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Articles re Tesla—Fact or Fiction?

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Just finished debunking the latest string of negative articles on Seeking Alpha. Let me know what you think. https://seekingalpha.com/article/4189303-tesla-short-thesis-model-3-demand-wrong
What do you think of this one?

Tesla: $35,000 Model 3 Branding Is Gone (For Now) - Tesla, Inc. (NASDAQ:TSLA) | Seeking Alpha

Is he right? The Monroneys have been changed. I saw the new one over the weekend and I can't find a reference to the $35,000 price on the site anymore. Your thoughts?
 
What do you think of this one?

Tesla: $35,000 Model 3 Branding Is Gone (For Now) - Tesla, Inc. (NASDAQ:TSLA) | Seeking Alpha

Is he right? The Monroneys have been changed. I saw the new one over the weekend and I can't find a reference to the $35,000 price on the site anymore. Your thoughts?

They don’t make it easy to find— because it isn’t available yet— but it’s there.

10DF0F5B-F4D0-4938-94F6-919D5541200F.jpeg
 
A lot of powerful people are TERRYFIED of Tesla. The only reason all the other car companies are building electric cars is because of FEAR. Chevy actually losses money on every Bolt they sell. If it wasn't for Tesla nobody except the Chinese would be building cars to lessen climate change. If everybody starts buying electric cars, solar roofs and power walls why to we need oil? I totally understand why it's Tesla against pretty much EVERYBODY else.

There are many reasons other cars companies are resisting making electric cars.

Probably one of the biggest is momentum. Companies build their whole system around delivering whatever their product is. Kodak has been offered up as the biggest example of a company that went bankrupt because the refused to change. That isn't really true.

My father had a direct distributorship with Kodak and was a beta tester for their new products. He had an semi-insider's view into what was going on. Kodak saw what was going to happen and did everything they could to change course, but economically and logistically it wasn't feasible.

Most people are not familiar with the long logistical trail in film photography. Consumers are familiar with buying film and getting back prints, but few really saw the sausage getting made. Making film in the first place is fairly specialized. Kodak employed a large workforce of blind people to make the film because it had to be done in darkness. (Solar panels need to be made in the dark too which I believe is why Solar city chose Buffalo for their factory, there was a population of unemployed, trained, blind factory workers in nearby Rochester). On top of that film processing requires a lot of chemicals. And finally you need special paper to make the prints. There is also a lot of specialized equipment, but Kodak didn't make much of that.

Kodak had a massive investment in manufacturing and support for a whole slew of things that simply went away with digital photography. The need for Kodak supplies with digital photography is around 1-5% what you need for film photography. Kodak had this massive investment in an entire network that needed to die and writing it all off was too much for the company to handle. There was no room left for a Kodak company in the new environment.

Electric cars aren't quite as radical a change as with film to digital, but it's still a very big change. Not only do car companies need to bin whole swaths of engine and transmission tech that they spent billions on, the whole chain related to maintaining those technologies goes away too.

The bean counters in the car companies look at what it's going to cost to switch to electrics between throwing out billions in intellectual property, closing plants to make them, putting mechanics at dealerships out of work, and the costs of designing and gearing up to make EVs, they probably have coronaries. In microcosm it was reported last week Porsche is having some problems retooling their factory to make the Taycan at only 20,000 a year. Electric cars have a completely different parts flow to put together and the industrial engineers need to learn the new ropes.

On top of momentum, there are also die hards who resist change who do everything they can to continue the ICE train.

And finally there is the global economic picture. The entire world economy is structured around oil. In the 1970s the center of gravity for oil production shifted from the US to the Middle East and that disrupted the US economy very badly for a few years. The US has propped up its national debt for the last few decades by having the US dollar closely tied to the price of oil.

We can disentangle that and probably come out stronger for it, but if its done too quickly, it could crash the dollar and send the world's economy into a tail spin.

At least some forward looking politicians want to get the US disentangled from oil. Ultimately it will be better for the US economy, but there are those who don't want the status quo to change, or want to go back to a mythical 1950s where the US directly dominated the world oil market.

People have pointed to the coming of the automobile and how the horse and buggy industry didn't resist it. But first off they were nowhere near as organized or as big as the transportation powers that be are now, and in many cases the horse and buggy makers were among the first car makers.

The use of horses in cities were a major problem at the end of the 19th century. "Tail pipe emisions" actually come from the waste left behind by horses. Horse waste in the streets of major cities was becoming a major problem. Legions of people had to be employed by cities to clean the streets multiple times a day and the urine in the streets was both a bad odor and sanitation problem that could not be removed by guys with shovels.

I've read some stories about the waste problems. Cities like New York had to deal with many tons of waste a day and disposal was falling behind production.

Cars were hailed as the "pollution free" transport alternative. As soon as cars got cheap enough, adoption was very fast.

With the oil economy, it's vast and it does work. The problems are not as obvious as hundreds of tons of horse manure. Electric cars are superior in many ways, but not so blatantly obvious that the FUDsters can sow enough doubt to keep much of the public in the dark.

The world's news is far more Balkanized than anything was at the end of the 19th century. Back in the 19th and most of the 20th century, there were entire regions of the world who experienced a very different world from us, but people living in a given geographic region got pretty similar news to their neighbors and most people lived in the same consensual reality. Today because people can select their news so readily your next door neighbor could be living in an entirely different reality from you.

You may be well educated about electric vehicles and their advantages, but your neighbor may not even be aware you own one and think they are useless toys. I was watching something on YouTube the other day and one of those links in the side bar caught my eye. I watched a bit of it and it was basically a bunch of long form ads for high horsepower ICE. There was one for the Dodge Demon where one of the people from Dodge was talking about all the steps in drag racing the car at the track and through the whole thing I was thinking, "and you take a P100D, punch the go pedal and get almost the same result with none of the other hoo haw..." And you will get a better result with a 2020 Roadster with less fuss. And both the P100D and Roadster can be driven in the rain.

They completely ignored high horsepower EVs. That crowd doesn't want to admit they are driving dinosaurs.

A poll that came out last year found that something like 60% of Americans really don't know anything about electric cars. The legacy car makers don't want people to know about them because if people actually did know what they were capable of, they wouldn't want ICE anymore and then they would be in trouble.

The FUD campaigns against Tesla have taken on a hysterical pitch. The powers that be are scared to death the Model 3 will succeed and then everyone in the car industry but Tesla will be in trouble because the public will want something they can't provide for at least half a decade (in the numbers required).
 
There are many reasons other cars companies are resisting making electric cars.

Probably one of the biggest is momentum. Companies build their whole system around delivering whatever their product is. Kodak has been offered up as the biggest example of a company that went bankrupt because the refused to change. That isn't really true...

Great, informative post, @wdolson - thanks. Completely agree. I lived in Japan for many years in the '80s, '90s and '00s, and saw the film --> digital shift moving faster there, ahead of the US. I haven't studied the industry, but know that somehow Fuji Film was able to manage the transition where Kodak failed. I wonder what was different environmentally between the two, or what they did differently. Fascinating stuff, I'm sure somewhere there's a case study or book on the two.
 
Great, informative post, @wdolson - thanks. Completely agree. I lived in Japan for many years in the '80s, '90s and '00s, and saw the film --> digital shift moving faster there, ahead of the US. I haven't studied the industry, but know that somehow Fuji Film was able to manage the transition where Kodak failed. I wonder what was different environmentally between the two, or what they did differently. Fascinating stuff, I'm sure somewhere there's a case study or book on the two.

Fuji Film had/has a broader base. They have had a partnership with Xerox for many years and they were in the optics and medical instrument market. Japan as well as many European countries are also quicker to step in to save companies in trouble. I don't know what the Japanese government did, but they probably did more than the US government did for Kodak.
 
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This article comes close to FUD:
New tests of automatic braking systems found a worrying flaw — and 2 Tesla models did the worst
Apparently they didn't read the manual. Tesla's emergency braking is designed to reduce the speed of a collision, and having reduced the speed, you're back in control. It performed as advertised. The rest of the article says that Autopilot performed the best at most other tasks.

Interesting that Tesla chooses to do it this way. AEB seemed to perform as designed as you noted. 25mph reduction in speed, so the 31mph test probably collided at 6 mph. But the Teslas both avoided the crash completely with ACC on. Wonder why AEB is programmed that way, as the system appears perfectly capable of completely avoiding the collision.

All the rest of the tests, autopilot (both the AP1 on years old 7.1, and the model 3 on current software) seemed to do a great job.
 
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So, some FACT articles for a change. Every single one of these Bloomberg opinion pieces is pretty good:

Elon Musk Just Showed Exactly Why Tesla Should Be Private
Elon Musk Stumbles Into a Good Point
Elon Musk Has Some Fun With Tesla


My favorite Matt Levine quote:
If you announce a buyout of your company, and you go through with it, and your main purpose in doing it is to squeeze the shorts: Yeah, fine, that’s business, that’s cool.

Also:
The market for unlevered equity stakes of mature private companies with 11-digit valuations is actually quite robust. If Musk announced today that his financing sources have committed $60 billion of equity I would be, yes, surprised, absolutely, but it would also, in this weird world we live in, make a kind of sense.
And:
Assuming, somewhat recklessly, that someone has told him this and that he listened, then the most reasonable conclusion would seem to be: Elon Musk is really going to make an offer to take Tesla private! With an incredibly weird structure, and incredibly weird financing, and announcing it in an incredibly weird way. And probably everything I wrote above will be superseded by something even weirder by lunchtime today. It should be great.

As is this one on Slate from Felix Salmon
It’s Not a Crazy Idea for Elon Musk to Take Tesla Private

In fact, assuming that Musk is telling the truth when he says that he has all the necessary financing lined up, the main risk to his plan is that shareholders will consider the $420 price too low and will vote against Tesla going private, even if they too might prefer to own a stake in a private company.

As for the price: In a world where Morgan Stanley claims that Waymo, the self-driving car subsidiary of Alphabet, is worth $175 billion before it’s made a single dollar in revenue, putting an $80 billion valuation on Tesla is not entirely ludicrous.
 
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It's interesting that a month or two back I was thinking Tesla would be better off going private, but I thought at the current valuation it really wasn't possible. Elon has figured out how to do something I thought impossible again.

Having to do the dog and pony show for the last two earnings calls might have been the last straw for Elon and upper management. Elon and everyone else have been up to their elbows in Model 3 hell all year and at the end of the first two quarters they have to set aside time to plan and do the earnings call. Elon was also not on his best behavior for the Q1 call this year.

Another thing that is probably even more important is Tesla has to do a rush at the end of every quarter to get the build and delivery numbers up to look good for investor stuff and it hurts quality. No other car company is under that kind of scrutiny. A handful of investors may care if GM delivered +/- 10% cars last quarter, but most people don't. If there is a steady trend rise or fall quarter to quarter people may start to notice something, but there is little pressure for quarter to quarter performance.

Tesla has had to plan its production schedule around how many deliveries they can make in a quarter, building for overseas at the beginning of a quarter and domestically at the end so most cars built in a quarter are delivered in the same quarter. That artificial requirement is probably driving Elon and the logistics people nuts as production ramps across the board.

Getting rid of that constraint would probably help the company build cars on a schedule that is best for customer experience from order to delivery and overall quality because there will be no artificial need to run up production and delivery numbers for short periods.
 
Another article worth reading.

There’s a big problem with Elon Musk’s plan to take Tesla private

Ignore most of it but focus on this:

According to Sjostrom, companies are required to comply with public-company disclosure rules if they have more than 2,000 shareholders. There are some nuances in how this number is calculated—most employees can be excluded, for example—but Tesla likely has more than 2,000 shareholders under any reasonable definition.

Tesla's other option would be to register Tesla as a public company—satisfying SEC rules—but not list its shares on a stock exchange. This should be completely legal and would provide shareholders with the same transparency they enjoy now. But if Tesla's goal is to end the distracting impact of quarterly financial reports, this wouldn't accomplish that goal.

Tesla doesn't really have a problem with producing quarterly financial reports. Tesla has a problem with short-sellers, options traders, stock speculators, noise traders, etc. Delisting the company solves the problems, even if the company is technically "public" for reporting purposes.
 
Major rumor in this CNBC article. It can't be trusted, but some anonymous person is claiming:


A Saudi buyout would probably require CFIUS approval, and I sure wouldn't vote for it. But who knows, this is just a rumor from an untrustworthy source.

Tesla board plans to tell Elon Musk to recuse himself, prepares to review take-private plan
It seems likely that *they* talked to *him*, since MbS (Mohammed bin Salman) visited Tesla. Not clear whether they just wanted to invest, or if the talk discussed "taking private".

Suspicious: Have MbS and MBS (Mark B. Spiegel) ever been seen together? :)
 
The headline alone on this one is fiction and the article is fiction as well. It's business insider. Don't even follow the link. I didn't.

https://www.google.com/url?sa=t&rct...-work-2018-8&usg=AOvVaw28mgPpM0poc-oWJrUK8Jv7

https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=newssearch&cd=1&cad=rja&uact=8&ved=0ahUKEwjlwZC3suvcAhWFmuAKHd69DPcQqQIIKSgAMAA&url=https://www.businessinsider.com/funding-not-secured-musks-explanations-about-taking-tesla-private-does-not-work-2018-8&usg=AOvVaw28mgPpM0poc-oWJrUK8Jv7

Anyway they're trying to claim that funding isn't secured.

We have it confirmed that the entire Business Insider article is complete bullshit from an M&A expert quoted by CNBC:

Tesla still hasn't said where its secured financing is coming from — here's what that probably means

There are no legal repercussions for saying "funding secured," said Frank Aquila, an M&A partner at Sullivan & Cromwell.

"It's sort of the same difference between collusion and conspiracy," Aquila said. "Collusion isn't a crime. It means nothing in the legal sense. Conspiracy is a crime. If you say 'I secured this,' it could mean you had a conversation. Committed means something else. If you have committed financing, you have documentation and conditions. Secured just means lined up. It doesn't mean that much."
 
From the lead of a Times story today by Sorkin et al. (Tesla Directors Do Damage Control After Elon Musk Tweets):

"In recent days, according to people familiar with the matter, some of his fellow board members delivered a stern message: Stop tweeting.

"Mr. Musk hasn’t heeded that advice. He has continued to post messages on Twitter, publicly plotting the company’s strategy and in some cases making assertions of dubious accuracy."

You would think he's "erratically" tweeting away like Donald Trump (the subtext, if not the actual text, of so much Musk coverage is that he's as contemptibly unhinged as the toxic oaf in the White House). Am I missing something, because when I scroll through his tweets and replies, the only one "strategic" or remotely substantive about the go-private venture since last Tuesday was yesterday's "I'm excited to work with Silver Lake..." Frivolously, there were the "short shorts" quips on Aug 10. I see nothing else from him, on any subject, that isn't wholesome or innocuous.

This is the freaking New York Times. In the very same breath that they disparage him for continuing to fire off multiple tweets "of dubious accuracy," the only certainty is how false their assertion is. But then it's all about "narrative gravity" (must-read essay on the subject here: The Invisible Force That Warps What You Read in the News | Backchannel). The shadow persona of Musk as a Trumpian enfant terrible has so deeply taken hold in the media that any story that conforms to that narrative gets a free pass from editors, fact-checkers and the facile pundits who rehash the narrative on TV.