Share →
Tesla’s stock has been struggling a bit recently.  I personally think they have been “crushing it” on all fronts recently, but after last night’s Model Y Unveil event I’m not so certain.   The recent announcement that they really were going to offer a Model 3 at $35,000 and the upgrade to 250kW in the Supercharger Version3 are significant marks toward overkill in the electric vehicle space.  And as we say at EVTV, “Overkill is Always Appropriate“.  Kind of like the little black dress.  You can’t go wrong with it. The $35,000 mark is a powerstroke.  The average price of a new car of any kind in the U.S. is now over $37,000.  The traditional automotive manufacturers are simply reeling in disbelief that the Tesla Model 3 has simply backseated the forever dominant BMW/Mercedes battle for dominance in the premium sedan market.  This battle has gone on for decades.  The market for $50-70,000 sedans is actually pretty small, but very prestigious and has a halo effect on everything.  So everyone has to play.  But BMW has particularly “owned” this segment by specializing in it. In a single year, Tesla has just sent everyone else to the showers.  It’s over.  They own it.  The car has it all, performance, styling, safety, green cred, and it doesn’t burn gasoline.  And they’re very near to selling more Model 3’s than the next two contenders combined. The win is crushing and devastating and has sent ICE OEMs into an absolute PANIC.  After years of pooh poohing the whole idea and Must in particlar, they suddenly see the future, about the moment it arrives of course. And then he announces that he actually IS going to sell a base version at a smooth $35,000.  The price of an Accura or a Camry.   Suddenly, a Model 3 with 220 miles of range enters the mom and dad market. There’s a lot more going on here than I see signs of cognition of in the space.  In this video, all CAN aside, we go back in history to the March 31, 2016 announcement of the Model 3.  To quote Musk, “And the price?  … The price is $35,000.” That was kind of a big fat flat statement.  And they signed up 115,000 reservations THAT day with lines at Tesla stores stretching for blocks.  In the ensuing days and weeks, 455,000 people put down deposits on that car.  But they put that down for a $35,000 car.  My Model 3, picked up February 19, 2018, almost two years later, cost me a slick $56,000.  Worse, $8,000 of that was for an autopilot that never has been delivered. And so one of the struggles for Tesla is the sale of some 250,000 Model 3’s, when they had $1000 deposits for 455,000.  Leaving some 200,000 cars on the table. I am always taken aback by the greed for subsidy evident among our viewers.  It is viewed as a universal public good that solar equipment installations and electric vehicle purchases should rightly be subsidized with tax credits and deductions. Somehow even excused as “levelling the playing field” given all the less direct subsidies enjoyed by status quo corporate interests.  And as most of us liberal libertarians are generally opposed to most taxes just in general, it seems to catch you guys by surprise that I’m not all over tax credits for EVs.  It’s not that I am unenthusiastic.  It’s that I oppose them ENTIRELY.  Now focus– focus here.   I OPPOSE them in their entirety. I have said this repeatedly but our viewers have always viewed this as some sort of inside “Jack Joke”.  It never was.  Read my lips.  No new tax credits. It is not that I don’t see the advantages they offer and the pump priming they can do.  I understand the allure of cocaine and methamphetamines as well.  The problem is they all result in the same thing.  Some really serious problems down the road.  Subsidies DISTORT markets in ways that can be harmful, and most often harmful to exactly the people and entities you are trying to encourage and jumpstart. The adoption curve is neither smooth nor automatic and success is not assured.  Even today, I continue to be BESIEGED by those desperately seeking information and assistance with their Coda’s, their Azure Dynamics eTransit Connects, their Fiskers, and any of the other “orphans” out there.  Byron Izenbaard and I were recently offered THREE fully operational pristine eTransit Connects with a fourth that had a problem with the eDrive.  I’ve got a full drive train sitting across the room from me.  They were offered by a University at $500 each.  This is a $58,500 list price EV based on the Ford Transit Connect that were NOT failed, and indeed in perfect operating condition.  Byron is actually my goto guy for problems with this model. We both passed on the offer.  I’ve got two now.  And there is simply no future in mastering the intricacies of an orphan vehicle from a bankrupt company that made 286 of them in the U.S. ever.  I passed the info onto our recent visitor from New Jersey, Matt Foley.  This would give him a van to park down by the river in case he needed a place. And I think he put in a bid on his way home. The EV subsidy was a spectacular exercise in  poor design.  It was an almost obscenely generous $7500 tax CREDIT.  Not a deduction.  You actually get a dollar for dollar reduction in taxes owed for the first $7500 spent on a new electric automobile.  But then it only applies to the FIRST 200,000 vehicles sold by THAT manufacturer.   And then it doesn’t end, but actually phases out in a brutalizing succession of six month “dates” designed to celebrate bankruptcy on particular days. This is the HEART of my deep gut wrenching vomit tasting aversion to the whole “progressive” neo marxist alt left libtard mantra.  They’re like kids.  Dancing in the glow of enthusiasm for their own virtuous good intentions to save the world and celebrate utopia, they simply never think ANYTHING through.  They lack the fully formed cerebrum of adult humanoids.  They can’t follow a line of cause and effect further than the bathroom, which apparently they also suffer some apprehension and general confusion about.  And so we must all suffer the “unintended consequences.” So picture this, in the next year or so, every recalcitrant oppositional conventional automotive manufacturer who bitterly and resentfully caves int o producing an electric model will be SUBSIDIZED to the tune of $7500 tax credit on THEIR first 200,000 sales, while Tesla will not.  Putting Tesla, the sole cheerleader for this entire revolution, at an artificially induced $7500 price disadvantage.  The only salve to this amazing insult is that the entire credit is about to expire anyway. Along the way, Tesla itself was complicit urging potential customers to get their orders in by November 1 to be assured of delivery before the end of December so they could still get the full credit.  This pulled a lot of sales that were likely to happen anyway into December.  Well the party is over and it’s January.  What do YOU think happened to Model 3 sales then?  Actually ALL Tesla sales then. The inevitable hangover from the cocaine party.
And so my view of such subsidies and do gooding is that it causes people to make enormous investments and plans during the party period, leaving them vulnerable and besieged in the hangover.  It doesn’t create markets, it DISTORTS them.  And it is a central element of a belief system.  The only reason to offer a $7500 tax credit to someone who purchases the car is because you have a FAILURE OF VISION and a crisis of confidence that anyone would ever want one without the credit. If the improved technical elegance and efficiency of electric drive is a true benefit, why wouldn’t people buy it anyway?  I happen to believe it IS not just a marginal benefit, but a completely DISRUPTIVE innovation.  And you are trying to kill one of the most brilliant innovators in the space with your “good intentions” and child-mind solutions.  And doing a pretty good job of it at that. Yes, Tesla might have grown a bit more slowly without the tax credit.  It’s the story of the old bull, the young bull, and the herd of cows.  The young bull suggests to the old bull “Why don’t we run down the hill and have our way with one of them cows?!!!”  The old bull’s response of course: “Why don’t we walk down …and do em all.” The magnetic drive, battery powered automobile IS going to take over ALL personal transportation and potentially most commercial transportation as well.  It is because it is simply a more elegant and efficient way of accomplishing the task and as Musk has proven emphatically, it involves NO compromise or sacrifice AT ALL. Indeed it is a markedly IMPROVED EXPERIENCE to own one.  I make this as a flat statement of fact.  You don’t get to have an “opinion” on it.  It is demonstrably so. How soon that factoid promulgates among the vast body politic and is accultrated by it has been the sole mission of EVTV  for a decade and quite concurrent with the development of the Tesla.  The FIRST prototype of the Tesla Roadster to actually produce forward motion was in February 2008.  We drove our EVTV Porsche Speedster electric on Christmas day of 2008 and started our video series in May 2009.  We recognized IMMEDIATELY that if a 54 year old guy who knew nothing about cars, could build an electric car in three months working half days falling down drunk wearing yellow shoes, and it’s FIRST drive was at 94mph and it’s FIRST drive to empty was 110 miles in range, what we had here was a not precisely a technologyl problem.  But a potentially HUGE acculturation problem.  And so we enlisted and enabled 100,000 guys to go build their own and show it to their brother-in-law.  Take him for a ride so to speak. Musk focused on building the Tesla and scaling it to volume production.  I don’t know which was the easy part.  Either way, it’s kind of like crawling through 40 miles of piss, blood, pus, broken glass and razor blades on your way to being an overnight success story.  But the benefit to our world is worth every painful step. And with just a bit of persistence by a handful of people, the outcome is inevitable. So I think the early 2019 crash in Tesla sales is very real, although largely unrecognized.  A few analysts have picked up on this and for one time in a row have it correct.  But I had no idea how serious it was until last night’s Model Y unveil. I used to be famously in love with Whitney Houston and it is bare coincidence that my wife looks just like her.  An innocent kid out of a gospel singing church, she was lovely and sang indeed like an angel. No wonder, Whitney’s mother, the gospel-trained vocalist, CissyHouston, is an aunt of Dionne Warwick.  I watched Kevin Costners THE BODYGUARD a dozen times.  The last time I saw her on stage, she was staggering around slurring every word, forgetting the lyrics to songs she had sung a hundred times, and obviously both drunk and high on stage.  I was in tears. I very nearly was again last night watching Tesla’s Model Y Unveil.  Musk has taken a page from Steve Jobs in staging these “events”, part nightclub, part rock concert, and all celebration of Tesla by the cult, for product announcements. And despite a slight stutter, has always done a pretty masterful job of them. The Model Y event was scheduled for 8:00PM Pacific time, which is a bit bizarre to begin with.   That’s 10:00 PM here and past my bedtime.  But I hung in there drowsily with my Dr. Pepper and Camels patiently waiting until it FINALLY started 20 minutes late.  All that was missing was a heroine sloshed Whitney Houston. Musks stutter was indecipherable in places.  He was nervous and lost looking and emitted a bizarre halting mini history of Tesla rolling out each car in turn from the first prototype to the still non-existent new Roadster and Semi before finally rolling out the Model Y.  Which looked for all the world just like a Model 3 with a rear hatch, which the Model 3 kinda/sorta already has.  And then, they never showed the hatch.  But 7 people painfully climbed out of the Model 3/Y.  And so I guess it’s a crossover SUV? Excuse me, an SUV is supposed to have mudders, a higher ground clearance, and the ability to dance across rugged terrain while the music plays in the video commercials.  No, nobody actually uses them that way, but that’s the image and that’s what they are supposed to be.  The reaction from the crowd was initial applause, but the swell dampened instead of swelling and there was this ghostly silence afterwords with this wierd series of “wooh- woohs” and “yays” kind of heroically trying to carry it in the background.  LAME is the word that pops to mind. Fortunately, my east coast li’l buddy Galileo Russell was there for HyperChange TV and he’s always pumped up so tight and talking at 4x with his Tesla fanboyz enthusiasm that it is just infectious.  You must watch this. Again, I was almost in tears.  He tried to get access to the Press Lounge by pronouncing he was streaming live to 600 people with his cell phone.  As luck would have it, can you believe it was the one night when he wasn’t the only one there with a cell phone and they absolutely rudely shoved him away.  He wound up sitting on a parking lot curb outside with his buddy, heroically trying to deliver a “breakdown” of the event, and it looked like they were both going to break down right there. Indeed, I was shocked to hear him speaking at 1X speed. I had never heard him speak normally before.  I felt so bad I wanted to give him a hug and tell him it was going to be alright. BUT WAIT. It gets worse. Sean Mitchell got an invite and had a flight and a hotel reserved and wanted to be the OTHER guy there with a cell phone. Except all the Boeing 737 longs got grounded along with his flight. So he was heroically driving in his Tesla on the DAY of the event from Denver to Hawthorne. Don’t know yet what happened to Mr Mitchell as his last video was from Jean Nevada and he apparently did NOT make it to livestream the event. Nothing from him since his last update in Nevada. And the key part to the Jobs/Musk event model is that they always hold a little something in the back pocket.  The surprise announcement nobody knew was coming. It’s pat schtick at this point.  ANd actually everybody knows its coming and they love to speculate on what it’s going to be this time. You ALWAYS have the supersecret wow ’em announcement on top of the expected product unveil. Only Musk didn’t have one this time.  He politely thanked everyone for coming and ran from the room.  Houston, we have a problem here. Yes, the stock is down $20 this morning after.  And yes, Tesla could come perilously close to bankruptcy.  But it won’t.  Tesla sales are not going away.  But after a year of trying to get production to 5000 per week or even 7000 per week, the spectre of 7000 per month sales is indeed a disappointment. But it’s a setback, not a head shot.  He’s making all the right moves.  He’s introducing the car into Europe and China, although economies there are maudlin at best.  Still some latent demand there.  And the drop to $35000 is going to work very well.  And selling a car at the numbers he is remains remarkable in all respects.  He can raise capital if he needs to in order to survive. Plenty will fund further adventures. But don’t expect a big gush of Model Y orders such as enjoyed by the Model 3.  It’s an airpuffed Model 3. Those who stood in line to get their reservation in early in March of 2016 kind of got screwed. Their $35,000 car didn’t show up until the END of the delivery cycle of course and their early “position” meant absolutely nothing.  I mean less than nothing.  No reward for early support at all. So you can walk down the hill with the old bull on the Model Y “reservation”.   Indeed, while they WERE taking reservations online during the event, Musk didn’t even mention it. Why so lame? I might suggest the Osborne effect. That is where you announce a somewhat improved version of a currently selling product, that you cannot deliver for some time, but in the meantime kill sales of the current model, in this case Model 3, while people wait for the newer improved version. There is so much in common between the Model 3 and the Model Y, this could be a real concern and somewhat explain Musks tepid presentation. He may be all too keenly aware what this could do to Model 3 demand at a critical moment. The correct move would have been not to announce the Y until the end of the year. With the expiration of the tax cuts, the dramatic drop in unit sales, and the heroically lame Model Y rollout, I remain enormously optimistic.  If you liked Tesla stock at $350 you’re going to love it at $270.  And he really is making all the right moves.  The Maxwell acquistion will allow him to expand a battery moat that  is already unassailable.  The V3 Superchargers similarly on the charging network moat.  And I can tell you the Model 3 remains the best car I have ever driven to excess.  It’s a safety design phenomenon.  ANd at $35,000 an entirely new market of buyers opens up.  I still think it’s going to be an incredible year. I was personally a little wounded this week.  In this video we describe a CAN adapter for the ESP32 that is easy to install without tools at all and let’s you monitor the vehicle CAN bus on the Tesla Model 3. It has two CAN ports, and supports both WiFi and Bluetooth BLE and offers a great platform for smart phone and tablet apps to wirelessly access vehicle data in depth and ad nauseum. I even demonstrated a tiny application I whippedd out that lets you view battery data on a laptop screen. For me, it’s always about the batteries.   And a particular message on the vehicle bus, message ID 0x401 provides a series of messages giving the individual cell voltages you see here – all 96 of them.  It was curiously slow, with each message providing 3 voltages and the message timing was one message per second which seems slow to me compared to the 100ms 0x6F2 for the same thing on the Model S. But it begs the question how often do you really NEED an individual cell voltage to update?  So I thought it was cute.  Very small program.  Anyone can understand it.  And it does a useful thing. Click on the screen image and you can download a zip file with the source code and the ESP32CAN library in it. Speaking of useful things, we uploaded this video last Saturday and on Wednesday night I was pleasured to receive the latest software update from Tesla for the Model 3.  IT features a whoopi cushion easter egg you access by pressing the Tesla symbol and once activated, you can cause a stunningly accurate fart noise to emit from the passenger seat by simply pressing the left steering wheel control button unobtrusively.  The wife got in the car and we were soon in hysterics. Unfortunately, it came at a price.  The bastards deleted message 0X401 from the vehicle CAN bus ENTIRELY.  It’s just no longer there.  Gone.   Saturday  to Wednesday.  These over the air updates allow you to do some marvelous things very quickly don’t they? Remember, it is only paranoia if they are NOT out to get you.  I know you’re hurting Elon, but classless.  Just classless.  You’re a closet deplorable. We’ll find a way around it of course.  And Musk will find away around his problems as well.  Its all for the good if I can just talk Gali out of that whole suicide thing. But somebody needs to have a talk with Elon.  Closing stores. Not closing stores. Lowering prices.  Not lowering prices.  The stutter extends beyond his voice.  You’re crushing it big guy and these ARE the good old days.  The fight is a lot more fun than the win. Tesla’s strongest moat is the 250,000 new owners from last year.  As they show the car to friends family and foes alike the adoption curve will grow.  In fits and starts, but grow it will.  By summer this car will be on fire and again most likely unobtainium. Never mind that we are always one camel sneeze away from gasoline disaster anyway. Jack Rickard