,
25 tweets,
5 min read
Read on Twitter
1/ Here is a reader's guide to the email sent by @elonmusk to all $TSLA employees this morning. It reads between the lines, and asks some questions. Here's the link to the entirety, but I'll take it paragraph by paragraph. tesla.com/blog/tesla-com…
2/ Let's start with the introduction: 
3/ So, last week it was SpaceX employees, and this week its $TSLA employees who learn via email. No 8-K as of yet. As we review the email, let's see how well the Twitter Sitter Committee (mandated by the SEC Consent Judgment with Tesla) is doing its job.
4/ Here's the first paragraph:
5/ Wait, 2018 was the "most successful year in $TSLA's history" but the company is all but certain to lose more than $1 billion? If that's success, what does failure look like? And wasn't the Model 3 supposed to be a "mass market" vehicle, not a "premium vehicle"?
6/ On we go:
7/ Anyone else becoming a bit weary of lectures about "sustainable transport and energy" by the guy who often handles a 20-mile commute in his Gulfstream G650? Or who demonizes fossil fuels when CA will need to rely even more heavily on them now that it's closing nuclear plants?
8/ As for the "massive entrenched competitors," is Elon just now discovering that the auto business is capital intensive, competitive, and cyclical? How many of $TSLA's competitors got a free factory? Or $6B plus in subsidies, tax abatements, tax credits, electricity discounts?
9/ Next:
10/ Let that sink in. $TSLA sold 7,000 more high ASP cars in Q4 than Q3, but will have a tinier profit. Q1 will be profitable only with "effort and luck". Translation: Q1 will be a massive loss. There's a phrase for this: Structurally Unprofitable.
11/ Next:
12/ Translation: those of you waiting for the Low Range $TSLA Model 3 costing $35k will continue to wait because it's not coming in Q1 or in Q2. And, our European order book is so dreadful that we'll have to start offering the Lemur there soon.
13/ Next:
14/ "Sorry for all these numbers"?! What numbers? Did you give us the CapEx numbers on the Shanghai plant, for which we still lack an 8-K? The European order book numbers? The U.S. order book numbers? The actual battery cost? (Hint: $250/ kWh, far higher than what $TSLA teased.)
15/ Next:
16/ $TSLA delivered 4.6k cars/week in Q4 by grossly underspending on SG&A, leading to customer disappointment and, even, fury, on a scale never seen for any car maker this century. And so now it will slash SG&A even further. Good luck getting Service Center appointments or parts.
17/ Next:
18/ Elon forgot to apologize for all the $TSLA stock options that will not now vest. And, he never apologized to the 5% of the workforce he cut, quietly, several weeks back. But, no worries, Kimbal continues to get fat on option exercises & sales.
19/ Next:
20/ The best we can say about this paragraph is that, at least, Elon is not shamelessly pumping these non-existent products with fantasy specs, for whose development growth CapEx is wanting. Maybe we have the $TSLA Twitter Sitter Committee to thank for that.
21/ Finally:
22/ So honored that I have jeopardized your livelihoods by telling the massive, unadulterated lie about "funding secured" that exposes $TSLA to existential danger in SEC, DOJ, and private actions. So honored that I couldn't resist the spliff Joe Rogan handed me.
23/ $TSLA's share price is $314 as I write this. Come mid-May, that number will seem stratospheric, and far in the distant past.
24/ This year, 2019, is the reckoning. The EU order book is tiny, despite an invitation to all comers. Elon dropped the ball on homologation, giving the EV competition several extra months to make inroads. $TSLA is resorting to fleet sales and trickery. Buckle up. <fin>
This, to me, is the key point in the thread. The Model 3, which so many thought would be $TSLA's salvation, will be its destructor.
