How silly. Those suppliers would be up crap's creek if they cut off Tesla. That isn't how things go.
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Doesn’t make sense, Tesla has very positive cash conversion cycle.
They get paid on the car before they pay the suppliers.
They should negate this as quickly as possible
Tesla didn't lose the class-action, they settled. $1million goes to the lawyers, and $4.5 million goes to the model S/X owners who bought EAP and didn't get the features they were told/promised at the time they were promised. I think you're right that the removal of FSD was a result of this lawsuit being settled, but just wanted to point out the nuance of the settlement. See answer to Karen below.
There were features with EAP that were not delivered to the customer's expectations (autopilot 2 being par to autopilot 1 by a specific date; parking lot summon by a specific date; on-ramp to off-ramp autopilot, etc). This is the "confusion" that Elon mentioned. So to avoid this scenario again, where customers pre-paid for future features (and getting anxious about it), Tesla can re-introduce the feature again in the future (for a fee). This gives the customers a chance to say yay/nay based on what they can see and can be delivered, and not on what they understood the feature to be.
Tesla will always strive to improve their product, but customer expectations grew too rampant is all.
humbaba
sleeping until $7000
How would you know it's not the big money driving price down so they can buy more?
The other possible effect of the reorganization is to produce more single-motor cars in the mix, because perhaps there's a shortage of front motors? This might help them produce more total cars by moving around the bottleneck.
Oh, I hear you on that. But in our current screwed-up crony-capitalist world, Tesla has to maximize profit in order to maximize the number of EVs they put on the road. The disinformation spreaders have succeeded at that much: they have prevented Tesla from getting the loads of equity capital which they would otherwise have gotten, which would have enabled faster expansion with less profits. C'est la vie.
Obvious FUD is obvious.
"Quadir, 28, didn’t identify any suppliers or vendors by name. "
"In a memo to suppliers in July, the company asked some suppliers to refund some payments to help it turn a profit."
"The Wall Street Journal reported in August on an Original Equipment Suppliers Association survey of executives that found most respondents believed Tesla posed a financial risk to their companies."
"Some small suppliers claimed in the previous several months that they failed to get paid, the newspaper reported, citing public records."
Let's break this down:
1) Quadir, a small-time investor who only gets any attention because she got one company right (hello, stopped clock) and someone made a documentary about her because of it, and who is short Tesla, claims some suppliers are going to go broke, but has no names to mention.
2) We all remember the attempt to spin "Tesla taking a hard line in supplier negotiations" as "OMG TESLA IS ABOUT TO IMMINENTLY GO BANKWUPT" last summer. Apparently I missed the subsequent bankwuptcy news. As an investor in Tesla, let me add: HECK YES they should be negotiating as hard as possible to get favourable terms with their suppliers.
3) The Original Equipment Suppliers Association survey was about companies worried that Tesla itself would go bankwupt, and that would have knock-on effects on them - not that they were going to go bankwupt supplying Tesla. Not mentioned about the surveyed companies: "all of the respondents said they wanted to continue or grow their business with Tesla".
4) "Small suppliers" is putting it lightly. There were a couple of lawsuits over tiny construction and remediation contracts (example) that Tesla was disputing. "The total outstanding dollar amount of claims is relatively small, totaling nearly $8 million, according to the documents." Of course, they don't mention that in this article - they spin it to sound like Tesla is three months behind schedule paying for steering wheels.
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Ulmo
Active Member
Yes, and I specifically looked to see if I could see damage from the recent tsunami's, and didn't see any; I came to that conclusion as well.
Ulmo
Active Member
The market in general is pricing in waaaay too much future growth; multiples are near historic highs. One has to expect some reversion. It will become clear which sectors and companies don't actually have any future growth, and their stock prices will drop.
Making vague, general statements like "riskier, highly valued growth stocks don't do well in a bear market" is misleading. In fact, if you've picked the correct highly valued growth stocks, ones which will continue to grow for fundamental reasons during the bear market, you will do well.
Ford was privately held during most of its early period. But does anyone doubt that it would have been an excellent investment *right through* the WWI recession *and* the Great Depression? There were other companies which would have been too. Some, even, where buying them before the Crash and keeping them through the crash and the whole Depression would have done well for you (though not many!).
Baring truly clearly NEGATIVE or positive news, we have systematically seen PRE and early market trading up, and then the selling begins - and fall.
dqd88
Member
Is there a source for this assertion that vendors aren't getting paid and filing liens? Which vendors?
I keep hearing things like this here and in other places. If they already have holdings, forcing the price lower to buy more makes no sense at all. The market is memoryless. "What have you done for me recently?" The situation today is exactly what it was predicted to be about two months ago, and yet the stock is down $100 from that point, because it never made back the losses in between.
dqd88
Member
Yeah I have a hard time believing this narrative about suppliers. If it can't be substantiated then this person is being libelous.
This is nuts. Price going down because of FSD and crap. It's high time Tesla fights this with lots of advertising dollars and TV ads. The more people know on TV and through advertising the better it will be - guaranteed.
I used to think that way, but as a result I missed out on Microsoft and Apple, and by not thinking that way I made tons of money on Exxon and Chevron (back when oil was profitable). So... I disagree.
I don't like people I can't trust, but in investing? Most CEOs can't be trusted. I think Musk can be trusted *more than average*. And some of the most profitable companies are the least trustworthy. A hard lesson to learn.
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