"Carmageddon For Tesla"“Total sales in November rose 0.9% from a year ago to 1,393,010 new vehicles, according to Autodata”
“But Tesla – which lost $619 million in Q3 – delivered only 3,590 vehicles in November in the US, down 18% from a year ago.”
Tesla isn’t quite out there by itself, though. The Wall Street hype machine backs it up, dousing it with billions of dollars on a regular basis to burn through as fast as it can. This masterful hype has created a giant market capitalization of about $52 billion, more than most automakers, including Ford ($50 billion). It’s not far behind GM ($61 billion).“One: 3,590 vehicles amounts to a market share of only 0.26%, of the 1,393,010 new cars and trucks sold in the US in November. Porsche outsold Tesla by 55% (5,555 new vehicles).”
“Two: Tesla doesn’t report monthly deliveries. It wants to play with the big boys, but it doesn’t want people to know on a monthly basis just how crummy and by comparison inconsequential its US sales numbers are. Opaque and dedicated to hype, it refuses to disclose how many vehicles it delivered that month in the US. So the industry is estimating Tesla’s monthly US sales.”
“In Q3, Tesla delivered 220 handmade Model 3’s. In October, it delivered about 145 handmade units. In November, the assembly line still wasn’t assembling cars”
“Four: This is where hype goes to die. In February 2017, Tesla hyped these Model 3 production numbers for 2017:
Our Model 3 program is on track to start limited vehicle production in July and to steadily ramp production to exceed 5,000 vehicles per week at some point in the fourth quarter and 10,000 vehicles per week at some point in 2018.
November is solidly in the fourth quarter. 5,000 vehicles per week would mean over 20,000 a month. OK, this is November and not December, so maybe 4,000 a week for a total of 16,000. We got 345.”
Serious delinquencies in subprime auto loans have reached Lehman Moment proportions. But there is no Financial Crisis. These are the boom times. Read… Auto-Loan Subprime Blows Up Lehman-Moment-Like
"Elon Musk's First Payload To Mars: His "Midnight Cherry Tesla Roadster Playing Space Oddity"“Musk is undeniably the greatest snake oil salesman modern financial markets have ever seen, and that is why he is planning the next spectacular event before a further correction.”
“In late November, we reported on Elon Musk’s desperate attempt to boost market confidence with a shock and awe performance unveiling Tesla’s new semi-truck and roadster. While the event was a thriller, it appears the laws of physics may have finally caught up with Tesla’s stock -
now in a bear-market from September highs.”
“While the practical use for a Tesla roadster on Mars is still unknown, it would buy Musk some time to keep the stock elevated for perhaps a few more secondly offerings.”
“On Friday evening, Musk tweeted what the payload of the Falcon Heavy would be— his “midnight cherry Tesla Roadster playing Space Oddity”.
But the story gets better, because the powerful Falcon Heavy rocket will launch his Tesla into the orbit around Mars. Musk added, the Tesla “will be in deep space for a billion years or so if it doesn’t blow up on ascent.”
“…explains the financial circumstances of why Musk is attempting to conduct the great show ever known to man through SpaceX, as it means the cross promotion would keep his scheme alive. In the mean time, the short theses build:1. Negative Cash Flows
“If you can’t make money selling a $100,000 car to rich people, how are you going to make money selling a $45,000 car to normal people?” Rocker told The Times. He was referring to the upcoming mass-market Model 3. “I’m saying they’re going to lose money on every Model 3 they build and sell,” Spiegel said. Based on Tesla’s Q4 2016 earnings report, he figured the combined average selling price for non-leased Model S and X is about $104,000 and the combined average cost of building them about $82,000.
2. Competition from the Big Guys
Electric vehicles are still only a tiny fraction of total new vehicle sales in the US. Tesla sold about half of them. In March, according to Autodata, Tesla sold 4,050 vehicles in the US, similar to Porsche. All automakers combined sold 1.56 million new vehicles. This gave Tesla a market share of 0.26%. “Tesla faces a formidable set of competitors, and they’re coming in with guns blazing,” Wahlman told The Times. “Once the market is flooded with electric vehicles from manufacturers who can cross-subsidize them with profits from their conventional cars, somewhere around 2020 or 2021, Tesla will be driven into bankruptcy,” Spiegel said.
3. Tesla’s vanishing tax credits
The federal tax credit of $7,500 that EV buyers currently get is limited to 200,000 vehicles for each automaker. Once that automaker hits that point, tax credits are reduced and then phased out. Of all automakers, Tesla is closest to the 200,000 mark. Under its current production goals, the tax credits for its cars could start declining in 2018. This would give competitors, whose customers still get the full tax credit, a major advantage. About 370,000 folks put down a refundable $1,000 deposit on Tesla’s Model 3, perhaps figuring they’d get the $7,500 tax credit. But as it stands, many won’t. Rocker thinks that this is going to be an issue. The refundable deposit “commits them to nothing,” he said. Those that don’t get the tax credit may just ask for their money back and buy an EV that is still eligible for the credit.
4. The Question of patent protection
Tesla has made its patents available to all comers, thus lowering its patent protections against competitors. Also, the key part of an EV, the battery, is produced by suppliers; they, and not Tesla, own the intellectual property. This is true for all automakers. But Tesla might still be closely guarding crucial trade secrets that are not patented.
5. Musk’s distractions from his day job
Musk has a lot of irons in the fire: Tesla, SpaceX (with which he wants to build a colony on Mars or something), solar-panel installer SolarCity which Tesla bailed out last year; projects ranging from artificial intelligence to tunnel digging; venture capital activities…. “He’s all over the map, from tunneling to flights to Mars to solar roof tiles,” Rocker said. These announcements have the effect of boosting Tesla’s stock: “It’s ‘Let’s get the acolytes excited. Implant in the brain! Let’s buy Tesla stock!’”
6. Execution risk
“Investing is all about possibility and probability,” Yusko said. “Is it possible that Tesla will produce 500,000 cars in the next two or three years? Yes. Is it probable? No.” Tesla has missed many deadlines and goals, and quality problems cropped up in early production models. As Tesla is trying to make the transition to a mass-market automaker, execution risk will grow since mass-market customers are less forgiving.
7. Investor fatigue
Having lost money in every one of its 10 years of existence, Tesla asks investors regularly for more money to fill the new holes. In March, it got $1.2 billion. In May last year, it got $1.5 billion. Tesla will need many more billions to scale up production and to digest the losses. Tesla has been ingenious in this department. But when will investors get tired of it? “We’re awfully close to the point where people wake up and realize these guys are seriously diluting our equity” with new stock and convertible bond issues, Yusko said. According to The Times, Yusko “is looking for the moment when the true believers begin to lose faith.”
*Update
8. Emerging solid-state battery technology
Musk has invested a lot into his Gigafactory and technology producing lithium-ion batteries. The EV game is all about the best battery technology and a new threat has emerged using solid-state technology. If Tesla does not adopt to these new battery trends consumers would likely gravitate to EVs who posses such technology, because of the longer distance and shorter charge time.”
http://www.zerohedge.com/news/2017-12-0 ... ddon-teslahttp://www.zerohedge.com/news/2017-12-0 ... pace-oddit