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

[Leo9]

Tesla and Panasonic freeze spending on $4.5bn Gigafactory
Japanese company also suspends planned investment in Shanghai plant

Tesla and Panasonic freeze spending on $4.5bn Gigafactory

This doesn't look good.

 

[W84M3]

Why is TSLA -3% premarket?

I think there is unconfirmed news that Panasonic & Tesla freeze spending on Gigafactory; whatever that means.

Panasonic last straw to negotiate on China sourcing? IMO with the Maxcells & cut in S/X production, Tesla is diminishing their role and prepping to cut ties.

 

[Donatas]

So is your name really “Donut”?

no, our names come with those suffixes originally, they just change in different forms, for example 'for Donatas' would be 'Donatui'.
and it has nothing to do with donuts my name is made from an ancient greek name Donatus which means given as a present, donated

 

[Dan Detweiler]

Why is TSLA -3% premarket?

Elon had pasta last night and has been up with heartburn.

Come on...does there really need to be a reason? We have seen that the market has its own interpretation of what moves the price. Could be anything.

Dan

 

[Antares Nebula]

Some news about Tesla and Panasonic freezing spending on GF1

 

[neroden]

Do you not consider a ~$0.5 billion agreement a Material Definitive Contract? (Many would like more details about the FCA transaction.)

I don't think it's material. Best guess is that it's $500 million over several years, so maybe $150 million a year. Tesla has kept deals that size confidential before.

 

[Leo9]

Elon had pasta last night and has been up with heartburn.

Come on...does there really need to be a reason? We have seen that the market has its own interpretation of what moves the price. Could be anything.

Dan

There is always a reason for a 3,5% drop early premarket.

 

[W84M3]

-5%; absurdity

 

[neroden]

Awful hit piece in WSJ today by Holman Jenkins:
Opinion | Get Ready for a Pileup, Tesla
“Get Ready for a Pileup, Tesla”

I have WSJ subscription so am willing to add a comment with your help on some specifics, have 2 days before they close comments. Might be marginally useful because existing comments are largely uninformed or off-topic, including the few that are pro-BEV.

I will summarize here bcuz paywall, esp what data I think I need for a comment:

Basis for article data is cited as this one from McKinsey: Improving electric vehicle economics | McKinsey

Let’s call that report “MKR” for reference.

Pitch of the article (NOT my pitch)

• Tesla is only making money because of tax incentives which are expiring, and “Morgan Stanley says Tesla sales will be 344k below its low end last predicted range”. Comment: WTF source and context missing for this number out of the blue.
• BEVs are being sold at a $12k loss, citing MKR. What MKR actually says if you follow the link is:
  • However, there is a problem: today, most OEMs do not make a profit from the sale of EVs. In fact, these vehicles often cost $12,000 more to produce than comparable vehicles powered by internal-combustion engines (ICEs) in the small- to midsize-car segment and the small-utility-vehicle segment (Exhibit 1). What is more, carmakers often struggle to recoup those costs through pricing alone. The result: apart from a few premium models, OEMs stand to lose money on almost every EV sold, which is clearly unsustainable.
  • Comment: Since there are so few BEVs being manufactured, sounds to me like this is really “Chevy Bolt is being sold at a $10k loss before tax incentive”. I think we knew that.
• A whole pile of new BEVs are coming to the US market this year, all by committing $300B to manufacture money-losing cars, but they can break even because of tax breaks.
• Tesla is losing the tax breaks this year, so it is totally screwed because:
  • It’s sales are declining and it only makes money because of tax breaks
  • All these new cars coming get the tax break.
• Comment: can we point to Tesla margins that exceed the original $7500 tax break, certainly exceeded the $3750 incentive level during Q1 which I believe exceeded Q4 in M3 sales, despite FUD we have all seen; also
• Jenkins goes on to claim that BEV successes elsewhere in the world are a sham because of government subsidies.
  • Punchline at end of article: “The kicker is that Norway can afford its electric car habit partly because it’s one of the world’s biggest oil and gas exporters. Pretty much the same basic model now has been adopted by green regulators everywhere. The world is ruthlessly promoting an electric-car industry that is a hothouse flower and will need massive and continuing subsidies from buyers and users of gasoline-powered cars.”
  • Comment: easy to refute that last?

This is really an awful stinker of a piece, would like to provide some focused reply, even without expectation that it will make much difference.

Thanks for your help.

It's WSJ Opinion -- these are the guys who drove Vince Foster to suicide because they, and I quote, "lie without consequence". They have a history of deliberately lying about statistics and falsifying quotes in order to promote fascism. Every one of them belongs in prison for life.

 

[lklundin]

Tesla and Panasonic freeze spending on $4.5bn Gigafactory
Japanese company also suspends planned investment in Shanghai plant

Tesla and Panasonic freeze spending on $4.5bn Gigafactory

This doesn't look good.

That article has the usual hit-piece language and I am unsure how well informed their source is on Tesla's GF1 spending, other than the quote:
"We will of course continue to make new investments in Gigafactory 1, as needed," a Tesla spokesperson told Nikkei.

But Panasonic probably intends to suspend spending on GF1.

 

[Mars ☰mperor]

That article has the usual hit-piece language and I am unsure how well informed their source is on Tesla's GF1 spending, other than the quote:
"We will of course continue to make new investments in Gigafactory 1, as needed," a Tesla spokesperson told Nikkei.

But Panasonic may intend to suspend spending on GF1.

 

[neroden]

The bill is bipartisan - but supported only by Alexander who is retiring and Collins who frequently breaks with other Republicans (because her state is competitive and she faces a re-election in 2020).

FYI, Collins has essentially no chance of being re-elected. I expect her to retire in 2020. If she doesn't, she's going to be facing an opponent who starts out $2.5 million ahead of her in fundraising in a year when Republicans are facing a massive backlash at the ballot box in a state which is trending Democratic; she's toast.

 

[neroden]

That article has the usual hit-piece language and I am unsure how well informed their source is on Tesla's GF1 spending, other than the quote:
"We will of course continue to make new investments in Gigafactory 1, as needed," a Tesla spokesperson told Nikkei.

But Panasonic probably intends to suspend spending on GF1.

This appears to be a completely unsourced article, so I figure it's just false.

 

[neroden]

One could argue that selling regulatory credits generally and using their zero emission vehicles to offset other manufactures emissions specifically has become an ordinary course of Tesla’s business.

Yeah, I think this is the case.

 

[Tslynk67]

This appears to be a completely unsourced article, so I figure it's just false.

It's a very serious falsehood if not true, and IMO something that Tesla should respond to.

 

[stef]

That article has the usual hit-piece language and I am unsure how well informed their source is on Tesla's GF1 spending, other than the quote:
"We will of course continue to make new investments in Gigafactory 1, as needed," a Tesla spokesperson told Nikkei.

But Panasonic probably intends to suspend spending on GF1.

Note how the title makes it easy to read it as they are freezing a 4.5B investment (I know that’s not what it says if you care reading the whole thing and not just the number).

Edit: question is did they put this out to distract from the early ER news or did Tesla announced an early ER date to distract from this? We shall find out soon...

 

[neroden]

I listened to the Webinar yesterday and was impressed by all of their presenters. I'm currently planning on putting some money in to ARKK. One thing in Cathy's brief input on Tesla puzzles me. In the context of investing in disruptive technologies, she mentioned that in 2018, about 1.3 million electric cars were sold and that within 5 years she expects 26 million to be sold. That's a 20-fold increase. Let's be aggressive and say that Tesla will build 4 million cars in 5 years. Where in the world are the other 22 million going to come from??

China.

 

[Leo9]

It's a very serious falsehood if not true, and IMO something that Tesla should respond to.

Agreed. Hopefully Tesla will address it, but I can't believe that Nikkei would post a completely false article.

 

[Carl Raymond]

In an attempt to keep a realistic balanced view, who can provide some reasons as to why this report being this early would NOT necessarily be bullish?

Well, Wall St will want to talk about deliveries shortfall and capital raising. Musk would rather be talking about FSD. The unusual timing of events may simply be to get people excited about HW3 and direct the narrative in the preferred direction.
If there’s mention of a raven I will get excited.

 

[neroden]

Curt,
It is great that ARK's ETFs include TSLA. Why would one invest in an ETF whereby its vary nature would limit gains from TSLA to keep it within 10% of its portfolio?

It's a way to swing-trade TSLA without actually paying attention to the market.