Hi, I’m a short seller

[anticitizen13.7]

While I have grown to significantly dislike Tesla (and i actively try not to), i dont dislike any of you or any longs. At the same time this place absolutely HATES the shorts. I mean you really really hate us. That's weird.

There are substantial groups of other people who have seething hatred for Tesla, Tesla fans, and TSLA long-term shareholders.

For example, the Reddit sub RealTesla:
r/RealTesla

It’s a toxic mix of auto industry veterans who can’t stomach the changes that Tesla is accelerating, short sellers with tens of thousands of $ or more at risk, and people who simply hate Elon Musk because they believe he is a “con man”. A lot of these people regularly make derogatory comments about Tesla fans and mock them as being cultists, fanboys, and worse. I’ve been reading r/RealTesla for some time now, and it’s pretty clear what these people generally think of places like TMC.

 

[Unpilot]

I used to dive into the Reddit sub forums and also look at you tube comment's ...but now I go outside and take my dog for a walk.
I smile at my neighbors and drink my coffee.

Generally I am happier when I do that.

 

[Electroman]

Oh my God, that subreddit page makes Seeking Alpha look like a Tesla fanboi site.

With this much of hatred and a zeal to see Tesla die, *anything* is possible. I don't think the haters will just stop with only sabotaging the production line.

 

[anticitizen13.7]

Oh my God, that subreddit page makes Seeking Alpha look like a Tesla fanboi site.

With this much of hatred and a zeal to see Tesla die, *anything* is possible. I don't think the haters will just stop with only sabotaging the production line.

I used to dive into the Reddit sub forums and also look at you tube comment's ...but now I go outside and take my dog for a walk.
I smile at my neighbors and drink my coffee.

Generally I am happier when I do that.

I read a very broad array of automotive industry websites and forums. r/RealTesla is probably one of the more vicious and mean-spirited communities.

My evaluation on r/RealTesla is that for most people, it's not worth reading. Most of the links posted there are worthless from a big picture perspective, because it's always some individual case of a Tesla car being messed up, or the latest clickbait from CNBC on how "bad" things are at Tesla. People go there to confirm the hatred they already have.

The reason I read r/RealTesla is because it is a gauge of how a certain segment of the population views Tesla and electric cars. We'll know that TSLA has peaked when r/RealTesla actually starts being positive about the company... or becomes a ghost town because there's not much left for the haters and doubters to push anymore.

 

[30seconds]

That is a good question, the thing is most shorts dont really care about production numbers long term. Sure we like when the stock moves down, but honestly if they produced model 3's faster it would show the demand isnt there for a 50k+ car, and i dont think they make money on a 40k one. SO honestly i just dont care that much what production is. I definitely enjoy following the #Shednaught stuff though.

So what level of “lack of demand” of a $50k car do you see as sending Tesla down this spiral?

 

[beamthegreat]

I am not shorting or buying TSLA puts (markets can stay irrational longer than you can stay solvent) but I am fully loaded on Daimler and BMW stocks. Both of them will be launching their own EVs soon and I think Tesla will have a even harder time reaching profitability with increased competition.

 

[sundaymorning]

I am not shorting or buying TSLA puts (markets can stay irrational longer than you can stay solvent) but I am fully loaded on Daimler and BMW stocks. Both of them will be launching their own EVs soon and I think Tesla will have a even harder time reaching profitability with increased competition.

Investors here understand Daimler, BMW and Audi more than needs to. Know your enemy. The Art of War.....

Be careful with your investments, Tesla’s sales directly competes with BMW 3 series and Mercedes C class. Both German companies are limited in battery capability. There will be a cap on lithium as Tesla will end up with 1/3 of the worlds supply. The other 1/3 is in China and the last 1/3 is divided amongst the entire car industry. The Chinese manufactures are reluctant to share their lithium with anyone outside China as their country will demand the fastest pace of EV adoption.

Daimler first firm to warn Trump's tariffs will hit profits - Independent.ie

Trump's Tariff Tweet Sends Daimler, BMW Shares Careening

If you own shares of German car companies you would need to pray to the car gods that Trump doesn’t have his way, otherwise the German companies could be slapped with another 10-15% on tariffs, putting the base model of BMW 3 and Mercedes C class $3-4k higher than the base Tesla Model 3.

 

[beamthegreat]

If you own shares of German car companies you would need to pray to the car gods that Trump doesn’t have his way, otherwise the German companies could be slapped with another 10-15% on tariffs, putting the base model of BMW 3 and Mercedes C class $3-4k higher than the base Tesla Model 3.

Good thing the US only represents ~15% of Daimler's/BMW's revenue. EV sales are are currently insignificant, and the automotive giants will have no problem selling EVs at a loss to gain marketshare *while still being very profitable*.

There will be a cap on lithium as Tesla will end up with 1/3 of the worlds supply.

Tesla doesn't have a monopoly on lithium. They might be the first to build a large dedicated factory but do you seriously think no one else in the world can do the same? It simply isn't economical, hence why Tesla is and will continue to sustain major losses.

 

[sundaymorning]

Good thing the US only represents ~15% of Daimler's/BMW's revenue. EV sales are are currently insignificant, and the automotive giants will have no problem selling EVs at a loss to gain marketshare *while still being very profitable*.



Tesla doesn't have a monopoly on lithium. They might be the first to build a large dedicated factory but do you seriously think no one else in the world can do the same? It simply isn't economical, hence why Tesla is and will continue to sustain major losses.

I won’t waste my time debating you, seems like your knowledge is quite limited. Please catch up on Tesla and lithium related reading starting from 2013 on this forum.

 

[beamthegreat]

I won’t waste my time debating you, seems like your knowledge is quite limited. Please catch up on Tesla and lithium related reading starting from 2013 on this forum.

The Gigafactory, "economies of scale", striking lithium deals with suppliers from Chile/Australia/etc, I've heard it all.Tesla DOES NOT have a monopoly on lithium. There will obviously be increased demand, but all suppliers know this. Many lithium mining companies are expanding their capacity as we speak.

 

[Yggdrasill]

Good thing the US only represents ~15% of Daimler's/BMW's revenue. EV sales are are currently insignificant, and the automotive giants will have no problem selling EVs at a loss to gain marketshare *while still being very profitable*.

In my view, losing money isn't a very good business strategy. I'm very skeptical about the outlook for the large ICE vehicle manufacturers. At least one thing is certain, and that is that shifting production from 100% ICE to 100% BEV will be a huge challenge for them. Maybe they will rise to the challenge, maybe they will go bankrupt, we'll just have to see.

In my view, the huge ICE investments are a ticking time bomb on their balance sheets. I don't know when they will have to be written down to zero, but I definitely wouldn't want to be be left holding the bag when they are. So yeah, I wouldn't touch the big ICE vehicle manufacturers with a ten foot pole. If I were to invest in an automaker, besides Tesla, I think BYD would be at the top of the list.

Tesla doesn't have a monopoly on lithium. They might be the first to build a large dedicated factory but do you seriously think no one else in the world can do the same? It simply isn't economical, hence why Tesla is and will continue to sustain major losses.

Tesla has the cheapest batteries. This means Tesla can pay more for lithium than the competition, and still come out on top.

 

[beamthegreat]

At least one thing is certain, and that is that shifting production from 100% ICE to 100% BEV will be a huge challenge for them. Maybe they will rise to the challenge, maybe they will go bankrupt, we'll just have to see.

Depending on the source, current predictions estimate roughly 30-50% of all vehicles sold per year will be electric by 2040-2050. ICE vehicles will still dominate sales 20-30 years from now. Currently, Daimler/BMW stock is currently trading at 6 times earnings and pays 6%+ in dividend per year, meaning you'd more than quadruple your money in 12 years even if earning remains constant. In actuality, Daimler doubled their earnings and BMW almost tripled theirs within the past 8 years. IMO, I'd rather bet on a company with a proven track record than one that is losing billions of dollars and diluting shares almost 40% within the past 2 years.

 

[wnorris]

Depending on the source, current predictions estimate roughly 30-50% of all vehicles sold per year will be electric by 2040-2050. ICE vehicles will still dominate sales 20-30 years from now. Currently, Daimler/BMW stock is currently trading at 6 times earnings and pays 6%+ in dividend per year, meaning you'd more than quadruple your money in 12 years even if earning remains constant. In actuality, Daimler doubled their earnings and BMW almost tripled theirs within the past 8 years. IMO, I'd rather bet on a company with a proven track record than one that is losing billions of dollars and diluting shares almost 40% within the past 2 years.

Tesla to take up to 50% of US Small Luxury Market — BMW, Mercedes & Audi get Disrupted

Numbers are starting to trend against you my friend, but deep down I expect you know you that. ;-) That is why you are here.

 

[electracity]

Numbers are starting to trend against you.

The most important number is the percent market share of new vehicles made each year. Please explain how Tesla makes more than a small percentage of vehicles in ten years.

Tesla can have significant EV market share in a slow transition to EV. Tesla simply can't have high market share in a fast transition. They don't have the time, and they don't have access to the massive amount of capital they would need to be spending today to be a major manufacturer in 2025.

A rapid transition requires existing car makers to produce most of the EVs needed for that change.

As a side note, some forecasters believe that the number of vehicles in use will double in 25 years. This is an environmental nightmare. This forecast suggests that the absolute number of ICE vehicles in use will actually increase.

None of the above supports a short thesis for Tesla.

 

[wnorris]

The most important number is the percent market share of new vehicles made each year. Please explain how Tesla makes more than a small percentage of vehicles in ten years.

Tesla can have significant EV market share in a slow transition to EV. Tesla simply can't have high market share in a fast transition. They don't have the time, and they don't have access to the massive amount of capital they would need to be spending today to be a major manufacturer in 2025.

A rapid transition requires existing car makers to produce most of the EVs needed for that change.

As a side note, some forecasters believe that the number of vehicles in use will double in 25 years. This is an environmental nightmare. This forecast suggests that the absolute number of ICE vehicles in use will actually increase.

None of the above supports a short thesis for Tesla.

? - I personally do not care what Tesla's market share is of the EV market. As it grows (quicker than most anticipate) Tesla should own a healthy share that is directly tied to their production capacity. I posted the chart to show the trend of Tesla pulling sales from ICE makers in the small luxury car bracket. If this holds true, then you cannot say it would not impact BMW, Mercedes, Audi, or others.

From an environmental standpoint I would love to see other automakers assist in the transition to EVs, but they have yet to make a real effort at this point.

Not sure what you are referring to regarding a short thesis as the article and chart only help to refute it.

 

[jelloslug]

That is a good question, the thing is most shorts dont really care about production numbers long term. Sure we like when the stock moves down, but honestly if they produced model 3's faster it would show the demand isnt there for a 50k+ car, and i dont think they make money on a 40k one. SO honestly i just dont care that much what production is. I definitely enjoy following the #Shednaught stuff though.

So now making more cars is a sign of impending failure. We started out with "they cannot possibly make that many cars" and then went to "making that many cars will only bankwupt them faster" and now we have moved to "making lots of cars means nobody wants them".

 

[mongo]

Currently, Daimler/BMW stock is currently trading at 6 times earnings and pays 6%+ in dividend per year, meaning you'd more than quadruple your money in 12 years even if earning remains constant.

Your math is wrong. At a 6% rate, you double your investment in ~12 years (assuming reinvesting all dividends). Quadrupling would require a little over 12% dividends (again reinvested).

In actuality, Daimler doubled their earnings and BMW almost tripled theirs within the past 8 years.

Daimler AG stock price (ETR: DAI) is at the same point it was in December 1996, but it is up from Feb 2008. BWM (ETR: BMW) is at the same price as September, 2013 (also up from 2008)... A drop will quickly wipe out any dividends you reinvested... Suggest you view their charts on max time scale...

 

[neroden]

Depending on the source, current predictions estimate roughly 30-50% of all vehicles sold per year will be electric by 2040-2050.

Correct your model to 100% electric by 2030 (maybe 2032), which is the accurate projection (from the very consistent exponential growth curve). See how your business analysis looks then.

 

[TheTalkingMule]

Shorts basing their projections on other short's projection....lol. Consensus for the rational world(including even oil execs) is 50% of new vehicles being EV by 2025-2028.

 

[Yggdrasill]

Depending on the source, current predictions estimate roughly 30-50% of all vehicles sold per year will be electric by 2040-2050. ICE vehicles will still dominate sales 20-30 years from now.

That's a conservative estimate. And it's important to remember that luxury/premium cars will lead the transition. So in 2040, you might see that 50% of cars sold are electric, but the distribution is such that 40% of cars under $50k are electric while 95% of cars over $50k are electric. Electric cars are better than ICE vehicles. They are the premium product, and it's unlikely that people will continue to buy ICE vehicles if they don't have to.

And remember, even a modest hit to sales numbers can completely wipe out profitability. For instance, daimler likely wouldn't make any money on the C-class, if sales dropped by 25%.