Speaking of Q3 profitability. I think Tesla is capable of coming close to being profitable. Consider the conditions of 2016 when Tesla had a couple of profitable quarters. Fremont had tons of vacant space. Production of all cars was significantly less efficient than it is now. Gigafactory 1 was new and not yet carrying itself. Today, Freemont is cranking out 4 times more vehicles. GF 1 is cranking out a gigawatt hour of energy storage per year where capacity in 2016 was down in the megawatts. Revenue production is about an order of magnitude above 2016 levels. The question is, does Tesla have an order of magnitude more overhead. I've been trying to get a handle on this question.
This company is so screwed up. They need to get their act together before people can seriously buy into this company for the long. If it goes down another 20 I'm going to buy. If it moves up depending on the volume, I may short.
Or the quality control that comes with the larger volumes. I guess this is the reason its called speculation!
Some months ago, Top Gear did an in-depth review of the model 3 and they mentioned they saw no sign of the quality problems that some complained about early on. I think Elon said the first 2000, or so, cars had higher than desired wind noise. I've read other reviews that praised the quality, also. Jock-e, are there new QC problems or are you beating an old drum? Andrew, what is screwed up about Tesla? Are you referring to the vehicle delivery issues they are currently having with the new found volume or is your point of view that it's a basket case in every way? Tesla is the largest EV manufacturer in the world so surely they are doing something right?
Crickets? Don't you think that you should be able to back up your negativity? So, Ford is mostly exiting the car business. As I understand it, the Fiesta and Fusion will be gone and only the Focus will remain in the North American market. GM is back ordered by about a year on the Bolt. They plan to increase production but the Bolt came to market some months before the Tesla 3. Sales for this platform are not remotely in the same league as the 3 or even either the S or X. Nissan's LEAF once dominated the EV industry but is now the second best seller. A long range leaf would be a big boon but they just announced the 2019 LEAF and mentioned the LR version would come at some point in the future. Not only will Tesla not be crushed by the big players, Tesla is crushing the big players. Tesla is now the EV industry Goliath and there is no foreseeable end to Tesla growth. ... and yet the negative Tesla media coverage continues to be relentless. I don't think it's all short sellers manipulating the market, either. There are endless stories about critics, like John McElroy, who drive a car or see the factory and change their point of view. Consider the idea that media attention is being given to people have never driven a Tesla nor visited the factory and undoubtedly know nothing about electric cars but their negativity is published. Something isn't right. Ford is practically going out of the car business and not receiving anything like the negativity Tesla is. My view of the media is that primary outlets are dominated by a very small number of controlling interests who filter and rewrite stories to suit their needs. I wonder if other Tesla stock holders feel the same? I wonder if it is possible to own Tesla and also believe the primary media outlets are reasonably objective?
Vertical Group is an attack organization with no credibility. Also, this doesn't pass the smell test. Tesla's books are published. I've never heard of an accountant leaving because he noticed a line item he didn't like. The whole idea is ridiculous. The negative smear campaign is going to have to be more creative than that. I've seen people leave after a month in my industry. 100% of the time it's because they realized they were way over their head and they had neither the skills nor the energy to operate at the expected level.
Appears to be running out of gas as it is coming into horizontal resistance and the supply line of the reverse trend channel. I expect the selling pressure will pick up and we'll see if the sells get absorbed but I doubt it since demand has been weak again on this second corrective bounce. I expect the bar of the September low will get retested.
An article in this week's IBD Weekly points out that some EV competition (Audi, BMW and a couple more) should be rolled out about the same time government rebates expire for Tesla. Seems to me if a person can afford a $50-$75K car a measly rebate is not a deal breaker. Bring on the competition. This should drive the prices down and determine whether or not the general public will accept EVs as their transportation of choice.
These new EV companies couldn't matter less. They are going to pull batteries from the same pool as the rest of the non-Tesla EV makers. EV production is limited by battery production. A cool new car is helpful but not all that relevant. I'm sticking with Tesla. They have made tactical mistakes but their strategy has been without flaw. They are the only EV manufacturer that can scale battery production as necessary to meet demand. Not to mention the massive cost advantage they have on the most important and expensive component of an EV... Meanwhile, reports of vehicle delivery bottlenecks are being reported like they are stopping the company from doing business. When is doing so much business a company has to change it's delivery model so it can scale to meet demand a bad thing? I don't know if Tesla will make a profit in Q3 but they don't have to. They do have to come close, though. If they can produce 5K vehicles per month and break even, it will be an impressive feat which I'm sure will be reported as an epic failure. lol! Of course, if Tesla produce 55K vehicles in Q3 and they continue to lose significant money, that will be a major problem that will cause a blood bath on the market. I consider it to be pretty unlikely but we won't know until the beginning of October.
An article I read made it seem very straightforward for Tesla to report a profit in the next two quarters, as Elon has been guiding for. http://www.latimes.com/business/autos/la-fi-hy-tesla-nevada-casino-credits-20180624-story.html Could be that, even without tax breaks on the car sales, they will benefit from tax breaks in another way. The irony: if Tesla brought us to a clean energy future, they might cease to exist because they wouldn't be able to sell their tax credits to the polluters.
Tesla has the lowest overhead of any EV manufacturer. Losing the tax credits will hurt them but they will return to be an 800# gorilla, once the competition also loses their tax benefits. Of course, at the rate others are selling EVs, it will be a lot of years until the playing field is level again. I don't think Tesla is invincible. They have been hurt by the slow model 3 production ramp and they will be hurt with the loss of the tax incentive but they are the only company with a credible roadmap to viability in an unincentivized market. That goes for their solar plans, also. They know the price points they need to hit and they are working towards that. It's not certain they will succeed but I'm betting on them. If they can survive until the playing field levels, they will dominate.
Here is some info on the tax credit. Tesla has blown past the 200K vehicles delivered, currently sitting well over 250K. GM is currently on the cusp of rolling over the 200K EV odometer. Nissan, oddly, is down below 130K vehicles delivered in the US. https://insideevs.com/top-6-automakers-200000-federal-tax-credit-limit/ This is going to cause problems in the industry but Tesla will survive.
Reason for today's drop. Tesla Is Facing U.S. Criminal Probe Over Elon Musk Statements https://www.bloomberg.com/news/arti...-face-u-s-criminal-probe-over-musk-statements
"Current DOJ criminal investigations include Wells Fargo, Microsoft, Astra Zeneca, TV broadcasters, Verizon and ATT. And of course VW. It's a long list, not that Im happy Tesla is on it. But it is far from the end of the world. In fact seems minor compared to others." https://twitter.com/GerberKawasaki/status/1042099996592500736
Yeah. Not a big deal. I'm torn on this. I think Elon may have been trying to manipulate the market . I'm not sure. ... And Wall Street is so greasy, I'd like to see some kind of law enforcement, for once. I just don't want Elon selected, punished, and then let everyone else rip off traders on a day to day basis. Wells Fargo has been manipulating the Tesla stock for years. How is that legal? Chanos? Cnbc, Bloomberg, Forbes, nothing but Tesla attacks. It's brutal and straight up based on lies. Last week, a long time Tesla bear changed his point of view on Tesla .turned out, he had no idea what was going on at the factory and had never driven one. Are you kidding me? Clean them all up, including Elon, or do nothing and let the Lions rule the jungle.
It is unbelievable to see how many negative coverage on Tesla. Assuming that the main media companies have their own agenda. I got some weekly 287.50 calls yesterday but sold it too early for profits. Am still holding my JAN 18 2019 $300 calls.
Ross Tessien must not report to Jim Chanos. https://seekingalpha.com/article/4207361-tesla-model-3-revenue-1-u-s-passenger-cars-august
Does anyone remember the articles that Tesla employees were walking through sewage? Has anyone seen anything from OSHA regarding this? You'd think, if the allegation isn't a fabrication, OSHA would look into it. Tesla news seems to be straight out of the Republican smear campaign playbook. Perhaps that's a good sign. It's certainly shone some light into how trustworthy CNBC, Bloomberg, et al. are.
