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Krugerrand
Meow
To sum it up; 'We're still believers in the Tesla story, but my 4 year old asked me a question that caused me to temper my enthusiasm.'
Yea, I am speechless here...
After he mentioned his 4 year son I expected him also to proceed explaining that his published 1 page note actually had additional pages but they were eaten by family dog...
I think that my theory regarding the effort to keep stock below the exercise point of the GF convertible bonds for a time being has some merit...
I saw his comments as an attempt at damage control to having his name associated with the intellectually dishonest statements from a couple of weeks back.
Mainly, AJ ran from his "ICE technology improving along the line of Moore's Law" gibberish by burying that "point" into the "autonomous driving undermining Tesla's competitive advantage" "point". He did this by referring to the pace of improving computing in all cars in the context of discussing the advent of autonomous driving (i.e. going from 4 points to 3 points to imply his Moore's Law comment was about the computing of autonomous driving, not the ICE drivtrain... IIRC the original report had 4 "points", one of them being specifically that the ICE drivetrain could improve at a pace like Moore's Law).
Betty Liu of Bloomberg then nailed the follow up question, basically asking, if EVs are a better tech than ICE what difference does it make if it's a better human driven or autonomous car?
To this, Jonas said people are buying Tesla's for the visceral driving experience not because it's green... take out that pleasure, and what does Tesla have? (I probably don't need to say this but, of course, plenty of advantage! by the timeframe he's discussing, cost parity at purchase while $1-2K cheaper per year to own, safer (including a computer taking advantage of instant torque), quieter, more storage, energy independence, far more the computer on wheels that autonomous driving needs than a combustion engine, and lack of reliance on a finite resource. that's not to mention, some of us will like driving enough to sometimes shut off autonomous driving). Jonas did say this loss of driving pleasure would apply to all automakers (not mentioned in original report IIRC).
The other two points (building up infrastructure in China as a limit to Tesla's growth and trying to conflate EVs outside of Tesla doing poorly with the suggestion that there's a need for a battery breakthrough tempering his optimism on Tesla) were no more convincing in the interview than what we saw a couple of weeks back.
His attempts to justify his comments were just as baseless/strange as the original comments themselves. Thought it was interesting that he emphasized that it was just a 'one-pager' report. Fits in with it being a brief tap on the brakes.
Also, Betty Liu looks great in glasses. End of summary.
Also, Betty Liu looks great in glasses. End of summary.
Thanks all, maybe the oil co's and ICE makers have AJ's 4 year old at gunpoint and he's secretly begging for help.
Bob Lutz just said on CNBC Tesla "uses same battery tech as other companies" and "Tesla is grossly overvalued right now". I suppose a Ferrari uses the same ICE tech as a Civic too.
Bob Lutz just said on CNBC Tesla "uses same battery tech as other companies" and "Tesla is grossly overvalued right now". I suppose a Ferrari uses the same ICE tech as a Civic too.
Krugerrand
Meow
To be fair, sometimes a different perspective can be enlightening even if it comes from a child. I remind us of Elon's child trying to read a book in the back seat of his car and not being able to do it because of the lack of lighting. I believe the quote from his child was, 'This car sucks.'
The 4 year old in this situation asked a good question. Not his fault his father couldn't come up with a reasonable and logical answer, and extrapolate how that would (or wouldn't) affect Tesla down the road.
I honestly feel sorry for Adam Jonas after watching this, and my suspicion that he was coerced for some reason to make statements he does not believe. Why he was coerced, I do not know, but this is not the voice of the visionary, confident analyst who wrote such a thorough and fact-based 50-page analysis in February, followed by sensible supporting analysis in months after.
He is now contradicting himself completely based on absolutely no factual or fundamental changes in the company, and that just degrades his relevance, impact, and professional credibility. Definitely feeling sorry for him. Hope he's not being extorted.
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My own 4 year old says this:
"Daddy, I wish everyone could have a Tesla."
"So do I, son."
Couldn't be more proud of my little guy. That is precisely what many of us are working to achieve.
So what do we have at hand lately ? An analyst adjusting his evaluation of TSLA not based on facts but on doubts, a 4-Year-olds wish raised in him and another calling the demand for Model S of a 1+ billion people nation "robust".
Surely justifies at least a 10% drop. Yeah. Time to panic *rolls eyes*...
Surely justifies at least a 10% drop. Yeah. Time to panic *rolls eyes*...
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That is because there is nothing, really. The original "National Electromobility Development Plan" is from 2009, see the original PDF. The main points of the law passed by the German ministry today are that it will allow to:
- reserve special parking spaces and charging spaces in the public space
- reduce or waive parking fees fees for EVs
- to exempt EVs from access restrictions which were placed because for noise or emission protection
It wouldn´t even directly change those minor points, just allow them to be adressed in the future.
So I don´t want to be offensive, but this is old news/no news, sorry.
I find this interesting. Because, of course, it's true that people are buying EVs for driving pleasure, because they're more fun to drive, as we all know, as anyone who has driven one knows. However, considering how many "driving enthusiasts" in the world talk about EVs as if they'll be the death of driving pleasure, it's funny to note that our stock basically went down because "the car is too fun to drive and everything else is boring."
edit: upon watching the video, he repeats the nonsense that "EVs are failing outside of Tesla." This is not correct, EV sales are rising ~50% across the board this year, last year Plug-In America celebrated 100k EVs in the US in July, and last week they celebrated 250k EVs in the US. Nissan has sold ~130k Leafs worldwide. That is not failure.
Model X Beta Likely to Be Revealed Before Q3 Report
Hey AIMc and Theshadows, on the Model X reveal:
3 years ago on the weekend of October 1st, Tesla invited 3000 Model S reservation holders, journalists, and investors to the factory to reveal the Beta and give test drives. I wouldn't be surprised if they revealed the X on the anniversary or on the first weekend of October alongside with a couple new Model S options/standard equipment like AWD, lane departure warning and speed assist (which already are in some cars apparently). But in order for this to happen, we would probably see invitations within the next few days.
If not, remember Ben Kallo said that the Model X will be revealed September-October, it is unlikely that it is just a baseless claim.
Also, extrapolating from Elon Musk's comments of 15k-20k Model X in 2015, as well as getting to 400 cars/week in half the time of the Model S (3 months instead of 6 months), the latest that Tesla will have to ship the Model X would be the beginning of Q2. It is worth noting that the Model S Beta was revealed 9 months before first deliveries. So if we assume that the Model X will go from Beta to deliveries in 4.5 months, or half the time (Musk commented that 50% less time going from X Alpha to Beta than Model S, as well as 50% less time to ramp from 0-400 cars/week than Model S), then the latest that the Model X will be revealed is half way through November, which is a little bit after the Q3 report.
So I think that there is certainly a much larger than 50% chance that the Model X will be revealed before the quarterly report, but tacking percent chance on this seems a bit arbitrary.
Edit: Also, Musk said that the Beta will be done within 3 months during the Q2 quarterly call, which translates to late October at the latest. There's only one possible reason that Tesla will not reveal the Beta as soon as its done and that is to avoid an increase in orders so that they don't have wait times of 2+ years. But this doesn't make much sense if Tesla makes it clear that next year's production is sold out, which they did.
Hey AIMc and Theshadows, on the Model X reveal:
3 years ago on the weekend of October 1st, Tesla invited 3000 Model S reservation holders, journalists, and investors to the factory to reveal the Beta and give test drives. I wouldn't be surprised if they revealed the X on the anniversary or on the first weekend of October alongside with a couple new Model S options/standard equipment like AWD, lane departure warning and speed assist (which already are in some cars apparently). But in order for this to happen, we would probably see invitations within the next few days.
If not, remember Ben Kallo said that the Model X will be revealed September-October, it is unlikely that it is just a baseless claim.
Also, extrapolating from Elon Musk's comments of 15k-20k Model X in 2015, as well as getting to 400 cars/week in half the time of the Model S (3 months instead of 6 months), the latest that Tesla will have to ship the Model X would be the beginning of Q2. It is worth noting that the Model S Beta was revealed 9 months before first deliveries. So if we assume that the Model X will go from Beta to deliveries in 4.5 months, or half the time (Musk commented that 50% less time going from X Alpha to Beta than Model S, as well as 50% less time to ramp from 0-400 cars/week than Model S), then the latest that the Model X will be revealed is half way through November, which is a little bit after the Q3 report.
So I think that there is certainly a much larger than 50% chance that the Model X will be revealed before the quarterly report, but tacking percent chance on this seems a bit arbitrary.
Edit: Also, Musk said that the Beta will be done within 3 months during the Q2 quarterly call, which translates to late October at the latest. There's only one possible reason that Tesla will not reveal the Beta as soon as its done and that is to avoid an increase in orders so that they don't have wait times of 2+ years. But this doesn't make much sense if Tesla makes it clear that next year's production is sold out, which they did.
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Johan
Ex got M3 in the divorce, waiting for EU Model Y!
Because this note from Jonas surprised and perplexed me, and because I think our discussion on how on earth he came to write what he did is interesting, I decided to type out a transcript of the interview on Bloomberg:
Still after reading what I have typed it still doesn't make sense to me. I have bolded the nonsensical statments by Jonas.
Liu: I have to say that your report, which came shortly after Elon Musk himself said: "Look, I think my own shares are a little over valued" sent the stock tumbling about 10%. Did you expect that kind of response?
Jonas: Ahh, uhm... I'd be very careful with crediting one report with, or a one-pager in fact, for that kind of reaction. It was a rough day for the markets, I think if you remeber a lot of tech stocks were down. I think a lot of people were just pointing at something. So no, of course we did not expect that.
Liu: Right. Though they did cite your report quite frequently in various reports, including ours, as a reason. Now, behind your call though, I mean you're still bullish, you're still saying Tesla is a very good company. What exactly was behind your call Adam?
Jonas: Right, Betty... What we're basically saying is first we still are believers in the story, we still think Tesla is in fact the most important car company in the world. I think if you ask key suppliers you'll hear that sentiment echoed. We think it's worth $320, it's the only auto stock in America we recommend - we're underrated on GM and Ford. The message is there's probably some room for at bit more balance in the debate right now. Uhm, a bit more balance... So we do share Elon's view. Mainly, if we highligh quickly, we think that EVs categorically have been failing outside of Tesla. There are a lot of reasons behind that. We don't wann depend on break-throughs for batteries to democratize EVs. Second, we think that the ramp in China should be handled very slowly and carefully. We think Tesla is trying to build brand authenticity in the world's largest car market and that might take more time than investors are prepared for. And then finally, and I'll quote my 4 year old son Carlos at dinner about a month or so ago said: "Daddy, when the computers drive all the cars, why are people gonna buy a Tesla?". I'm thinking: Go to your room son, time out. But in all seriousness it changes - there's so much going on in mobility and applying Moore's Law to cars driving them selves it does change why people drive any car and we think Tesla and Elon Musk are very well positioned but it raises some questions.
Liu: OK, but with all due respect to your 4 year old, I'm trying to figure out that logic though Adam [laughing smirkly]. Even if there's driverless cars they are still driving cars and why wouldn't they be driving clean energy cars?
Jonas: Well, I think if you ask people why they bought the - why they spent $110-120 thousand or whatever on a Tesla, it's probably not because it's clean. It's because it's just a riot to drive. The driving pleasure, the accleration, the performance, the handling and what you feel as a driver and the stimulation you get is incredible. And you take that away - and this is not just a Tesla issue, the "ultimate driving machine" is BMW's logo too, what happens in the future? So all auto companies are confronting this complete revolution and re-invention of what we call shared autonomy and I guess the answer to Carlos' question is: Tesla has to make the best autonomous car. It's a different model than what they are doing today.
Liu: Alright, Adam - great to have you with you. Thank you so much for explaining your report with us. Adam Jonas the Morgan Stanley managing director who wrote that report on Tesla.
Still after reading what I have typed it still doesn't make sense to me. I have bolded the nonsensical statments by Jonas.
Liu: I have to say that your report, which came shortly after Elon Musk himself said: "Look, I think my own shares are a little over valued" sent the stock tumbling about 10%. Did you expect that kind of response?
Jonas: Ahh, uhm... I'd be very careful with crediting one report with, or a one-pager in fact, for that kind of reaction. It was a rough day for the markets, I think if you remeber a lot of tech stocks were down. I think a lot of people were just pointing at something. So no, of course we did not expect that.
Liu: Right. Though they did cite your report quite frequently in various reports, including ours, as a reason. Now, behind your call though, I mean you're still bullish, you're still saying Tesla is a very good company. What exactly was behind your call Adam?
Jonas: Right, Betty... What we're basically saying is first we still are believers in the story, we still think Tesla is in fact the most important car company in the world. I think if you ask key suppliers you'll hear that sentiment echoed. We think it's worth $320, it's the only auto stock in America we recommend - we're underrated on GM and Ford. The message is there's probably some room for at bit more balance in the debate right now. Uhm, a bit more balance... So we do share Elon's view. Mainly, if we highligh quickly, we think that EVs categorically have been failing outside of Tesla. There are a lot of reasons behind that. We don't wann depend on break-throughs for batteries to democratize EVs. Second, we think that the ramp in China should be handled very slowly and carefully. We think Tesla is trying to build brand authenticity in the world's largest car market and that might take more time than investors are prepared for. And then finally, and I'll quote my 4 year old son Carlos at dinner about a month or so ago said: "Daddy, when the computers drive all the cars, why are people gonna buy a Tesla?". I'm thinking: Go to your room son, time out. But in all seriousness it changes - there's so much going on in mobility and applying Moore's Law to cars driving them selves it does change why people drive any car and we think Tesla and Elon Musk are very well positioned but it raises some questions.
Liu: OK, but with all due respect to your 4 year old, I'm trying to figure out that logic though Adam [laughing smirkly]. Even if there's driverless cars they are still driving cars and why wouldn't they be driving clean energy cars?
Jonas: Well, I think if you ask people why they bought the - why they spent $110-120 thousand or whatever on a Tesla, it's probably not because it's clean. It's because it's just a riot to drive. The driving pleasure, the accleration, the performance, the handling and what you feel as a driver and the stimulation you get is incredible. And you take that away - and this is not just a Tesla issue, the "ultimate driving machine" is BMW's logo too, what happens in the future? So all auto companies are confronting this complete revolution and re-invention of what we call shared autonomy and I guess the answer to Carlos' question is: Tesla has to make the best autonomous car. It's a different model than what they are doing today.
Liu: Alright, Adam - great to have you with you. Thank you so much for explaining your report with us. Adam Jonas the Morgan Stanley managing director who wrote that report on Tesla.
Causalien
Prime 8 ball Oracle
Sounds like he got an emergency call from Elon to stop pumping the stock. Or someone connected to his firm sold a lot of calls on Tesla. Or goldman sachs need a break to let all the call options they wrote expire.
Then it feels like he doesn't want to be known as the guy who made tsla drop 10%. Which means he doesn't want to piss off Elon or tsla investors. So whoever called the break is probably not associated with Elon.
Then the thing about autonomous car. Either google had a breakthrough or Tesla showed him an early prototype that is a lot farther ahead than he thought. Personally I don't think it'll be commercial and popular until for another 10 years. So probably a knee jerk reaction because he believe it'll magically be on the road everywhere in 5 years, which will disrupt tsla's business model. Realistically speaking. There's a lot of political hurdle this'll need to go through and also a lot of technical hurdle since this involves safety. It's not as simple as an iphone.
Then it feels like he doesn't want to be known as the guy who made tsla drop 10%. Which means he doesn't want to piss off Elon or tsla investors. So whoever called the break is probably not associated with Elon.
Then the thing about autonomous car. Either google had a breakthrough or Tesla showed him an early prototype that is a lot farther ahead than he thought. Personally I don't think it'll be commercial and popular until for another 10 years. So probably a knee jerk reaction because he believe it'll magically be on the road everywhere in 5 years, which will disrupt tsla's business model. Realistically speaking. There's a lot of political hurdle this'll need to go through and also a lot of technical hurdle since this involves safety. It's not as simple as an iphone.
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