Tag Archives: Tesla

Musktopia Here We Come! by James Howard Kunstler

Historians will look back and undoubtedly see Elon Musk as a symbol of our age. From James Howard Kunstler at kunstler.com:

It ought to be sign of just how delusional the nation is these days that Elon Musk of Tesla and Space X is taken seriously. Musk continues to dangle his fantasy of travel to Mars before a country that can barely get its shit together on Planet Earth, and the Tesla car represents one of the main reasons for it — namely, that we’ll do anything to preserve, maintain, and defend our addiction to incessant and pointless motoring (and nothing to devise a saner living arrangement).

Even people with Ivy League educations believe that the electric car is a “solution” to our basic economic quandary, which is to keep all the accessories and furnishings of suburbia running at all costs in the face of problems with fossil fuels, especially climate change. First, understand how the Tesla car and electric motoring are bound up in our culture of virtue signaling, the main motivational feature of political correctness. Virtue signaling is a status acquisition racket. In this case, you get social brownie points for indicating that you’re on-board with “clean energy,” you’re “green,” “an environmentalist,” “Earth –friendly.” Ordinary schmoes can drive a Prius for their brownie points. But the Tesla driver gets all that and much more: the envy of the Prius drivers!

This is all horse shit, of course, because there’s nothing green or Earth-friendly about Tesla cars, or electric cars in general. Evidently, many Americans think these cars run on batteries. No they don’t. Not really. The battery is just a storage unit for electricity that comes from power plants that burn something, or from hydroelectric installations like Hoover Dam, with its problems of declining reservoir levels and aging re-bar concrete construction. A lot of what gets burned for electric power is coal. Connect the dots. Also consider the embedded energy that it takes to just manufacture the cars. That had to come from somewhere, too.

To continue reading: Musktopia Here We Come!

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Short-seller Chanos says Tesla sure does remind him of Valeant, by Christine Wang

A lot of executives have left Tesla recently. Rats deserting a sinking ship? From Christine Wang at cnbc.com:

The flight of executives from Tesla Motors reminds one shrewd investor of the shakeups that preceded Valeant’s plummet.

Famed short-seller Jim Chanos told CNBC that by his count, Tesla has already seen eight executives leave the company this year.

“The last high-profile company that we saw with such a similar large number of senior executive departures was Valeant,” Chanos said.

The battered pharmaceutical company has seen its stock plunge 90 percent in the past 12 months.

In May, Tesla’s vice president of production and its vice president of manufacturing left the company. At the time, Chanos told “Halftime Report” that one of his firm’s “historical signposts of a company in trouble is when numbers of senior people leave over a short period of time.”

“Tesla fits that bill. … We have all kinds of questions about the profitability of the business,” Chanos said.

In the wake of these departures, Tesla has also been hiring executives from other automakers including a new vice president of vehicle production from Audi.

The closely followed investment manager has been vocal about his short position on Tesla. He called the deal between the electric automaker and SolarCity a “shameful example of corporate governance at its worst” last month.

Tesla declined to comment.

http://www.cnbc.com/2016/07/06/short-seller-chanos-says-tesla-sure-does-remind-him-of-valeant.html

The Anti-Tesla Gets No Love, by Eric Peters

A car will soon be on the streets that costs under $10,000 and will get about 80 miles per gallon of gas. Why haven’t you heard about it? Eric Peters answers that question on a guest post at theburningplatform.com. One other feature about this car—it requires no government subsidies.

It’s interesting that the car That Makes Sense – economically and functionally – gets almost no press while cars that don’t (like the Tesla and other electric cars) do.

Elio Motors (company web site here) had a near-production-ready car on on display at the New York Auto Show last week. Company founder Paul Elio gave a presentation to reporters and took questions.

Bet you didn’t hear a thing about it.

This is downright Weird.

You’d think the media would be champing at the bit to let the public know that there is a car on the verge of production (with 41,000 of them already spoken for via cash-down reservations) that – according to Paul Elio – will cost well under $10,000 (under $8,000 is the target) and go well over 80 miles on a gallon of gasoline.
Ah, but it’s not electric – and so the Elio gets no love (much less coverage) from the media.

Electric cars (and other such cars) do because they lack the thing the media finds abhorrent – an internal combustion engine.

As long as it has batteries or fuel cells or solar panels or some other form of motive power – no matter how functionally impaired or expensive these may be – the media will spasm on the floor in ecstasy like a labrador retriever pup with a new chew toy. They will write stories more like love sonnets about the magnificence of whatever it is, provided it doesn’t use “old” and “dirty” technology.

That is, burn gas.

Well, the Elio does – but very little.

It is powered by a 900 cc three cylinder engine – about the same size as a typical motorcycle’s engine. Which is possible because the Elio weighs not much more than a motorcycle (about 1,250 pounds) and that is what makes 80-plus MPG possible.

Now, ponder that.

A car that can go 80-plus miles on a gallon of fuel is using very little fuel. The less fuel burned, the less exhaust produced and – here it comes! – the lower the emissions. The Elio’s emissions (it will comply with all of Uncle’s requirements) will be a fraction of those produced by any other currently available car simply by dint of the fact that it has a tiny engine that burns a fraction of the fuel.

No Magic (or elaborate/expensive technology) necessary.

Just simplicity – and light weight.

Which the media apparently doesn’t find attractive and therefore not worth reporting.

Meanwhile, endless fawning over the Tesla – the rich man’s toy subsidized by the working and middle class taxpayers who can look but never touch. They are fleeced by Uncle, so that Elon Musk – the Crony Capitalist King – can manufacturer $40,000-to-start (and from there to six figures) electric cars that are certainly sexy and Ferrari quick but which make as much sense as transportation as a thong does as clothing.

In Antarctica.

You have to be affluent – rich – to even contemplate the purchase (heavily subsidized by Uncle) of a Telsa. In which case, consideration of economy are an irrelevance. And if economy is irrelevant, what is the justification? Sexiness? Speed? Well, why not pay the rich to purchase Porsches, too?

Ah, but the Tesla is electric – and “zero emissions.”

Well, yes – it is electric. But “zero emissions”?

Sure, as far as the tailpipe (which, being electric, it hasn’t got). But electricity does not spontaneously appear out of the Void. It must be generated – and that requires (well, mostly involves) the burning of coal and oil, which produces emissions … just elsewhere.

Probably, more of them than the little Elio produces.

To continue reading: The Anti-Tesla Gets No Love

 

How Elon Musk Empowers Fools to Part Ways with Their Money, by MN Gordon

Elon Musk has magic beans that make the stocks of his companies grow to the sky. What he doesn’t have are profits, but prosperity is just around the corner. From MN Gordon at economicprism.com:

Tesla Motors is up to something remarkable. But what it is, exactly, is unclear. According to the Tesla Motors website, the company’s mission is: to accelerate the world’s transition to sustainable transport.

This all sounds quite brilliant, indeed. Though we must admit, we’re not really sure what sustainable transport is…or why the world’s transition to it should be accelerated. Nonetheless, we’ll assume this is a noble cause.

Tesla’s bold CEO, Elon Musk, certainly thinks it is. In fact, the twelve billion dollar man’s so sure of the endeavor he keeps upping the ante. The company’s now on the hook to expand production of its electric vehicles to 500,000 a year by 2018.

No doubt they’ve got their work cut out for them. Production of 500,000 Tesla’s per year represents an increase of nearly 1,000 percent from the 50,580 electric vehicles delivered last year. Is this even remotely achievable?

Wall Street certainly thinks it is. For while Tesla’s on the hook to deliver 500,000 electric vehicles per year by 2018, the big banks, and the savvy investors they represent, just bought the challenge hook line and sinker.

Today’s Premier Purveyor of Spectacle and Hucksterism

Last week, for example, Tesla Motors raised $1.46 billion in new capital from the sale of its 6.8 million new common stock offering. “The shares were priced at $215 by the lead managers Morgan Stanley, Goldman Sachs, Deutsche Bank, Citigroup, and Bank of America Merrill Lynch,” IFR said.

From what we gather, Tesla had already raised over $4.5 billion through a combination of debt and stock offerings over the last six years. The $1.46 billion addition “will be used mainly to pay for $2.25 billion in capital investments Musk has said will be needed this year to prepare for high-volume production of the Model 3.”

Obviously, Musk takes his company serious. We wouldn’t expect anything less. Yet its noble brilliance may be obscuring what business it is that Tesla’s really in.

The company, if you didn’t know, doesn’t earn a profit. Thus their main activity is the consumption of capital. Investors with soft brains and warm hearts give Tesla money and the company devours it. By this we can make some conjectures about what business it is that Tesla’s really in.

For instance, one could easily perceive it’s a business someone like P.T. Barnum – the 19th Century’s premier purveyor of spectacle and hucksterism – could appreciate. In this respect, the business Musk is really in is not sustainable transport after all. Rather it’s the business of separating fools from their money. Without question, like P.T. Barnum, he’s good at it.

To continue reading: How Elon Musk Empowers Fools to Part Ways with Their Money

The Crony Capitalist King, by Eric Peters

A business that can’t survive without help from the government isn’t really a business; it’s a boondoggle. From Eric Peters on a guest post at theburningplatform.com:

If Elon Musk’s various projects are so Iron Man fabulous, why do they all need so much government “help”? Shouldn’t Tesla – and Solar City and SpaceX – be able to stand on their merits… if they actually have merit?

Tesla fanbois – and Musk himself – will tell you all about the virtues of his electric cars. They are sleek and speedy. This is true. But they are also expensive (the least expensive model, the pending Model X, will reportedly start around $35k, about the same price as a luxury sedan like the Lexus ES350) and come standard with a number of significant functional deficits such as a best-case range about half that of most conventional cars and recharge times at least 4-5 times as long as it takes to refuel a conventional car.

That’s if you can find a Tesla “supercharger” station.

If not, then the recharge time becomes hours rather than half an hour.

But the real problem with Tesla cars is that no one actually buys them.

Well, not directly.

Their manufacture is heavily subsidized – and their sale is heavily subsidized.
Either way, the taxpayer (rather than the “buyer”) is the one who gets the bill.

On the manufacturing end, Tesla got $1.3 billion in special crony-capitalist “incentives” from the state of Nevada to build its battery factory there. This includes an exemption from having to pay any property taxes (unlike you and I) for the next 20 years. Another inducement was $195 million in transferable tax credits – which Tesla could sell for cash.

California provides similar inducements – including $15 million from the state of California to “create jobs” in the state.

Tesla does not make money by selling cars, either.

It makes money by selling “carbon credits” to real car companies that make functionally and economically viable vehicles that can and do sell on the merits – but which are not “zero emissions” vehicles, as the electric Tesla is claimed to be (but isn’t, actually, unless you don’t count the emissions produced by the utility plants that provide the electricity they run on, or the emissions produced mining the materials necessary to make the hundreds of pounds of batteries needed by each car).

Laws in nine states (including California) require each automaker selling cars in the state to sell a certain number of “zero emissions” vehicles, else be fined. Since only electric cars qualify under the law as “zero emissions” vehicles – and the majority of cars made by the real car companies are not electric cars – they end up having to “purchase” (air quotes for the same reason that you are a “customer” of the IRS’s) these “carbon credits” from Tesla, subsidizing Tesla’s operations and adding to the expense of manufacturing their own functionally and economically viable cars.

The amount Tesla has “earned” this way is in the neighborhood of $517 million.

Tesla is a newfangled taken on the welfare queen. Or more accurately, the EBT card – which is designed to look like a credit card. To have the appearance of a legitimate transaction … as opposed to a welfare payment.

Underneath the glitz and showmanship, that’s what all of Musk’s “businesses” are about. They all depend entirely on government – that is, on taxpayer “help” – in order to survive.

Without that “help,” none of Musk’s Tesla’s could survive.

It is estimated that Tesla’s various ventures – including his new SolarCity solar panel operation and SpaceX – have cost taxpayers at least $4.9 billion, with Tesla accounting for about half of that dole.

To continue reading: The Crony Capitalist King

 

The Tesla 3 … and “Shit Talkers” Like Me, by Eric Peters

On general principles, SLL is hostile to Elon Musk, Tesla, and all they stand for. If you want the other side of the story, there are an abundance of laudatory articles in the mainstream press and on the Internet. Here’s an article that supports SLL’s bias (what gets published here usually does). From Eric Peters on a guest post at theburningplatform.com:

It’s depressing when even Jalopnik – a car site that’s supposed to be into cars – throws a bukakke party for the new Tesla 3.

Which is a car in the same way that this is an airplane:


Elon Musk’s latest four-wheeled exercise in rent-seeking will reportedly be “sold” (fundamentally dishonest word; I’ll explain) for about $35,000 to start. Which is a “deal” – sort of – when compared with the other Tesla, which has a starting price just under $70k.

Jalopnik writes (if it can be described as such):

“The entry-level Tesla Model 3 sedan is coming the month and it’s not just supposed to transform the future of the company, it’s supposed to transform the electric car into (sic) a bit player for the sybaritic and the techno-weirdos into a clean vehicle for the masses….”

The “writer” (sorry, I can’t help myself) then goes on to abuse the “shit talkers” (that’d be me) who “howl all day” about the electric Edsel’s range and recharge issues – which have not been solved.

As per usual, this article – pretty much all the articles – parrot Tesla’s press kit talking points about the car’s potential range, which is “up to” 300 miles. Well, sure. You might also earn “up to” $100,000 a month working from home, using our multi-level marketing scam. Just call 1-800-BULLSHIT and sign up now.

It amazes that so many people still fall for the “up to” schtick.

Especially here.

The editorial laziness, the engineering ignorance – or the bought-and-paid-for shilling is truly spectacular.

Ok, sure. The car might indeed go “up to” 300 miles… if you live in a nice warm place like southern California…. if you drive on mostly flat roads and like a Clover (gimpy acceleration, stick to within a few MPH of the speed limit) and avoid using electrically powered accessories like the headlights and heater and air conditioning.

Then, maybe.

Of course, a $5,000 used Corolla can do all that stuff, too.

More, actually.

Granted, it’s not sexy. But it’s also not subsidized.

To continue reading: The Tesla 3 … and “Shit Talkers” Like Me

Tesla Loses More Than $4,000 On Every Car Sold, by Tyler Durden

Tesla loses more than $4,000 on every car sold, but subsidy slurper and crony capitalist extraordinaire Elon Mosk plans to make it up on volume. From Tyler Durden at zerohedge,com:

Last week, following the latest abysmal (if only in GAAP terms) quarter for Tesla, we showed what we thought was without a doubt the most important chart for the company that has taken “story” to the next level: its cash flow, or lack thereof, and the stunning observation that in just the first six months of 2015, Tesla burned $1.1 billion in cash. Its current cash levels? Just $1.2 billion more.

The problem, judging by the collapse in its stock price after its Q2 earnings, others are starting to notice too, such as Reuters. And now that the growth “story” has taken a back seat following the latest guidance cut in deliveries, fears that the company will have to dilute shareholders to keep the “story” afloat, are rapidly emerging. Case in point, Reuters calculation of a fact that was known to most observers but certainly not to retail enthusiasts who “bought the stock just because others bought the stock”, i.e., that Tesla loses about $4000 on ever car it makes.

The Silicon Valley automaker is losing more than $4,000 on every Model S electric sedan it sells, using its reckoning of operating losses, and it burned $359 million in cash last quarter in a bull market for luxury vehicles. The company on Wednesday cut its production targets for this year and next. Chief Executive Elon Musk said he’s considering options to raise more capital, and didn’t rule out selling more stock.

Musk has taken investors on a thrill ride since taking Tesla public in 2010. Now he’s given himself a deadline, promising that by the first quarter of 2016 Tesla will be making enough money to fund a jump from making one expensive, low volume car to mass producing multiple models, and expanding a venture to manufacture electric power storage systems.

Now that might be tricky, because unless like AMZN, Tesla has a seriously underestimated source of profitability (we have yet to hear of the Tesla Cloud), the company has just pigeonholed itself and is willing to trade off its growth “story” for cash burn. Which with nearly virtual certainty, results in about a 30-50% cut to forward multiples.

To continue reading: Tesla Loses More Than $4,000 on Every Car Sold