Tag Archives: Tesla

Are Tesla’s Sudden China Woes A Harbinger Of Things To Come? by Fan Yu

The thing about doing business in a command economy is you’ve got to stay in good with the commanders, who are sometimes known to be capricious. From Fan Yu at The Epoch Times via zerohedge.com:

o see the impact China’s fickle market can do to a company’s value, look no further than Tesla.

On April 20, the Chinese Communist Party (CCP)’s media and regulators began a series of public rebukes against the California-based electric carmaker. The criticisms were broad, ranging from Tesla’s car safety, to data gathering practices, as well as customer service.

In early June, technology website The Information reported that Tesla’s May China orders fell by nearly half compared to April, according to internal data. Orders fell from 18,000 in April to 9,800 in May, a reflection that Chinese consumers were negatively impacted by the uproar.

And all of this has erased $137 billion in market value as Tesla’s stock price declined 19.5 percent since April 21.

A Series of Unfortunate Events

Tesla has encountered issues all year in China. In February and March, the CCP banned Tesla from its military compounds and housing units on concerns that the company could collect information via the cameras attached to Tesla cars to facilitate spying on behalf of the United States.

In early April, Tesla’s communications and governmental affairs director in China announced that any data collected within China would be stored in China and will not be sent to the United States, in an effort to quell CCP security concerns. This came about after founder and CEO Elon Musk publicly declared that Tesla would not engage in spying.

On April 20, CCP mouthpiece Xinhua published an article from the sidelines of the Shanghai Auto Show slamming the electric vehicle maker on the quality of its vehicles, citing consumer complaints.

On the same day, an official post on WeChat from the account of the powerful Commission for Political and Legal Affairs also drew attention to the Auto Show, when a woman climbed onto the roof of a Tesla vehicle to complain about her car’s faulty brakes. The video of the woman went viral on Chinese social media. While it’s unclear why the CCP organ which oversees the country’s police and court system would weigh in on electric cars, it was nonetheless a powerful rebuke of Tesla.

While Tesla China originally pushed back against this narrative, stating that the woman in question has been protesting against Tesla for some time, later during the same week the company issued a public apology and promised to better listen to customer complaints.

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The Cryptoverse – Bastard Son of the Fiat, by David Stockman

Many people who have made a lot of money in cryptocurrencies would vigorously resist the notion that their gains are fueled by the same monetary inflation that’s fueling gains in many other speculative markets. From David Stockman at davidstockmanscontracorner via lewrockwell.com:

Goodness gracious, me! Is this the ultimate case of the pot-calling-the-kettle-black or what?

If there were ever a pure play in the great fraud of fiat, Elon Musk is it. Yet here he is electing to go with crypto instead.

The true battle is between fiat & crypto. On balance, I support the latter.

Actually, there is a seminal picture in these few words and it amounts to this: Crypto currencies are not money, they are the latest boiling hot speculative asset class that, ironically, is just another bastard spawn of the central bank money-printers. They are not an alternative to bad central bank money; they’re are an issue from its own loins.

It’s blatantly evident that neither Bitcoin nor any of the other swarming herd of cryptos are a store of value or a medium of exchange. During the last 48 months, for example, the value of Bitcoin has changed on a monthly basis as follows.

Monthly Value Change:

  • Gain of 40% or more: 7 months;
  • Gain of 20% or more: 17 months;
  • Gain of 10% or more: 21 months;
  • Loss of 20% or more: 5 months;
  • loss of 5% or more: 19 months;
  • Loss of 2% or more: 22 months;

As to a means of exchange for anything less than a $125,000 Tesla (for a time), a good old fiat wire transfer, check or chunk of cash has a lower transaction cost as a percent of purchase price.

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Tesla – and GM – Finally Admit It, by Eric Peters

Electric cars, including Tesla’s, in the US have yet to meet the market test: can they be sold without subsidies at a price that will their makers to make a decent profit? From Eric Peters at ericpetersautos.com:

 
 
 

GM – and Tesla – just publicly admitted that they can’t sell electric cars. Or rather, they need your help – via Uncle.

To pay people $7,500 each to “buy” their electric cars.

To be paid by those who pay the taxes which will make up for the taxes not collected from the people who “buy” electric cars. This is the wealth transfer scheme styled “electric car tax credits.”

They have been around for years – and may be coming back – because electric cars have pull rather than range.

Great sums of money were expended to extract great sums of money – via the tax code, which was adjusted to give preferential treatment to the purchasers of electric cars by making electric cars seem more affordable than they are, in fact.

 

In order to create the fiction of a “market” for electric cars, where none – or very little – actually existed.

If that were not the case, then why the need to pay people to “buy” them? In every other case of such massive discounting – an industry term –  the need to apply such discounts is taken as evidence of the car being discounted being a flop.

Get rid of them by whatever means necessary – as by giving them away –  and then build no more.

The Aztek being a for-instance. Imagine being paid to buy one. Of course, the difference with EVs is that instead of GM paying you to buy an Aztek, the government is making someone else pay for your electric Aztek.

Or rather, your neighbor’s electric Aztek.

No one would abide such a thing, much less laud such a thing. How come almost no one is questioning this thing?

That question is hardly ever raised – much less answered. Probably because of the answer. Electric cars are the Azteks of our time, but worse. And unlike the Aztek, which was merely ugly – electric cars are evil. A kind of cancer that is not only metastasizing but being encouraged to metastasize.

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Elon’s “Earnings”, by Eric Peters

Elon Musk’s subsidy-slurping, tax-credit-trading companies will be the poster children for the Biden administration, like Solyndra was the poster child for the Obama administration. From Eric Peters at ericpetersautos.com:

It is being “reported” that Tesla’s net “earnings” have “surged” to $438 million. What they do not report is that this includes $518 million “earned” via regulatory credits – which aren’t cars. Rather, they are monies mulcted from other car companies, paid to Tesla to get “credit” for not having made a sufficient number of electric cars themselves.

Enough to achieve compliance with government requirements, as in California, that they build a certain number/percentage of them – else pay Elon to get the “credit.” In other words, it is a racket.

A shakedown.

Only legal – like the income tax. But it does not change the nature of the thing. Only the marketing of the thing.

It is very interesting that no major automotive media reports the context about Tesla’s “earnings.” Instead, it is “reported” that Tesla is making money hand-over-fist.

Which is true.

It is also true of the IRS. And of Al Capone. But the media in those days did not cover for Capone. Everyone knew he was a gangster – and to be fair to Capone, he was only that because the government made his otherwise legitimate business – the selling of alcohol to people who very much wished to buy it –  illegal.

The situation with Tesla – and Elon Musk – is morally and legally the inverse. The government has made it illegal for other car companies to not sell electric cars, which most people do not wish to freely buy.

It makes no more sense for Toyota, say, to build lots of electric cars when there is no real market for electric cars than it does for Starbucks to build coffee kiosks in Death Valley. Luckily for Starbucks, there is no government regulation requiring hot coffee to be sold in Death Valley as the price of being allowed to sell hot coffee in San Francisco – so Starbucks doesn’t have to build coffee kiosks in the desert – nor pay some other coffee company that does build them in the desert, so as to get “credit” for it.

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Tesla, Quadruple-WTF Chart of the Year: It Should Just Sell Shares on Autopilot at Huge Prices and Exit Sordid Business of Making Cars, by Wolf Richter

Tesla’s ticker symbol should be TULIP. From Wolf Richter at wolfstreet.com:

Global market share of 1%. But market cap equals combined total of Toyota, Volkswagen (VW, Audi, Porsche, etc.), Daimler, GM, BMW, Honda, and Ford. Raised $10 billion in three months by selling shares.

Tesla is going to replace Apartment Investment and Management in the S&P 500 Index, S&P Dow Jones Indices announced Friday evening, fleshing out its initial announcement of November 16 that Tesla would be added to the index. The switch will become effective before the start of trading on Monday, December 21. Over $100 billion are estimated to flow in different directions as index funds have to unload Aimco and add Tesla. But they’ll position themselves ahead of time so they don’t have to all go out next Friday and buy or dump those shares in one day. In terms of Tesla shares, the index funds had a month to prepare.

The expectation that Tesla would be included in the S&P 500 index, and all the hype surrounding it, has been powering the last spike in my Quadruple WTF chart of the Year, which blew away and annihilated my Triple-WTF Chart of the Year of August 31, and my Double-WTF Chart of the Year of July 1, and my original WTF-Chart of the Year of February 4, which depicted the puny little 120% jump in one month, as noted in the chart below. Each of the prior three WTF points has been duly followed by a plunge (stock prices via YCharts):

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Tesla Gets Crushed in Germany by EVs from Volkswagen, Renault, and Hyundai Group: It Woke Up the Giants, by Wolf Richter

Increasing competition may not be factored into Tesla’s astronomical stock price. From Wolf Richter at wolfstreet.com:

Tesla’s share of the EV market plunged to 8.7% year-to-date, from 18.4% last year. Competition is now huge and across the spectrum. Tesla faces the same situation globally.

It has been a very ugly year in Germany for auto sales, except for EVs. The overall new vehicle market in Germany has plunged by 30% in the first seven months of 2020 to 1.526 million units. But EV sales have skyrocket by 65% over the first seven months, after having already skyrocketed by 88% in the same period in 2019, according to KBA, the German agency that handles nationwide new-vehicle registrations. Year-to-date, 61,105 EVs were sold, giving EVs a share of 4% of total new vehicle sales, up from less than 1% just two years ago in 2018.

But Tesla got crushed. Its sales over the seven-month period fell from 6,816 in 2019 through July, to 5,306 over the same period in 2020, and its share in the EV market plunged from 18.4% to 8.7%.

There are now three automakers that blew past it in Germany – Volkswagen Group, Renault, and Hyundai Group – while Daimler Group came in even with Tesla, and BMW group wasn’t far behind. This chart shows market share of each automaker, with all their EV brands and models combined:

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Moving the Iron amid Sagging Demand: Tesla Cuts Price of Model Y, after Cutting Prices of Model 3, S & X, as Other Automakers Offer Record Incentives, by Wolf Richter

Looks like the V-shaped recovery has bypassed the auto industry. From Wolf Richter at wolfstreet.com:

The time for deals on new vehicles has arrived.

Tesla fired its latest salvo to stimulate demand for its vehicles. But it is not alone; the entire auto industry is now cutting record deals to move the iron in face of sagging demand.

This weekend, Tesla chopped the price of its Model Y crossover by $3,000, or by 5.6%, from $52,990 when deliveries began in mid-March, to $49,990 (image from its website taken today):

The Model Y is Tesla’s hottest newest model, in the hot category of crossovers, and yet, price cuts are needed to stimulate demand.

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Doug Casey on Elon Musk’s Cybertruck

Doug Casey has a diametrically opposite view of Elon Musk and Tesla than most of the alternative media. In the interests of promoting differences of opinion and controversy, here’s Casey from caseyresearch.com:

Chris’ note: It looks like something out of a sci-fi novel… and it’s got everyone’s attention.

I’m talking about Elon Musk’s latest project… his long-awaited “cybertruck.”

As you can see below, it’s not your typical truck:

Now, if you didn’t already know, our founder Doug Casey is a life-long car guy. So I had to get his take on this new truck since it’s truly unlike anything we’ve ever seen.

Below, in a brand-new Conversations With Casey, Doug shares his thoughts…


Chris Reilly, managing editor, Casey Daily Dispatch: Hi, Doug. Let’s talk about Elon Musk’s new Cybertruck…

It looks like something out of a sci-fi novel. What do you think of it? Is it a good idea?

Doug Casey, founder, Casey Research: This latest episode of Adventures with Elon, featuring his strange pickup truck, is most entertaining. Better yet, it’s sci-fi brought to the real world. Elon is like an animated version of Tom Swift Jr. – of whom I was a huge fan when I was a kid. And still am…

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“He’s Full Of Shit”: New Bethany McLean Expose Eviscerates Elon Musk’s Solar City Bailout, by Tyler Durden

A top-notch investigative reporter goes after Elon Musk. From Tyler Durden at zerohedge.com:

Bethany McLean’s reputation proceeds her, with good reason. She’s mostly known for tackling the Enron scandal and the 2008 financial crisis – two of the biggest financial frauds over the last decade or now. She co-authored Enron: The Smartest Guys in the Room, which was later made into a movie.

And now, she’s setting her sights on Elon Musk and Solar City, something we expected was about to happen last week.

As we said yesterday during our report about Vern Unsworth’s lawyer threatening Elon Musk, the boy wonder has created so many legacy legal liabilities, it is tough to track which ones – and when. Now, it’s appears that one of the biggest whoppers, his “bail out” of Solar City that skeptics such as this website and countless others long believed to be a sham, has finally been thrust into the limelight by an author whose gravitas simply can’t be ignored.

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The Electric Obamaphone, by Eric Peters

The main problem with Elon Musk’s and soon to be everyone else’s electric cars is there will not be enough people who will buy them at anything close to profitable prices. From Eric Peters at theburningplatform.com:

Elon just admitted something which is getting very little coverage – and no explanation.

He announced that Tesla will no longer be selling the “affordable” $35,000 Model 3 he promised would be Tesla’s first mass-market electric car. Like so many of Elon’s promises, that one’s out the window, too.

The price of the least expensive Tesla just rose to $39,000. Well, technically $38,990 – to make it go down easier.

That’s still a $4k decrease in “affordability” – and a reality check.

Elon is admittingthat electric cars aren’t mass-market cars. That after all the glitzy assurances, after all these years, in the end, they are what they have always been: Specialty cars for people with the disposable income to indulge other-than-economic considerations such as “technology” and – as Elon loves to tout – the driving characteristics of electric cars.

There’s nothing per se objectionable about specialty cars – whether electric or powered by a high-performance boxer six, like a Porsche.

But there is a problem.

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