formula One World Driver’s Championship last weekend.
Lotus is now owned in majority by Zhejiang Geely Holding Group in China. On the other hand, Team Great Britain rode Lotus track bikes to the gold medal in the 4 km Team Pursuit at the World Championships in France a few days ago, edging out the Italian Team. I reckon the Lotus velodrome bikes are made in England though.
The Tesla Cybertruck, (should have been renamed the “Phantom Truck”), looks like it belongs with the scale models used in the 1960’s Captain Marvel TV series.
The cybertruck is just one of his elaborate jokes. He’s making fun of the truck buyers in the US.
Everyday Freethought,
There is a huge waiting list to buy one, so enough people want one for now — which is what matters.
It was the plan for the Cybertruck that woke up Ford, because it lives and dies by pickups. And it felt super-threatened. So they took it seriously and beat Tesla to market with a pickup to protect their own turf.
I think there was a commenter here who was on the waiting list for a Cybertruck, and when Ford came out with its F-150 Lightning, he switched and bought one of those.
Whether or not the Cybertruck succeeds in the future, we’ll just have to see. But if 500,000 people out of 330 million Americans buy one every year, it’s probably considered a big success.
Wolf,
I am hoping Tesla has one great bounce left in her. The last time I loaded up on 6-month out of money puts. The next time I would go for 12+ months really-out-of-money.
Wolf,
In the next article, please do not overlook Tesla’s third-generation AI humanoid robot. It took three guys to wheel it on stage for the unveiling couple of weeks ago. At this pace Tesla will soon catch up to Honda’s Asimo robot from the year 2000.
There’s video that many may have seen now on YouTube, in which the tester hauls a Model A Ford on a trailer 64 miles and uses about 160 miles of range hauling the 3500 lbs with a Ford f-150 Lightning and standard battery. Starts with 200 miles range and on return he has 40. So you’d spend an hour travelling and 45 minutes to charge. Even Ford states that hauling anything could reduce range by half. A commenter sarcastically stated it would probably make more sense to use the Model A to haul the F-150.
MotorTrend gets similar proportional results in different configurations; premium battery, light and heavy loads etc.
Conclusion: this truck doesn’t do truck things but the wife could use it to go shopping around town, which from my observations seems to be what a lot of huge pickups are used for anyway. With no load it does better, the tested range is 255 miles or so on the big battery, it just doesn’t haul well.
The Cybertruck claims 500 mile range, but with no details about range under load, etc. The 500 mile one would certainly be the ~$78,000 one not hauling anything.
The F-150 runs from $54 to $90K.
All this is YouTube BS unless you have comparisons: how many miles with the standard F-150 XLT, and how many miles with the Lightning, pulling the same load on the same road at the same speed. Without comparison, it’s braindead YouTube clickbait BS
Also when was the last time I hauled a trailer??? Never. I don’t know anyone who hauls trailers. Some people haul trailers with their trucks, most don’t. They just commute with it, take it on vacation, run to the store with, and use it go out at night. I’m just so sick of this braindead garbage.
The MotorTrend article, “Tow No! The Ford F-150 Lightning …” has various configurations and range results to objectively inform interested shoppers who may be considering electric pickups whether this type of vehicle is suited to their needs.
BTW, pulling a trailer with a pickup is a fairly big thing: a lot of recreation trailers are designed to extend over the truck bed.
Some friends of ours recently took a 5,000 mile tour with this configuration; a hefty trailer but with a gas pickup, of course.
Anyway, From the Ford Marketing Sales Literature:
“F-150 Lightning targets 563 horsepower, 775 lb.-ft. of near instantaneous torque4 – more than any F-150 ever – and a 0-60 mph time in the mid-4-second range when equipped with an extended-range battery, based on typical industry methodology. F-150 Lightning targets a maximum 2,000 pounds of payload in the standard-range model with 18-inch wheels, and a maximum 10,000 pounds of available towing capacity on XLT and Lariat trucks with the extended-range battery and Max Trailer Tow Package.”
Elsewhere Ford do disclose that the range could be half or less with trailer pulling dependent on the size of the trailer and the configuration of the vehicle chosen.
…
And yes, we concur, as I noted in my post that: “Conclusion: this truck doesn’t do truck things but the wife could use it to go shopping around town, which from my observations seems to be what a lot of huge pickups are used for anyway.”
I’m not sure but it seems the system doesn’t allow comment replies that are more than 4 deep. This comment is in reply to Wolf’s comment about towing.
Wolf, just because you have never towed and don’t personally know anyone who does, doesn’t mean that for some people it’s not an important consideration when buying a truck. Some people tow and some people tow a lot of the time. Tests showing electric trucks not being able to tow for very long is just data that some would find very useful.
Your site is great with lots of very detailed, well researched and thought out articles but sometimes your replies are just plain outrageous. Your comment was pure brain dead garbage you are so tired of hearing from others.
FleaBite,
Just don’t buy an EV pickup if you don’t like it. I ran a big Ford dealership in Truck Country (Tulsa) for a decade, and we sold mostly pickups. I know exactly what people use their trucks for in an urban area — and it’s not for towing. Buy what you want. That’s your decision. What is braindead is to use an application for a pickup that very few people ever use — regularly towing heavy loads — to say that EV trucks don’t work. Get real!!
And besides, a standard 600 hp Lightning (with a nearly flat torque curve, hahahaha) will out-tow a standard F-150 XLT any time. And it will out-tow a turbo-diesel too.
I welcome the cybertruck. It reminds me of the Atari arcade game Battlezone. I am Tired of every car looking like an egg. Everything looks the same. Give me hard lines on some auto designs.
Ethan, considered aesthetically, sure, but aerodynamics doesn’t care about aesthetics when it comes to ‘fuel’ (petro or electric) efficiency…hence the ‘teardrop’ look. Get that cheap enough for increased horsepower engines and those ‘hard lines’ will return…
may we all find a better day.
@91B20,
It turns out the cybertruck is surprisingly aerodynamic, even without the rounded edges of most cars. At least that’s the case from the aerodynamics simulations I have seen.
JeffD.-my old mind working from old textbooks rather than simulation software (what are you using, if i may ask?). Curious about the sub-to-transsonic cdx curves for that truck…
may we all find a better day.
Give me simple utilitarian. Christ, in the end it’s nothing more than a transportation appliance heading to the scrapyard. Wash, rinse, repeat.
Elon will be the McAfee for the Millennials.
Looks like an X-fighter landed on a Tonka truck. Or a Citroen and Unimog love child. These fashion blunders used to not last any time at all , but car designers had to put Cheerios on the table too. Being as how it’s elon musk, it’s bound to be a big hit. I question this truck’s work ethic. But most trucks don’t work hard anymore. They’ve learned from us.
rick m.-sagacious observation…
may we all find a better day.
With you there, I used to like Teslas and had generally good experiences riding in them (until this year, when nothing seems to go right with the newer models–lousy charging, jerky driving, phantom braking), but Imho the Cybertruck is the epitome of Elon’s by now annoying habit of chronically overpromising and underdelivering. He did it with the batteries and self-driving too, but the Cybertruck was hyped to oblivion for years and years and turned out to be an ugly, practically undrivable clunker with little in actual value. One look at it and you wonder who the heck would be dumb enough to buy that mess–there’s practically a social stigma now for buying Teslas esp down in Texas (as Tesla drivers now have the rep of being the most annoying drivers on the road with reason), but a Cybertruck invites open mockery. As much as I at least grudgingly respect Elon for helping to drive the industry and encourage space exploration, he really has become a liability where TSLA is concerned, he can’t just keep his mouth shut and focus.
In fact it’s a dumb irony that he of all people started mouthing off about telework and WFH workers pretending to work, when he’s the textbook definition of pretending to actually do anything, somehow finds hours and hours of spare time to read up on frivolous stupidity on the Internet and post memes and trends on Twitter everyday. And then on top of that he got loudly political and wound up alienating about two-thirds of Tesla buyers (upper class and upper middle class professional progressive types). If the Tesla board has sense, they might want to move Elon Musk to a new title as something like technical or design director, not even his cultists can save him from his own mistakes and he should not be the head honcho at a company like that.
Yes, the truck looks like it should be a moon vehicle. Maybe it can be called the Tesla Luna. Or maybe Tesla Loco (crazy in Spanish).
Never thought Teslas were aesthetic…they look like pedi-eggs, over-streamlined and appointed with too many futurist-fetishist fittings. A Roomba is more visually compelling.
Cyber-truck…looks better as Voltron’s roller-skate.
“appointed with too many futurist-fetishist fittings”….what are you talking about? The cars are minimalist by design and very aerodynamic for max efficiency.
Billions of dollars and unearned, inauthentic, and undeserved respectability with mess anyone up. But hey, he fucks like a champ, I guess.
I think the Teslas look like Saturn cars from the 90’s, personally, with a little of Woody Allen’s “sleeper” thrown in.
Simone Giertz beat him to a Tesla truck when she cut up a new Tesla roadster to make a pickup she calls the Truckla. I guess he had to do something different.
And so many ETFs have a large stake in Tesla.
Nasdaq is already back where it was in 2020. Is it safe to say that housing market os also close and the lack of transparency and liquidity, and the delay on case shiller reporting is the only reason it doesn’t appear so?
After all both these markets went crazy under same pretext, so they should correct similarly.
Tesla shares half off from the top. But aren’t they also 400% up from before the exponential ride up?
Crazy meme stocks usually fall all the way back. I think we’ll see tsla trading 50-100 in the next year or 2.
Fast forward 6 months:
Apple Shares Get Halved.
Dividend Yield Doubles To 1.8%.
Tesla is not a car company, but it’s a cult, a religion, an AI company, an energy company and whatever!
Whatever Tesla may or may not be but it sure is a joint stock company, and stocks are the only product Tesla will ever profit from through the fraudulent market manipulative means, such as stock spits, short squeezes, and SP500 membership.
They should add fourth category “cash flow from market manipulation” in their cash flow statement, because traditional category like cash flow from operating activities, will never bring enough cash for Tesla.
All of these have now ended and now the main product “the stock” has only one place left to go, HOME!
Rapid and fraudulent rise and fall of tesla, and their likes like sp500, apple, amazon, google, microsoft, nvidia, asml, etc is the symptom of a larger disease which we hope will uncover itself in due course.
Currently sp500 is above the pre pandemic peak but the total market capitalization of all the companies traded on NYSE and NASDAQ is lower than that of pre pandemic peak when sp500 was 3400, and it would have been even lower if these 7 companies( APPL, GOOGL, MSFT, TSLA, NVDIA, AMZN, META) are not artificially puming and dumping sp500.
People talk about summer rallies but how many stocks other than these 7 are beneficiaries of these? Is it possible to rally SP500 without pumping these 7?
Much will be written in history books.
Tesla bros are insane fanatics. They believe all these companies were the brain child of musk. I have no doubt if the purchase of Twitter goes through, inside of 5 years his devotees will claim he and Jack Dorsey developed Twitter while eating burritos in the mission district.
The Tesla bros give the crypto bros a run for their ever dwindling money though. I’m still reading about them regularly buying bitcoin and even flirting with garbage like luna-c.
If Tesla cannot make enough of them then main stream auto makers will gladly take sales of them and in increasing numbers, styles and yes real world innovations.
The vehicle themselves are getting very, very long in the tooth, with designs that are becoming less appealing to the purchasers that have choice of new ideas, methods and comfort. Build quality has improved but trails the European and Korean makers by a margin.
Parts are hard to find and very expensive after a shopping carpark dingle so insurance is so high Tesla had to offer it and I suspect at no profit margin.
Market forces, pricing and competition will see TSLA at share price levels approaching other manufacturers in due time.
Like Apple, once you run out of innovation you run only on brand loyalty.
Notice I never said I favor or not electric vehicles as I value my sanity more
The main stream auto makers have had 10 years to jump in, they are only barely getting there now. What have they been doing?
My Tesla friends love theirs. They are fanatical.
BMW was selling i3 electric since 2013. The was no cult yet to go insane about it.
The i3 looks like someone hit a Mercedes with an ugly stick.
Drive one. You’ll soon see why there’s no cult. I had one as the dealer loaner when my old 335i was getting serviced and when I told my service manager what I thought of it he could only say, “We get that a lot.”
After 335i any car would suck. Jeez.
It is the cult aspect of EVs that makes them repulsive.
Recently bought an EV for 60k.
Test drove many evs ans bought non TESLA.
My friend bought a model 3 and it came with so many quality issues.
It needs to go to service center twice in the first month of ownership.
I like TESLAs but I believe more and better EVs are coming and would give tough competition.
Tesla makes good cars but their stock price needs to go down a lot.
Every time I have to drive my wife’s Camry I realize how last decade it is. I get n, have to adjust the seas, steering wheel side mirrors ,put car in reverse and hit the start button. Whe i drive I have to pair my iphone to get google maps and streaming music to play. With my Tesla 3, it remembers your profile so all the adjustments are automatic for my profile. Then wen I leave my Tesla and walk away it turns itself off and folds the mirrors. When I walk away from the Camry. It still is runnng so I have to open the door and physically turn off the engine..and then I have to remember to lock the doors. Thats is why we are Fanboys
OMG the level of entitlement here is shocking. I’m sure Arnesto is a nice guy, but this kind of attitude is why this planet is in so much trouble. (I hope you’re joking)
A vehicle is transportation from A to B – do we really need it to be a perfect entertainment pod?
Humans always want more-more-more stuff!
Owning a 10 year old car already makes you one of the wealthiest 5-10% of people on Earth; all that other stuff incrementally adds another couple of percent of value beyond the Camry’s basic transportation function.
Why do we believe consumerism is the most important thing? It will be the death of us all. And I’m shocked that you would let your presumably-loved wife live in such poverty! :-)
I really like my Tesla MYLR. I am not a fanatic but it is the best car I’ve owned in my 50 years of owning more than a few cars. I think Elon should STFU and get back to building cars and launching rockets.
What about the hyperloop and spacex projects!
The Hyperloop project is fantastically stupid, and has rightly been mocked since it was announced. SpaceX is mentioned, albeit briefly, in TGDFA.
What is ‘TGDFA’?
Concerned-that which follows the “R”.
may we all find a better day.
KB,
Also this was about Tesla and Tesla’s stock, and Tesla doesn’t own SpaceX the hyperloop BS.
I just love those whataboutism fallacies (google it) when it comes to Tesla.
ARKK looks like miniature version of larger Chase Coleman’s – Tiger Global Management
There are about 1000 stocks that are “on sale” now at 80% or more off their highs. Likely to see more soon, too.
Some of them will not survive, but others will be fantastic bargains for investors looking for turnaround stories.
Wolf I know we all love to hate on Elon. I’ve been hatin’ myself even. But I do appreciate a bit his sick sense of humor. It almost seems like deep down he appreciates the rediculousness of his situation. Yes I do think you must have a tint of sociopathy to become so rich. But it’s almost as if the federal reserves plan to breed such a monster is almost successful. Yes tsla is barely viable as a business but as a contriarian to your amazing writing, it’s almost as if the feds plan worked. Business that was bettering humanity always almost seemed unviable 2008 onwards. Yes it is technically worse in terms of carbon emissions in my opinion (electric cars). Somehow I think however, easy loans made unviable business possible forcing entrenched monopolies to compete. For example Uber. Terrible bussiness, but as a result (for me) the local grocery chains were forced to compete and offer actually good delivery service where there had no incentive before (whereas Ubers service is terrible). Don’t get me wrong, maybe you know me. Asset appreation has killed the benefits of such a scheme. But just my opinion, giving the benefit of the doubt, I believe they actually thought it could work and improve the standards of all living for us. Unfortunately the unintended consequences of asset appreation was debt service that had no economic benefit. I do see them as appreciating that error now and trying to move in the right direction. I do believe better days are ahead for my generation (millennials). Anyways I really appreciate your writing I think you’ve converted me to a future mug owner. Much love.
WTF!? “tsla is barely viable as a business”
Q3 2022 earnings results: $21.4B in revenue and EPS of $1.05 per share
I’ve been watching Elon Musk for years, and have always been a skeptic of the save-the-planet idealism of Tesla and their solar panels. The success of both those industries (EV’s and solar) are wholly dependent on government subsidies and green legislation, which are likely to disappear once the right takes over the purse strings of Congress again.
What I am not willing to do is to bet against Musk’s other ventures. He now has more satellites (Starlink) in the sky than all the governments of the world, combined, times 3, with many more coming. Now he’s going to have the Twitter platform. Suppose–just off the top of my head–he’s able to fold Twitter into SpaceX and Starlink, and transform Twitter into a giant search engine/universal communications tool/file sharing program, all open-source? What if companies write apps for Musk’s Twitter platforms the way they do now for APPL and Android? Can Starlink provide mapping the way Google maps does, and integrate them into those apps?
SpaceX has a current value of $100 billion, give or take, BEFORE anyone thought about how to make Twitter a satellite-based OS for the whole world, bundled onto Starlink ISP’s and monthly subscriptions for internet access, now in over 30 countries and counting.
Is there anything stopping SpaceX/Starlink/Twitter from also streaming movies? Delivering news? Broadcasting NFL games? If so, what? Why shouldn’t that platform, which includes all the expensive space-based hardware to make it work, be worth at least what Google is, plus all the socials, plus whatever crumbs fall off of the table lifting rockets for NASA?
True, it has been shown-control the media, control the masses.
KW wrote: “The success of both those industries (EV’s and solar) are wholly dependent on government subsidies and green legislation, which are likely to disappear once the right takes over the purse strings of Congress again.”
TOTALLY dis agree KW!
The successes of EVs and solar generation of hot, water and space heating, is wholly dependent on the continuing developments of the physics and engineering of those products.
That we are currently seeing large increases in cost and environment improvements is obvious IMHO, and will continue.
Meanwhile, the manufacturing of PHEVs with fuel efficiencies of 50MPG is a great step forward.
I, for one, look forward to the day when vehicles are charged from their solar array ”skins.”
At the rate of improvements, it should be this decade.
Here’s a link to a recent article confirming the above.
https://3dprintingindustry.com/news/solar-energy-output-tripled-using-stanford-universitys-3d-printed-agile-device-213131/
Maybe Wolf will allow it to stay up, but if not you can search for Stanford solar energy and find it along with several other articles on such improvements.
I’ve been hearing that for several decades. We’ll see if they’re right this time.
Charging large, power hungry EV batteries with solar panels (skins?) is a great idea which has been researched for a long time and the facts dispute the viability. Do the engineering on the solar panel capacity and efficiency and see what I am talking about. It’s like fusion power is right around the corner every 10 years.
Much like the destruction of the world from climate change is just around the corner, every ten years…
Anthony A: I look at this differently. As technology is produced, the following generations and models become more efficient and more effective. Right now, solar panels (and all alternative energy) and EVs are in their infancy, just as laptop computers were in their infancy thirty years ago. The problem with all the people ready to jump onto nuclear (despite the waste problem – which is huge – and the slight but incredibly dangerous issue of an accident) is that they want green energy to be a perfect substitution for fossil fuels NOW!. We have to be patient and play the long game, understanding that green energy will help while weaning ourselves off of fossil fuels. And something most people won’t want to do – we have to consume less (and that means a bit of sacrifice). Elon Musk might be a jerk but he has the right idea with EV’s.
In Porter County Indiana (Wheatfield) there is a 200 MW; 1100 acre solar farm currently under construction.
I run my house and charge my Tesla with only solar roof panels. I live near Austin.
How about valuing Tesla stock based on what Tesla can realistically achieve in our lifetime, against intense competition, and a peaking macro-environment?
What’s to stop that?
TSLA P/E at 72 CMG at 56.
It all depends on your thoughts on the future.
I have big thoughts about future innovation, but I see no reason why “the future” belongs to Tesla.
The biggest mistake of growth investors is to underestimate competition and execution risks, evidenced by ARKK’s fall from grace. Companies will have to make money to be successful going forward in a tough macroeconomic environment. The bubble is bursting, and that should be no surprise to anybody.
Kevin,
You fotgot to add Tesla sentient robot to your view of the future.
If you studied this so much, why not invest in it?
He probably could do most of the above except that he seems to be shooting himself in the foot again and proving himself to be a security risk with all his awkward and strange tweets.
You probably didn’t intend it this way but this comes off as one of the more ridiculous outlandish Elon fanboy posts recently. Just one example, “Suppose–just off the top of my head–he’s able to fold Twitter into SpaceX and Starlink, and transform Twitter into a giant search engine/universal communications tool/file sharing program, all open-source?” Sure, right when Elon solves the cold fusion problem and transforms base metals into gold to make an Iron Man suit all in his spare time on a weekend. Is this post supposed to be taken seriously? You list all kinds of wild off the wall inventions most of which don’t even make any sense, and way overdo what SpaceX and Starlink are doing–they’re doing good things not gonna disagree, but still basically using the same tech that was figured out 60 years ago by NASA and their contractors. All without a hint of practicality or business sense, and it’s that manic distraction and failure to focus that’s been Elon’s (and Tesla’s) main problem above all in the past two years. What does it even mean to “transform Twitter into a giant search engine” and what would be the gain or business model in that? How exactly would he pry market share away from the Big Boys who already dominate in search? Google has the basic technology figured out with MS, Yandex, Baidu, Yahoo and other companies focussing a lot of their core business around it and have thousands of the world’s best and brightest engineers working full-time to make it better and better, with decades of experience–and you seriously think that Twitter under Elon would be able to upstage all of those well entrenched players who’ve mastered the tech, from scratch? What sort of tech breakthrough in search do you even see making this possible? What does “universal communications tool/file sharing program” even mean? What market need does this solve, specifically? What does open source have to do with it and how would this even help Twitter’s business? Google, Baidu, Meta, Bytedance, Oracle, SAP and MS already release a lot of utilities open-source to support their products so it’s not even anything innovative.
Not trying to pick on you here but this whole post just comes off as the same sort of disorganized, unfocused mess that’s more and more been coming to plague Tesla and Elon’s other projects and businesses lately and spreading them thin. Elon has never had an issue being a visionary and being fair about it, even with his flaws he’s been a good one, and has helped to drive a lot of industrial development and disrupting in key areas. But his issue more recently is a worsening and increasing colossal failure to convert his visions into something practical and working, frustrating his investors and customers and then compounding the error by being foolish on social media and alienating them even more. Your post Tbh is an even more ridiculous example of the fanboys’ annoying claims over the past 5 years that Elon was so much smarter than everyone else in the car industry that Tesla stock, really, was worth more than all other car companies combined, because it’s “really a tech company” and TSLA would soon out-sell every other car manufacturer, even Toyota and GM. Yet for all of Elon’s wild visions, Tesla has been failing more and more to get basic things right, like providing for easily replaced parts, or training mechanics to fix things (which TSLA also makes things harder about by rejecting a dealer), or solving basic issues like self driving or battery issues, let alone messes like the Cybertruck. A whole string of failures and broken promises, and now Tesla is starting to lose market share and fall further behind in key tech and consumer satisfaction even in the EV market as both more established players and other hungry newcomers break in. (A lot of us are interested in buying EV’s for our next car but fewer and fewer in a Tesla, we have so many better options now) How do you think Elon is going to achieve all these far-fetched things when he can’t even solve problems in what’s supposed to his core business and core market? Not saying these problems aren’t fixable, and yes Elon is a remarkable bright guy who can often get the job done when he actually settles down, but they require some actual focus and practicality, and these flights of fancy are the opposite of what’s needed.
You can argue against the Cult of Elon with facts and data- but you won’t win!
I’ve noticed that 3 and 4 word pithy replies are sometimes all you get. Has there been a great dumbing-down of civilization? And is the Cult of Elon partly to blame for this phenomenon?
“Haters gonna hate”
“Weak sauce there”
“Market share doesn’t matter”
“Go Elon!”
“It’s the woke mind-virus”
“I’m always calm” (that was someone else, but you get the idea)
NoPrep-…’calm’ or ‘sedated’ ?
may we all find a better day.
I’m a former software engineer and I took his comment seriously. No musk fanboi here, but it would be easy to do. Adding a search engine and file storage to twitter would be easy. It already has news and streaming video.
Starlink cannot do mobile video because you need that huge antenna. But better management could easily turn twitter into a news/entertainment/video game service.
Not really a fanboi. I am curious how the dumbest, most-easily-distracted CEO on earth somehow moves markets, and now entire news cycles. As i opened my news site this morning, the very first headline says, “Musk tweets complicate diplomacy from Ukraine to Taiwan” and “Pentagon assessing Starlink funding”.
Somehow a playboy who isn’t paying much attention to anything besides sending funny memes has built a system of space satellites, and if he presses a button, the Pentagon’s fancy toys stop working and friendly governments can fall. How did that happen?
While making fun of Musk for having Tesla shares fall by half, don’t forget that he sold nearly $7 billion, near the top. That doesn’t suggest someone who isn’t paying attention, or guy who believes his own press releases.
Also noticed that he teased the purchase of TWTR, the Establishment and most of the workforce there went batsh*t, then insiders launched a lawsuit to force him to buy. So–he linked up some investment banks that will assume over half the risk of the purchase, likely with the implication that if they didn’t they could forget about being part of anything SpaceX-related for the rest of time.
It takes about a second to share a meme or like a comment on the socials. He does that a few times a day while prolly sitting on the john, and people think that everything he touches is probably a huge shorting opportunity. Weird.
“don’t forget that he sold nearly $7 billion, near the top”…pretty good for the dumbest CEO on earth. Sheesh!
Tesla isn’t a religion for everyone. Its a forwards looking PE ratio of 35. Rivian is a cash burning machine and recently recalled all it’s vehicles, of which it expects to deliver only 25k this year. ICE is a dying industry with declining sales and yet EV sales are going to the moon. Say what you will about the idiot savant. He’s already won.
“Tesla isn’t a religion for everyone. Its a forwards looking PE ratio of 35.”
Seems like it’s a religion for at least one person: you :-]
But I agree with you on some of your other points. But note that millions of vehicles are being recalled every year. Right now, for example, Ford is recalling certain 2021-2022 F-150 trucks. Underbody heat and noise insulators may loosen and contact the aluminum driveshaft…
No fire and brimstone in his comment.
Not sure how to just comment on the article without clicking on a comment, but wasn’t the Nasdaq up 85% in 2000? As far as valuations, we’re not anywhere near the valuations now and we’re down over 30%. Not saying it won’t continue going down but to say it’s definite, I just don’t see it that way.
Jess,
“Not sure how to just comment on the article without clicking on a comment,”
There is a commenting box at the bottom. Scroll all the way down, and you’ll see it, and you can start a fresh comment there.
In the three years between March 1998 and March 2000, the Nasdaq went up 173% (from 1,788 to 5,046).
In the 2.5 years from March 2000 to October 2002, the Nasdaq went down 78% (to 1,114), falling well below the March 1998 level.
In the three years between Nov 2018 and Nov 2021, the Nasdaq went up 118%.
Mike,
Do you know how a stock loses 90%?
It loses 50%. Investors swoop in to buy it. Then it loses another 80%.
That is the story of Tesla.
Tesla is a revolutionary product. I have had numerous coworkers that love their Teslas. And love us probably the right word. I admire Musk the carmaker.
The problem is that, though there are barriers to entry, the barriers aren’t too high for the highly capitalized legacy carmakers.
The fall of Tesla may pressure the market, but it’s not a “biggie” imo. The everything bubble built and burst because of the global debt orgy and human greed. Musk is the poster child for what’s wrong with capitalism.
I am happily short Tesla, SPACs and frauds. SPACs are now down more than 60% on average. They should fade away.
When Powell started raising rates I declared the shorting season as officially opened here. GLTA.
The Western World dispensed with Capitalism long ago.
There are Central Banks (public and private) and friends of Central Banks.
Within markets in the U.S., competition is often as fierce as it ever was. My company and its competitors fight like cars in a bag for sales.
I think this is well known.
To try to be specific about the U.S. system, I’d say the main rigging is that investors and the financial industry are bailed out, no matter how little the bailout might be deserved. Nauseatingly. Again and again. A competitive but I think second problem is that monopolies or at least too much consolidation is being tolerated in select industries. I’d call out prominent tech firms and corporate media as two areas with unhealthy consolidation in individual markets.
Cats! Guess I have Tesla on the brain.
There is a math exercise, which is beyond me.
a) The current value of Musk’s shareholding in Tesla less previously pledged collateral (linked to Space X and other endeavours, which may be on the brink of or now actually triggering margin calls on Tesla stock) plus Musk’s personal cash on hand from Tesla stock disposals not used to fund tax liabilities.
LESS
b) The total amounts pledged by Musk to acquire Twitter (including bank loans / equity arrangements underwritten by Tesla stock) less the (presumably dwindling) amounts pledged by others to acquire Twitter.
This wasn’t fully picked up by the media a few months ago, although I recall someone sketching out something similar to the above and it looked tight then. I think it’ll surprise a few people how constrained Musk is.
Correct. Thought of this before. Tesla stock has very high liquidity (daily dollar volume is enormous). Nevertheless, only so many billions he can pull out of it without complete crash. Offering $50 Billion cash (while rates are going up) for an app is insane. He had buyers remorse the next day I’m sure.
How a great salesman can offer to buy something like that? Ego.
I think in history of all human kind, he is the person who paid (will pay) the largest amount for an asset at the very peak of the market.
When have you heard any one (individual) buying $44B worth of market securities right at the top of the stock market (that too in one of the greats bubble of all time).
I am sure he knows this and hence the remorse. And to add insult to injury that asset price has already dropped quit a bit, so when put forward the $44B deal few months back he was over paying for a not so great app and now with current market conditions he is way way way way over paying for it.
Guess easy come easy go…..
Adobe buying some app or whatever for $20 Billion recently (when market is already reeling) is in that class of invetments.
Still, timing wise, Ray Dalio declaring ‘cash is trash’ takes the cake imo.
It’s not an individual but I recall Intel buying a whole series of communication chip makers in ‘99. They wanted to diversify their product line, a worthy goal. But they utterly failed and sold the companies off, one by one and at a low price several years later.
I interviewed at San Francisco Telecom in ‘99, I thought. But I figured out soon enough it was being bought by Level 3 (Level “something”) which was being bought by Intel. All at once. Like a turducken. Crazy times and Intel got sucked in.
that chart from around 180 to 400 looks like a Hugh top to me.
earnings next week. Let’s see if Elon can pull another rabbit out of his karma .
Trevor Milton, x-ceo of Nikola, was just convicted of 3 counts of fraud for pumping lies about his electric vehicles! Another case of selective prosecution when Musk’s litany of lies pumping TSLA’s autonomous capabilities has led to not only to monetary fraud but to hundreds of deaths and injuries! White House has officially confirmed that China is America’s number 1 enemy and a new cold war has begun! TSLA China soon to be a collateral KIA!
Nikola doesn’t make electric vehicles but represented itself as making HYDROGEN vehicles, but they only run when pushed downhill.
Trevor Milton was a liar on a much larger and more comprehensive scale than Elon and his erratic and obviously farcical Twitter habit. Milton claimed millions of orders that didn’t exist, working prototype that didn’t exist, hydrogen storage that didn’t exist (and still doesn’t), check out the WSJ podcast about him, he’s a complete Huckster who ripped off every person he interacted with even before Nikola. He belongs in jail.
Nice piece. Forty years of tax cuts for the rich and the asset classes were already inflated when the Pandemic lit the fuse. Adam Smith observed: The rich should be taxed “something more than in proportion” to their wealth. “The inequality of the worst kind” was when taxes must “fall much heavier upon the poor than upon the rich.” Wide income disparities destabilize economies. And that was in 1776!
I been short tsla for most of this year. Wolf is right to avoid tsla, however, I would look at the EV suppliers as EV are a huge growth zone. Everything is taking a beating but onsemi (ON) has a big lead in silicon-carbide chips which can withstand the high temperatures generated by EVs, power storage and in industrial machinery.
There are people in the auto industry that think if they build vehicles with the proper propulsion source that their company will also be assigned a price/earnings ratio equivalent to TSLA (12x higher). This is laughable as they obviously don’t understand the cult of personality.
Amazing chart,cult is the word for the gentleman when my Son In Law said he was going to install a Tesla solar panel roof tiles and battery pack on his home in Philadelphia.
I don’t argue with my SIL (when folks are brainwashed including myself almost impossible to change our minds) but I asked him what the cost would be and he said he had no idea. A quick estimate from internet said 65k. A conventional roof was 6 k and the lifespan about the same for both. I told him to sign up right away and then asked him about the reasons? He said to save on his 150 a month electric bill! He did get a new roof and could not afford the Tesla roof. His house is worth 400k so 25 percent would be roof! Cult like following!
I have asked several neighbors who chose to install solar panels what their expected payback is and if it’s worth it. The smart one’s admit that it doesn’t pencil and they didn’t install them to save money but to do their part for “the planet”. It is interesting to note that none of them that I know installed battery backup systems in the event of a power interruption.
From a savings perspective, I found that solar hot water was the best choice for us. It cut our electric consumption dramatically and the payback is about 4 years. If I managed the resistance heating element better (I’m playing with it, but it isn’t “right” yet), the payback time would probably be further reduced. The tank life is expected to be 10 years (warranty for 5) and, with the “systems coverage” endorsement we have on our homeowner’s insurance, is a covered replacement (with a $500 deductible).
I have solar panels and battery back up getting installed.
$30,000. My electric company just doubled their rate so I’ll be now paying $250/mo on average.
10 year break even if electric prices never go up again and that includes backup power. With tax incentives/subsidies that drops to about 7 years.
It the end it made sense over a 5k gas generator hook up – though not by a lot.
Interesting, at what latitude do you live?
Did u check how much it costs to run that generator/ per hour . Not efficient
My dad rigged up a hot shower like that in summer cottage many years ago. Painted tank black. You get good hot shower by 11am on sunny day, and lasts well into the night.
Elon was given a leg up in life by ultra rich parents. He was given the factory in California by Toyota for free. He received billions of dollars in grants by the US government for solar, space and electric cars. He is no genius but an ego centered cult leader.
As Wolf points out the religiosity of Elon and Kathie, I would like to point the destruction these grants are causing. Solar installation cost 300 percent more than they should and Elon plus his brother destroyed the competition. No monopoly suit?
SpaceX received unlimited help from NASA. There is a bid fix suit. Competition did not get grants or technology. What gives?
Electric car subsidies are plowed right back to Tesla with its high priced cars.
Rivian and Ford beat Tesla as Wolf points out. Rivian had a bolt loose recall but otherwise has a great looking truck.
I bought my first Hybrid in 2006 (i have two currently) and won’t buy an electric car till they mature in five years but will not buy a Tesla. Tesla owners are cult members
Ford had a great hybrid but bowed out to Tesla when they invested in Tesla. Not sure why they won’t bring it back
The top 1% of US households have a net worth around $13 million. Literally millions of American children grow up in such households. How many become ultra successful in anything ?
Sure Tesla got its first factory for free but if there were anyone else interested I the factory it would not have been free. You are literally chastising him for creating value out of something no one else wanted.
SpaceX received help from NASA. That is the way it is supposed to work. Government does the initial ground breaking working and the private sector takes over. SpaceX has saved US taxpayers billions compared to what they would have been forced to pay to Boeing or Lockheed.
I say this over and over.
Rent tech stocks, own dividend paying value.
I have noticed over the decades that if you intend to make money off of a tech stock, you have to be extraordinarily lucky and choose a Microsoft or a Google early in the game, or you have to be extraordinarily savvy and get out at a great price.
Because these stock rarely ever pay dividends, it costs too much (R&D) to stay on top in the tech world, and scads of these companies will rise and fall and go extinct having never payed out a dime to investors.
In summary, IMHO tech stocks, all of them, are a huge gamble I am not remotely interested in.
Remember if you short a stock you have to pay their dividend. If you are short against the box, you own the stock, you pay the dividend to yourself.
This is the kind of time when lots of idols fall.
ARKK acted like an arc — it went parabolic. Like a rocket, ironically.
Musk is a cautionary tale of people putting too much faith in a brand, a name. He is a redux of Trump in the 1980s, when people (read: Citi) were throwing money at him for a sprawling outlandish ADHD portfolio of frolics, most of which predictably collapsed. I never put a dime of trust or money in any such character. Each did some useful stuff, but it gets lost in a amongst a cloud of vain, promotional vapor. The public impulse to lurch toward a star, a savior, and illusions of easy riches, is the predominant factor.
We have millions of “cult investors” who invest in massive cash burn machines. Masayoshi Son comes to mind. How many cultists follow him? No telling but must be millions.
I’m surprised that these losses in value are remarkable to anyone. But then, I AM a dinosaur.
Classic error: a successful person thinking success, or smarts, or luck, in one domain, transfers effortlessly to all.
So, Musk was going to solve traffic, and climate change, and the complexities of social media, and interstellar travel ….
It will be very interesting to watch, if the fan interest fades, along with his wealth, how this TWTR acquisition, one of the corporate buy-out fiascos of all time (right next to AOL-Time Warner), will go. I have never seen such a train wreck in my life, such a mishmash of rookie errors.
Most of the people who made billions think they have gained expertise over almost everything
The Starlink/Ukraine issue is more important than Tesla whose future is autonomous driving which doesn’t work unless you consider the highway part of an assembly line. Starlink is vital to their war effort, and accusations he is denying service in E Ukraine. If the DOD picks up the bill will they assume some degree of control. Why did they give up control of the internet in the first place? Glass half full TSLA is up 300% since 2020 and it’s trajectory seems to be following that of crypto currency which is an SEC project. The Army will have a self-driving tank before you have a self driving car.
Ambrose-addendum-why has DOD given so much of our national military adventure-efforts over to private interests since Eisenhower? (rhetorical question, pretty sure i’m familiar with most of the responses…).
may we all find a better day.
Certainly more important to Musk whether he recognizes that or not. He’s all over the place with that, being flip and acting like a 12 YO. I would be surprised if he’s not deemed a security risk. If he is, there goes a lot of government funding as well.
Glad to see someone like Musk around. There may be some innovative spark left in the US industry. You don’t have to like the person but turning the world-wide car industry on its head, building rocket boosters that land vertically for reuse, building a mesh network of Starlink satellites are pretty amazing. And he has a sense of humor. Telling the Ukrainians to negotiate and the DoD to pay up for Ukraine’s Starlink services is comedy gold.
“And he has a sense of humor. Telling the Ukrainians to negotiate and the DoD to pay up for Ukraine’s Starlink services is comedy gold.”
How is any of that funny?
It is refreshing. He can piss off Joe & the neocons, wokesters, msm, and the deep state. I expect to see him with orange hair soon.
In the words of Elwood Blues, “Our Lady of Blessed Acceleration, don’t fail us now.”
Andin that spirit, Jeffrey Hoogland’s first lap time from a standing start on a 250 meter velodrome in France, in an absolutely huge gear, a couple days ago to win the World Championships in the Kilometer Time Trial = 17.747 seconds & maxing out at 77.0 kph top speed. (decades ago on a steel bike & in a smaller gear, Prairie Rider was clocked at 18.9 seconds on the opening lap of the four lap run)
But related to Tesla, and in the spirit of Blessed Acceleration:
Earlier this week, ‘The GreenTeam,’ students from the University of Stuttgart recorded a zero to 100 kph electric vehicle acceleration record in 1.461 seconds. The GreenTeam E0711 is carbon fibre, all wheel drive, powered by a new high-voltage (cue the AC/DC song now please) battery pack that drives in-house-built motors combining to produce 180 kW (242 horsepower). The machine weighs 145 kg and pulled 2.5 g of peak acceleration on the run.
“We are delighted that we broke the world record and brought it back to Germany!” said Pavel Povolni.
Professor Wolfram Ressel, congratulated the students, “The University of Stuttgart is proud that the GreenTeam has succeeded in setting a new record for the acceleration of e-vehicles.”
Oh yeah, zero to 62 mph in an electric car in under a second-and-a-half! Shit, that is quick. Gotta get one of those machines…
When I see you grinning at the stop light, I’ll just go Nah. Knock yourself out.
I hope it has good brakes!
It’s not a car. It’s a go-kart.
andy,
True, it’s a very small machine. But it highlights the thing that an electric vehicle can do amazingly well, and that is throw down instant torque and accelerate.
For short or medium range trips in the city, an EV is quick and well-suited. That is 99% of my driving, but I have yet to make the jump from ICE to EV. Maybe someday? However, I do like my now ten year-old hybrid SUV, and I especially like the way it accelerates in the snow & slush with a set of Blizzaks on.
“two automakers have electric pickups on the street right now ”
Rivians are not on the street now – recalled.
Rivians are on the street just fine. A “recall” is a super-common procedure where the automakers asks certain customers to bring the vehicle to a service dealer to have the issue fixed. It’s not a biggie. There are millions of vehicles affected every year by recalls.
Right now, for example, Ford is recalling certain 2021-2022 F-150 trucks. Underbody heat and noise insulators may loosen and contact the aluminum driveshaft… But you still see some F-150s out there, don’t you?
A buddy of mine is an engineer there. Took me for a spin in one about a month back. Very nice truck, very quick. I don’t know how well they’ll do long run, but it’s cool if you have the money I guess. I’m a diesel truck fan myself, there’s nothing better when you need to pull or haul a load a long distance.
And in this case, Rivian’s mobile support will often come out to the customer site.
The issue involves a nut which is on tight, but Rivian’s engineers decided the nut required tightening by another 50%.
My neighbors Rivian is on the street every day…I see it, but don’t hear it which is nice. No noise pollution….one of the best features of EVs that is commonly overlooked.
Until 2020, the TSLA stock hovered around just 15 to 20 dollars. Then the 2020 Covid stimulus checks came and the TSLA price started to climb a mountain, topping above 400 $. So it still has a long way to fall, like so many other assets.
Competition is coming quickly . Every auto company will be producing EVs by 2024.
What will happen to millions of batteries when they reach the end of their useful life?
Joan-not to worry, think of current vehicle tires-a real problem at the end of their service lives in so many ways ever since their inception, but, as with those, as with much of the detritus of our technoindustrial civilization, we’ll just add batteries to that massive pile of problematic refuse we continue to look away from until we’re used to seeing it there…(see ISEP-definition).
may we all find a better day.
Sustainability concerns often presume status quo, but evolving technology keeps buying us time.
Battery chemistry and EV technology is researched by the best engineering minds on earth and they regularly perform innovative miracles. They’ll probably figure something out. A new technology perhaps.
It’s gonna be expensive, of course. The government hasn’t exactly been bashful about regulating everything that smells like revenue. These vehicles will be tracked and modified remotely (software revision upgrades) and it’s possible that you may eventually lease/deposit the battery like welding bottles or pay an ampere-hour excise tax. More expense. They won’t be allowed in landfills, hopefully even the Third World countries will enforce proper procedure. We’ve dumped toxic waste on them for too long. Shameful doesn’t begin.
So, are there problems, sure, will we fix them, sure(or nobody gets paid), will it cost a bundle, sure, that’s what they need us for.
You and some others presume there is a “Moore’s Law” equivalent in battery technology, where batteries will magically shrink 10 fold in size and increase 10 fold in capacity every 5 years. Batteries aren’t semiconductors and there is no such law, there will certainly be innovation but the rosy prospects you outline are not a given.
And tires are not going away ,wonder what do airlines do with discarded tires
There are many companies that have proven the ability to recycle 99% of the battery and its components. Just in Canada alone (I’m Canadian) there are multiple listed on the TSX.
In Australia the company GMG (https://graphenemg.com/) is already building Graphene/Aluminum ION batteries that charge faster, more energy dense, and lighter than Lithium Ion/Lithium Iron Phosphate, etc
Aluminum is much more abundant than Lithium and as much easier to recycle. Also these batteries don’t have a runaway reaction causing fires etc like existing Lithium batteries have (There are solid state Lithium batteries that are coming out that also don’t do this, typically using Silicon.
1. Some batteries are being re-used by utilities. That’s a new trend.
2. The recycling industry is slowly ramping up. There still are not a lot of batteries to recycle since it takes 8-10 years for the first batteries to show up on the recycling market. But 8-10 years ago, there were hardly any EVs out there to support an industry. So the industry will grow slowly as supply of old batteries increases. There are valuable materials in a battery, and it’ll be a good business. Nearly everything in a car gets re-used (salvage) or recycled. This business is as old as the automobile, and it’s doing fine.
You are 100% correct sir!
@Wolf “But It’s Not a Stock Split.” You are, as they say in French, impayable. Keep it coming!
Musk has managed to p*** off a lot of people in Europe currently due to his contacts with the Kremlin regarding Ukraine. People who have regarded him as an automotive Steven Jobs/ god, are now declaring that they’ll sell their Teslas immediately. A fallen god ….will be interesting to see if this affects Tesla sales in Europe.
I can kinda, sorta understand why people see Musk as a visionary. But why would you want a visionary running a car company? I think a more apt description of Musk would be the reincarnation of P. T. Barnum.
I appreciate Musk’s marketing skills. He’s possible the greatest marketer who ever lived, and thus deserves every penny of his fortune. He’s even inserted himself into the Ukraine conflict!! WTF????
Whatever happens, in the end, Musk will be okay. I do fear for the sanity of Ross Gerber however…. That guy was so emotionally and financially invested in Tesla it was crazy. Over the last year the shares of $GK have almost halved. Soon he can join the Cathie Woods Hall of Shame.
I used to think his investment firm Gerber/Kawasaki was a maker of motorcycles for infants!
Amazingly when the PPP money went out he took some of it and… gov database listed it as a motorcycle dealer. Someone had to check that box between his firm & bank. Hmmmm
Musk is also a brilliant stock manipulator. TSLA has had two stock splits , 5to 1 and a recent 3 to 1. TSLA can see back to 20 dollars post splits and still be over valued.
I believe I read a few weeks back that Elon has put up 90 billion of his stock holdings as collateral. Toonces be driving TSLA
Peter Theil just applied for citizenship in Malta along with having already gained it in New Zealand. He is of the same political thought I now hold as Republican with a Libertarian’s bent…. Theil stated he is tired of the direction the U.S. is headed. And, now Elon is sucking up to China in supporting Taiwanese takeover and was rewarded with a Chinese tax break on certain Tesla models in China. A new investment factor is the reality that American business men are now willing to abandon the USA. This issue is going to be a critical outcome of the coming election which throws a new big and powerful punch to understand the implications in the big investing picture. As Trump said about Musk that he is successful due to tax and subsidy support. What a joke on those of us who love the brutal but most positive outcome the Old School American Capitalistic system creates (not state capitalism to be clear). This is the real elephant in the room regarding Elon as he is loyal to…..any one who gives the manchild his way….
Peter thiel is a Young Global Leader at the WEF, along with transsec Buttigieg, tulsi g, pierre trudeau, e macron and some twelve hundred others. They have a publicized agenda. It’s worth a little research. Secretive groups have always functioned on the indifference of the masses. To the extent that nobody cares, they thrive. Malta will sell anybody a passport, lots of little countries and some big ones do. Loyalty to one’s country of birth is scarce among the wealthy. But their gardeners and housekeepers and Porsche and Gulfstream mechanics have flags in front of their houses and hanging from their rear-views.
rick m-
“…and it’s Tommy this and Tommy that and ‘throw him out’, the lout, but he’s the ‘saviour of his country’ when the guns begin to shoot’…”
-kipling
American businessmen have been dealing with unsavoury regimes since at least the 1920s (some of the examples might surprise you) — this is hardly a new phenomenon.
I think you may be wrong with your Tesla analysis. It is not a car company, it is an AI company. Much like Microsoft is not a computer company.
Other than that love your work.
OK, here we got it, the proof that Tesla isn’t an automaker for true believers, but a religion, just as I said in the article, but I didn’t have proof. Now we have proof.
Not a car company? I saw 100’s of Teslas on the road today. Also saw 7 recharging at Target. Guess those were AI bots driving them. Not a computer company? I saw several Microsoft computers at Best Buy today. Maybe those computers were just holograms.
Elon Musk is in the throes of some sort of narcissistic mania. Overexposure much? Sit down, Jokerface, you’re turning into a Kenny Rogers lookalike.
Tesla is obviously a car company in the sense that it makes cars. But that’s where the comparison ends with pretty much any other car company. It’s business model is radically different. EV only; direct to consumer; no advertising; no unions; limited model line up.
That model has yielded the highest operating margins in the industry.
You can certainly argue that Tesla is overvalued but I am not sure it makes sense to throw it in the analytical bucket as GM and Ford. It’s business model is radically different.
“No unions” at its plant in Germany? Wait and see. Tesla already had to set up the employee works council (which is not a union); it is composed of employees and represents employees’ interests at top management, which is standard in Germany. IG Metall, which represents autoworkers, has set up an office right by the factory.
“limited model line up” = a negative. Plus, Tesla fell behind on pickups. That’s a huge segment in the US, and Tesla still doesn’t have a product out, while Ford and Rivian do.
The Chevy Bolt beat the Tesla model 3 to market. Today model 3 sells in a week more than the bolt will sell in a year.
Tesla radically transformed that market in spite of not being the first.
The F-150 lightning and Rivian are niche players and likely to remain as such.
The electric pickup market is still wide open for the taking.
The interesting thing about the Ford Lightning is that most of the buyers are NOT F-150 (ICE) owners that switch to electric — at least not yet. The vast majority of the buyers own something other than an F-150, often not even a truck. The Lightning doesn’t often convert current F-150 owners. I’m not sure what that means. Maybe truck buyers need some time. Maybe they need a buddy that rolls up in an electric truck for their hunting weekend before it clicks. But it also means that Ford hasn’t even started leveraging its huge base of satisfied truck customers. Many people swear by their trucks and don’t change brands. And that’s an interesting dynamic given the huge number of F-series on the road today.
In my opinion, Tesla’s just look a bit newer/cooler and a bit more forward thinking than Chevy Bolt or some of the other EV’s I’ve seen (I’m not saying they are, it’s just the branding). I don’t care for Teslas but they don’t look too bad. The Ford Mach E Mustang is a bit sleeker looking of a SUV as well… of course you can’t say that in a Ford Mustang Facebook Group or all hell breaks loose with the Internal Combustion owners losing their minds saying “That’s not a Mustang!!!!!” I mean it gets nasty with the flame throwing that I can’t even stand Facebook groups anymore because people are so nasty.
From my point of view, the polarization of EV vs ICE is pretty crazy right now. I did meet a guy this weekend with a Tesla. Loves it for his city commute to his business daily and uses his truck for his weekend cabin, trailer, toys, etc. Different applications for everybody.
I have a ICE Ford Mustang and a 3/4 ton RAM truck for plowing snow, pulling a trailer, business, etc. A few people on the comments made statements about how A EV loses range pulling “XYZ with XXXXX lbs”. I mean for F sake, who’s going to be pulling a massive trailer with a EV truck? Doubtful for long period of times but who knows. The truck EV market is just getting started and should be fun to watch.
I’m in the rural areas a lot, use a truck, have friends with trucks and my clients (outdoor/hunting industry) all pretty much have trucks. I don’t see them converting to EV yet but I would imagine the time will come. If I see any of these good ol’ boys converting from their pickups, I’ll report it here.
All the Tesla/Elon hating cultist commenting. 🤣
Tesla is expanding 50% year over year, has the most preorders on the CyberTruck than any car in history, all while raising prices to obscene levels. Yet you mopes think Tesla is somehow about to collapse. 😄🤣😂
Tesla could dramatically drop the price of their cars and still be making industry leading profits.
In order to even insinuate demand is dropping those demand levers, price being one of them, would at least need to be pulled. But once pulled demand would shoot back up.
When the disruptive technology of the gas car (ICE) replaced the horse people made the same type of hateful comments about gas cars. Now EVs are the disruptive technology replacing the gas cars and here you are. 😁 The ICE age is dead, it’ll be gone before 2030.
You’re conflating a technology with Tesla. It’s quite possible to imagine a bright future for EVs and even think Tesla will be successful in that space, and still think Tesla’s current market cap is absurdly high. Having come down 50% it’s certainly less absurdly valued now, but a 74 P/E is still very high. The article specifically says: “Tesla has real products – near luxury and luxury vehicles – that lots of people want to buy globally, and that Tesla cannot at this point make enough of. And it’s making money building those vehicles.”
That said, I’m curious where horse people were making hateful comments about gas cars in 1903? Did they write letters to the local newspaper? Were they upset there would be less horsesh*t on city streets?
You know, I was curious about that too, whether or not people liked horseless carriages and their feelings about it.
I’ve got a subscription to newspapers.com so I looked into it, just a bit. I searched for “horseless” + “1903” + “New York”. In 1903, the Buffalo News basically dismissed horseless carriages as a rich man’s toy that would never replace a horse-drawn delivery wagon.
I went back a few years(1900+Pennsylvania). In 1900 the term horseless carriage was used. So was automobile, locomobile, steam wagon, and “automa”. Still nobody writing letters, but just the general sense of “it’ll never catch on”. Locomobiles were things people went to see at county fairs, to watch them race.
HOWEVER…. there are a couple of problems with horses that many people(farmers, delivery companies etc.) were aware of.
There were not enough big, heavy horses alive to pull all the heavy wagons that hauled produce and freight. More than one farmer’s journal in the 1890s lamented the lack of horses weighing more than 1600 and definitely 1800 pounds to haul wagons. Were horseless carriages a solution? I think they ended up being a solution since it was a lot easier to build a wagon and slap an engine on it than wait on the horse population to grow.
Another factor in the rise of horseless carriages: Eastern Equine Encephalitis. It first hit the US in the late 1890s and killed MILLIONS of horses. That right there gave horseless carriages a serious opportunity to take over.
So horseless carriages were in, and horses were out.
Now it’s 125 years later and the same words are being used to describe electric vehicles. Will the electric vehicle muscle out ICE vehicles? Probably. Is Elon Musk a total nutbar who should dial back the crazy? Probably.
We don’t think Tesla is imploding, we just don’t think is correctly valued, and won’t be until its stock is about 1/3 of what it is now.
David Trainer of New Constructs has some research indicating that Tesla stock is largely supported by speculative capital. He also maintains a zombie companies list which has some big names like Doordash, Carvana, Peleton etc, possibly Uber.
His theory is that a Tesla stock crash could trigger a cascading effect that takes down most of these zombies – speculators trying to sell zombie stock to offset for Tesla loss. And with some big names on that list, it could spillover further.
I don’t have an opinion on this one way or the other. But I thought it was interesting.
So much is happening now on the Macro/Nation-States Level with the Sanctions+Blowback.
Consider the European Auto Mkt – New Car Sales (save NORway, who have their own Energy Sources and pretty much rigged themselves to favor BEVs) to be severely disrupted.
IMHO, if CHNese and VNMese BEV Makers manage to successfully launch their Models into the USA West Coast and the BOS-WDC Corridor in 2023CE as planned – TSLA will be pressed.
Auto Mechanic YouTuber Scotty Kilmer just did a vid reviewing and lambasting TSLA Models for their poor mfg quality (compared to an Audi BEV and other Midrange+ Car Models. Granted, Audi may be in the Hurt-Locker from the Sanctions Blowback) standards and Vehicular Maintenance+Repair Turnaround Cycles.
The TSLA stock still could be a Short-Squeeze Play.
I’m not giving Financial Advice – 😄^_^ – If you hold TSLA Stock, I recommend you discuss Exit Strategies and Covered Puts with your Investment+Tax Advisors.
P.S. – Been seeing more negative reviews on BEV Trucks’ TOWING Capabilities (read, distance) vs Petrol/CNG/Hybrid Types.
Have a great weekend.
Try to get your Tesla fixed … just think delay and high cost. They all aren’t new anymore. Can’t do everything via a software/firmware download. Should’ve spent more time investing in cost effective servicing capabilities.
if we consider this from the business side, then everything is correct! why invest money in a business that will not bring profit and will not benefit at all?
I’d like to see Gates’ put on this action. The OG tech bro called it right.
I had to browse the history on the Model T Ford to keep things in perspective.
The Model T was released in 1908 with a top speed of 45 MPH.
From Google, the Model T became fairly reliable 7 years later in 1915.
Meaning, as long as you had constant maintenance (every 1K miles) and didn’t mind fixing a flat every 200 miles, they would last up to 100K miles.
We are still early in the EV evolution. Nobody would put up with what early Model T owners had to endure.
I think Tesla, Rivian, Ford, and GM have done very well given their time on the market.
Perhaps problems faced by the early Model T Fords had something to due with the infrastructure of that time. Most of the roads were still dirt roads with wagon wheel ruts and in the larger towns, uneven cobblestones must have rattled those Model T’s to no end.
Current infrastructure problems for the EV revolution to be achieved will certainly include a major overhaul of our electrical supply and delivery grid… and this will not be an inexpensive undertaking.
Definitely infrastructure issues but also EV technology. Same as the Model T.
1) The Model T had few gas stations and the EV’s have few charging station. The Model T required a complete repair toolkit while traveling. The expectations of an EV owner are completely opposite but the infrastructure to repair is similar. Time will change this.
2) The range of the Model T before refilling with gas was 40 miles.
That would be unacceptable for EV owners (Unless it was a golf cart). IMHO, the EV range is still unacceptable without more fast charging stations.
3) The reliability of the Model T was horrible. EVs have better reliability and lower cost of maintenance today. IMHO, EVs have better reliability than the best gas powered cars. Less things to go wrong.
The horse and buggy owners who sneered at the early Model T’s were 100% wrong. I try not to be one of them.
I value reliability and convenience so I would not have been an early adopter of the Model T. I am currently not an early adopter of EVs. I’ll wait a bit until convenience and range issues have been worked out.
If I was alive in the Model T days, I would have waited until my beloved, trusty horse Bessie passed into the great CA sunset before replacing her with a newfangled machine.
I am now waiting for my beloved Jeep, Bessie, to pass in the same way.
It was much easier recycling a dead horse back in the day than a dead Jeep today.
As Wolf pointed out, auto recycling has come a long way since 1915.
Seen it all before, Bob,
“…and the EV’s have few charging station.”
This might have been the case 10 years ago. Oh my, how time flies! Now charging stations are all over the place.
There are way more charging stations in California (where I think you live) than gas stations. As of April, in California alone, according to the EIA, there were 35,594 public chargers and 43,429 shared private chargers (for tenants, employees, visitors, residents etc.) for a total of 79,023 chargers. They’re along Interstates, they’re along other highways, they’re in towns and cities. They’re small, just a piece of equipment in a Walgreens parking lot, so you may not see it if you’re not looking for it, but they’re everywhere.
The EIA publishes this data, just google it, and you can find the charging stations in your city. For example, this is what Sacramento looks like. The green dots are charging stations.
Thanks for updating me, Wolf!
EV charging stations are less obtrusive than gas stations so I don’t even notice them.
Tesla should be paying close attention to the competition. I’ve spent quite a bit of time driving a 2022 Kia Niro EV. It’s a $45K small SUV (station wagon!) that competes with the $65K Tesla Model Y.
The Kia is not as fast as the Model Y, but still has plenty of performance for spirited driving under normal road conditions. And it has buttons, knobs and a normal dash cluster. You can drive the car without ever laying a finger on the touchscreen. And that touchscreen has Android Auto/Apple CarPlay.
Kia only seats 5, unlike the Model Y which can be equipped to seat 7, assuming at least two of them are smaller than the average adult.
Build quality on the Kia is excellent. If you put them both in front of me and told me to pick one, it would be the Kia. That I only have to spend $45K to get it is just a bonus.
So? It’s still up 10x from pre Covid highs.
1. No, 3.5x … Pre-covid high was about $64 in February 2020. So now at $221, it’s 3.5 times, not 10 times, the pre-covid high (221/64 = 3.45). Basic math is apparently not your strength.
2. Maybe someday you can say, it’s “still up 2x from pre Covid highs,” and then one day maybe you can say “it’s still up 1x from pre covid highs,” hahaha, who knows, and it doesn’t matter. But it’s important to keep the data and the math straight when posting here. Thank you for your understanding.
Wolf,
How can I convince my friend who got into Tesla very early to book some profits! I don’t think Tesla is a bad company per se but think it is way way overvalued at current levels!
Thanks!
They’ll figure it out on their own. Everyone eventually does. Don’t try to give investment advice to your friends. Just listen with a polite smile, nod, and move on to the next topic.