Tesla the growth myth. I have seen a multitude of articles, tv pundits, YouTube millennials all gushing over what an incredible quarter Tesla just had by crushing expectations & delivering 139,300 cars while producing 145,036. The hype machine continues to roll on. $tsla $tslaq
Inside I want to chuckle as I realize how easily the masses are manipulated. Elon Musk knows this & his greatest gift is leading lemmings off a financial cliff. Hey give me your money & we will dream about Mars, Hyperloops, appreciating cars & money printing solar panels.
I don't truly desire to meet Elon Musk, I am not a celebrity chaser or glam hunter. Yet, if I did I would high five him (An air high five Corona-Bros) for being the greatest manipulator of easily led people in the history of the world.
This guy belongs in the annals of the cultist hall of fame. The Bhagwan Shree Rajneesh had a cult which was a lot more fun than old Elon's but his collection of cars & his follower count were a wee bit smaller. Manson was a little more overt about whacking people. Elon does it
through software upgrades using his giant pools of mindless Guinea pigs. Bro but have you driven one? How can you not be impressed with this guy? He has convinced the world he is saving it by producing cars & making himself billions which have almost no impact on pollution.
Gasp, sacrilege you charlatan. No fact. The more electric cars we build the more electricity we need to power them. California where most of these technological marvels exists generates 70% of it's energy using fossil fuels. The additional electricity needed to power these things
creates additional pressure on the grid & more fossil fuels are burned to generate this electricity. California in it's genius instead of putting that money into clean energy infrastructure has been doling billions out to Elon Musk to make the problem worse.
Yet don't fret Elon has put that money to good use by buying lots of mansions & jets, playing with pig minds & digging giant underground Tesla amusement park rides. Let's step back from all of this common sense truth & look at some numbers. Tesla did sell 139,300 cars in Q3, 2020
An increase from their highest Quarter Q4, 2019 of 112,000. That is an increase of approx 27,300 cars a 25% bump. That is a 25% growth rate after doubling your capacity, having four gigafactories, & selling directly into four of the five largest economies in the world. I know
Tesla is production constrained & there is unlimited demand. Noooooooooo!
Take a gander here, Tesla defines their production capacity at around 172,500 cars per quarter. Yet, with this underutilized capacity it shows even with billions in government subsidies which shifts the demand curve to the right allowing artificially deflated prices & constant
price cutting Tesla can't sell it's cars. It is not a production constraint it is a demand constraint. Need more empirical evidence take a look at Tesla's increasing lease numbers. 13% of all model S & X's were leased not sold. 7% of all autos sold were leased. Not great for
the bottom line. But bro Tesla is a tech company. Well if so Tesla is one of the least efficient & profitable. When benchmarked against tech they don't deserve a tech valuation. Tesla, growth numbers are less than Facebooks which generates almost 3x the revenue on a much higher
margin business. Their growth rate trails Amazons by 15% Q over Q & oh yeah Amazon generates 15x Tesla's annual revenue. Netflix's quarterly revenue growth of 25% higher than Tesla's. We could do this all day but if Tesla is a tech company it is a dog. A cost intensive
business which generates revenue from a product which is sold at a price point maybe 5000-6000 times the cost of a Netflix membership rate & lags in revenue growth, wow! Wait dude Tesla is generating profits & with their efficiency they will start generating enormous cash &
be way more profitable than these tech companies. Haven't you ever heard of Wrights Law? Wrights Law in essence states the more units produced, the more efficiency & thus decreasing costs & bingo more profits. Lets see, Tesla had a Gigafactory in Nevada, Fremont, & Buffalo &
produced almost 100k in a quarter. They also added several outdoor production lines to achieve this number. Let's just say 33,333 cars per giga. Now they added a plant in China, fully operational & they produced around 36,250 cars. A whopping productivity increase of 2,917 cars.
So for around a cool 4 billy(billion) they got a production increase of less than 3,000 cars. But wait, Tesla is building another Giga in Europe where sales fell greater than 50% this quarter. I hear cars built in Germany with Unions & Regulations are almost free to build.
(That is sarcasm for you Tesloonians.) These are the principles of Wrights Law in it's purest form. Oh and solar, yeah that isn't growing either. In fact market share has been slipping dramatically since Musk bailed out his cousins with Temple donations.
No worries plants are expensive so expect another biannual cap raise promising robotaxis, moon rides or other fantastical non-existent things & yes you can peel off your greenbacks & donate again to the Temple of Musk. Yet know you are not an investor but a sucker! $tsla $tslaq
FYI, I use approximations & not exact numbers although the numbers are close approximations. These are my opinions not investment advice.
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