1/ Short-ish thread with thoughts on $TSLA re-opening Fremont & what it means to the Big Picture.
2/ I understand arguments going both ways about whether California gov't is acting too restrictively. The big problems I have with Musk's approach are (a) his hypocrisy, given his earlier COV-19 denialism, and (b) his defiance of the law. Speak out, protest, etc. But obey.
3/ Back to Big Picture. Fremont reopening sooner Does Not Matter. Tesla has inventory from Q1 in US & in Europe that remains unsold. The demand just isn't there.
4/ Yeah, yeah, I hear about how everyone is awaiting the Model Y.
In reality, very few are awaiting the Model Y. It costs too much. It's as unreliable as the Model 3.
VW's ID.3 is a far more compelling choice. Not for nothing has Tesla been so mum on Model Y orders.
In reality, very few are awaiting the Model Y. It costs too much. It's as unreliable as the Model 3.
VW's ID.3 is a far more compelling choice. Not for nothing has Tesla been so mum on Model Y orders.
5/ So, Big Picture problems are, in this order...
Tesla's Demand was already shrinking
EV competition was already gutting Tesla in EU
COV has further devastated demand
No cash can leave China
Used Tesla cars will experience massive depreciation
and...
Tesla's Demand was already shrinking
EV competition was already gutting Tesla in EU
COV has further devastated demand
No cash can leave China
Used Tesla cars will experience massive depreciation
and...
6/ ... the depreciation problem becomes even worse as battery degradation problems in older vehicles begin to manifest.
As much as anything, Battery Day may be about promising Tesla buyers it will some day cost less to replace batteries than the extravagant amount it now costs.
As much as anything, Battery Day may be about promising Tesla buyers it will some day cost less to replace batteries than the extravagant amount it now costs.
7/ Elon & Zach will say, "Look at our awesome liquidity! We just added $4B in Working Capital availabilty!"
Very nice, but for Tesla, China is a black hole:
It sucks in $711 million of Tesla capital.
It sucks in demand formerly served by Fremont.
But no cash can emerge.
Very nice, but for Tesla, China is a black hole:
It sucks in $711 million of Tesla capital.
It sucks in demand formerly served by Fremont.
But no cash can emerge.
8/ At some point, biz press & analysts will wake up to the China reality. Jonas knows, but pretends the problem away because he wants to see Morgan Stanley keep feeding at the fee trough.
9/ There will be a mystery: why do consolidated results appear only just terrible, while Fremont situation looks catastrophic & Tesla continues to need cash?
At that point, maybe, finally, analysts & the SEC will demand detailed segment reporting.
At that point, maybe, finally, analysts & the SEC will demand detailed segment reporting.
10/ More Big Picture.
What is happening in Germany? A whole lot of nothing. The forest is gone. The roadway is mostly in. And now... crickets. Germany awaits Tesla filing foundation plans.
BS from German pols & Musk aside, delays mean no cars will be built in Germany in 2021.
What is happening in Germany? A whole lot of nothing. The forest is gone. The roadway is mostly in. And now... crickets. Germany awaits Tesla filing foundation plans.
BS from German pols & Musk aside, delays mean no cars will be built in Germany in 2021.
11/ The idea of building a Brandenburg factory was idiotic when announced & now has become utterly lunatic.
Expect Musk to delay as long as possible.
Expect German pols to grow anxious. Probably, like NYS pols, they'll wring their hands & fidget in their seats, but do nothing.
Expect Musk to delay as long as possible.
Expect German pols to grow anxious. Probably, like NYS pols, they'll wring their hands & fidget in their seats, but do nothing.
12/ How about this Texas stuff? It's all part of creating an excuse to close up shop in Fremont, which Shanghai made inevitable
Will Tesla build a Texas factory? Only if Texas pols are foolish enough to front most of the cost.
Never underestimate the stupidity of pols anywhere.
Will Tesla build a Texas factory? Only if Texas pols are foolish enough to front most of the cost.
Never underestimate the stupidity of pols anywhere.
13/ Just as a reminder, my open letter to Tex Gov Abbott. Hey, Texan $tslaq, pass it along to the Guv & to your local friendly elected officials?
14/ The semi? MIA.
Roadster 2? MIA.
Okay, then, how about the Cybertruck?
It has fake specs & a fake price. It will be an incredibly expensive toy.
People don't buy expensive toys in hard times.
Roadster 2? MIA.
Okay, then, how about the Cybertruck?
It has fake specs & a fake price. It will be an incredibly expensive toy.
People don't buy expensive toys in hard times.
15/ I've taken lots of incoming for saying Tesla will raise in Q2.
I admit: I'm baffled Tesla hasn't done so yet. Not sure why not.
But, I'll say it again, Tesla needs to raise before investors get a look at what its balance sheet looks like right now.
I admit: I'm baffled Tesla hasn't done so yet. Not sure why not.
But, I'll say it again, Tesla needs to raise before investors get a look at what its balance sheet looks like right now.
16/ A huge source of Tesla revenue historically has been regulatory credit revenues. (See, e.g., Q1)
COV has dried up that source. No other OEMs need those credits any longer.
Tesla may have more FCA pooling revenue it can recognize, but 2020 is the end of that gravy train.
COV has dried up that source. No other OEMs need those credits any longer.
Tesla may have more FCA pooling revenue it can recognize, but 2020 is the end of that gravy train.
17/ Final Big Picture thought:
Tesla's demographic target has always been progressives fooling themselves into thinking driving one of Elon's cars, complete with FIT credit, would help save the Earth.
Musk has now made a very public pivot...
Tesla's demographic target has always been progressives fooling themselves into thinking driving one of Elon's cars, complete with FIT credit, would help save the Earth.
Musk has now made a very public pivot...
18/ He suddenly re-styled himself as a Trump-supported (& Trump-supporting) "libertarian".
It's a bold pivot, & risky.
Maybe it drums up TX political support for factory subsidies.
Or maybe it backfires & turns off many fans.
But most likely, it just won't matter either way.
It's a bold pivot, & risky.
Maybe it drums up TX political support for factory subsidies.
Or maybe it backfires & turns off many fans.
But most likely, it just won't matter either way.
19/ Also, the idea that someone whose companies have accepted $10B+ of government subsidies (I'm still toting them up, with help) can posture himself as a libertarian is a joke. Expect continuing push-back.
20/ Needless to say, none of this has anything to do with share price. Joe Rogan is utterly innocent of any of these realities. And he is better informed than 99% of Tesla investors.
