Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable

[humbaba]

The fake responses in CR survey is a major problem I guess even Tesla doesn't realize it. I have personal experience to show CR doesn't/can't authenticate the replies. If I were a ICE car dealer, or a TSLA short, of course I would pretend I own a Tesla, which had tons of issues.

This problem is not too significant for most products, but for Tesla, it's significant and can get worse because more and more shorts, paid bashers, car dealers, legacy car makers, oil/coal interest, will learn the trick. This problem will continue to damage Tesla's reputation until Tesla realize and do something about it. I'm not saying Tesla cars don't have issues, I'm saying those fake responses can easily mess up the results and change public perception about the brand.

What Tesla should do is to conduct their own survey through emails and publish the real results, and work diligently to address the issues. Hoping CR and other websites to address the authentication issue will lead to nowhere.

I agree that it is a problem. I disagree that it is one that Tesla can address by doing their own surveys. That is a conflict of interest so obvious that there is no way the media, much less the shorts, would miss out on trumpeting that fact far and wide.

Not that I have a better idea.

 

[anthonyj]

Remember the nearly $100 million in options that billionaire Stanley Druckenmiller bet against TSLA? These options expire tomorrow, Feb 22. It doesn't take much imagination to figure out what information Druckenmiller used to justify this bet.

View attachment 379390

Take a look at the chart. The stock seems to hit a monthly low every third week of each month, way more often than not. It’s actually very suspicious.

 

[TNEVol]

Does CR list the number of M3 owners who responded to their surveys? All I see is "locked" where those numbers might be disclosed.

Sure there are problems, with all cars, but if only 10 people replied to their Tesla M3 survey, that would put the report into a new realm of FUD.

If you look at the reliability ratings you will see the ones that have insufficient responses for statistical purposes
I have found when I looked back at other cars I have owned, CR reflected the same problems i had with the model. I wouldn't be surprised that the survey reflected problems with the early s drive train but didn't reflect Tesla's corrective actions. I suspect this is because CR is always having to force car manufacturers to do recalls.

 

[mershaw2001]

@Papafox How do you know those options expire in feb and not, say, in march? I read the article listed and didn't mention of the expiration date.

These options expire tomorrow, Feb 22. It doesn't take much imagination to figure out what information Druckenmiller used to justify this bet.

 

[dddaaa0]

 

[jhm]

My bull thesis is Tesla’s brand value should already be up there in top 5, which means the brand alone worth much more than current market cap.
Only need some time for it to be recognized, shouldn’t be too long.

I agree that Tesla's brand value is huge. My frustration, however, is that Musk does not believe in brand marketing and so is not so keen to monetize the value of a brand. The irony here is that Musk is really good at creating brand value in spite of thinking so little of branding.

 

[EVNow]

CR has been doing this a long time. If they don't have a statistically significant sample they say so. Not every new car sold in America gets a reliability rating.

Do they publish their methodology ? How do they make it statistically significant when the sample is not random ?

If the CR buying 3 owners are different significantly from those who don't - it's not scientific.

 

[RobStark]

I think just like conference call, we need a Customer survey on Say where actual Tesla customers can do a survey. ...???

Or Tesla can allow JD Power and Strategic Vision to access Tesla owners through DMV databases.

Very few will care what happens on Say.

 

[AudubonB]

A few months ago, members of this community sent scores (probably hundreds), of manipulation concerns to the SEC and I haven't heard of a single one that has been acted upon. When Cramer was speaking loudly that Musk had nothing to worry about with the SEC going after his "funding secured" comment in a timely fashion, and with tons of shorts jumping on the SEC about Musk's statement, that afront to the SEC's illusion of adequacy in securities oversight necessitated a response (whether right or wrong). None of the alleged manipulations by shorts and others betting against Tesla get much press, and so the SEC sweeps them under the rug. The agency lacks the personnel to do an adequate job of policing the markets and rather than rolling up their sleeves and making an example out of the few most flagrant violations with the most shorted stock in the markets, the SEC has mostly sat on their hands and continued to pursue their usual subjects, such as those guilty of ponzi schemes.

I fear it is time that a concerted push to bring up ALL these concerns goes forth to -

• The SEC's Inspector General. In my understanding, the IG is the closest there is to an ombudsman, although his specific charge is, inter alia "to promote integrity, economy, efficiency, and effectiveness in the Commission". In general, OIGs within US governmental agencies are...in theory...independent offices within that agency who have the ability to open doors and drawers and conduct very thorough, severe investigations, and to effect actions. OIG link: SEC.gov | Office of Inspector General
• Friendly congresspersons. Those of you in states with sympathetic Senators or Reps - some kind of letter explaining in brief your beef might be able to induce some action. In theory, this is the purview of your Rep, not your Senator, but I can see a situation in which a Senator might be willing to carry the necessary water.

 

[TradingInvest]

When CR appraised Model S, no one complained

It's totally different. CR had a formula to calculate a number based on several tests including acceleration, handling, traction... then they compared the number with the existing scale to get a final score. That's why Model S got 103 out of 100. The model S was too good and got out of the scale. It's like you take an SAT test, you get what you get. It's not like CR did Tesla a favor.

Ever since the 100 and 103 scores were published, CR's attitude toward Tesla has changed 180 degree. I don't know what's the reason behind the change, I guess some shorts made efforts there.

You could contact CR to point out the authentication problem in their survey, I think they will do nothing about it. Even though this issue will unfairly hurt Tesla. I don't mind if Tesla gets the lowest scores. I do mind if Tesla is treated unfairly when some interested parties are cheating.

Similarly I don't mind when the stock drops on the news. I do mind when someone got the news several days before the public, and bought tons of $295 Puts expiring on Friday. This is actually real. When I heard a buy bought so many $295 weekly Puts, I thought he probably got some inside news.

 

[shrspeedblade]

Do they publish their methodology ? How do they make it statistically significant when the sample is not random ?

If the CR buying 3 owners are different significantly from those who don't - it's not scientific.

The people filling out CR surveys are hardly a random sample of buyers in the automotive realm. That has always been my #1 problem with their methodology because it is anything but scientific and is almost geared for confirmation bias by design. And they won't own it- because being "the authority" is far better for generating subscriptions.

 

[Singuy]

So is stock price manipulation just an open secret?

More like..open open. Don't think anyone is being secretive...

 

[RobStark]

What Tesla should do is to conduct their own survey through emails and publish the real results, and work diligently to address the issues. Hoping CR and other websites to address the authentication issue will lead to nowhere.

Tesla knows what the numbers are because they own their service centers.

The market doesn't trust companies to objectively execute and report reliability surveys on their own products.

 

[Joe F]

If you look at the reliability ratings you will see the ones that have insufficient responses for statistical purposes
I have found when I looked back at other cars I have owned, CR reflected the same problems i had with the model. I wouldn't be surprised that the survey reflected problems with the early s drive train but didn't reflect Tesla's corrective actions. I suspect this is because CR is always having to force car manufacturers to do recalls.

Thanks, but as I indicated, not being a subscriber to CR, those ratings are locked, hence the question.

EDIT: typo.

 

[Singuy]

The people filling out CR surveys are hardly a random sample of buyers in the automotive realm. That has always been my #1 problem with their methodology because it is anything but scientific and is almost geared for confirmation bias by design. And they won't own it- because being "the authority" is far better for generating subscriptions.

It is what it is. I don't doubt CR's reliability report. It's a new car model with a brand new drive train, brand new take on everything and speed manufactured at an affordable price. Tesla got most of it right out the gate but as with any new tech products(or even new car models), there will be teething issues. So far drive train failures are uncommon which is the most impt part. Panel gaps, paint issues, touch screen issues, software freezing, etc etc are really non issues. CR ding a company if their customer return their cars to the shop to get something fixed.They most likely dinged Model 3 pretty badly for having unreliable brakes which required an OTA to fix. 99% of the problems are not related to coolant pumps, A/C failures, battery or motor issues. That's where it counts. Oh yeah Tesla needs to have a way to power the car if that stupid 12v battery goes out. The short sellers couldn't wait for articles about Tesla's being towed to the service center due to worn out lead acid batteries.

 

[TradingInvest]

Business Insider on Twitter

This is the more important headline

I like what Business Insider put out here. I hope everyone understand there are most likely 3 reasons why BI put out something positive about Tesla:

1. At this moment they have a long position
2. Someone want the stock to go up and paid them to publish something positive
3. They do this to show they are balanced to prevent lawsuits from Tesla.

 

[jepicken]

No, Consumer Reports actually freshly changed their rules, which resulted in the ranking change.

What rule did they change? The only thing I found that you could be referencing is that they followed up with subscribers that didn't respond to the initial survey to encourage more responses. But the CR article says that's not a fresh change:

For the past few years, CR has been going back to car owners who did not answer the initial survey to gather additional information, and to include a greater number of the newest vehicles.​

They also mention this:

When the Model 3 first came out in 2017, Consumer Reports gave it an average predicted reliability score based on the survey results at the time about the Model S because the two shared much of the same technology.​

CR was generous to give Model 3 an average predicted reliability based on Model S, since in my view the Model 3 tech - motor, battery cells, battery pack, display, software, etc. - is dramatically different from Model S. Even the production line is dramatically different.

BTW I've always wondered whether CR gives minor issues like panel gaps the same weight as major ones like catching fire in the driveway (as some ICE vehicles are prone to do). I found the answer:

The Overall Reliability Verdict summarizes a model's overall reliability over all 17 trouble spots. Because problems with the engine major, cooling, transmission-major, and drive system can be serious and more expensive to repair, our calculation gives extra weight to problems in these areas. The Reliability scores show whether the model had more or fewer problems overall than the average model of that year.​

So the Model 3's below average ranking implies there's more than just minor issues, or the minor issues are so common they overcome the low weighting.

 

[Fact Checking]

Tesla knows what the numbers are because they own their service centers.

Note Tesla's statement today in response to the CR decision:

"Not only are our cars the safest and best performing vehicles available today, but we take feedback from our customers very seriously and quickly implement improvements any time we hear about issues. That’s just one of the reasons why, in this very same survey from Consumer Reports, Model 3 was rated as the #1 most satisfying car, and why Tesla vehicles have topped Consumer Reports’ Owner Satisfaction survey every year since 2013 – the first year Tesla was included in it."

“We’re setting an extremely high bar for Model 3. We have already made significant improvements to correct any issues that Model 3 customers may have experienced that are referenced in this report, and our return policy allows any customer who is unhappy with their car to return it for a full refund. This new data from Consumer Reports comes from their annual Owner Satisfaction survey, which runs from July through September, so the vast majority of these issues have already been corrected through design and manufacturing improvements, and we are already seeing a significant improvement in our field data.”​

Note the final part: Tesla is already seeing "significant improvements". (To the extent you trust Tesla's data.)

What is the logic in Consumer Reports not recommending their subscribers to buy the objectively safest, most satisfying car in their category?

What is the logic in Consumer Reports recommending less safe, less satisfying cars that might get owners injured or killed with a higher probability, just to save them from ... "panel gaps" and "paint specks"?

I mean, I would support a decision that includes reliability data that impacts safety or utility, but most of the defects CR listed were cosmetic.

The "owner satisfaction" score already includes reliability: an unreliable car will make owners less satisfied.

So CR ist basically double counting the negative votes of owners and is using mostly cosmetic reliability complaints as grounds to override owner preference and disqualify the safest, most satisfying car on the list...

 

[BoringUsername]

"Not only are our cars the safest and best performing vehicles available today, but we take feedback from our customers very seriously and quickly implement improvements any time we hear about issues. That’s just one of the reasons why, in this very same survey from Consumer Reports, Model 3 was rated as the #1 most satisfying car, and why Tesla vehicles have topped Consumer Reports’ Owner Satisfaction survey every year since 2013 – the first year Tesla was included in it."

Strange that CNBC didn't include this part of the response during their coverage today...

 

[Singuy]

The Overall Reliability Verdict summarizes a model's overall reliability over all 17 trouble spots. Because problems with the engine major, cooling, transmission-major, and drive system can be serious and more expensive to repair, our calculation gives extra weight to problems in these areas. The Reliability scores show whether the model had more or fewer problems overall than the average model of that year.​

So the Model 3's below average ranking implies there's more than just minor issues, or the minor issues are so common they overcome the low weighting.

So have anyone here noticed any wide spread drivetrain problems with the Model 3? Also how are paint/fit and finish a "reliability" issue? Shouldn't reliability only test if the car can get you from point A to point B without any issues? Or are cars also show pieces and speckled paint is unreliable when it comes to winning car show awards?