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Almington Capital @AlmingtonCap
, 10 tweets, 5 min read Read on Twitter
1/ Brief thread on $TSLAQ production & demand. These are 2 sides of the $TSLA narrative. It needs exponential growth in production AND the demand to absorb said production for the huge market cap to hold. We already know production has stalled out. Just look at Bloomberg's model.
2/ As we know all too well (and as we've repeatedly recounted), production can't be sustained at the rates @elonmusk has promised. Long gone is the 7k burst wk, let alone the 10k/wk M3 promises. Even the 5k/wk "sustained" rate has proven ephemeral. $TSLA…
3/ Thanksgiving was the last week of $TSLA "production hell", in which Elon fought to show a 1k/day extrapolation. Evidently, that particular flavor of flimflam has gone out of style. Unsurprising, since such bursts have proven busts time and again. $TSLAQ…
4/ We now have reports that production has all but stopped, thanks to the invaluable on-the-ground snooping of @skabooshka. Likewise, we know, thanks to the redoubtable efforts of the #SGF #shortygroundforce, that inventory has been piling up. $TSLA $TSLAQ
5/ Meanwhile, $TSLA has been pulling every conceivable lever to move the inventory it hasn't sold. In advance of Christmas, @elonmusk announced the "release" vehicles that couldn't be delivered by year-end to help buyers maximize the $7.5k credit. $TSLAQ
6/ For weeks, we've seen the push to find buyers. And today, Elon finally dropped all pretense of $TSLA building its car to order. He even dropped the dreaded "i" word for the first time. So much for the multi-year backlog... @markbspiegel
7/ Even $TSLA fans such as @TroyTeslike have finally started to grasp the demand problem. He acknowledges that even the current paltry 4k/wk production may be too much for the North American market to absorb.
8/ Of course, $TSLA is supposed to be heading to Europe next year with the M3. That will help absorb some of the current capacity, but after the initial backlog drawdown, it's not likely to add all that much. Likewise, China can't solve the demand problem over the long-run.
9/ Perversely, the production hell that bedeviled the M3 ramp may actually have delayed the realization that demand is far more limited than once surmised. As #SGF reports continue to roll in, "research" from the likes of Wedbush will soon look comical.…
10/ Bottom Line: $TSLA has had a host of production problems, but these have served only to hide the limits of demand. The market will soon realize that, as $TSLAQ has said repeatedly, the M3 is a niche product with margins set to contract harshly in 2019.…
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