I generally eschew conspiracy theories under the rubric that little explained by conspiracy cannot as well be explained by incompetence and that the occurrence of stupid is vastly more common than the occurrence of evil in the hearts and minds of men.
But it is also true that it can only be a conspiracy theory if there is NOT an underlying conspiracy. And it is only paranoia if they are NOT all out to get you.
In the case of Tesla, the car and the company, if you eliminate all other possible causes, what remains is the answer. And I have the increasingly uncomfortable feeling that not all is right with the world.
Let’s start with the car. I suppose it’s a matter of opinion, and I’m certainly given to having one, but what is emerging is a stunning lack of challenge to the premise that the Tesla, in all its variants, is the most advanced automobile ever designed and manufactured on purpose, and the best car ever made in all respects. Basically ALL voices and opinions to the contrary have simply disappeared from the scene – poof – gone.
I presume you are aware that the Model 3 won Detroit News Magazines 2018 Car of the Year award. As it happens, it was also named car of the year by Popular Mechanics March 2018 Automotive Excellence awards. AutoExpress Car of the Year 2019: Tesla Model 3
Automobile Magazine 2018 Design of the Year: Tesla Model 3.
The grandfather of ALL automotive magazines is MOTOR TREND. Motor Trend started publication in September 1949 with the Kurtis Sportscar on the cover. A car so beloved they later acquired one of the 16 ever built for display in their publishing offices.
This magazine has from 1949 existed by the hand of car lovers for car lovers and represents the largest collection of photographic automotive pornography ever assembled by man.
Also in 1949, they named their first CAR OF THE YEAR – THE 1949 CADILLAC SERIES 62 SEDANETTE.
In 2013 they rather shockingly named the Tesla Model S CAR OF THE YEAR with the astonishing admission that since 1949, there was NEVER A CAR LIKE THIS.
And in 2019 they have named the 2013 Tesla Model S as the ULTIMATE CAR OF THE YEAR – the top CAR OF THE YEAR in seven decades of publication and naming a car of the year every year.
It is refreshing and encouraging that in a world where all our long trusted television news shows, and institutions such as the Department of Justice, the State Department, and the Federal Bureau of Investigation have been exposed as deeply corrupt rotten to the core partisan organizations infested with dishonesty and corruption, to contemplate for just a moment the integrity of Motor Trend Magazine. This is an enterprise that derives almost all their income from printed advertisements carried in the publication. And overwhelmingly those ads are from the automotive industry touting their newest and greatest models. And they have awarded the ultimate car of the year of all cars of the year to a car and a company that has never in its history ever spent a dime on advertising of any kind, and whom if it DID advertise it would be highly unlikely to do so in a print magazine.
It is also arguably the SAFEST car ever built. There is actually a current imbroglio over this between Tesla and the National Highway Traffic Safety Administration. They test cars for safety in a number of categories and indeed assign a point score in each category. That then is translated to a “star” rating with 1 star being very minimal and 5 stars being the maximum that can be awarded. Not only did Tesla achieve a five star rating in ALL categories tested, but the point score was the highest ever achieved at NHTSA by any car.
Tesla proudly announced this fact to anyone who would listen. And NHTSA takes strong exception to this. Note that they don’t actually deny any of Tesla’s claims, but they are incensed that Tesla would divulge point scores or make any statements beyond the official number of stars awarded. This is some sort of governmental attempt to limit what you can SAY about a publicly funded and governmentally administered test.
So my claim is that Tesla makes the BEST automotive vehicle on the planet, barring none, in all respects, including SAFETY. It is just the best car ever built. And I would challenge anyone to demonstrate even partially that this is not so.
Now there are any number of reasons why people buy the cars they buy. But few actually take aim at being the personal owner of the SECOND best car in the world. It’s like going on ALLRECIPES.COM and searching out the SECOND BEST lasagna recipe. For what???
You might well make the fifth most popular lasagna recipe, because you are vegan and don’t want any meat in your lasagna. But you KNOW you aren’t getting the best.
Let’s take a look at Tesla’s car production figures. They just finished their LARGEST production quarter with some 87048 vehicles produced. They DELIVERED over 95,000 vehicles in the quarter, also a record, but that is because 8000ish vehicles produced in the first quarter were not delivered until the second.
Let’s take a look at a couple of things. Q2 2015, two years AFTER the Model S became WIDELY available, they produced 12807 vehicles. That’s 679% growth in four years or 170% per year.
Part of the “short thesis” is that Tesla cannot produce enough cars to meet demand. And a second part of the short thesis is that there won’t be demand for the cars they produce. What am I supposed to do with this? Two mutually exclusive and totally unlikely factoids issuing from the same potato disposer simultaneously.
Again, Tesla doesn’t advertise for a very cunning reason. It doesn’t work at all. The public trust in commercial messaging has now broached zero and has gone into negative numbers. Mike’s Pillow really was NOT the best night’s sleep I ever had. And basically 100% of the public discounts ALL of 100% of the commercial messaging it sees.
But we do still largely trust our friends and associates. And so if you see a Tesla, better get to ride in a friends Tesla, better yet he lets you DRIVE their Tesla, you want one. Period. I’ve never HEARD of anyone riding in a Tesla who did not immediately conclude that they wanted the car.
Could they afford the car? Did they need a car? Did they already have a car? All open and valid questions. But they did WANT THAT ONE on contact.
I have a couple of viewers who have advised me in the last week they were picking up a Model X and Model 3 respectively. They’ve known about Tesla for years. They have wanted a Tesla for years. They are both buying one this week.
So my claim from observation and intimate knowledge, is that Tesla can sell all they can make and they can do so at essentially any price they want. It is a growing demand and totally inelastic and agnostic. It grows by contact. The more they make and deliver, the more people have contact with the cars and the more demand is generated for all that they make.
How far does this extend? How LONG can you sustain 170% compounded growth?
You know, that SHOULD be the defining question. And I’m unusually pleased to note that it is not because it is one of those astonishing things that just tickle my sense of whimsey when I come across them.
EVTV has largely ceased to convert ICE cars to electric drive, which was long our only reason for life. It started in 2009 and while the Tesla Roadster was much discussed, not a single one had ever been actually delivered. If you wanted an electric car in the spring of 2009, you had to build one. There were ZERO models offered by the sum total of all automotive manufacturers worldwide. We defined, aided, abetted, and enabled the tinkerer/innovator stage of the adoption curve and noted numerous times that on achieving “early adopter” phase we were out of it.
I lied. The outcome was SO assured that by 2017 my mind, with the laser like focus and attention span of a four-year-old, just wandered away. This no longer requires my efforts. The outcome is assured.
And Tesla was largely the reason. Basically it costs between $20-40,000 to do a good build converting an ICE car to electric drive.
Tilt and tittle at that all you want, I did a lot of them and a lot of different ways and several were over $100k. Not really unusual among custom car enthusiasts and I expect those guys will be doing electric conversion show cars 50 years from now.
The Model 3 at $40k is a better car than I can do at $40k.
Worse, it is kind of a one sided launch. We covered the news of LOTS of different electric cars, and most notably HUNDREDS of VW press releases that never were actually cars. And the conclusion was that it just doesn’t matter. Porsche and BMW were the only ones that had the right stuff to compete with TEsla and they didn’t. All else didn’t matter and couldn’t matter. And yes, Porsche’s Taycan will launch this September 4th and they are going to sell 30,000 or 40,000 of them and THEY STILL WON’T MATTER.
Tesla just owns it. And at this point, the moats of its battery technology and costing, its Supercharger network, it’s online sales model, the Over the Air Software Updates, and much much more put it SO far out ahead, that the other manufacturers are still announcing the “coming Tesla killer” aimed at the 2013 Tesla Model S. Problem: It is 2019.
And so we basically got out of converting EV’s BEFORE we got to the early adopter stage. I lied. Because the outcome is not just assured, it is unstoppable.
But if all else fails, the commonly held marker for the BEGINNING of Everett Rogets adoption curve early adopter stage is 2.5% market penetration.
So where are we at? The current global market for automobiles is a little squishy on your definition of an automobile, but as a personal transportation device is currently widely regarded as 78 million units annually with about 15 million in the U.S.
The short thesis is that Tesla CANNOT POSSIBLY meet their projections of 360,000 units this year. Duh. That’s 0.0046 or 0.46%.
ALL electric cars from EVERYBODY all told don’t reach 1% of the market for cars. We aren’t even CLOSE to the “early adopter” stage.
I’m at the point where if you don’t have Tesla logo on your car you’re not electric and don’t matter. To the point that we are working furiously on things like an OBDII port adapter for the Model 3, or reverse engineering Tesla batteries, not EV batteries, TESLA batteries for solar energy storage. I have a half finished Cadillac Escalade conversion hanging in the air on a lift where it has hung for a year.
But the blue sky for Tesla is essentially UNLIMITED. They can sell all they make and make all they sell starting at 360,000 units and topping out at 78 million. They are 0.46% of a $2.3 TRILLION dollar market. And they appear to my biased eye to already own ALL of it.
It reminds me of Sandra Bullock and Sylvester Stallone, in the movie DEMOLITION MAN. In the future, ALL restaurants had consolidated under the brand name TACO BELL. If SOMEBODY doesn’t do SOMETHING pretty quickly, in the future ALL automobiles will be Tesla’s.
Hyperbole? I grow weak in the knees publicly repeating a prediction I have quietly been making for years. It is so unbelievable all I can harvest from it now is ridicule. But you are not going to BELIEVE the big names and huge corporations that face unavoidable and absolute bankruptcy and dismemberment, in the VERY NEAR future. No government can save them. Hundreds of thousands if not millions of jobs lost. Economic disruption and dislocation of unparalleled proportions. Office furniture available for 6 cents on the dollar. Not reorganization. But like Eastman Kodak. Sears. K-Mart. Companies that could not fail and are already gone. Picture GM, VW, Daimler. The biggest. The best.
Let’s take a look at the awl bidness. Currently we are at 100 million barrels of oil used each day worldwide – 20 million here in the U.S. At $55 per barrel, that’s about $5.5 billion per day. That’s another $2 TRILLION world market business. As the percentage of all automobiles that are electric grows, the demand for oil will diminish. Fully 50% of all oil goes to road transport. That is $2.75 billion per day. And for every day that future is delayed, is another $2.75 billion. It would be a $2.75 billion win if the adoption of the electric car could be forestalled for ONE DAY. The incremental growth of the automotive market is as I stated, inevitable and unstoppable. But for every day it is delayed, there are BILLIONS of dollars at stake. Literally the clock is running at $1,909,722 per minute on just that part of oil used by automobiles.
And it would be unlikely they would find that beneath them. Texaco bought the entire Ovonics nickel-metal hydride battery business from General Motors, with the patents of course. They allowed this battery chemistry for camera and laptop batteries, but specifically REFUSED to license it to anyone in larger sizes suitable for electric cars and that continued until the patents ran out. By then it didn’t matter, the lithium battery was ascendant. But it absolutely delayed the development of electric vehicles by many years.
Stanford Ovshinsky, inventor of this nickel-metal-hydride battery died in 2012 at the age of 89 still deeply embittered by what General Motors and Texaco, later acquired by Chevron, had done to his baby. It’s greatest potential use and the use Ovshinsky specifically developed it for was never realized. They simply bought it and shelved it.
Does that make sense? To spend hundreds of millions of dollars to acquire a promising technology and then shelve it and not worry AT ALL about selling any products from it? Just park it?
HOLD THAT THOUGHT.
Now let’s take a look at Tesla Short Interest. These are people who ostensibly SELL a stock they don’t own, and hold it until the price goes down, and then buy shares on the open market to pay back the stock they borrowed to sell in the first place. The concept is of course sell high and buy low. But kind of in reverse. You sell it before you own it. And you buy it when it is discovered that you don’t and you have to pay it back. But if you sell at $360 and the stock drops to $175, you get to buy back at less money and you keep the difference.
Let’s look at short interest in the stock of Tesla. First, this is not usual. This is not normal ALL stocks have people hedging and shorting. Even people LONG on a stock will hedge with some short bets. Indeed, at one point I had 50,000 shares of a company called Keynote Systems that were not really tradable. I had invested in the company long before it went public and so faced a “lockup” period where I couldn’t sell the shares. So I sold them “short against the box” before the expiry of the lockup period. When it expired, everybody was unlocked and a lot of the early investers sold the stock, plummeting it from $140 a share to $60. Netting me $80 per share AND I STILL OWNED the original 50,000 shares. Unfortunately, the stock never recovered and I think I later sold it out at about $40 per share.
Tesla hit a high of about $379 last year on rumors they were taking it private. I was astonished to see MULTIPLE news stories this month, CELEBRATING the news that Elon Musk had been caught in a lie regarding FUNDING SECURED on his move to privatize the company.
This is astonishing on several levels. First, if all true, WHY would we be seeing news stories a year later reminding us of something unimportant from a year ago. But second, it never was true in the FIRST round. It’s kind of like Trump’s Charlottsville massacre. It never was true AT ALL, but if you repeat it enough times enough people will be fooled to be effective?
The Saudi prince HEAD of a national investment fund DEVOTED to alternate energy investments is LOBBYING Elon Musk to take the company private. He is DEMANDING it. And he has a hundred billion to spend on the project. What part of “funding secured” am I missing here? If you have a Saudi Prince with $100 billion burning a hole in his pocket standing on your desk stomping his little Saudi foot insisting that you do it his way, how much more strain do you want to put on the term “secured”?
Tesla did not fail to take the company private because it didn’t have funding. Elon is not precisely a genius on the byzantine world of public stocks. A large percentage of Tesla investors are institutional “funds” and by their fund charters are severely limited on how much of their holdings can be illiquid. That means typically that no more than 10% of their holdings could be in private companies. And as Elon owned 25% of the company at the time, he couldn’t get the votes from these funds to do the deal. It would mean the funds had to get out, and they didn’t WANT out.
It wasn’t that he couldn’t get the FUNDING to do the deal. He couldn’t get 50% shareholder approval even with his 25%. Oh, he MIGHT have but a large segment would have voted against, including me, and it would have been an ugly fight. So the idea died. But it never died from lack of funding. So understand this ALL REPORTING ON THIS MATTER fully qualifies under the Trump definition of FAKE NEWS. That is not incorrect news. Or inaccurate news. FAKE NEWS means it is developed entirely against all known facts for nefarious and partisan reasons by design. And Musk’s “funding secured” is entirely FAKE NEWS. And if it were real news, why would they repeat it a year later? It only makes sense if it is FAKE NEWS, has a nefarious purpose, and so any opportunity to repeat it is to the original purpose – to mislead the public.
So Tesla reached $379. And had you been short, and held on, you would be delighted to learn that Tesla’s Q1 2019 featured a plunge in sales and a huge loss, after reporting a profit in Q4 previous. And indeed we see that of short holdings dropped from 26,268,029 to 24,783,245 as shorts cashed in. 1484784 shares were covered. They bought at the lower price and pocketed the savings.
I can get with that. It seems like an UNUSUAL number are betting things will get worse and hanging in there. Indeed an entirely unnatural number. But it is worse than that. Over the next two months, short interest actually ROSE to 37925793. What?
In May, the stock dipped to its lowest value in years, a great opportunity to cover and take your victory lap. Barely 400,000 shares did just that. But out of 37 million. Indeed they shorted AGAIN to 43,664,833. This is 34% of the tradable shares. Understand that NO company in the HISTORY of the stock market has ever carried 34% short sale. It’s not unusual. It just doesn’t happen at all.
In June, Tesla announced an all time high water market for auto deliveries of over 95,000 cars. And the shorts remaining got out. Well down to 41,459,952. Where it has held steady for over a month while Tesla crushes it on one announcement after another. They have now introduced a 3MWh 1.5Mw battery pack aimed directly at competing with natural gas peaker plants that basically cannot ever lose a cost comparison.
Shorts don’t behave this way. They sell high, buy low, and pocket the difference. That is if they are in it to make money. These shorts keep doubling down and they INCREASE their sales AS TESLA succeeds. At this point you have a company that is growing its production at an exponential rate, growing its revenues at an exponential rate, has the best product in the entire market, with unlimited demand in a market it owns outright just 0.46% of. It is the ultimate growth stock in the ultimate market with UNLIMITED BLUE SKY – room to grow.
Oh, and did I mention they can raise ANY amount of money they like, at any time, on three days notice? There last three calls for capital have taken less than a week and were oversubscribed in all cases. They raised MORE money than they asked for.
So we have exponential growth, into an unlimited market, with unlimited capital ready and waiting to invest. What kind of moron bets against that?
Well the concept of them BEING a moron implies the assumption they are trying to make money in the first place. What if they had NO desire to make money at all?
The entire 41 milion short interest represents an investment at the current $235 per share of $9.635 billion.
What if it’s not an investment at all? What if it’s an expense?
Elon Musk has since upped his stake to 38.6 million. Why? Did he need more shares? The cash was clogging up the vacuum cleaners in his house?
The company can’t BE bought. And Musk doesn’t want to die a bitter old man at 89. But the SEC CAN be bought apparently. And while they investigate, fulminate, and litigate Musk’s tweeting style, what starts to look like the largest stock manipulation in the history of the United States of America is going on as we speak. Is it POSSIBLE they don’t know about it? In a word, NO. It is not possible that a stock swindle of this proportion could be going on without the express and direct participation of the Securities and Exchange Commission charged by law with preventing it. Absolute corruption corrupts absolutely, to misquote a phrase.
The nickle metal-hydride battery was purchased in an asset purchase between two publicly traded corporations. Tesla is itself plublicly traded and Musk owns enough of it that purchasing it and dismembering it is just not conceptually feasible. But this level of stock manipulation, coupled with a funded and directed disinformation campaign, could conceivably drive it to failure.
And at $5.5 billion dollars per day, simply delaying the inevitable is very profitable on a total expense of $10 billion dollars. The payback period on that is less than two days.
I still see articles explaining why batteries feature more emissions than gasoline cars. All funded by industry groups and advocacies that one off, two off, or sometimes three off lead directly to oil companies. So paid for disinformation campaigns are an absolutely established mode of operation for these companies. Why would they hesitate at stock manipulation to foster fear, uncertainty, and doubt? And who in the auto industry would call them out on it? GM and Texaco conspired. There were no questions or unforeseens. It was a conspiracy to defeat the concept of electric cars.
I was shocked to learn that Jeffery Epstein had a regular contributor to Forbes Magazine submit a story on him so laudatory as to be creepy. What was shocking was not that he did it or that the writer agreed to do it, but how CHEAPLY he sold his soul. A couple grand goes a long way with today’s writers.
And so I am also a bit naive about online comments. I assume that they are all the true beliefs of the writers. So how does Seeking Alpha have 100% negative articles on Tesla with amazing collections of preposterous facts? There’s actually a very easy explanation. They get paid. And they get paid TRULY TRIVIAL amounts of money. A soul today goes for less than $5 per pound. You can’t buy ribeye for that.
$4.3 TRILLION combined annual market between autos and oil. A puny $10 billion in “expense” – not investment. And a 32% short interest suddenly makes all the sense in the world. There can’t be that many crackpots that will bet against a company with superb execution, unlimited capital, and unlimited opportunity growing on an exponential curve. But if you are just investing in their failure, with that kind of real markets at stake, the stock market looks like penny ante poker.
I have no interest in tracking the money or reading the chicken entrails. I already know how this comes out. The irony is double. It looks like the oil companies and automakers have no possibility of losing this one. In reality, they have no way to win it. One man has them totally surrounded, outnumbered, and outgunned.
Elon Musk.
Bite it bitch.
And bury me next to Seth Rich.
Jack Rickard
jack@evtv.mehttps://www.tesla.com/referral/marion1544
169 thoughts on “The Tesla Conspiracy… or Am I a Dead Whistleblower?”
Stanley A. Cloyd
Go drive the best Caddy, Jag, BMW, Lexis, etc they make. Jot down the MSRP. Then do what I did and test drive the Tesla model three. SOLD! I have to agree with the thoughts above. None justify their price as well as the Tesla offering. I absolutely hate the traditional abusive dealer buying experience. In a coal mine, a prison, a shipyard, or a platoon the average car salesman would get a near fatal ass-whoppin. Add to that the predilection of all traditional car dealerships goal of never letting go of your serviced vehicle for less that a cool $1,000 fee and you have a classic case of the parasite that sucked soo much blood out of the host that the host expired from anemia leaving a unsupported parasite looking for a new healthy (so far) host.
Thanks for the post, Jack. I bought my first shares of Tesla in the midst of the “funding secured” brouhaha. Why? Because I wanted a stake in Tesla even if it was private, maybe even especially if it was private! I am down, I don’t care as a paper loss is just that at all. I’ve seen your argument before, both on your video and also on Now You Know with Zack and Jessie. Makes sense to me.
But the reason for the thanks is…..I was getting worried. There hadn’t been a new EVTV video in two weeks and you’re a likable old cuss with interesting things to say and an interesting way of getting there [in your own good time]. And while there are 10 years of videos, the ones I like are the selfish solar ones. In fact, I’ve been busily planning my 10 kW Panasonic HIT with Enphase micro inverters and 30 kWh of Tesla battery backup, generally off grid and easily expandable to 20 kW as I convert from the idea of “limited resources” to “earthquakes happen and LA is due and it will be somewhat awful if I’m alive”. And thus “selfish solar”. Will you mind if I call it “self-supporting solar”? Lying to myself is easier with good alliteration. lol
Oh boy – Jack – Once again just blown away by your way with words. Being a model S owner and a modest TSLA investor (and an electrical engineer) you are confirming my thoughts about the future of transportation. Bravo.
I thoroughly enjoy reading A well written article I am intelligent writer who has No agenda ( that I know of).
Jack, once again you hit the nail on the head!
BTW – my homelink garage door activator works fine 99% of the time and I just love my Autopilot v1 – though I don’t trust it completely. Often women are just like that. My wife is a very good example of this.
I am fascinated by “summon” of which we were supposed to get “enhanced summon” last March. I use summon EVERY Day to get the Model 3 out of the garage. Well in theory. Sometimes it opens the door. Sometimes not. Sometimes it opens the door and comes out. Sometimes it doesn’t come out. Sometimes it opens the door and comes out and shuts the door. Sometimes it forgets to shut the door. AI? It’s like watching a mentally retarded puppy lurch around in the garage and yard. Hilarious, but also sad. It is now my favorite feature. I just can’t wait to see what it will come up with next.
Bottom line? Autonomous driving: FAIL. Support for self repairs? FAIL. All else – it’s the best car in the world.
Jack just want to say thank you.
I enjoy your informative videos and love your wit and intelligent sence of humor. You my friend are the man.!! FYI I am an early access recipiant and have been testing enhanced summon on my Model 3 for the last 6 months or so. I mostly test it in empty parking lots and have been using it daily to pick me up at the front door of my office. At first it exhibited a pretty convincing retarded puppy impersonation. After 4 FW revisions. I am pleased to say that during that time the feature has matured to the point that people who have seem the exhibition have all be blown away. The car has on multiple occasions, flawlessly backed out of my parking spot. Driven in the correct lane around a curved parking lot at normal speed. Slowed just before making the required turn into a circular entry drive in front on my office. And stops with the drivers door in front of me.All that said I am still apprehensive to try this while other cars are driving in the parking lot. So progress is being made.
As I grow into my elderly years I find myself with and abundance of wealth and riches. Unfortunately, none of Mr Musks cars cater to my needs. Even with onset of autonomous driving, his cars are a pain in the assembly to get in and out of. Not enough room flexibility once you get there. So, as far as I am concerned, the Tesla is still half a car. And so, I take my fanny, and my money, to other electric vehicle manufacturers that can meet those needs.
Robert, my wife and I felt the same way with Model S. In truth, any sporty low roofline car is that way. We did find the model X to be far better. And we love it.
Maybe the shift to SUVs simply reflects our aging population.
Agree. I am 68. A little difficult to get in and out of my model 3 (being obese does not help things). Have spoke to a few in my age group and older that have mentioned this exact factor being very important in their latest vehicle choice.
Oddly I share your pain. My Model S is actually painful to enter and exit. The Model 3 modestly less so. I think the Y will improve on this yet but I will probably hold out for the pickup. So I see it as a gradually improving situation where they originally considered drag coefficients more important that creature comfort. I think they will evolve that. 3 miles less range and two inches more headroom on the entry profile is my vote too.
My question is what can I as one of the little guys who works for a living do with this information, fascinating as it is? So far my little bit is owning 25 shares of Tesla and ordering a model 3 which I expect in 3-4 weeks. Yes, driving one makes one want their own. No question. What else can I do to both support the inevitable ascendancy of electric transportation and make a profit at the same time. That’s the trick isn’t it? BTW Jack, Love your writing. You actually say something with your words. That like common sense isn’t so common anymore…
You’re all over it. You’re doing it. My call for $1500 Tesla stock price by February 2023 stands. Indeed, at this point I think it will be proven comically conservative.
As a Tesla shareholder, I’m trying to grasp the implications of this. Shorts can sell at a loss to drive the price down and limit the amount of captial Tesla can raise.
It really is quite sad how willing some are to undermine a globally-loved American product built by American workers getting paid good wages. I understand not wanting to buy a stock, but to actively orchestrate its demise is whole different level.
This sent chills down my spine: “And at $5.5 billion dollars per day, simply delaying the inevitable is very profitable on a total expense of $10 billion dollars. The payback period on that is less than two days.”
You’re on point, Jack. The biggest plus in all of this? $TSLA is (currently) artificially discounted by a stupendous amount. Diligent investors will reap great rewards by seeking out the FACTS, rather than being spoon-fed their BELIEFS. Never have I seen such an OBVIOUSLY great buying opportunity.
Wow Jack. You really nailed it. I’m also an owner and investor and a mechanical engineer. My Tesla is the best automobile I’ve ever owned and I will never go back. More “fake news” women love Teslas.
I saved up 50k over 3 years, and went ahead and dumped all of it into TSLA at $250 average cost.
I also own a model 3 and I know how far Tesla is ahead of competition.
It is inevitable that Tesla will become a muti-trillion dollar company in a decade at this pace.
i have difficulty reading this knowing you’re a trumper, with trump notions popping up here and there in the article and people politely ignoring them and focus on the tesla talk… i cannot ignore it.
Jack, I’ve held the position in this essay, give or take, for a couple of years. But what confuse me is how few people are saying this, let alone shouting it from the rooftops, despite an outrageous percentage of the float being consistently shorted.
It’s as though ‘sensible’ Tesla backers are too scared to join the dots, to point out that the emperor has no clothes, lest they get called conspiratorial Elon fan boys.
A couple of whoppers here: Google will be surprised to hear advertising doesn’t work. More than one economist may object to banishing the elasticity effect.
A little bit of knowledge combined with delusions of competence. Sigh. You have at least managed self delusional condescension.
Google won’t be the LEAST bit surprised. But they would rather you not mention it to their advertisers…. you will be stunned to learn no doubt that their EXISTENCE is based on it. The credibility of the commercial message has been in huge and accelerating decline. And what this means is that for any given product, the number of “impressions” required to result in a sale has skyrocketed. Google has basically taken advertising from print media certainly, and largely even from Television, by delivering an ever larger number of impressions at an ever decreasing cost. But in the antibiotic effect, the American public simply becomes more skeptical of the commercial message. Initially, you could choose to “SKIP” the ads on YouTube. The time period before you can effectively do this has been lengthened, and now many ads you can’t skip at all. This is directly due to the measurable effect of the ads as essentially NO ONE will even watch them given a choice.
The theory was that they demographic metrics were SO good that you would only be presented ads about things you were already interested in. As this conflicts with the ambitions of the advertisers, it didn’t work out. And so they become increasingly dictatorial on the ad messages you must “suffer” to view the videos.
Price elasticity. You are trying to imply you know something of this when it is immediately apparent that you don’t. Elasticity is studied because it is variable and indeed one of the more troublesome variables in economic theory. But it is not only a variable, but it is strangely variable from product to product. And I think even a broadstroke take on Tesla would reveal to any competent person in this field that Tesla is in and of itself an outlier. It’s price elasticity is not only unexpected but among certain socio-economic groups actually inverts. Spikes in the curve if you will. You simply are oblivious to an obviously interesting case. My hyperbole in referring to this apparently exceeds your threshold in the willing suspension of disbelief.
I love your ideas and understanding of how human nature is continually enticed into bad cultures where the bad seem to prosper. However I am often inspired by good people who have prospered. We belong to a strange species that probably came to dominate other homonoid bipeds over a short geological period of several hundred thousand years.
Prof Richard Wrangham in “The Goodness Paradox” inspired my idea that the tribes in those times were dominated by the women who loved talking (did this evolve also?) as they ‘gathered’ whilst the guys were ‘hunting’. Naturally bad guys were shunned by female attention so the good guys ruled the gene pool. It seems mega civilizations diluted this rapid evolution of our way of thinking.
A three year trip to Mars would perhaps create a closed system similar to that open village system. Our brains would have to be occupied by creative and innovative thinking to survive and inspire those back on Earth.
Lately I have noticed a slight shift in mainstream coverage. Maybe I’m being optimistic, but it seems there’s a chance that the “hot take” on Tesla may soon be to say something positive. Goodness knows that’s easier to prove, even if lately it seems harder to believe by your average Joe. Still amazing to me what I hear from people whose only exposure to Tesla is from headlines and news blurbs about production issues, fires, and crashes. Even while the reality is better represented by my friend who drove my Model 3 and then sold his dream-car Porsche to buy a Tesla.
Jack, you nailed it again ! And better written that my own prose. As an even older than you pre-early adopter ( I built my first electric three-wheeler in 1977 ), I cannot be more in line with you.
My views on “the electric car, here and now” are now published and you are personally cited in the acknowledgment page at the end of the book! Keep publishing your “feet on the ground” videos and papers like this one.
Thank you for the excellent article Jack! I’ve followed your videos throughout the years and found them quite entertaining. Thank you for your insights and documented legacy of the rEVolution. I also went through a similar transition, where I thought EV conversion was going to be where it was at, but realized how much better, safer, and cheaper an EV could be when built from the ground up. It was of course also Tesla which made me realize this.
What you so elegantly explained in your article concerning a short conspiracy is spot on and exactly what I have said for some time as well. Its a drop in the bucket expense compared to the behemoth industries which are being disrupted and obsoleted. Its sad to see how much the main stream media has been consumed and bought by their corporate sponsors, to the point where it is hard to find anything which isn’t heavily misleading or biased (even beyond the subject of EVs). History will look back in disgust at all those who tried to stem the tide which is Tesla. If China ends up being a more willing engine for EV world domination, so be it, though I suspect Tesla will survive the hostile domestic storm here in the US and emerge triumphant as well. Human survival depends on it. Let the fossil fools have the world pried from their cold greasy hands, so that we and our children, and children’s children can be more healthy and live in a more beautiful world.
thanks so much Jack. Finally — an explanation of the whole damn thing that makes sense. Of course you’re right. Your math is irrefutable — The shorts aren’t worried about the burn at all. They are being paid to short the stock.
I remember last year waiting for Tesla to hit the 5000 cars per week milestone, which was said to indicate the arrival of not-bleeding-cash anymore. Much excitement. Plus astounding work — a whole new production line assembled in record time under a heavy duty “tent”.
But when they finally made 5000 — hooray! — the stock price FELL.
And the SEC BS. Jeez.
Yes. It makes sense now. Thank you.
I don’t expect you’ll get killed for explaining this. I am concerned about Elon. Putin and friends make a great deal of money from oil. Exxon Mobil needn’t hire a hit man. They can leave it to the experts.
However, I’m hoping Tesla has made it now to where eliminating EM is not worth it. Or maybe they recognize the benefits of Elon’s other work at SpaceX, Neuralink, etc to where slowing it down is enough.
That’s twice the short interest that you’re talking about.
It does happen. It is rare, but it does happen.
Don’t make the mistake I did and fall down through the current day equivalent of the Refco rathole. Isn’t it more logical to assume that short sellers are looking at the same information you are — that Tesla has barely yet penetrated the market, and then looked at the market cap of Tesla as compared to, oh, GM, and said “maybe one of these stocks has temporarily gotten ahead of itself.” Seems more likely to me, anyway.
And no, I’m not short the stock, neither do I own the stock, I’ve known about the company since before it was publicly acknowledged to exist, and I hope they succeed. Seriously. I hope they put GM out of business. I hope Tesla dances on their collective graves. My feelings about the car industry are public knowledge (though sadly, I can’t seem to find an active link on the web … alas). I’d own a Tesla if they’d just bloody well put in physical controls rather than rely on touch-screens. Feel free to call me old fashioned :shrug: I am. Guilty as charged. But yeah, there are reasons not to love the car. Glad you do, though.
@DavidNavas
You’re hesitating to buy a Tesla because it lacks “physical controls?” I’m astonished. It uses a touchscreen for media control. Many cars have now gone to touchscreens for HVAC control, so am I to understand that you don’t own a Tesla because you have to use a touchscreen to change a radio station or the source of your music? THAT would restrain you from owning a car with a total cost of ownership that’s less than a Camry when that car is, as Mr. Rickard describes it, the best car ever made?! Remember that there are physical controls for controlling volume, skipping songs or tracks, and for adjusting the temperature. One could use the touchscreen for navigation, but the Tesla voice control for setting nav destinations works perfectly. You said to feel free to call you old-fashioned, but methinks your problem involves a lot more than being old-fashioned.
God forbid someone have different priorities when deciding how to spend 5-6 figures of their own money! The groupthink is thick enough to cut with a knife.
Human interface design is important. In a moving bumping vehicle where your attention should be on the road, landing a finger on the correct pixel, or navigating menus, is a horrible interface. Knobs, levers and switches may be old-fashioned but they work fabulously well. You can locate, identify and operate them instantly with muscle memory and feel with hardly a thought even on a bumpy road where a touch screen becomes a maddening (and dangerous) distraction. The screen is great for moving maps, providing information, or maybe playing Donkey Kong. But for real-time piloting controls it’s not the best tool for the job. I think Tesla knows this but I think they also view human drivers as a necessary but temporary annoyance and for that reason aren’t all that interested in Human Factors Engineering.
Wow! Just wow! Thank you Jack Rickard for explaining the short stock concept in a way I can understand especially how it applies to the Tesla vs everyone story.
Interesting read. Although I really don’t understand how the huge short interest is such “money well spent” for the entrenched oil and gas interests. I also know that not all shorts are bought and paid for by these interests. I know some independent investors that are short TSLA. They seem genuinely convinced that it’s all a house of cards, that Elon is a fraud, that Tesla can never make a sustainable profit, that there is diminishing demand, and that I am an idiot in being long TSLA. These are “reasonable” people, but I can not reason with them. One says he bought his BMW M850i with profits from his last short bet. So, it’s not all directly tied to these conspiratorial entrenched interests. There are a lot of others along for the ride on the shorts train.
The cost of producing the Model 3 is too high for a mass market car.
The Model S/X now face competition and declining tax credits in the U.S. TSLA never made them profitably.
TSLA has to move the metal and will keep cutting prices to do so, Elon is distracted at best – certainly charismatic and funny but also a terrible micromanager and businessperson.
TSLA has a toxic balance sheet, insane valuation and haemoragges cash. The price cuts only make the losses more and more critical.
Look for a CEO in an office with old worn beige carpet who drives a Toyota, not one who lives in several mansions and flies a jet while preaching to the suckers/marks about moving to mars and how only he can save the planet.
As the con unwinds and the lies catch up to Elon, the shorts will increase their positions – with bagholders become increasingly desperate to sell we will have no need to cover.
That’s why we call ourselves $TSLAQ, after the bankruptcy we won’t need to.
Kia Kaha E Hoa
No this is not FUD or investment advice, do your own research and don’t drink the darn kool-aid.
So I’ve got one question. HOW MUCH did they pay you to spread this child-mind nonsense. You’re not very good at it, so it couldn’t have been much. Do my own research? Do you know who you are talking to and what I do for the last decade? I’m where they GO to do research.
1. The cost of producing the Model 3 is too high for a mass market car. What do you think a mass market car IS. And how much is the RIGHT cost to produce one. And if it costs to much, and is priced too high, why do people keep buying them? A child mind at work.
2. Jamming three partial child mind thoughts in one sentence implies a serious lack of Catholic education opportunity COMBINED with an assignment to the SHORT bus to public school. But it would be natural for Tesla to face competition. But they don’t have any. It is an ODDITY that they don’t, but they don’t now, and I’m seeing nothing on the horizon. Declining tax credits really don’t matter. Like AT ALL. I don’t think they were EVER a good idea. Tesla never made them profitably. Now just what do you know about “profitably” and what do you think that looks like if you are in the room with it and it is making “profitably” noises? Child-mind at work.
3. Move the metal and keep cutting prices. I hope so. That would be the natural, ordinary, and expected progression as they achieve scale. That’s the plan kiddo. The rest of this garbled sentence seems to be some aspersion/description of Elon Musk. Which would be like a house cat trying to describe the Cathedral at Notre Dame.
4. A TOXIC balance sheet, insane valuation, and some garbled word about cash. Losses? More and more critical? You’re really not very good at this. Child mind.
5. Look for a loser, instead of a winner, as a CEO. Child mind.
Again, since you are not very good at this I assume you have BUTKISS at risk. So what’s a soul go for these days? What are they paying you? Whatever it is, they are NOT getting their money’s worth.
Uhh. Jack. Take your meds dude. The cost of producing a Model 3 is more than the revenue they generate from selling a Model 3. That is a problem. A big big big problem.
Actually, it’s not a problem at all MYSELF. What it is is a heroic child mind view of “bidness” and specifically the automobile bidness.
To build cars in QUANTITY involves building a mile long “machine” to build cars that consists of indoor space, robotics, people, power, and a couple HUNDRED other things. Actually most of the machine is engineered “logistics” designing which parts occur where delivered by whom to what specifications. All of this comes together and what comes out the end is cars.
The “machine” runs between a BILLION and three BILLION to build. The actual materials and labor to build the car are usually negligible. My Escalade lists for $59k and all parts and labor run about $7,000. But you have to pay off the machine. And so the “margin” is a function of how many you build and sell. For the first 40,000 Escalades you don’t make ANYTHING. And every Escalade after that rains money. So how much you “make” in profit on a particular model is almost purely a function of how many you sold and your costs per car and profit per car are similarly entirely swamped by the number made and sold.
Last I heard, the “margin” on the Model 3 had fallen to about 19%. But with increasing sales, they think it will be back in the 25% range.
So what you see as a big big problem is really just a reallly big big level of ignorance and a gross misunderstanding of the business. You see no auto executive thinks anything about the costs to build a car against the price of the car. They think entirely in terms of the number of sales necessary to break into profit at all. And success is entirely a function of being able to precisely predict sales for a model that doesn’t exist, in a market four or five years from now. By and large they are actually pretty good at it. It just doesn’t work at all in the manner most people think it does. Huge fixed cost. Small marginal costs. And success means predicting future sales.
This is what extant OEMs were in disbelief that a newcomer could enter the business at all. It is a horrendously complex business with enormous capital requirements, and how could anyone predict numbers on a completely different KIND of car – an EV. The TRUE shorts think they have a sure bet on the Tucker/DeLorean effect. Huge hype and enthusiasm, but in the end failed car companies because of the unavoidable cruelties of the car business.
The advantages of an EV to the end consumer are just overwhelming. Nobody “goes back”. It’s a one way trip. After EV ownership, ICE vehicles make no sense at all. But only EV owners know this. And that tribal knowledge is spreading exponentially. Tesla is the best version available. And their numbers will simply continue to climb. The more Teslas exist, the more demand increases. Exponentially.
But I have my Dr. Pepper right here and I’m on dose.
And once the Model Y is out, that shares so many components with the Model 3, they production costs will be lowered again. This the same thing big auto does, shares components to reduce costs. And not just between their own models, but even between manufacturers.
Paul
parrhesiastes1 can be summed up thus: he cannot afford a Tesla and is accordingly butthurt.
This is so very true. It hit me when I went in big time on TSLA, when Elon announced going private at $4.20. Big Oil got me again and the stock was doing the opposite of logic. I have been holding ever since and, hopefully, some time Big Oil will break just like Coal did.
The shortselling community is not selling FUD – we get pissed on by bagholders for telling the truth. Not just a little we are subjected to real abuse, frivolous lawsuits, personal attacks – we get our employers called and our livelihoods threatened.
Ask yourself, is this what an honest company does?
A real business wastes zero time with the shorts and the upper echelon of the short selling community wastes zero time with real businesses.
Boohoo…. Did Elon also steal your lunch money in school? You are spreading FUD, as opposed to the facts mentioned in this article. Keep shorting, time will tell.
This is the “Luddite” view. Disruptive industries create new and different jobs. Already, the renewable energy sector is creating MORE jobs and opportunities than the fossil fuel industry.
Many of these “jobs” have yet to be invented (the technology underpinning them does not exist yet).
Consider the internet…
30 years ago, if a young child had said “One day I want to become a web master”.
What the hell was that – 30 years ago? Something to do with research on spiders? Today (2019), many MILLIONS of people are doing well-paid jobs that the internet spawned.
“I intend to make a living as an Internet Vlogger” said another child… He was told to quietly pay attention to his schoolwork and told not to speak rubbish…
His little sister was sent up to her bedroom for a few hours after she had said “I want to be a smartphone App Developer…”
parrhesiastes1, haha. All you have are baseless euphemisms. There is no real short selling community, any group calling themselves that is peanuts compared to the large interests heavily shorting the stock. Your small time shorts don’t matter at all. You are too stupid to realize you are playing in a game you have no influence on. It is a stupid game because the big players with the control don’t care about making money shorting, so good luck playing a game no one credible expects to actually win. Shorting tesla is now just a delay, tesla has done too good to be taken down by it. They can raise all the money they want. That is just a fact. If those same forces move against tesla competitors, that would just help tesla continue to be a monopoly on EVs.
Even if tesla screwed up and couldn’t survive, any number of auto companies or suppliers would try to buy them and throw a lot of money at it. The chance your short pays off is low, but if you shorted under 200, you are losing money no matter what. No sane person would have opened short positions at 170 in high volumes, yet we saw it happening. Proper shorting is done when the price is high, not rock bottom.
When it comes down to it, people like you have a mental illness. Teslaq is a mentally ill person. People like you are fanboys for the actual short interests and you don’t even realize it.
“That’s 679% growth in four years or 170% per year”
No it’s not. 170% a years for four years makes 835%. These don’t add, they multiply. Because the 170% of the first year also grow the second years, and both grow on the third year, and so on.
In this case, it’s a bit more than 161% a year. Still very a nice growth.
Eloquent, Factual and Understandable. fearing a future void of truth is reasonable. Speaking truth to protect the future is mandatory. All that is necessary for evil to triumph is for good men to do nothing. Our words and actions will determine who is victorious in this.
Keep up the good fight.
There is nothing “flawless” about the Tesla Model 3. I have made high comedy and continued criticism of both it and the Tesla Corporation for many years. Summon and autonomous driving is comic. Getting in and out of the car is a pain, albeit slightly better than the Model S. The suspension is stiff and jarring. I have a LIST of this stuff.
At the same time, I have completely disassembled the car, examined all the pieces, and as best I can tell, this is the most advanced technology in automobile land and the batteries particularly are from another planet and time period.
It IS the best car ever built. And focusing on the minor discrepancies in the first iteration of a new car model is not really very useful, beyond pointing out some areas to Elon Musk et al for possible improvement.
My biggest complaint is not service, but lack of support for owner maintenance and right to repair. It is driving insurance through the roof and does not encourage the Tesla cult – indeed it pours water on it to no good purpose I can divine.
And no, it isn’t me David. I know this because IT improves, with no change to me, my house, my wireless, or my garage. I’m pleased to report that I can now faithfully summon my steed from the garage. It will back up a few feet, open the garage door, and then back up the remainder of 20 full feet, and then close the garage door. And it will do this fully 50% of the time. That’s dramatically up from 10% just six months ago. With no changes to anything except the software in the car through OTA updates.
There was recently a news story where some people told a story that Model 3 cars are routinely being made with missing bolts or with electrical tape holding together broken plastic parts.
What I found interesting is that it was 100% hearsay (aside from two photographs, provided by the “whistleblowers” themselves). Presumably if this is really a problem, there are thousands of Model 3 owners out there who could identify that their car has the slapdash assembly work, and sell photos to the news services (while shaming Tesla into fixing their Model 3 cars to proper quality). I am not aware of even a single Model 3 owner stepping forward and saying “Yes, the whistleblowers’ story is true and I can prove it, look at my car.”
Presumably when you have thousands of people working on production lines, some of them are better than others, and thus some of them are careless or sloppy or too lazy to do their jobs properly. But I recently read some speculation that some are in fact moles, trying to get away with as much subtle sabotage as possible.
I’ll end by quoting Heinlein’s Razor: “Don’t attribute to malice what is adequately explained by stupidity. But don’t completely rule out malice, either.”
Jack
Can the public get a petition to force Congress to investigate the SEC principles?
I wrote several articles on this at seeking alpha, hard to get positive Tesla articles published
But you are right
SEC heads need to roll
We needn’t DO anything about the SEC. We don’t really even need to DO anything about oil company shorts. Sunshine is by itself not just the ultimate power source, but the ultimate disinfectant as well. As this leaks out and becomes public knowledge, you will find that all the creatures who scurry about in dark places behind the view of the world, will scurry away to other dark places. They do not like sunshine.
In this case, that scurry rather turns into a short squeeze. Don’t miss it. With just the right amount of play, you can fund a Tesla from Tesla stock and call options.
China… In just one word.
China has no oil. China leads the world in EV adoption and renewable energy tech and manufacturing.
China is already the “lifeblood” of most US and European car makers. Without China, most traditional automakers are vulnerable. Many are starting to see that China is not interested in ICE cars anymore.
China laid out the red carpet for Elon Musk and Tesla. In less time than it takes to say “WTF!”, the Chinese have built (the first of many) Tesla Gigafactories.
China will extract as much knowledge and expertise as it can from the Tesla business model, and will happily fund it if necessary – without any limits. The Tesla “method” will be China’s benchmark for its entire automotive AND energy industries.
This does not stop at “cars”… China will extrapolate this methodology into all areas of renewable energy – and has been doing so, brutally and aggressively, for almost 20 years now.
China is poised to become the “OPEC” of renewable energy ALONG WITH being the world’s major supplier of products that CONSUME that energy.
China will soon control not only the equipment that facilitates PRODUCTION of renewable energy, but also its CONSUMPTION, by way of most electrically-powered “stuff”.
The death of American Capitalism (with all its corruption, greed and harmfulness) will be swift and brutal.
It will happen within the next ten years.
Your timeline is suspect. But your concept is all too sound. I said years ago that I feared we would all wind up working for the Chinese. But later amended that to the fear that they would simply hire Brazillians and Mexicans instead and we would be out of a job entirely.
Bill Gates is forced to go to China to develop his gen4 nuclear plant. Elon Musk is building in Shanghai. And so it goes.
Jack… you are perhaps the world’s most important “Industrial Philosopher”. Your decades of experience in a highly specialised industry is now being devoted to extremely intelligent and well-reasoned analysis and predictions. Please, please… get all of this into a book. It will be a best-seller.
And what would I do with that? I say what I say when I say it. And I did it all through the development of the PC, and all through the development of the Internet, and all through the development of the EV, and now I’m doing it through the development of solar energy storage. And for those with an ear to hear, hear – and profit thereby.
People write books these days to monetize things. Every talking head on TV now has a book out and most of the savvy YouTubers do as well. I don’t need the money. In fact, I quit needing money at age 33 when I didn’t have any, and decided I didn’t want any. And its been raining money ever since. The shit clogs up the vacuum cleaners and gets into everything. Nasty stuff.
If you want to support me, go to our online store and buy something. And while you are there, go buy something else that works with it. And after you put them together, do something with it. And make us something new and better. And keep doing that. We are here to inspire and enable people to tinker and innovate and invent and change the world,
We have almost no interest in entertaining copper foil helmets and morons who prattle UNCEASINGLY about their OPINIONS and their BELIEFS in some sort of whacked value system where they think any of that has any importance at all. . We seek “a few good men” to go and change the world,.. This is FULLY outlined in our FIRST video in May 17, 2009. And NOTHING HAS CHANGED. Go review it.
I’ve gotten older. The breathing is heavier. The steps are slower. The hair is grayer. But the mission is the same. And a few more miles before I sleep apparently I am called.
Elon Musk is changing the world in just this manner. Working 100 hour weeks to help perfect God’s creation.
Elon Musk and friends must remain in control. I believe the current shareholder rights are structured to prevent a hostile takeover using oil money (thankfully).
Merging with Apple would likely remove that control. Therefore it won’t happen. Tesla can get all the money it needs without accessing Apple’s coffers.
My pet theory is that the Saudi attempt to provide secured funding to take Tesla private was a potential threat. Maybe the infamous tweet was designed to scare off the Saudi attempt to buy up Tesla stock (whether planned or not, that is what happened).
The fact that short interest and FUD/Smear/SEC is so intense is because the threat from Tesla is now much more real. It shows Big Oil now sees Tesla as succeeding, whereas before they were a pin prick. The fact that they have tried and are trying so hard, but not succeeding is heartening. Money cannot always buy you extended life or remove threats.
The more cars Tesla sells the greater the momentum. Tesla owners will drive public opinion.
The disruption is now well underway – onto my second bag of popcorn.
Actually I agree that the Saudi pressure to go private may have been a very dangerous idea to entertain. Musk has lost control of companies before. The public markets may be his greatest ally going forward.
Apple is a special kind of case and as you know I have advocated this merger for about seven years now. Mutual needs. Apple is blue sky starved but cash rich. Tesla is swimming in blue sky, but with an insatiable appetite for cash. More to the point, Apple needs a visionary leader. On the demise of Steve Jobs, they have been without one. And so you see, this would work much better WITH Musk in control. Perhaps Tesla should acquire Apple….
Ironically Apple is poised to compete with Tesla. And I didn’t mean to imply Tesla would not have competition. I meant it won’t be from any of the standard players you think of now. Apple, Google, Amazon, even Dyson Vacuum cleaners are all potential participants. And quietly, Apple is getting much closer than you might think to an introduction.
Greate article. When Tesla become profitable, do you see Tesla declare dididents?
It would be nice to see that big oil pays money directly to 34% of Tesla share holders.
Lets make the expense of big oil higher !!!
Technology companies and growth companies are a special case. You don’t pay dividends and indeed you don’t want to EVER make any particular money. Profits are anathema and a sure sign of corporate mismanagement. Profits reportable as income, and dividends, are a confession that management no longer knows where to put money profitably.
AS LONG AS you can maintain growth, ALL revenues should be plowed directly into funding MORE growth. Properly managed, you still can’t hit zero. And a slight positive balance is nice. A slight negative is nothing to worry about. But you certainly don’t make profits, pay taxes on them, or remit them to shareholders. That means you have no place left to invest.
And so a company such as Apple, run by an accountant (Tim Cooke) reaching market saturation in smart phones and tablets, winds up piling up 250 BILLION in cash, declaring a dividend, instituting a stock buy back program, etc. etc. – all ADMISSIONS that it just doesn’t know what to do with the money as they have no place to properly put it to work.
We would hope Tesla NEVER HAS A PROFITABLE QUARTER while I live. That means they wills still be growing, innovating and imagining future products that will MAKE YOUR LIFE BETTER. And of course they will continue to grow. Ultimately, at Tesla’s current growth rate, their cars will require the entire mass of the solar system within just a few years. So that isn’t happening. But it can grow for a LONG ways in a 78 million unit market. And it is of course hyperbole to consider they will subsume all of it. In integral calculus, you define the limits of the variables and assume a rate of change to calculate the area under the curve. ie, they are at 0.46% growing at 150% per year and they can’t go BEYOND 78 million units. Unless it is also a growing market.
As to the adoption curve. 2.5% is classically the beginning of the early adoption phase. I say classically because each technology has a slightly different curve depending on the cost advantages and benefits offered.
The TIPPING point is NOT the beginning of the early adopter phase. It is generally and roughly defined as 10% market penetration.
Exponential growth BEGINS at the tipping point. So if you think Tesla HAS been growing, or that EV adoption has been growing, you ain’t seen nothing yet.
I often refer to this as the Friday/Tuesday phenomenon, On Friday it seems you can’t give em away, and on the following Tuesday nobody can get one because they are all sold out for six months. When that occurs is the defining question.
My questions may have been covered elsewhere but the answers would bear repeating anyway.
“Hypothetically” a company could create a shell where investments would be made at “arm’s length” or beyond in order to avoid financial responsibility. Such a shell would then by various means engage in short selling shares, with the sole purpose of flooding the market with non-existing shares; then declare bankruptcy
What happens to the value of Tesla shares, to Tesla corporation, to unaware buyers of vapor shares.
Who carries the burden and who carries the responsibility to “balance the books?”
Is this a plausible scenario, or are safeguards in place to reliably prevent this type of manipulation.
Well it all depends on the level of play here. But basically you have to have an account somewhere and it has to have a balance. And you will find that the “house” never loses. There is no shortfall. If you short the stock, the proceeds of the stock go into the account, but you cannot access that amount until the shares are covered. And indeed, if you wind up upside down, you have to have enough CASH on the books to cover the shortfall or be within your allowed “margin” which on Tesla stock is basically 0.
Part of the short squeeze is that in theory left from days of yore, if the stock goes UP beyond what you are permitted, you get what’s termed a margin call. That means they “call”you and give you the choice between ponying up more cash to cover, or sell part of the stock or shortage. In today’s computer markets, a margin call really means instantaneous liquidation. Your “margin call” is really a text message that the stock was covered, you lost $49000, and it was deducted from your cash reserve in your account.
Ironically, these triggers happen so fast, you can find yourself in the really goofy position of a spike triggered the sale, the stock then plummeted, and you would be REALLY in the money, except for the forced sale which took out your position.
At a larger scale, like oil companies and auto companies, you go to a Jeffrey Chanos and say “Hey Jeff” we have some funds we would like to put under management. And Jeff says “How Much?” And you say, “Well let’s start with $3 BILL”. And Jeff replies “Would you believe I AM a certified money manager? As it so happens? And what are your “investment goals” with this $5 BILL? Let’s talk”. $5BILL? Why yes we were actually thinking $5 BILL. Did we say $3? ”
And would you believe, that whatever the investment goals are, just HAPPEN to be exactly how Mr. CHanos rides anyway. What a stroke for luck! A marriage made in heaven….what are the chances…..
Yah. It’ll take a week or two. But I think I can fix it. Mainstream has threatened before. Kind of a hazard of the game I play. But I’m pretty good at getting it to go away.
No, trying to sue the SEC is like trying to sue the government, it’s pennies on the dollar for the SEC to crack the whip on Tesla, but nobody and I mean NOBODY cracks the whip on them. But say you do sue them, at best, the dude running it gets dumped over “mismanagement” and you “might” get a “mea culpa” from the next jackass down the ladder. But other than that, you’re not gonna “win” anything from them, cause they “own” the game!
“TESLA batteries for solar energy storage.” Tesla Battery Packs secondary market for energy storage will be big, It will open up all kinds of off-grid possibilities. All we need is an interface to use them safely. Jack is leading the way. Soon living off the Plantation with energy independence will be achievable. Thank You Jack!
Superb article Jack.
My math shows the following numbers.
1 model3 replaces (20.000km/y, 6L/100 km) 1200L fuel/y
1 m3 robotaxi replaces 6000L fuel/y.
1 semi replaces 40000L fuel/y.
And the bomb will be the robosemi with 200.000L fuel/y.
Once more, I agree with Jack. And putting my word where my mouth is (and vice-versa), I published my opinion in “The electric car, here and now”, a book available at all good bookstores. And if you check the acknowledgements page at the end, you will find EVTV and Jack Rickard !
Great article Jack! One thing I don’t understand is if $10B is a drop in the bucket for big awl why would they ever cover their short positions? Wouldn’t they just continue to double down and further attempt to delay the inevitable?
I don’t understand. How is the short interest relevant to TESLAs performance when you specifically acknowledge that “they can raise ANY amount of money they like, at any time, on three days notice”?
The larger the short interest the more the price has been held or forced down by these sellers. This lower share price then means less money is raised that otherwise could have been raised. Any follow-on offering (more shares sold) is effectively limited by the number of existing shares outstanding because existing shares are diluted with the issuance of additional shares. So, the lower the share price the more shares must be offered to cover the shortfall which means existing shares become less valuable due to the dilution. It’s a double whammy. A lower share price also hurts financially as the shares are often used in place of currency for compensation or purchases. Now it’s a triple-whammy
However, the flip side is that these shorts are now mandatory buyers of shares as they must cover at some point. If the price starts up and the sellers don’t have bottomless pockets they must buy to cover. This short covering (buying) raises the price more which leads to more short covering. Continuing the cycle is called a short squeeze when the price rockets higher to flush these guys out. When short the holders must be careful because there is no limit to the losses that can accrue.
Only shares held in margin accounts can be shorted. If shares are held in certificate form they can not be shorted.
Watched some of the video, Jack, and the theory sure seems plausible.
You probably made the video prior to the news about Walmart roof fires and Tesla solar.
Obviously, the Tesla solar is not directly related to the Tesla car business, but still…
Would be interested in your thoughts on this topic.
I don’t have any. The Walmart deal was entirely a product of Solar City. Tesla acquires the company and inherits the mess.
I can tell you that Walmart is very very difficult for their suppliers to deal with and there is more to this story than you are quite getting from the news coverage.
It is a seriously uninteresting topic for me personally. And we’re very involved with solar at the moment. This is decades old technology and installation and most probably the entire issue is installation. So I only glanced at the news reports and dismissed them mostly in the first couple of paragraphs. It won’t have any impact on Tesla now or in the future in any germane way I can imagine. But I really just struggle to even have an opinion or reaction. Non-event. And uninteresting if it were an event.
I get the feeling that what you are saying is just the tip of the iceberg. Big oil and big auto are capable much more. I think that they are actually buying tesla shares and selling them at a lost to manipulate the prices lower. It’s like you said, it’s just an expense to them. What are your thoughts?
I’ve suspected events have been going on exactly as you described in this article. Glad to see you take the time to put into words these events in a coherent manner. My suspicion is that IF the oil companies and their ilk succeed in destroying Tesla(I feel it’s an unlikely but possible scenario), most of the EV offerings from the big automakers that exist will also disappear at least as quickly as EVs entered the market. Tesla succeeded in bringing to market products that were comparable to what that the major automakers could have brought to the market in the 1990s, but whom instead deliberately chose not to. Sure, the technology wasn’t as good in the 1990s as it was when Tesla entered the market, but it was good enough that we could have gotten 150+ mile ranges at freeway speeds with it when sufficient attention was paid to vehicle efficiency. Cars like the NiMH-equipped Solectria Sunrise and GM EV1 demonstrate this.
And his name was Seth Rich. Now he’s dead, and Assange is in prison for the crime of journalism, while the shill, bug-eyed, ankle-biting-barking bitch of a diminutive but ever ferocious Hilldabeast walks free as she gets thrown more treats by Goldman Sachs for barking some more. The more that people talk about it, the less that can be done to silence them.
Oh, that’s easy. They don’t feature any emissions at all. Gas cars do.
Try this at home, go attempt to suck start your Oldsmobile through the tailpipe. Just set the ignition switch to ON not start, and then wrap your lips around the tailpipe, and then inhale until the engine turns over just enough to start. But keep inhaling until you are certain it is running smoothly.
Now go repeat the experiment on the Tesla. This is kind of a fail right off the get go. You will struggle to FIND the tailpipe. That’s because it is cunningly hidden in the steering wheel beneath the airbag. Remove the airbag assembly and wrap your lips around the center hole. Then place your foot on the brake and tap the control bar up or down just to the right of the steering wheel.
You do not have to rely on me or others. This is how you can demonstrate to YOUR OWN SATISFACTION that battery cars do not feature more emissions than gasoline cars. And I hope your recovery from the Oldsmobile portion of the test is speedy.
Fear not Sara Byrd. The inescapable truth is that if anyone finds the article too long and tedious to read, they are genetically predisposed to not get anything useful from it anyway. And there is nothing you or I can do about that. It just is.
I learned long ago to speak to those with an ear to hear. And to purposely be totally oblivious to the rest. You can view that as arrogance, vanity, or intense delusion at your pleasure and at whatever level of rationalization makes you comfortable. I view it as a practical matter in changing what I can, accepting what I can’t, and being sagely aware of the difference.
I have a certain thought process and study interesting things intensely. It has allowed me eggregious and undeserved success and blessings in life that actually are so ridiculously over the top as to drive certain feelings of guilt watching everyone else suffer so. And so I am willing to share. For those with an ear to hear. But I am not precisely RESPONSIBLE for their wretched existence. I didn’t cause it. My blessings are in no way derived from it.
SO I am actually QUITE pleased you found it interesting and potentially useful. But it just isn’t for everyone. And I’m all good with all of that.
I know that “you can’t hold back history,” and I have agreed that Tesla is the best car ever made. I’ve had my Model S for going on three years. But I’d like to hear a further explanation of why Big Awl can’t beat Tesla into failure. In spite of “history,” it still seems like they have the resources to beat Elon if they choose to go all in. Why so you think that’s not the case?
The concept is being on the wrong side of history. And you are kind of the reason. Every time they sell a Tesla, you get 10 new people that know enough about it to want one. As I DID say in the article, there are lots of reasons NOT to immediately buy one. But they all want one. And so it’s like the old shampoo commercial, and she gets two people and they get two people and so on. And to continue the water closet analogy, you can’t put the toothpaste back in the tube.
I usually refer to this as “a heroic act of gravity defiance.” And they are always doomed to failure. It’s a function of deeply ingrained DNA level species differentiation. We just work that way.
And note the immense power of this. Of 10 who get to ride in a Tesla, four should want one, four should definitely NOT want one, and two should be uncertain. That’s the standard distribution. My claim is ALL 10 want one. Every time. I’ve never heard of anybody actually riding one, and certainly not driving one, who didn’t want the car. And that is unheard of. It doesn’t happen ever. But I’ve never heard of a single occurrence of but in seat with a negative reaction.
The “tipping point” is actually some off in the distance. At about 10% market penetration, electric cars demand will increase suddenly and even explosively. You’ll be on a waiting list for two years to get one. Kind of like being able to get a first iPhone but worse because the resources to ramp production are much greater.
So a delaying action is the best they can hope for. If they can forestall the 10% point by a month, it’s some portion of $82.5 billion. Now clearly that isn’t 100% of the market, and clearly this year’s new cars are but a small portion of the total number of cars in operation. We sell 80 million cars per year but there are 1.5 billion cars. So this is a simple calculation to make the point that the scale of the mountain of gigaducats involved, makes the $10 billion short position penny ante and lost in the rounding errors. Correct my mathematics as you like, it still comes out the same way.
I would suggest as well, that the slowness of VW et al in introducing serious contenders is kind of based on, let’s send a soldier out front and see if he gets killed first. They’re all watching Tesla with intense interest that probably rises to the occasion of high anxiety. If Tesla were to fail, they could slow march and scale back their EV plans pretty easily. If Tesla wins, they truly believe their immense machine and decades of experience will allow them to convert and beat Tesla anyway. That smug arrogance is in almost all cases fatal to legacy technology large corporations. It’s just unheard of for them to survive it in anything resembling present form. I guess ATT DID survive after a fashion. But it’s a very different remnant of what it was. They kept the name basically. But the landline phone company is long gone. Picture VW proudly proclaiming an august history, but only selling car insurance in the future. With 1/500th of the headcount.
Jack, wouldn’t you assume that long ago the Chinese completed the reverse engineering of all of Tesla’s motor and battery technology? Knowing that they’ll never truly stop their flagrant intellectual property theft, what is to prevent them from producing a 模特3 for the masses (sans FSD at first) at half the price of a real Tesla M3?
Nothing. That is precisely Tesla’s aim, to get as many electric cars out into the wild as is humanly possible. They basically don’t care if you copy them.
We’ve long known about Tesla’s open patents and Elon’s stated goal of entering the car business mainly to disrupt and transform it. HOWEVER, it’s impossible for me to believe that Tesla, in it’s massive battle with the short-sellers, is forgoing dividends in order, among other things to build Gigafactory 3 AND “doesn’t care” if the technology is ripped off to a degree sufficient to render that new factory useless. I’m pretty sure it’s not true that they don’t care if the Chinese put them out of the Asian market by stealing their design and manufacturing methods.
I think Tesla only cares about its FSD. Definitely Tesla does not want to share their Full Self Driving knowledge.
FSD is a bigger deal, than EVs. The electric car manufacturing becomes a “commodity” soon, not big deal.
Also, I think Tesla is confident that they will be ahead of others with new innovations as times goes on …
If you don’t stand still and keep going forward with constant improvements, other can not catch up to you, others become a motivation to keep moving on… If you stop you are deserved to be over run …
Flagrant intellectual property theft is a self aggrandizing meme narrative bringing great comfort to the American public. It inadequately describes a much larger and more complicated conflict. It is not so much that China is STEALING anything. We are actually SENDING them the designs. We electronically transfer all data necessary to manufacture our circuit boards to China quite willingly because they will produce the finished product for 1/5 the cost.
China doesn’t HAVE patent and copyright protection. They don’t HAVE such laws. Indeed they don’t have the CONCEPT of such things. The very idea does not make any sense to the average Chinese at all. How can you OWN an idea? Or a design for that matter? What are those clazy Amellicans on about anyway? What “intellectual” property????
And so Trump et al are trying to IMPOSE copyright and patent protection onto a country that doesn’t even value the concept.
And as any Chinese will readily admit, they do not have our inventive tendency. They can copy things. They can produce them very cleverly. But true invention or innovation is not as in their nature as it is here. The concept of the garage tinkerer is just not strong there. But incremental improvement is.
But copying the Tesla Model 3 is not nearly as easy as you imagine. You pretty much have to copy an entire mindset encompassing the manufacturing, the design, the entire gestaldt of it. They will do it. I don’t think you will recognize the result of it exactly. But yes, it will be half the price. I’m predicting the past again. BYD is ALREADY the largest producer of EVs in the world – NOT TESLA!!!!
That said, China is now the largest auto market in the world at some 26 million units this year – down quite a lot from over 28 million last year. And there is a curious dynamic at play. It has to do with a kind of enhanced sense of image and ego they term “face” and there is MUCH face in driving a Tesla over driving a BYD. Or in having an iPhone over a Samsung.
To extend both the complexity AND the irony, note that iPhone is an American company, Samsung is a Korean company, and both are largely manufactured in China. But the CHinese strongly prefer the iPhone as it enhances FACE.
You have to understand that Chinese are naturally proud of their country and their “race”. And they truly believe that the 21st century is the century of China where they will emerge as the dominant economic power in the world. At the same time, very viscerally they love, admire, and emulate all things American. And they hold us pretty much in awe. A source of endless fascination.
I could write a book on this. But I won’t. Nobody reads books anymore. While the Chinese march into the “Century of China” we rather omitted the part about teaching our children to read. Or even to “cipher” Jethro Bodein style. We were oh so busy indoctrinating them into a failed Marxist/Maoist mindset of nonsense and superstition, an affectation of our least able to appear “intellectual” and superior. Gag. Retch.
Where is the energy to charge all those future electric vehicles is going to come from?
Your timeline for the demise of IC cars may have to be modified to account for the construction of infrastructure to generate and distribute electricity.
Enter the dragon! Or, if you will, selfish solar. A year ago I had 16 PV panels up. Today I have 56. I can cover all my electrical needs sunup to sundown, Or I can charge my Volt, Leaf, and Tesla. I can’t do both….just yet. I’m still building and expanding the power plant. In 2020 the Federal tax credit drops to 26%, still better than a kick in the pants. I’ve been retired two years now and the primary form of entertainment here is still: going into the garage and making something cool. My gasoline bill WAS $200 per month. My power bill, on average, WAS $350 per month. I’m just too old to focus on “pay back” timelines. It is a comfort however to know they can jack up the utility rates all they want for us “fixed income” retires (independent as a hog on ice) and walk away with a mouth full of feathers. At this point knocking the ute bill down to $20/ month involves doubling or tripling battery capacity. Summer Arizona AC is a bitch even at night. If the creek don’t rise, It’s gonna happen.
Dear Jack, you have had a great influence on me. I built 2 evs, one lead acid and one LiFePo4. Now please, I am a moron when it comes to trading stock – can you please explain to me the connection between unexplained short trading and suppressing the manufacture of Teslas?
It increases the cost of and access to additional capital investment. But more powerfully, if indirectly, it continues the campaign of spreading fear, uncertainty, and doubt about the enterprise entirely. If consumers suspect Tesla will go bankrupt, that would leave them stranded and orphaned for service, and that fear dampens sales. FUD is employed because it is very effective.
Tesla is the easy target but almost symbolic. If you notice, the larger automakers have been ANNOUNCING electric plans for YEARS now. But they never seem to quite bring them to fruition. That is not entirely incompetence. They are kind of “hanging” back waiting to see what happens to Tesla. And so Tesla kind of acts as a proxy battle/proving ground for the entire concept.
The conversion from manufacturing ICE cars to manufacturing electric cars is not quite as trivial as they would have you believe. It is a huge investment, cannibalizes their own product lines, and is actually very dangerous. Most people do not realize the thin and narrow line these automakers walk to be profitable. The numbers are sufficiently huge most people believe they are the source of all money somehow. It is not precisely so. And so they are holding their breath, watching Tesla, and hoping for good things (for themselves).
So oils activities are certainly aided and abetted by the autos, who watch in trepidation to see the outcome.
Fear not. I was not being specious. Elon has them outnumbered, outgunned, and surrounded. It LOOKS like an impending huge battle. In reality, they will lay down their arms, and wail like little girls in the end. A string of suits trailing pathetically to the parking lots with their little cardboard boxes of desk mementos and corporate award trophies. Wondering how the public could be so fickle and unappreciative of their heroic and expert efforts. Age 52, unemployed, and unemployable. Most will become “consultants” meaning will provide negative and embittered advice for food.
It is part of the creative/destructive assembly line of American innovation and development. A thing of such beauty it brings me to tears regularly. Moving from two guys in a garage, to huge corporate entities of immense manufacturing scale, to decay and finally extinction on a never ending conveyor belt of technological discovery and development.
It is precisely what accounts for the unlikely situation that the United States of America has 4% of the feet and 25% of the shoes on the planet.
Having a live webcam is a nice feature,
it can help fill-in between your videos.
The new main shop camera has a color-balance
“perception” problem, blue washed-out?
The image is reversed (left is right, right is left)
The clock is a half hour slow and only updates every 5 seconds.
The good news is, it appears to have better resolution.
and is no longer upside-down
And if you’d swing ‘shopcam 2’ to the right,
we could watch your water reclamation project in real-time.
The Reno Gazette has stumbled up some interesting information, I will print the words spoken by Chris LIster ( vice president of
operations at the gigafactory) on the video:
Chris Lister ” from a big picture perspective, we’ve located suppliers on site, THEY bring THEIR raw materials in, THEY process them into finished product and then they supply us ( tesla) with that product, whether thats cooling tubes, whether thats cells, whether thats cans for making the cells. These pieces come into the operation and what comes out of the gigafactory ( is ) powerwalls, powerpacks, battery packs for the model 3 and drive units for the model 3. ”
So it would appear what the gigafactory is, is not really a tesla factory at all, it is more like a rented space where various suppliers can produce parts used by tesla. Whether or not the suppliers pay rent I have no idea, but it is not really Tesla producing these parts!!
Tesla appears to facilitate the location and space for suppliers to work from, the parts are of course branded as tesla parts.
I would imagine that each supplier has to pay its own workers etc, so would the workers in the gigafactory be employed by tesla or by the suppliers? My guess is that its the suppliers.
This is a business model that I have not seen discussed before in regard to tesla, I realise that this is the way car makers and other businesses run. I would imagine that most people would assume the TESLA gigafactory is actually run by tesla, but in reality its full of suppliers doing the producing for tesla. People are always saying tesla builds everything from the ground up, but its not really that way at all, tesla uses other companies to do the building, they might be better seen as the final assembler of the cars. But do they actually do the assembling or is the fremont factory also full of other companies doing the assembly?
For me this is very interesting information. Its a bit like if I was selling say some chinese brand battery ( or any other product) and I get them to put my company name on the battery, then its very easy for me to give the impression that my company actually built the items.
Would you say that for GM to claim it produces American-made cars, it’s necessary for GM to own the site that mines the iron ore, has GM employees mining it, and sends the ore to GM owned steel mills staffed by GM employees? How would Tesla-branded parts come out of the Gigafactory were it not for Tesla owning the manufacturing process? As you said, you realize that this is the way car makers run, so why do you emphasize the statement, ” . . . It is not really Tesla producing these parts,” with two exclamation points?? (See what I did there?)
When I buy store-brand products at my local grocery store, I’m well aware that they don’t process the food themselves. Branding products produced in another company’s factory is done everywhere. As long as the processes are completed in Tesla facilities, they are, in fact, American-made, fully under the auspices of Tesla.
Tesla seems to be working exactly like any car manufacturer would, especially one making products with thousands of parts, EXCEPT that Tesla had the sense to know that having the other companies’ facilities right inside the Tesla plant increases the efficiency of JIT (just-in-time) manufacturing by a substantial multiplier.
I guess I don’t see the point you’re making very clearly. I sense that it’s pejorative, but from my reading, it just heaps kudos on Tesla.
I think its absolutely amazing what tesla has achieved, credit to those involved, they are indeed changing the world, it does appear to me
that the gigafactory is seen as a tesla entity, Of course its well known that panasonic was involved in some way, but it does suprise me that the modus operandii might be multiple companies each doing there own section of product supply. That is quite a surprise to me.
I’ve sat in every Tesla model and I must say the build quality and fit and finish is not quite there yet. Of course given the sheer accomplishment, you can forgive the cosmetics.
What I haven’t heard much about is anyone using the open source of its technology that Tesla claims to have given away, to build a better mousetrap.
For example I would think that the larger chassis of classic 70’s American cars like the 1973 Buick Riviera would be ideal for a Tesla conversion. Maybe this is a job for Chip Foose?
Great artickle – we agree with the oily end of this shtick… and hope you is correcto about the outcome. ‘Cause if ever there was a bunch of slimey dipsticks showing water in the oil the 27% oil depletion allowance, the giveaways of Arctic Drilling sites, the endless wars in the middle east and disruptive tactics in Kazakstan to support more oil could not disprove you theory. The U.S. Gov is totally invested in Petroleum Dollars and will do everything to avoid losing that investment including endless destabilization in the Middle East – endless brushwars and death for American soldiers and a permanently lockjawed and lockstepped march toward Climate oblivion for a few “dollars more”.
Thanks for the ‘heads up’ on Jack R. Interesting guy! Me? I’m a retiree on a fixed income and only ‘dream’ of owning/driving one of Elon’s creations. LoL. Best I can do will be to buy a few Tesla shares toute de suite !
It would appear so. As I’ve said for 10 years, we’re only one Camel sneeze away from a real mess. Fortunately, we have become in the interim a net exporter of energy. But the price is the price and apparently we’ll be seeing significant increase in gasoline prices in coming months. If the Saudis and the the Iranians go to war, it could be much higher.
If you notice, the artificially imposed $4.50 per gallon of 2008 has strangely gone away coincident with the advent of the Tesla and the Leaf and the Volt. It may be back here pretty soon.
I think competition wasn’t on the ball when I read their announcements. But now that some of them are out, it looks like they got on the ball with the Mercedes EQC, Audi E-Tron, Kia E-Niro, and Jaguar I-Pace, despite their executives’ desperate pleas to fail at those. It’s as if their engineers didn’t know how to fail in what had to be one of the most exhilerating markets they entered. EQC and E-Tron are both quieter, more comfortable, less harsh, and better pocketed (I mean door pockets) than Tesla, and all of the cars I mentioned go further than my Tesla Model S60D that always seemed to run out of energy just short of my destination. They meet the sweet spot of range, even though it isn’t fantastic range like the Model 3. Yet, the Model 3 is still a bumpy ass pocketless car that we don’t fully own and can’t program shareware into, not letting us buy third party products, not able to bring it to 3rd party repair shops, Elon acting like a monarch about it, precisely the people we want to jettison, hiring the likes of toxic feminists and more monarchs that even own their own ISLANDS they are so sick for his Board of Directors, all of which have massive conflicts of interest (meeting the SEC definition of “non-conflicted” in opposites-land).
Elon needs to be a full time CEO, and he is only a half time CEO.
I also think that it’s quite possible much of what you predict is at least largely true if Elon is still able to steamroll over his evil board of directors, and that we will have to break Tesla up into pieces due to competition concerns.
But in the end, I don’t think it will just be Tesla. It can’t be. I offered to help make it a great company, and they shot the other direction as much as they could go, giving only occasional partial subsets of lip service to whisps of the things that would make them much better and more successful. But more than that, we need competition, and if they take too much market share, we will have to break them up.
As for electric cars? Don’t get in their way; it’s hard enough to implement them in the marketplace as it is. But also don’t put them where the market isn’t ready; they should just sell them as fast as they can make them and sell them, and not worry about it. Eventually we will get there, in time. We are solving the pollution problem (not global warming; that’s fake). It’s not YET solved, and it WILL be solved, because we ARE going to electric, which means we choose the energy type, not the old plants and animals, so we CAN go clean, and also, we WILL go clean.
I wonder where the big weapons contractors fit in all this, namely those selling to Saudi Arabia,. ..after all they presumably stand to lose a lot of business once the Saudis are no longer raking in the oil money to splurge on their military.
Jack are you ill? No post since August 10 – or, God forbid, have the determined defenders of the status quo secured your silence through threats of violence upon your family?
Tesla will definitely prevail more in the coming years! My uncle who used to hate the fancy tech of the newest vehicles now starting to like the latest Tesla models.
I presume you are aware that the Model 3 won Detroit News Magazines 2018 Car of the Year award. As it happens, it was also named car of the year by Popular Mechanics March 2018 Automotive Excellence awards. AutoExpress Car of the Year 2019: Tesla Model 3
Automobile Magazine 2018 Design of the Year: Tesla Model 3.
The grandfather of ALL automotive magazines is MOTOR TREND. Motor Trend started publication in September 1949 with the Kurtis Sportscar on the cover. A car so beloved they later acquired one of the 16 ever built for display in their publishing offices.
This magazine has from 1949 existed by the hand of car lovers for car lovers and represents the largest collection of photographic automotive pornography ever assembled by man.
Also in 1949, they named their first CAR OF THE YEAR – THE 1949 CADILLAC SERIES 62 SEDANETTE.
In 2013 they rather shockingly named the Tesla Model S CAR OF THE YEAR with the astonishing admission that since 1949, there was NEVER A CAR LIKE THIS.
And in 2019 they have named the 2013 Tesla Model S as the ULTIMATE CAR OF THE YEAR – the top CAR OF THE YEAR in seven decades of publication and naming a car of the year every year.
It is refreshing and encouraging that in a world where all our long trusted television news shows, and institutions such as the Department of Justice, the State Department, and the Federal Bureau of Investigation have been exposed as deeply corrupt rotten to the core partisan organizations infested with dishonesty and corruption, to contemplate for just a moment the integrity of Motor Trend Magazine. This is an enterprise that derives almost all their income from printed advertisements carried in the publication. And overwhelmingly those ads are from the automotive industry touting their newest and greatest models. And they have awarded the ultimate car of the year of all cars of the year to a car and a company that has never in its history ever spent a dime on advertising of any kind, and whom if it DID advertise it would be highly unlikely to do so in a print magazine.
It is also arguably the SAFEST car ever built. There is actually a current imbroglio over this between Tesla and the National Highway Traffic Safety Administration. They test cars for safety in a number of categories and indeed assign a point score in each category. That then is translated to a “star” rating with 1 star being very minimal and 5 stars being the maximum that can be awarded. Not only did Tesla achieve a five star rating in ALL categories tested, but the point score was the highest ever achieved at NHTSA by any car.
Tesla proudly announced this fact to anyone who would listen. And NHTSA takes strong exception to this. Note that they don’t actually deny any of Tesla’s claims, but they are incensed that Tesla would divulge point scores or make any statements beyond the official number of stars awarded. This is some sort of governmental attempt to limit what you can SAY about a publicly funded and governmentally administered test.
So my claim is that Tesla makes the BEST automotive vehicle on the planet, barring none, in all respects, including SAFETY. It is just the best car ever built. And I would challenge anyone to demonstrate even partially that this is not so.
Now there are any number of reasons why people buy the cars they buy. But few actually take aim at being the personal owner of the SECOND best car in the world. It’s like going on ALLRECIPES.COM and searching out the SECOND BEST lasagna recipe. For what???
You might well make the fifth most popular lasagna recipe, because you are vegan and don’t want any meat in your lasagna. But you KNOW you aren’t getting the best.
Let’s take a look at Tesla’s car production figures. They just finished their LARGEST production quarter with some 87048 vehicles produced. They DELIVERED over 95,000 vehicles in the quarter, also a record, but that is because 8000ish vehicles produced in the first quarter were not delivered until the second.
Let’s take a look at a couple of things. Q2 2015, two years AFTER the Model S became WIDELY available, they produced 12807 vehicles. That’s 679% growth in four years or 170% per year.
Part of the “short thesis” is that Tesla cannot produce enough cars to meet demand. And a second part of the short thesis is that there won’t be demand for the cars they produce. What am I supposed to do with this? Two mutually exclusive and totally unlikely factoids issuing from the same potato disposer simultaneously.
Again, Tesla doesn’t advertise for a very cunning reason. It doesn’t work at all. The public trust in commercial messaging has now broached zero and has gone into negative numbers. Mike’s Pillow really was NOT the best night’s sleep I ever had. And basically 100% of the public discounts ALL of 100% of the commercial messaging it sees.
But we do still largely trust our friends and associates. And so if you see a Tesla, better get to ride in a friends Tesla, better yet he lets you DRIVE their Tesla, you want one. Period. I’ve never HEARD of anyone riding in a Tesla who did not immediately conclude that they wanted the car.
Could they afford the car? Did they need a car? Did they already have a car? All open and valid questions. But they did WANT THAT ONE on contact.
I have a couple of viewers who have advised me in the last week they were picking up a Model X and Model 3 respectively. They’ve known about Tesla for years. They have wanted a Tesla for years. They are both buying one this week.
So my claim from observation and intimate knowledge, is that Tesla can sell all they can make and they can do so at essentially any price they want. It is a growing demand and totally inelastic and agnostic. It grows by contact. The more they make and deliver, the more people have contact with the cars and the more demand is generated for all that they make.
How far does this extend? How LONG can you sustain 170% compounded growth?
You know, that SHOULD be the defining question. And I’m unusually pleased to note that it is not because it is one of those astonishing things that just tickle my sense of whimsey when I come across them.
EVTV has largely ceased to convert ICE cars to electric drive, which was long our only reason for life. It started in 2009 and while the Tesla Roadster was much discussed, not a single one had ever been actually delivered. If you wanted an electric car in the spring of 2009, you had to build one. There were ZERO models offered by the sum total of all automotive manufacturers worldwide. We defined, aided, abetted, and enabled the tinkerer/innovator stage of the adoption curve and noted numerous times that on achieving “early adopter” phase we were out of it.
I lied. The outcome was SO assured that by 2017 my mind, with the laser like focus and attention span of a four-year-old, just wandered away. This no longer requires my efforts. The outcome is assured.
And Tesla was largely the reason. Basically it costs between $20-40,000 to do a good build converting an ICE car to electric drive.
Tilt and tittle at that all you want, I did a lot of them and a lot of different ways and several were over $100k. Not really unusual among custom car enthusiasts and I expect those guys will be doing electric conversion show cars 50 years from now.
The Model 3 at $40k is a better car than I can do at $40k.
Worse, it is kind of a one sided launch. We covered the news of LOTS of different electric cars, and most notably HUNDREDS of VW press releases that never were actually cars. And the conclusion was that it just doesn’t matter. Porsche and BMW were the only ones that had the right stuff to compete with TEsla and they didn’t. All else didn’t matter and couldn’t matter. And yes, Porsche’s Taycan will launch this September 4th and they are going to sell 30,000 or 40,000 of them and THEY STILL WON’T MATTER.
Tesla just owns it. And at this point, the moats of its battery technology and costing, its Supercharger network, it’s online sales model, the Over the Air Software Updates, and much much more put it SO far out ahead, that the other manufacturers are still announcing the “coming Tesla killer” aimed at the 2013 Tesla Model S. Problem: It is 2019.
And so we basically got out of converting EV’s BEFORE we got to the early adopter stage. I lied. Because the outcome is not just assured, it is unstoppable.
But if all else fails, the commonly held marker for the BEGINNING of Everett Rogets adoption curve early adopter stage is 2.5% market penetration.
So where are we at? The current global market for automobiles is a little squishy on your definition of an automobile, but as a personal transportation device is currently widely regarded as 78 million units annually with about 15 million in the U.S.
The short thesis is that Tesla CANNOT POSSIBLY meet their projections of 360,000 units this year. Duh. That’s 0.0046 or 0.46%.
ALL electric cars from EVERYBODY all told don’t reach 1% of the market for cars. We aren’t even CLOSE to the “early adopter” stage.
I’m at the point where if you don’t have Tesla logo on your car you’re not electric and don’t matter. To the point that we are working furiously on things like an OBDII port adapter for the Model 3, or reverse engineering Tesla batteries, not EV batteries, TESLA batteries for solar energy storage. I have a half finished Cadillac Escalade conversion hanging in the air on a lift where it has hung for a year.
But the blue sky for Tesla is essentially UNLIMITED. They can sell all they make and make all they sell starting at 360,000 units and topping out at 78 million. They are 0.46% of a $2.3 TRILLION dollar market. And they appear to my biased eye to already own ALL of it.
It reminds me of Sandra Bullock and Sylvester Stallone, in the movie DEMOLITION MAN. In the future, ALL restaurants had consolidated under the brand name TACO BELL. If SOMEBODY doesn’t do SOMETHING pretty quickly, in the future ALL automobiles will be Tesla’s.
Hyperbole? I grow weak in the knees publicly repeating a prediction I have quietly been making for years. It is so unbelievable all I can harvest from it now is ridicule. But you are not going to BELIEVE the big names and huge corporations that face unavoidable and absolute bankruptcy and dismemberment, in the VERY NEAR future. No government can save them. Hundreds of thousands if not millions of jobs lost. Economic disruption and dislocation of unparalleled proportions. Office furniture available for 6 cents on the dollar. Not reorganization. But like Eastman Kodak. Sears. K-Mart. Companies that could not fail and are already gone. Picture GM, VW, Daimler. The biggest. The best.
Let’s take a look at the awl bidness. Currently we are at 100 million barrels of oil used each day worldwide – 20 million here in the U.S. At $55 per barrel, that’s about $5.5 billion per day. That’s another $2 TRILLION world market business. As the percentage of all automobiles that are electric grows, the demand for oil will diminish. Fully 50% of all oil goes to road transport. That is $2.75 billion per day. And for every day that future is delayed, is another $2.75 billion. It would be a $2.75 billion win if the adoption of the electric car could be forestalled for ONE DAY. The incremental growth of the automotive market is as I stated, inevitable and unstoppable. But for every day it is delayed, there are BILLIONS of dollars at stake. Literally the clock is running at $1,909,722 per minute on just that part of oil used by automobiles.
And it would be unlikely they would find that beneath them. Texaco bought the entire Ovonics nickel-metal hydride battery business from General Motors, with the patents of course. They allowed this battery chemistry for camera and laptop batteries, but specifically REFUSED to license it to anyone in larger sizes suitable for electric cars and that continued until the patents ran out. By then it didn’t matter, the lithium battery was ascendant. But it absolutely delayed the development of electric vehicles by many years.
Stanford Ovshinsky, inventor of this nickel-metal-hydride battery died in 2012 at the age of 89 still deeply embittered by what General Motors and Texaco, later acquired by Chevron, had done to his baby. It’s greatest potential use and the use Ovshinsky specifically developed it for was never realized. They simply bought it and shelved it.
Does that make sense? To spend hundreds of millions of dollars to acquire a promising technology and then shelve it and not worry AT ALL about selling any products from it? Just park it?
HOLD THAT THOUGHT.
Now let’s take a look at Tesla Short Interest. These are people who ostensibly SELL a stock they don’t own, and hold it until the price goes down, and then buy shares on the open market to pay back the stock they borrowed to sell in the first place. The concept is of course sell high and buy low. But kind of in reverse. You sell it before you own it. And you buy it when it is discovered that you don’t and you have to pay it back. But if you sell at $360 and the stock drops to $175, you get to buy back at less money and you keep the difference.
Let’s look at short interest in the stock of Tesla. First, this is not usual. This is not normal ALL stocks have people hedging and shorting. Even people LONG on a stock will hedge with some short bets. Indeed, at one point I had 50,000 shares of a company called Keynote Systems that were not really tradable. I had invested in the company long before it went public and so faced a “lockup” period where I couldn’t sell the shares. So I sold them “short against the box” before the expiry of the lockup period. When it expired, everybody was unlocked and a lot of the early investers sold the stock, plummeting it from $140 a share to $60. Netting me $80 per share AND I STILL OWNED the original 50,000 shares. Unfortunately, the stock never recovered and I think I later sold it out at about $40 per share.
Tesla hit a high of about $379 last year on rumors they were taking it private. I was astonished to see MULTIPLE news stories this month, CELEBRATING the news that Elon Musk had been caught in a lie regarding FUNDING SECURED on his move to privatize the company.
This is astonishing on several levels. First, if all true, WHY would we be seeing news stories a year later reminding us of something unimportant from a year ago. But second, it never was true in the FIRST round. It’s kind of like Trump’s Charlottsville massacre. It never was true AT ALL, but if you repeat it enough times enough people will be fooled to be effective?
The Saudi prince HEAD of a national investment fund DEVOTED to alternate energy investments is LOBBYING Elon Musk to take the company private. He is DEMANDING it. And he has a hundred billion to spend on the project. What part of “funding secured” am I missing here? If you have a Saudi Prince with $100 billion burning a hole in his pocket standing on your desk stomping his little Saudi foot insisting that you do it his way, how much more strain do you want to put on the term “secured”?
Tesla did not fail to take the company private because it didn’t have funding. Elon is not precisely a genius on the byzantine world of public stocks. A large percentage of Tesla investors are institutional “funds” and by their fund charters are severely limited on how much of their holdings can be illiquid. That means typically that no more than 10% of their holdings could be in private companies. And as Elon owned 25% of the company at the time, he couldn’t get the votes from these funds to do the deal. It would mean the funds had to get out, and they didn’t WANT out.
It wasn’t that he couldn’t get the FUNDING to do the deal. He couldn’t get 50% shareholder approval even with his 25%. Oh, he MIGHT have but a large segment would have voted against, including me, and it would have been an ugly fight. So the idea died. But it never died from lack of funding. So understand this ALL REPORTING ON THIS MATTER fully qualifies under the Trump definition of FAKE NEWS. That is not incorrect news. Or inaccurate news. FAKE NEWS means it is developed entirely against all known facts for nefarious and partisan reasons by design. And Musk’s “funding secured” is entirely FAKE NEWS. And if it were real news, why would they repeat it a year later? It only makes sense if it is FAKE NEWS, has a nefarious purpose, and so any opportunity to repeat it is to the original purpose – to mislead the public.
So Tesla reached $379. And had you been short, and held on, you would be delighted to learn that Tesla’s Q1 2019 featured a plunge in sales and a huge loss, after reporting a profit in Q4 previous. And indeed we see that of short holdings dropped from 26,268,029 to 24,783,245 as shorts cashed in. 1484784 shares were covered. They bought at the lower price and pocketed the savings.
I can get with that. It seems like an UNUSUAL number are betting things will get worse and hanging in there. Indeed an entirely unnatural number. But it is worse than that. Over the next two months, short interest actually ROSE to 37925793. What?
In May, the stock dipped to its lowest value in years, a great opportunity to cover and take your victory lap. Barely 400,000 shares did just that. But out of 37 million. Indeed they shorted AGAIN to 43,664,833. This is 34% of the tradable shares. Understand that NO company in the HISTORY of the stock market has ever carried 34% short sale. It’s not unusual. It just doesn’t happen at all.
In June, Tesla announced an all time high water market for auto deliveries of over 95,000 cars. And the shorts remaining got out. Well down to 41,459,952. Where it has held steady for over a month while Tesla crushes it on one announcement after another. They have now introduced a 3MWh 1.5Mw battery pack aimed directly at competing with natural gas peaker plants that basically cannot ever lose a cost comparison.
Shorts don’t behave this way. They sell high, buy low, and pocket the difference. That is if they are in it to make money. These shorts keep doubling down and they INCREASE their sales AS TESLA succeeds. At this point you have a company that is growing its production at an exponential rate, growing its revenues at an exponential rate, has the best product in the entire market, with unlimited demand in a market it owns outright just 0.46% of. It is the ultimate growth stock in the ultimate market with UNLIMITED BLUE SKY – room to grow.
Oh, and did I mention they can raise ANY amount of money they like, at any time, on three days notice? There last three calls for capital have taken less than a week and were oversubscribed in all cases. They raised MORE money than they asked for.
So we have exponential growth, into an unlimited market, with unlimited capital ready and waiting to invest. What kind of moron bets against that?
Well the concept of them BEING a moron implies the assumption they are trying to make money in the first place. What if they had NO desire to make money at all?
The entire 41 milion short interest represents an investment at the current $235 per share of $9.635 billion.
What if it’s not an investment at all? What if it’s an expense?
Elon Musk has since upped his stake to 38.6 million. Why? Did he need more shares? The cash was clogging up the vacuum cleaners in his house?
The company can’t BE bought. And Musk doesn’t want to die a bitter old man at 89. But the SEC CAN be bought apparently. And while they investigate, fulminate, and litigate Musk’s tweeting style, what starts to look like the largest stock manipulation in the history of the United States of America is going on as we speak. Is it POSSIBLE they don’t know about it? In a word, NO. It is not possible that a stock swindle of this proportion could be going on without the express and direct participation of the Securities and Exchange Commission charged by law with preventing it. Absolute corruption corrupts absolutely, to misquote a phrase.
The nickle metal-hydride battery was purchased in an asset purchase between two publicly traded corporations. Tesla is itself plublicly traded and Musk owns enough of it that purchasing it and dismembering it is just not conceptually feasible. But this level of stock manipulation, coupled with a funded and directed disinformation campaign, could conceivably drive it to failure.
And at $5.5 billion dollars per day, simply delaying the inevitable is very profitable on a total expense of $10 billion dollars. The payback period on that is less than two days.
I still see articles explaining why batteries feature more emissions than gasoline cars. All funded by industry groups and advocacies that one off, two off, or sometimes three off lead directly to oil companies. So paid for disinformation campaigns are an absolutely established mode of operation for these companies. Why would they hesitate at stock manipulation to foster fear, uncertainty, and doubt? And who in the auto industry would call them out on it? GM and Texaco conspired. There were no questions or unforeseens. It was a conspiracy to defeat the concept of electric cars.
I was shocked to learn that Jeffery Epstein had a regular contributor to Forbes Magazine submit a story on him so laudatory as to be creepy. What was shocking was not that he did it or that the writer agreed to do it, but how CHEAPLY he sold his soul. A couple grand goes a long way with today’s writers.
And so I am also a bit naive about online comments. I assume that they are all the true beliefs of the writers. So how does Seeking Alpha have 100% negative articles on Tesla with amazing collections of preposterous facts? There’s actually a very easy explanation. They get paid. And they get paid TRULY TRIVIAL amounts of money. A soul today goes for less than $5 per pound. You can’t buy ribeye for that.
$4.3 TRILLION combined annual market between autos and oil. A puny $10 billion in “expense” – not investment. And a 32% short interest suddenly makes all the sense in the world. There can’t be that many crackpots that will bet against a company with superb execution, unlimited capital, and unlimited opportunity growing on an exponential curve. But if you are just investing in their failure, with that kind of real markets at stake, the stock market looks like penny ante poker.
I have no interest in tracking the money or reading the chicken entrails. I already know how this comes out. The irony is double. It looks like the oil companies and automakers have no possibility of losing this one. In reality, they have no way to win it. One man has them totally surrounded, outnumbered, and outgunned.
Elon Musk.
Bite it bitch.
And bury me next to Seth Rich.
Jack Rickard
jack@evtv.me
https://www.tesla.com/referral/marion1544
Go drive the best Caddy, Jag, BMW, Lexis, etc they make. Jot down the MSRP. Then do what I did and test drive the Tesla model three. SOLD! I have to agree with the thoughts above. None justify their price as well as the Tesla offering. I absolutely hate the traditional abusive dealer buying experience. In a coal mine, a prison, a shipyard, or a platoon the average car salesman would get a near fatal ass-whoppin. Add to that the predilection of all traditional car dealerships goal of never letting go of your serviced vehicle for less that a cool $1,000 fee and you have a classic case of the parasite that sucked soo much blood out of the host that the host expired from anemia leaving a unsupported parasite looking for a new healthy (so far) host.
Thanks for the post, Jack. I bought my first shares of Tesla in the midst of the “funding secured” brouhaha. Why? Because I wanted a stake in Tesla even if it was private, maybe even especially if it was private! I am down, I don’t care as a paper loss is just that at all. I’ve seen your argument before, both on your video and also on Now You Know with Zack and Jessie. Makes sense to me.
But the reason for the thanks is…..I was getting worried. There hadn’t been a new EVTV video in two weeks and you’re a likable old cuss with interesting things to say and an interesting way of getting there [in your own good time]. And while there are 10 years of videos, the ones I like are the selfish solar ones. In fact, I’ve been busily planning my 10 kW Panasonic HIT with Enphase micro inverters and 30 kWh of Tesla battery backup, generally off grid and easily expandable to 20 kW as I convert from the idea of “limited resources” to “earthquakes happen and LA is due and it will be somewhat awful if I’m alive”. And thus “selfish solar”. Will you mind if I call it “self-supporting solar”? Lying to myself is easier with good alliteration. lol
Ben~Andy
Jack – have you read “The Smear” by Sharyl Atkinson?
Oh boy – Jack – Once again just blown away by your way with words. Being a model S owner and a modest TSLA investor (and an electrical engineer) you are confirming my thoughts about the future of transportation. Bravo.
I thoroughly enjoy reading A well written article I am intelligent writer who has No agenda ( that I know of).
Jack, once again you hit the nail on the head!
BTW – my homelink garage door activator works fine 99% of the time and I just love my Autopilot v1 – though I don’t trust it completely. Often women are just like that. My wife is a very good example of this.
I am fascinated by “summon” of which we were supposed to get “enhanced summon” last March. I use summon EVERY Day to get the Model 3 out of the garage. Well in theory. Sometimes it opens the door. Sometimes not. Sometimes it opens the door and comes out. Sometimes it doesn’t come out. Sometimes it opens the door and comes out and shuts the door. Sometimes it forgets to shut the door. AI? It’s like watching a mentally retarded puppy lurch around in the garage and yard. Hilarious, but also sad. It is now my favorite feature. I just can’t wait to see what it will come up with next.
Bottom line? Autonomous driving: FAIL. Support for self repairs? FAIL. All else – it’s the best car in the world.
Jack just want to say thank you.
I enjoy your informative videos and love your wit and intelligent sence of humor. You my friend are the man.!! FYI I am an early access recipiant and have been testing enhanced summon on my Model 3 for the last 6 months or so. I mostly test it in empty parking lots and have been using it daily to pick me up at the front door of my office. At first it exhibited a pretty convincing retarded puppy impersonation. After 4 FW revisions. I am pleased to say that during that time the feature has matured to the point that people who have seem the exhibition have all be blown away. The car has on multiple occasions, flawlessly backed out of my parking spot. Driven in the correct lane around a curved parking lot at normal speed. Slowed just before making the required turn into a circular entry drive in front on my office. And stops with the drivers door in front of me.All that said I am still apprehensive to try this while other cars are driving in the parking lot. So progress is being made.
As I grow into my elderly years I find myself with and abundance of wealth and riches. Unfortunately, none of Mr Musks cars cater to my needs. Even with onset of autonomous driving, his cars are a pain in the assembly to get in and out of. Not enough room flexibility once you get there. So, as far as I am concerned, the Tesla is still half a car. And so, I take my fanny, and my money, to other electric vehicle manufacturers that can meet those needs.
Robert, my wife and I felt the same way with Model S. In truth, any sporty low roofline car is that way. We did find the model X to be far better. And we love it.
Maybe the shift to SUVs simply reflects our aging population.
Agree. I am 68. A little difficult to get in and out of my model 3 (being obese does not help things). Have spoke to a few in my age group and older that have mentioned this exact factor being very important in their latest vehicle choice.
Tesla pickup for you, Robert 😉
Oddly I share your pain. My Model S is actually painful to enter and exit. The Model 3 modestly less so. I think the Y will improve on this yet but I will probably hold out for the pickup. So I see it as a gradually improving situation where they originally considered drag coefficients more important that creature comfort. I think they will evolve that. 3 miles less range and two inches more headroom on the entry profile is my vote too.
Try the Model X. Getting in and out is the exact reason I bought it over the two sedan models.
Wow! Thanks Jack. Great story. Love your writing.
This is great. Thank you Jack.
You said Newt
Time for another talk with Billy’s mum. See ya next week
Billy’s dad
My question is what can I as one of the little guys who works for a living do with this information, fascinating as it is? So far my little bit is owning 25 shares of Tesla and ordering a model 3 which I expect in 3-4 weeks. Yes, driving one makes one want their own. No question. What else can I do to both support the inevitable ascendancy of electric transportation and make a profit at the same time. That’s the trick isn’t it? BTW Jack, Love your writing. You actually say something with your words. That like common sense isn’t so common anymore…
You’re all over it. You’re doing it. My call for $1500 Tesla stock price by February 2023 stands. Indeed, at this point I think it will be proven comically conservative.
Thanks for that comforting thought Jack. I have been a bit worried about it lately😣
I suppose a rich middle east company would pressure Tesla to go private, then they have more control over it. Ovonics version 2 to protect oil sales.
..now send the Cliffs notes to Gfilche for an Aderall induced YouTube rant 😉
^HAHA
Great work here.
I’m living like a poor person to HODL my shares. Here we go!
Fantastic article, spot on. Seeking Alpha has lost all its credibility with the disproportionate, unsubstantiated and frequent hit pieces on Tesla.
I’ve always seen Seeking Alpha as a bunch of Beta’s spewing Fake News, they were never credible. As usual Jack is spot on.
As a Tesla shareholder, I’m trying to grasp the implications of this. Shorts can sell at a loss to drive the price down and limit the amount of captial Tesla can raise.
Wonderful article. Very thought provoking…
It really is quite sad how willing some are to undermine a globally-loved American product built by American workers getting paid good wages. I understand not wanting to buy a stock, but to actively orchestrate its demise is whole different level.
Perfect. I didn’t think my eyes could be opened wider, but now they are. A thousand thanks, Jack, and Bonnie for spreading the word.
This sent chills down my spine: “And at $5.5 billion dollars per day, simply delaying the inevitable is very profitable on a total expense of $10 billion dollars. The payback period on that is less than two days.”
You’re on point, Jack. The biggest plus in all of this? $TSLA is (currently) artificially discounted by a stupendous amount. Diligent investors will reap great rewards by seeking out the FACTS, rather than being spoon-fed their BELIEFS. Never have I seen such an OBVIOUSLY great buying opportunity.
Brilliant!
Yes Jack, thank you!
Wow Jack. You really nailed it. I’m also an owner and investor and a mechanical engineer. My Tesla is the best automobile I’ve ever owned and I will never go back. More “fake news” women love Teslas.
I saved up 50k over 3 years, and went ahead and dumped all of it into TSLA at $250 average cost.
I also own a model 3 and I know how far Tesla is ahead of competition.
It is inevitable that Tesla will become a muti-trillion dollar company in a decade at this pace.
I have 50k in TSLA.
It’s not a risk if it is inevitable.
i have difficulty reading this knowing you’re a trumper, with trump notions popping up here and there in the article and people politely ignoring them and focus on the tesla talk… i cannot ignore it.
Then you are a moron. And you shouldn’t be reading this stuff at all. It’s not good for your little child-mind head. Cat videos. Think cat videos.
Awesome Jack….I’m LMAO !!
Jack, I’ve held the position in this essay, give or take, for a couple of years. But what confuse me is how few people are saying this, let alone shouting it from the rooftops, despite an outrageous percentage of the float being consistently shorted.
It’s as though ‘sensible’ Tesla backers are too scared to join the dots, to point out that the emperor has no clothes, lest they get called conspiratorial Elon fan boys.
A couple of whoppers here: Google will be surprised to hear advertising doesn’t work. More than one economist may object to banishing the elasticity effect.
A little bit of knowledge combined with delusions of competence. Sigh. You have at least managed self delusional condescension.
Google won’t be the LEAST bit surprised. But they would rather you not mention it to their advertisers…. you will be stunned to learn no doubt that their EXISTENCE is based on it. The credibility of the commercial message has been in huge and accelerating decline. And what this means is that for any given product, the number of “impressions” required to result in a sale has skyrocketed. Google has basically taken advertising from print media certainly, and largely even from Television, by delivering an ever larger number of impressions at an ever decreasing cost. But in the antibiotic effect, the American public simply becomes more skeptical of the commercial message. Initially, you could choose to “SKIP” the ads on YouTube. The time period before you can effectively do this has been lengthened, and now many ads you can’t skip at all. This is directly due to the measurable effect of the ads as essentially NO ONE will even watch them given a choice.
The theory was that they demographic metrics were SO good that you would only be presented ads about things you were already interested in. As this conflicts with the ambitions of the advertisers, it didn’t work out. And so they become increasingly dictatorial on the ad messages you must “suffer” to view the videos.
Price elasticity. You are trying to imply you know something of this when it is immediately apparent that you don’t. Elasticity is studied because it is variable and indeed one of the more troublesome variables in economic theory. But it is not only a variable, but it is strangely variable from product to product. And I think even a broadstroke take on Tesla would reveal to any competent person in this field that Tesla is in and of itself an outlier. It’s price elasticity is not only unexpected but among certain socio-economic groups actually inverts. Spikes in the curve if you will. You simply are oblivious to an obviously interesting case. My hyperbole in referring to this apparently exceeds your threshold in the willing suspension of disbelief.
It happens.
I love your ideas and understanding of how human nature is continually enticed into bad cultures where the bad seem to prosper. However I am often inspired by good people who have prospered. We belong to a strange species that probably came to dominate other homonoid bipeds over a short geological period of several hundred thousand years.
Prof Richard Wrangham in “The Goodness Paradox” inspired my idea that the tribes in those times were dominated by the women who loved talking (did this evolve also?) as they ‘gathered’ whilst the guys were ‘hunting’. Naturally bad guys were shunned by female attention so the good guys ruled the gene pool. It seems mega civilizations diluted this rapid evolution of our way of thinking.
A three year trip to Mars would perhaps create a closed system similar to that open village system. Our brains would have to be occupied by creative and innovative thinking to survive and inspire those back on Earth.
Lately I have noticed a slight shift in mainstream coverage. Maybe I’m being optimistic, but it seems there’s a chance that the “hot take” on Tesla may soon be to say something positive. Goodness knows that’s easier to prove, even if lately it seems harder to believe by your average Joe. Still amazing to me what I hear from people whose only exposure to Tesla is from headlines and news blurbs about production issues, fires, and crashes. Even while the reality is better represented by my friend who drove my Model 3 and then sold his dream-car Porsche to buy a Tesla.
Thanks, Jack. It is so pleasant to hear truthspeak clarifications.
Still waiting for someone to buy my plane so i can buu a used S.
God love you.
Terrence
Jack, you nailed it again ! And better written that my own prose. As an even older than you pre-early adopter ( I built my first electric three-wheeler in 1977 ), I cannot be more in line with you.
My views on “the electric car, here and now” are now published and you are personally cited in the acknowledgment page at the end of the book! Keep publishing your “feet on the ground” videos and papers like this one.
Great read and disturbing…
(Wasn’t it Pizza Hut?)
My time well spent reading this blog, unfortunately, I can’t afford a Tesla now but I’m going to do everything possible to get one in a few years.
Thank you for the excellent article Jack! I’ve followed your videos throughout the years and found them quite entertaining. Thank you for your insights and documented legacy of the rEVolution. I also went through a similar transition, where I thought EV conversion was going to be where it was at, but realized how much better, safer, and cheaper an EV could be when built from the ground up. It was of course also Tesla which made me realize this.
What you so elegantly explained in your article concerning a short conspiracy is spot on and exactly what I have said for some time as well. Its a drop in the bucket expense compared to the behemoth industries which are being disrupted and obsoleted. Its sad to see how much the main stream media has been consumed and bought by their corporate sponsors, to the point where it is hard to find anything which isn’t heavily misleading or biased (even beyond the subject of EVs). History will look back in disgust at all those who tried to stem the tide which is Tesla. If China ends up being a more willing engine for EV world domination, so be it, though I suspect Tesla will survive the hostile domestic storm here in the US and emerge triumphant as well. Human survival depends on it. Let the fossil fools have the world pried from their cold greasy hands, so that we and our children, and children’s children can be more healthy and live in a more beautiful world.
thanks so much Jack. Finally — an explanation of the whole damn thing that makes sense. Of course you’re right. Your math is irrefutable — The shorts aren’t worried about the burn at all. They are being paid to short the stock.
I remember last year waiting for Tesla to hit the 5000 cars per week milestone, which was said to indicate the arrival of not-bleeding-cash anymore. Much excitement. Plus astounding work — a whole new production line assembled in record time under a heavy duty “tent”.
But when they finally made 5000 — hooray! — the stock price FELL.
And the SEC BS. Jeez.
Yes. It makes sense now. Thank you.
I don’t expect you’ll get killed for explaining this. I am concerned about Elon. Putin and friends make a great deal of money from oil. Exxon Mobil needn’t hire a hit man. They can leave it to the experts.
However, I’m hoping Tesla has made it now to where eliminating EM is not worth it. Or maybe they recognize the benefits of Elon’s other work at SpaceX, Neuralink, etc to where slowing it down is enough.
I’ve been watching this with gold for the last 10 years. Perhaps Covid will disrupt the swamp.
“Understand that NO company in the HISTORY of the stock market has ever carried 34% short sale.”
https://www.sec.gov/rules/other/265-23/gkell100405.htm
Don’t like 40%? Think 2005 is a little old news even if you are talking about “HISTORY”?
https://seekingalpha.com/article/4249355-overstock-com-lendable-shares-short-supply
That’s twice the short interest that you’re talking about.
It does happen. It is rare, but it does happen.
Don’t make the mistake I did and fall down through the current day equivalent of the Refco rathole. Isn’t it more logical to assume that short sellers are looking at the same information you are — that Tesla has barely yet penetrated the market, and then looked at the market cap of Tesla as compared to, oh, GM, and said “maybe one of these stocks has temporarily gotten ahead of itself.” Seems more likely to me, anyway.
And no, I’m not short the stock, neither do I own the stock, I’ve known about the company since before it was publicly acknowledged to exist, and I hope they succeed. Seriously. I hope they put GM out of business. I hope Tesla dances on their collective graves. My feelings about the car industry are public knowledge (though sadly, I can’t seem to find an active link on the web … alas). I’d own a Tesla if they’d just bloody well put in physical controls rather than rely on touch-screens. Feel free to call me old fashioned :shrug: I am. Guilty as charged. But yeah, there are reasons not to love the car. Glad you do, though.
@DavidNavas
You’re hesitating to buy a Tesla because it lacks “physical controls?” I’m astonished. It uses a touchscreen for media control. Many cars have now gone to touchscreens for HVAC control, so am I to understand that you don’t own a Tesla because you have to use a touchscreen to change a radio station or the source of your music? THAT would restrain you from owning a car with a total cost of ownership that’s less than a Camry when that car is, as Mr. Rickard describes it, the best car ever made?! Remember that there are physical controls for controlling volume, skipping songs or tracks, and for adjusting the temperature. One could use the touchscreen for navigation, but the Tesla voice control for setting nav destinations works perfectly. You said to feel free to call you old-fashioned, but methinks your problem involves a lot more than being old-fashioned.
God forbid someone have different priorities when deciding how to spend 5-6 figures of their own money! The groupthink is thick enough to cut with a knife.
Human interface design is important. In a moving bumping vehicle where your attention should be on the road, landing a finger on the correct pixel, or navigating menus, is a horrible interface. Knobs, levers and switches may be old-fashioned but they work fabulously well. You can locate, identify and operate them instantly with muscle memory and feel with hardly a thought even on a bumpy road where a touch screen becomes a maddening (and dangerous) distraction. The screen is great for moving maps, providing information, or maybe playing Donkey Kong. But for real-time piloting controls it’s not the best tool for the job. I think Tesla knows this but I think they also view human drivers as a necessary but temporary annoyance and for that reason aren’t all that interested in Human Factors Engineering.
Wow! Just wow! Thank you Jack Rickard for explaining the short stock concept in a way I can understand especially how it applies to the Tesla vs everyone story.
Thanks Jack,well done.
I initially thought I was the only one that saw Tesla monopolizing the entire industry by 2030.
The author doesn’t even mention Full Self-driving and the Boring Tunnel walled garden, which will seal the fate of all automakers – permanently.
Competition is dead in the water, no amount of money you throw into saving your company will come close to how far behind they all are.
What’s funny is, these dinosaur companies had 8 years with free open-source patents that Tesla offered – and they never used them.
Interesting read. Although I really don’t understand how the huge short interest is such “money well spent” for the entrenched oil and gas interests. I also know that not all shorts are bought and paid for by these interests. I know some independent investors that are short TSLA. They seem genuinely convinced that it’s all a house of cards, that Elon is a fraud, that Tesla can never make a sustainable profit, that there is diminishing demand, and that I am an idiot in being long TSLA. These are “reasonable” people, but I can not reason with them. One says he bought his BMW M850i with profits from his last short bet. So, it’s not all directly tied to these conspiratorial entrenched interests. There are a lot of others along for the ride on the shorts train.
wow amazing article love it
Legendary post Jack!
Jack, I am short TSLA stock.
The cost of producing the Model 3 is too high for a mass market car.
The Model S/X now face competition and declining tax credits in the U.S. TSLA never made them profitably.
TSLA has to move the metal and will keep cutting prices to do so, Elon is distracted at best – certainly charismatic and funny but also a terrible micromanager and businessperson.
TSLA has a toxic balance sheet, insane valuation and haemoragges cash. The price cuts only make the losses more and more critical.
Look for a CEO in an office with old worn beige carpet who drives a Toyota, not one who lives in several mansions and flies a jet while preaching to the suckers/marks about moving to mars and how only he can save the planet.
As the con unwinds and the lies catch up to Elon, the shorts will increase their positions – with bagholders become increasingly desperate to sell we will have no need to cover.
That’s why we call ourselves $TSLAQ, after the bankruptcy we won’t need to.
Kia Kaha E Hoa
No this is not FUD or investment advice, do your own research and don’t drink the darn kool-aid.
So I’ve got one question. HOW MUCH did they pay you to spread this child-mind nonsense. You’re not very good at it, so it couldn’t have been much. Do my own research? Do you know who you are talking to and what I do for the last decade? I’m where they GO to do research.
1. The cost of producing the Model 3 is too high for a mass market car. What do you think a mass market car IS. And how much is the RIGHT cost to produce one. And if it costs to much, and is priced too high, why do people keep buying them? A child mind at work.
2. Jamming three partial child mind thoughts in one sentence implies a serious lack of Catholic education opportunity COMBINED with an assignment to the SHORT bus to public school. But it would be natural for Tesla to face competition. But they don’t have any. It is an ODDITY that they don’t, but they don’t now, and I’m seeing nothing on the horizon. Declining tax credits really don’t matter. Like AT ALL. I don’t think they were EVER a good idea. Tesla never made them profitably. Now just what do you know about “profitably” and what do you think that looks like if you are in the room with it and it is making “profitably” noises? Child-mind at work.
3. Move the metal and keep cutting prices. I hope so. That would be the natural, ordinary, and expected progression as they achieve scale. That’s the plan kiddo. The rest of this garbled sentence seems to be some aspersion/description of Elon Musk. Which would be like a house cat trying to describe the Cathedral at Notre Dame.
4. A TOXIC balance sheet, insane valuation, and some garbled word about cash. Losses? More and more critical? You’re really not very good at this. Child mind.
5. Look for a loser, instead of a winner, as a CEO. Child mind.
Again, since you are not very good at this I assume you have BUTKISS at risk. So what’s a soul go for these days? What are they paying you? Whatever it is, they are NOT getting their money’s worth.
Uhh. Jack. Take your meds dude. The cost of producing a Model 3 is more than the revenue they generate from selling a Model 3. That is a problem. A big big big problem.
Actually, it’s not a problem at all MYSELF. What it is is a heroic child mind view of “bidness” and specifically the automobile bidness.
To build cars in QUANTITY involves building a mile long “machine” to build cars that consists of indoor space, robotics, people, power, and a couple HUNDRED other things. Actually most of the machine is engineered “logistics” designing which parts occur where delivered by whom to what specifications. All of this comes together and what comes out the end is cars.
The “machine” runs between a BILLION and three BILLION to build. The actual materials and labor to build the car are usually negligible. My Escalade lists for $59k and all parts and labor run about $7,000. But you have to pay off the machine. And so the “margin” is a function of how many you build and sell. For the first 40,000 Escalades you don’t make ANYTHING. And every Escalade after that rains money. So how much you “make” in profit on a particular model is almost purely a function of how many you sold and your costs per car and profit per car are similarly entirely swamped by the number made and sold.
Last I heard, the “margin” on the Model 3 had fallen to about 19%. But with increasing sales, they think it will be back in the 25% range.
So what you see as a big big problem is really just a reallly big big level of ignorance and a gross misunderstanding of the business. You see no auto executive thinks anything about the costs to build a car against the price of the car. They think entirely in terms of the number of sales necessary to break into profit at all. And success is entirely a function of being able to precisely predict sales for a model that doesn’t exist, in a market four or five years from now. By and large they are actually pretty good at it. It just doesn’t work at all in the manner most people think it does. Huge fixed cost. Small marginal costs. And success means predicting future sales.
This is what extant OEMs were in disbelief that a newcomer could enter the business at all. It is a horrendously complex business with enormous capital requirements, and how could anyone predict numbers on a completely different KIND of car – an EV. The TRUE shorts think they have a sure bet on the Tucker/DeLorean effect. Huge hype and enthusiasm, but in the end failed car companies because of the unavoidable cruelties of the car business.
The advantages of an EV to the end consumer are just overwhelming. Nobody “goes back”. It’s a one way trip. After EV ownership, ICE vehicles make no sense at all. But only EV owners know this. And that tribal knowledge is spreading exponentially. Tesla is the best version available. And their numbers will simply continue to climb. The more Teslas exist, the more demand increases. Exponentially.
But I have my Dr. Pepper right here and I’m on dose.
And once the Model Y is out, that shares so many components with the Model 3, they production costs will be lowered again. This the same thing big auto does, shares components to reduce costs. And not just between their own models, but even between manufacturers.
parrhesiastes1 can be summed up thus: he cannot afford a Tesla and is accordingly butthurt.
This is so very true. It hit me when I went in big time on TSLA, when Elon announced going private at $4.20. Big Oil got me again and the stock was doing the opposite of logic. I have been holding ever since and, hopefully, some time Big Oil will break just like Coal did.
Economic reality will break TSLA.
The shortselling community is not selling FUD – we get pissed on by bagholders for telling the truth. Not just a little we are subjected to real abuse, frivolous lawsuits, personal attacks – we get our employers called and our livelihoods threatened.
Ask yourself, is this what an honest company does?
A real business wastes zero time with the shorts and the upper echelon of the short selling community wastes zero time with real businesses.
Boohoo…. Did Elon also steal your lunch money in school? You are spreading FUD, as opposed to the facts mentioned in this article. Keep shorting, time will tell.
This is the “Luddite” view. Disruptive industries create new and different jobs. Already, the renewable energy sector is creating MORE jobs and opportunities than the fossil fuel industry.
Many of these “jobs” have yet to be invented (the technology underpinning them does not exist yet).
Consider the internet…
30 years ago, if a young child had said “One day I want to become a web master”.
What the hell was that – 30 years ago? Something to do with research on spiders? Today (2019), many MILLIONS of people are doing well-paid jobs that the internet spawned.
“I intend to make a living as an Internet Vlogger” said another child… He was told to quietly pay attention to his schoolwork and told not to speak rubbish…
His little sister was sent up to her bedroom for a few hours after she had said “I want to be a smartphone App Developer…”
And now HER little sister says “Hey, I can make a living being a professional troll for the Exxon Mobile. How cool is THAT??”
“All I have to do is spew nonsense on the Internet and they’ll give me HUNDREDS of dollars per week…!!!”
parrhesiastes1, haha. All you have are baseless euphemisms. There is no real short selling community, any group calling themselves that is peanuts compared to the large interests heavily shorting the stock. Your small time shorts don’t matter at all. You are too stupid to realize you are playing in a game you have no influence on. It is a stupid game because the big players with the control don’t care about making money shorting, so good luck playing a game no one credible expects to actually win. Shorting tesla is now just a delay, tesla has done too good to be taken down by it. They can raise all the money they want. That is just a fact. If those same forces move against tesla competitors, that would just help tesla continue to be a monopoly on EVs.
Even if tesla screwed up and couldn’t survive, any number of auto companies or suppliers would try to buy them and throw a lot of money at it. The chance your short pays off is low, but if you shorted under 200, you are losing money no matter what. No sane person would have opened short positions at 170 in high volumes, yet we saw it happening. Proper shorting is done when the price is high, not rock bottom.
When it comes down to it, people like you have a mental illness. Teslaq is a mentally ill person. People like you are fanboys for the actual short interests and you don’t even realize it.
Great FACTS Jack. You understand the entire story. As Tesla expands
Pingback: The Conspiracy Against Tesla … Is Too Obvious | CleanTechnica
Great article.
“That’s 679% growth in four years or 170% per year”
No it’s not. 170% a years for four years makes 835%. These don’t add, they multiply. Because the 170% of the first year also grow the second years, and both grow on the third year, and so on.
In this case, it’s a bit more than 161% a year. Still very a nice growth.
Eloquent, Factual and Understandable. fearing a future void of truth is reasonable. Speaking truth to protect the future is mandatory. All that is necessary for evil to triumph is for good men to do nothing. Our words and actions will determine who is victorious in this.
Keep up the good fight.
Sounds to me like your M3 works flawlessly except for the single task that involves interfacing with a non Tesla product.
There is nothing “flawless” about the Tesla Model 3. I have made high comedy and continued criticism of both it and the Tesla Corporation for many years. Summon and autonomous driving is comic. Getting in and out of the car is a pain, albeit slightly better than the Model S. The suspension is stiff and jarring. I have a LIST of this stuff.
At the same time, I have completely disassembled the car, examined all the pieces, and as best I can tell, this is the most advanced technology in automobile land and the batteries particularly are from another planet and time period.
It IS the best car ever built. And focusing on the minor discrepancies in the first iteration of a new car model is not really very useful, beyond pointing out some areas to Elon Musk et al for possible improvement.
My biggest complaint is not service, but lack of support for owner maintenance and right to repair. It is driving insurance through the roof and does not encourage the Tesla cult – indeed it pours water on it to no good purpose I can divine.
And no, it isn’t me David. I know this because IT improves, with no change to me, my house, my wireless, or my garage. I’m pleased to report that I can now faithfully summon my steed from the garage. It will back up a few feet, open the garage door, and then back up the remainder of 20 full feet, and then close the garage door. And it will do this fully 50% of the time. That’s dramatically up from 10% just six months ago. With no changes to anything except the software in the car through OTA updates.
Jack
His name was Seth Rich
HIS NAME WAS SETH RICH!
I HEAR YOU.
In any event, he’s dead. He’s buried And I could wind up taking chamomile tea or whatever those liberals drink with him very soon if I’m not careful.
There was recently a news story where some people told a story that Model 3 cars are routinely being made with missing bolts or with electrical tape holding together broken plastic parts.
https://www.cnbc.com/2019/07/15/tesla-workers-in-ga4-tent-describe-pressure-to-make-model-3-goals.html
What I found interesting is that it was 100% hearsay (aside from two photographs, provided by the “whistleblowers” themselves). Presumably if this is really a problem, there are thousands of Model 3 owners out there who could identify that their car has the slapdash assembly work, and sell photos to the news services (while shaming Tesla into fixing their Model 3 cars to proper quality). I am not aware of even a single Model 3 owner stepping forward and saying “Yes, the whistleblowers’ story is true and I can prove it, look at my car.”
Presumably when you have thousands of people working on production lines, some of them are better than others, and thus some of them are careless or sloppy or too lazy to do their jobs properly. But I recently read some speculation that some are in fact moles, trying to get away with as much subtle sabotage as possible.
I’ll end by quoting Heinlein’s Razor: “Don’t attribute to malice what is adequately explained by stupidity. But don’t completely rule out malice, either.”
Here is a video from German with English sub-titles about why German car rental company cancelled an order for 1oo Tesla Model 3 Why Tesla canceled our €5 million Model 3 order
https://www.youtube.com/watch?v=boWp5JqqenY&feature=player_embedded
Hear Hear! Well written! Well spoken!
Jack
Can the public get a petition to force Congress to investigate the SEC principles?
I wrote several articles on this at seeking alpha, hard to get positive Tesla articles published
But you are right
SEC heads need to roll
We needn’t DO anything about the SEC. We don’t really even need to DO anything about oil company shorts. Sunshine is by itself not just the ultimate power source, but the ultimate disinfectant as well. As this leaks out and becomes public knowledge, you will find that all the creatures who scurry about in dark places behind the view of the world, will scurry away to other dark places. They do not like sunshine.
In this case, that scurry rather turns into a short squeeze. Don’t miss it. With just the right amount of play, you can fund a Tesla from Tesla stock and call options.
Killed it! I loved this letter. And you can thank Zac and Jesse for sending me your way!
I will. Indeed it strikes me as very odd that they are doing my shit BETTER than I do it. What am I supposed to do with THAT????
China… In just one word.
China has no oil. China leads the world in EV adoption and renewable energy tech and manufacturing.
China is already the “lifeblood” of most US and European car makers. Without China, most traditional automakers are vulnerable. Many are starting to see that China is not interested in ICE cars anymore.
China laid out the red carpet for Elon Musk and Tesla. In less time than it takes to say “WTF!”, the Chinese have built (the first of many) Tesla Gigafactories.
China will extract as much knowledge and expertise as it can from the Tesla business model, and will happily fund it if necessary – without any limits. The Tesla “method” will be China’s benchmark for its entire automotive AND energy industries.
This does not stop at “cars”… China will extrapolate this methodology into all areas of renewable energy – and has been doing so, brutally and aggressively, for almost 20 years now.
China is poised to become the “OPEC” of renewable energy ALONG WITH being the world’s major supplier of products that CONSUME that energy.
China will soon control not only the equipment that facilitates PRODUCTION of renewable energy, but also its CONSUMPTION, by way of most electrically-powered “stuff”.
The death of American Capitalism (with all its corruption, greed and harmfulness) will be swift and brutal.
It will happen within the next ten years.
Your timeline is suspect. But your concept is all too sound. I said years ago that I feared we would all wind up working for the Chinese. But later amended that to the fear that they would simply hire Brazillians and Mexicans instead and we would be out of a job entirely.
Bill Gates is forced to go to China to develop his gen4 nuclear plant. Elon Musk is building in Shanghai. And so it goes.
Jack… you are perhaps the world’s most important “Industrial Philosopher”. Your decades of experience in a highly specialised industry is now being devoted to extremely intelligent and well-reasoned analysis and predictions. Please, please… get all of this into a book. It will be a best-seller.
And what would I do with that? I say what I say when I say it. And I did it all through the development of the PC, and all through the development of the Internet, and all through the development of the EV, and now I’m doing it through the development of solar energy storage. And for those with an ear to hear, hear – and profit thereby.
People write books these days to monetize things. Every talking head on TV now has a book out and most of the savvy YouTubers do as well. I don’t need the money. In fact, I quit needing money at age 33 when I didn’t have any, and decided I didn’t want any. And its been raining money ever since. The shit clogs up the vacuum cleaners and gets into everything. Nasty stuff.
If you want to support me, go to our online store and buy something. And while you are there, go buy something else that works with it. And after you put them together, do something with it. And make us something new and better. And keep doing that. We are here to inspire and enable people to tinker and innovate and invent and change the world,
We have almost no interest in entertaining copper foil helmets and morons who prattle UNCEASINGLY about their OPINIONS and their BELIEFS in some sort of whacked value system where they think any of that has any importance at all. . We seek “a few good men” to go and change the world,.. This is FULLY outlined in our FIRST video in May 17, 2009. And NOTHING HAS CHANGED. Go review it.
I’ve gotten older. The breathing is heavier. The steps are slower. The hair is grayer. But the mission is the same. And a few more miles before I sleep apparently I am called.
Elon Musk is changing the world in just this manner. Working 100 hour weeks to help perfect God’s creation.
Good work if you can get it.
Jack,
Elon Musk and friends must remain in control. I believe the current shareholder rights are structured to prevent a hostile takeover using oil money (thankfully).
Merging with Apple would likely remove that control. Therefore it won’t happen. Tesla can get all the money it needs without accessing Apple’s coffers.
My pet theory is that the Saudi attempt to provide secured funding to take Tesla private was a potential threat. Maybe the infamous tweet was designed to scare off the Saudi attempt to buy up Tesla stock (whether planned or not, that is what happened).
The fact that short interest and FUD/Smear/SEC is so intense is because the threat from Tesla is now much more real. It shows Big Oil now sees Tesla as succeeding, whereas before they were a pin prick. The fact that they have tried and are trying so hard, but not succeeding is heartening. Money cannot always buy you extended life or remove threats.
The more cars Tesla sells the greater the momentum. Tesla owners will drive public opinion.
The disruption is now well underway – onto my second bag of popcorn.
Actually I agree that the Saudi pressure to go private may have been a very dangerous idea to entertain. Musk has lost control of companies before. The public markets may be his greatest ally going forward.
Apple is a special kind of case and as you know I have advocated this merger for about seven years now. Mutual needs. Apple is blue sky starved but cash rich. Tesla is swimming in blue sky, but with an insatiable appetite for cash. More to the point, Apple needs a visionary leader. On the demise of Steve Jobs, they have been without one. And so you see, this would work much better WITH Musk in control. Perhaps Tesla should acquire Apple….
Ironically Apple is poised to compete with Tesla. And I didn’t mean to imply Tesla would not have competition. I meant it won’t be from any of the standard players you think of now. Apple, Google, Amazon, even Dyson Vacuum cleaners are all potential participants. And quietly, Apple is getting much closer than you might think to an introduction.
Greate article. When Tesla become profitable, do you see Tesla declare dididents?
It would be nice to see that big oil pays money directly to 34% of Tesla share holders.
Lets make the expense of big oil higher !!!
Technology companies and growth companies are a special case. You don’t pay dividends and indeed you don’t want to EVER make any particular money. Profits are anathema and a sure sign of corporate mismanagement. Profits reportable as income, and dividends, are a confession that management no longer knows where to put money profitably.
AS LONG AS you can maintain growth, ALL revenues should be plowed directly into funding MORE growth. Properly managed, you still can’t hit zero. And a slight positive balance is nice. A slight negative is nothing to worry about. But you certainly don’t make profits, pay taxes on them, or remit them to shareholders. That means you have no place left to invest.
And so a company such as Apple, run by an accountant (Tim Cooke) reaching market saturation in smart phones and tablets, winds up piling up 250 BILLION in cash, declaring a dividend, instituting a stock buy back program, etc. etc. – all ADMISSIONS that it just doesn’t know what to do with the money as they have no place to properly put it to work.
We would hope Tesla NEVER HAS A PROFITABLE QUARTER while I live. That means they wills still be growing, innovating and imagining future products that will MAKE YOUR LIFE BETTER. And of course they will continue to grow. Ultimately, at Tesla’s current growth rate, their cars will require the entire mass of the solar system within just a few years. So that isn’t happening. But it can grow for a LONG ways in a 78 million unit market. And it is of course hyperbole to consider they will subsume all of it. In integral calculus, you define the limits of the variables and assume a rate of change to calculate the area under the curve. ie, they are at 0.46% growing at 150% per year and they can’t go BEYOND 78 million units. Unless it is also a growing market.
As to the adoption curve. 2.5% is classically the beginning of the early adoption phase. I say classically because each technology has a slightly different curve depending on the cost advantages and benefits offered.
The TIPPING point is NOT the beginning of the early adopter phase. It is generally and roughly defined as 10% market penetration.
Exponential growth BEGINS at the tipping point. So if you think Tesla HAS been growing, or that EV adoption has been growing, you ain’t seen nothing yet.
I often refer to this as the Friday/Tuesday phenomenon, On Friday it seems you can’t give em away, and on the following Tuesday nobody can get one because they are all sold out for six months. When that occurs is the defining question.
My questions may have been covered elsewhere but the answers would bear repeating anyway.
“Hypothetically” a company could create a shell where investments would be made at “arm’s length” or beyond in order to avoid financial responsibility. Such a shell would then by various means engage in short selling shares, with the sole purpose of flooding the market with non-existing shares; then declare bankruptcy
What happens to the value of Tesla shares, to Tesla corporation, to unaware buyers of vapor shares.
Who carries the burden and who carries the responsibility to “balance the books?”
Is this a plausible scenario, or are safeguards in place to reliably prevent this type of manipulation.
Well it all depends on the level of play here. But basically you have to have an account somewhere and it has to have a balance. And you will find that the “house” never loses. There is no shortfall. If you short the stock, the proceeds of the stock go into the account, but you cannot access that amount until the shares are covered. And indeed, if you wind up upside down, you have to have enough CASH on the books to cover the shortfall or be within your allowed “margin” which on Tesla stock is basically 0.
Part of the short squeeze is that in theory left from days of yore, if the stock goes UP beyond what you are permitted, you get what’s termed a margin call. That means they “call”you and give you the choice between ponying up more cash to cover, or sell part of the stock or shortage. In today’s computer markets, a margin call really means instantaneous liquidation. Your “margin call” is really a text message that the stock was covered, you lost $49000, and it was deducted from your cash reserve in your account.
Ironically, these triggers happen so fast, you can find yourself in the really goofy position of a spike triggered the sale, the stock then plummeted, and you would be REALLY in the money, except for the forced sale which took out your position.
At a larger scale, like oil companies and auto companies, you go to a Jeffrey Chanos and say “Hey Jeff” we have some funds we would like to put under management. And Jeff says “How Much?” And you say, “Well let’s start with $3 BILL”. And Jeff replies “Would you believe I AM a certified money manager? As it so happens? And what are your “investment goals” with this $5 BILL? Let’s talk”. $5BILL? Why yes we were actually thinking $5 BILL. Did we say $3? ”
And would you believe, that whatever the investment goals are, just HAPPEN to be exactly how Mr. CHanos rides anyway. What a stroke for luck! A marriage made in heaven….what are the chances…..
You’ve gone mainstream, sir!
https://www.youtube.com/watch?v=vfILTM_xcOE
Yah. It’ll take a week or two. But I think I can fix it. Mainstream has threatened before. Kind of a hazard of the game I play. But I’m pretty good at getting it to go away.
Zac & Jesse did a great video with Jack’s article, all the way till the end when Jesse had to throw the Climate Change turd into the punchbowl.
Thank you Jack, you are a hero.
I’m on of the little people too. I am a Tesla shareholder and my first thought is – Can and should the SEC be sued?
No, trying to sue the SEC is like trying to sue the government, it’s pennies on the dollar for the SEC to crack the whip on Tesla, but nobody and I mean NOBODY cracks the whip on them. But say you do sue them, at best, the dude running it gets dumped over “mismanagement” and you “might” get a “mea culpa” from the next jackass down the ladder. But other than that, you’re not gonna “win” anything from them, cause they “own” the game!
💪 👍 👍 superb blog, every one on earth should read this article, thanks Jack.
You’re quite welcome.
Yes, they should. But they probably won’t. One of God’s little mercies on me.
Truth to tell, only a select few can ever benefit from this. I’m glad you found it suited its purpose for you.
And I hope you carry the benefits forward, across the land and into the future.
“TESLA batteries for solar energy storage.” Tesla Battery Packs secondary market for energy storage will be big, It will open up all kinds of off-grid possibilities. All we need is an interface to use them safely. Jack is leading the way. Soon living off the Plantation with energy independence will be achievable. Thank You Jack!
Superb article Jack.
My math shows the following numbers.
1 model3 replaces (20.000km/y, 6L/100 km) 1200L fuel/y
1 m3 robotaxi replaces 6000L fuel/y.
1 semi replaces 40000L fuel/y.
And the bomb will be the robosemi with 200.000L fuel/y.
Regards, Tamas
Spot on, and very well explained, Jack. Thanks for an excellent article.
Once more, I agree with Jack. And putting my word where my mouth is (and vice-versa), I published my opinion in “The electric car, here and now”, a book available at all good bookstores. And if you check the acknowledgements page at the end, you will find EVTV and Jack Rickard !
34% shorts on the company of the century?. All savings to buy Tesla each month.
Butts in the seat of my Model 3 Performance sold at least one Tesla for sure. I enjoy test driving people any chance I get.
Great article Jack! One thing I don’t understand is if $10B is a drop in the bucket for big awl why would they ever cover their short positions? Wouldn’t they just continue to double down and further attempt to delay the inevitable?
👍👍👍 Brilliant article. I hope that you make enough to buy you and Elon the best protection available. Or just move to China.
Thank you.
I already have a delightful little 300 square foot high rise apartment in Shenzen already picked out with a stunning view of the smog.
I don’t understand. How is the short interest relevant to TESLAs performance when you specifically acknowledge that “they can raise ANY amount of money they like, at any time, on three days notice”?
The larger the short interest the more the price has been held or forced down by these sellers. This lower share price then means less money is raised that otherwise could have been raised. Any follow-on offering (more shares sold) is effectively limited by the number of existing shares outstanding because existing shares are diluted with the issuance of additional shares. So, the lower the share price the more shares must be offered to cover the shortfall which means existing shares become less valuable due to the dilution. It’s a double whammy. A lower share price also hurts financially as the shares are often used in place of currency for compensation or purchases. Now it’s a triple-whammy
However, the flip side is that these shorts are now mandatory buyers of shares as they must cover at some point. If the price starts up and the sellers don’t have bottomless pockets they must buy to cover. This short covering (buying) raises the price more which leads to more short covering. Continuing the cycle is called a short squeeze when the price rockets higher to flush these guys out. When short the holders must be careful because there is no limit to the losses that can accrue.
Only shares held in margin accounts can be shorted. If shares are held in certificate form they can not be shorted.
Watched some of the video, Jack, and the theory sure seems plausible.
You probably made the video prior to the news about Walmart roof fires and Tesla solar.
Obviously, the Tesla solar is not directly related to the Tesla car business, but still…
Would be interested in your thoughts on this topic.
I don’t have any. The Walmart deal was entirely a product of Solar City. Tesla acquires the company and inherits the mess.
I can tell you that Walmart is very very difficult for their suppliers to deal with and there is more to this story than you are quite getting from the news coverage.
It is a seriously uninteresting topic for me personally. And we’re very involved with solar at the moment. This is decades old technology and installation and most probably the entire issue is installation. So I only glanced at the news reports and dismissed them mostly in the first couple of paragraphs. It won’t have any impact on Tesla now or in the future in any germane way I can imagine. But I really just struggle to even have an opinion or reaction. Non-event. And uninteresting if it were an event.
I get the feeling that what you are saying is just the tip of the iceberg. Big oil and big auto are capable much more. I think that they are actually buying tesla shares and selling them at a lost to manipulate the prices lower. It’s like you said, it’s just an expense to them. What are your thoughts?
I’ve suspected events have been going on exactly as you described in this article. Glad to see you take the time to put into words these events in a coherent manner. My suspicion is that IF the oil companies and their ilk succeed in destroying Tesla(I feel it’s an unlikely but possible scenario), most of the EV offerings from the big automakers that exist will also disappear at least as quickly as EVs entered the market. Tesla succeeded in bringing to market products that were comparable to what that the major automakers could have brought to the market in the 1990s, but whom instead deliberately chose not to. Sure, the technology wasn’t as good in the 1990s as it was when Tesla entered the market, but it was good enough that we could have gotten 150+ mile ranges at freeway speeds with it when sufficient attention was paid to vehicle efficiency. Cars like the NiMH-equipped Solectria Sunrise and GM EV1 demonstrate this.
And his name was Seth Rich. Now he’s dead, and Assange is in prison for the crime of journalism, while the shill, bug-eyed, ankle-biting-barking bitch of a diminutive but ever ferocious Hilldabeast walks free as she gets thrown more treats by Goldman Sachs for barking some more. The more that people talk about it, the less that can be done to silence them.
Interesting article thanks. Please explain your claim that battery cars do not feature more emissions than gasoline cars.
Oh, that’s easy. They don’t feature any emissions at all. Gas cars do.
Try this at home, go attempt to suck start your Oldsmobile through the tailpipe. Just set the ignition switch to ON not start, and then wrap your lips around the tailpipe, and then inhale until the engine turns over just enough to start. But keep inhaling until you are certain it is running smoothly.
Now go repeat the experiment on the Tesla. This is kind of a fail right off the get go. You will struggle to FIND the tailpipe. That’s because it is cunningly hidden in the steering wheel beneath the airbag. Remove the airbag assembly and wrap your lips around the center hole. Then place your foot on the brake and tap the control bar up or down just to the right of the steering wheel.
You do not have to rely on me or others. This is how you can demonstrate to YOUR OWN SATISFACTION that battery cars do not feature more emissions than gasoline cars. And I hope your recovery from the Oldsmobile portion of the test is speedy.
Jack – I wish you would’ve divided this up into say… 3 parts. I want people to read it but fear it’s too long for some.
Fear not Sara Byrd. The inescapable truth is that if anyone finds the article too long and tedious to read, they are genetically predisposed to not get anything useful from it anyway. And there is nothing you or I can do about that. It just is.
I learned long ago to speak to those with an ear to hear. And to purposely be totally oblivious to the rest. You can view that as arrogance, vanity, or intense delusion at your pleasure and at whatever level of rationalization makes you comfortable. I view it as a practical matter in changing what I can, accepting what I can’t, and being sagely aware of the difference.
I have a certain thought process and study interesting things intensely. It has allowed me eggregious and undeserved success and blessings in life that actually are so ridiculously over the top as to drive certain feelings of guilt watching everyone else suffer so. And so I am willing to share. For those with an ear to hear. But I am not precisely RESPONSIBLE for their wretched existence. I didn’t cause it. My blessings are in no way derived from it.
SO I am actually QUITE pleased you found it interesting and potentially useful. But it just isn’t for everyone. And I’m all good with all of that.
I know that “you can’t hold back history,” and I have agreed that Tesla is the best car ever made. I’ve had my Model S for going on three years. But I’d like to hear a further explanation of why Big Awl can’t beat Tesla into failure. In spite of “history,” it still seems like they have the resources to beat Elon if they choose to go all in. Why so you think that’s not the case?
The concept is being on the wrong side of history. And you are kind of the reason. Every time they sell a Tesla, you get 10 new people that know enough about it to want one. As I DID say in the article, there are lots of reasons NOT to immediately buy one. But they all want one. And so it’s like the old shampoo commercial, and she gets two people and they get two people and so on. And to continue the water closet analogy, you can’t put the toothpaste back in the tube.
I usually refer to this as “a heroic act of gravity defiance.” And they are always doomed to failure. It’s a function of deeply ingrained DNA level species differentiation. We just work that way.
And note the immense power of this. Of 10 who get to ride in a Tesla, four should want one, four should definitely NOT want one, and two should be uncertain. That’s the standard distribution. My claim is ALL 10 want one. Every time. I’ve never heard of anybody actually riding one, and certainly not driving one, who didn’t want the car. And that is unheard of. It doesn’t happen ever. But I’ve never heard of a single occurrence of but in seat with a negative reaction.
The “tipping point” is actually some off in the distance. At about 10% market penetration, electric cars demand will increase suddenly and even explosively. You’ll be on a waiting list for two years to get one. Kind of like being able to get a first iPhone but worse because the resources to ramp production are much greater.
So a delaying action is the best they can hope for. If they can forestall the 10% point by a month, it’s some portion of $82.5 billion. Now clearly that isn’t 100% of the market, and clearly this year’s new cars are but a small portion of the total number of cars in operation. We sell 80 million cars per year but there are 1.5 billion cars. So this is a simple calculation to make the point that the scale of the mountain of gigaducats involved, makes the $10 billion short position penny ante and lost in the rounding errors. Correct my mathematics as you like, it still comes out the same way.
I would suggest as well, that the slowness of VW et al in introducing serious contenders is kind of based on, let’s send a soldier out front and see if he gets killed first. They’re all watching Tesla with intense interest that probably rises to the occasion of high anxiety. If Tesla were to fail, they could slow march and scale back their EV plans pretty easily. If Tesla wins, they truly believe their immense machine and decades of experience will allow them to convert and beat Tesla anyway. That smug arrogance is in almost all cases fatal to legacy technology large corporations. It’s just unheard of for them to survive it in anything resembling present form. I guess ATT DID survive after a fashion. But it’s a very different remnant of what it was. They kept the name basically. But the landline phone company is long gone. Picture VW proudly proclaiming an august history, but only selling car insurance in the future. With 1/500th of the headcount.
Love a good conspiracy!
https://www.google.com/amp/s/www.cnbc.com/amp/2019/08/23/tesla-short-says-elon-musk-should-resign-over-solar-panel-fires.html
Pingback: My Quest For Net Zero & Beyond With Tesla Model 3 — Part 3 – Enjeux énergies et environnement
Y-axis?
Jack, wouldn’t you assume that long ago the Chinese completed the reverse engineering of all of Tesla’s motor and battery technology? Knowing that they’ll never truly stop their flagrant intellectual property theft, what is to prevent them from producing a 模特3 for the masses (sans FSD at first) at half the price of a real Tesla M3?
Nothing. That is precisely Tesla’s aim, to get as many electric cars out into the wild as is humanly possible. They basically don’t care if you copy them.
We’ve long known about Tesla’s open patents and Elon’s stated goal of entering the car business mainly to disrupt and transform it. HOWEVER, it’s impossible for me to believe that Tesla, in it’s massive battle with the short-sellers, is forgoing dividends in order, among other things to build Gigafactory 3 AND “doesn’t care” if the technology is ripped off to a degree sufficient to render that new factory useless. I’m pretty sure it’s not true that they don’t care if the Chinese put them out of the Asian market by stealing their design and manufacturing methods.
I think Tesla only cares about its FSD. Definitely Tesla does not want to share their Full Self Driving knowledge.
FSD is a bigger deal, than EVs. The electric car manufacturing becomes a “commodity” soon, not big deal.
Also, I think Tesla is confident that they will be ahead of others with new innovations as times goes on …
If you don’t stand still and keep going forward with constant improvements, other can not catch up to you, others become a motivation to keep moving on… If you stop you are deserved to be over run …
Ervin, that’s a very insightful post. I hadn’t thought of it that way before, but it certainly makes sense.
Flagrant intellectual property theft is a self aggrandizing meme narrative bringing great comfort to the American public. It inadequately describes a much larger and more complicated conflict. It is not so much that China is STEALING anything. We are actually SENDING them the designs. We electronically transfer all data necessary to manufacture our circuit boards to China quite willingly because they will produce the finished product for 1/5 the cost.
China doesn’t HAVE patent and copyright protection. They don’t HAVE such laws. Indeed they don’t have the CONCEPT of such things. The very idea does not make any sense to the average Chinese at all. How can you OWN an idea? Or a design for that matter? What are those clazy Amellicans on about anyway? What “intellectual” property????
And so Trump et al are trying to IMPOSE copyright and patent protection onto a country that doesn’t even value the concept.
And as any Chinese will readily admit, they do not have our inventive tendency. They can copy things. They can produce them very cleverly. But true invention or innovation is not as in their nature as it is here. The concept of the garage tinkerer is just not strong there. But incremental improvement is.
But copying the Tesla Model 3 is not nearly as easy as you imagine. You pretty much have to copy an entire mindset encompassing the manufacturing, the design, the entire gestaldt of it. They will do it. I don’t think you will recognize the result of it exactly. But yes, it will be half the price. I’m predicting the past again. BYD is ALREADY the largest producer of EVs in the world – NOT TESLA!!!!
That said, China is now the largest auto market in the world at some 26 million units this year – down quite a lot from over 28 million last year. And there is a curious dynamic at play. It has to do with a kind of enhanced sense of image and ego they term “face” and there is MUCH face in driving a Tesla over driving a BYD. Or in having an iPhone over a Samsung.
To extend both the complexity AND the irony, note that iPhone is an American company, Samsung is a Korean company, and both are largely manufactured in China. But the CHinese strongly prefer the iPhone as it enhances FACE.
You have to understand that Chinese are naturally proud of their country and their “race”. And they truly believe that the 21st century is the century of China where they will emerge as the dominant economic power in the world. At the same time, very viscerally they love, admire, and emulate all things American. And they hold us pretty much in awe. A source of endless fascination.
I could write a book on this. But I won’t. Nobody reads books anymore. While the Chinese march into the “Century of China” we rather omitted the part about teaching our children to read. Or even to “cipher” Jethro Bodein style. We were oh so busy indoctrinating them into a failed Marxist/Maoist mindset of nonsense and superstition, an affectation of our least able to appear “intellectual” and superior. Gag. Retch.
Jack Rickard
Where is the energy to charge all those future electric vehicles is going to come from?
Your timeline for the demise of IC cars may have to be modified to account for the construction of infrastructure to generate and distribute electricity.
Enter the dragon! Or, if you will, selfish solar. A year ago I had 16 PV panels up. Today I have 56. I can cover all my electrical needs sunup to sundown, Or I can charge my Volt, Leaf, and Tesla. I can’t do both….just yet. I’m still building and expanding the power plant. In 2020 the Federal tax credit drops to 26%, still better than a kick in the pants. I’ve been retired two years now and the primary form of entertainment here is still: going into the garage and making something cool. My gasoline bill WAS $200 per month. My power bill, on average, WAS $350 per month. I’m just too old to focus on “pay back” timelines. It is a comfort however to know they can jack up the utility rates all they want for us “fixed income” retires (independent as a hog on ice) and walk away with a mouth full of feathers. At this point knocking the ute bill down to $20/ month involves doubling or tripling battery capacity. Summer Arizona AC is a bitch even at night. If the creek don’t rise, It’s gonna happen.
Dear Jack, you have had a great influence on me. I built 2 evs, one lead acid and one LiFePo4. Now please, I am a moron when it comes to trading stock – can you please explain to me the connection between unexplained short trading and suppressing the manufacture of Teslas?
It increases the cost of and access to additional capital investment. But more powerfully, if indirectly, it continues the campaign of spreading fear, uncertainty, and doubt about the enterprise entirely. If consumers suspect Tesla will go bankrupt, that would leave them stranded and orphaned for service, and that fear dampens sales. FUD is employed because it is very effective.
Tesla is the easy target but almost symbolic. If you notice, the larger automakers have been ANNOUNCING electric plans for YEARS now. But they never seem to quite bring them to fruition. That is not entirely incompetence. They are kind of “hanging” back waiting to see what happens to Tesla. And so Tesla kind of acts as a proxy battle/proving ground for the entire concept.
The conversion from manufacturing ICE cars to manufacturing electric cars is not quite as trivial as they would have you believe. It is a huge investment, cannibalizes their own product lines, and is actually very dangerous. Most people do not realize the thin and narrow line these automakers walk to be profitable. The numbers are sufficiently huge most people believe they are the source of all money somehow. It is not precisely so. And so they are holding their breath, watching Tesla, and hoping for good things (for themselves).
So oils activities are certainly aided and abetted by the autos, who watch in trepidation to see the outcome.
Fear not. I was not being specious. Elon has them outnumbered, outgunned, and surrounded. It LOOKS like an impending huge battle. In reality, they will lay down their arms, and wail like little girls in the end. A string of suits trailing pathetically to the parking lots with their little cardboard boxes of desk mementos and corporate award trophies. Wondering how the public could be so fickle and unappreciative of their heroic and expert efforts. Age 52, unemployed, and unemployable. Most will become “consultants” meaning will provide negative and embittered advice for food.
It is part of the creative/destructive assembly line of American innovation and development. A thing of such beauty it brings me to tears regularly. Moving from two guys in a garage, to huge corporate entities of immense manufacturing scale, to decay and finally extinction on a never ending conveyor belt of technological discovery and development.
It is precisely what accounts for the unlikely situation that the United States of America has 4% of the feet and 25% of the shoes on the planet.
Having a live webcam is a nice feature,
it can help fill-in between your videos.
The new main shop camera has a color-balance
“perception” problem, blue washed-out?
The image is reversed (left is right, right is left)
The clock is a half hour slow and only updates every 5 seconds.
The good news is, it appears to have better resolution.
and is no longer upside-down
And if you’d swing ‘shopcam 2’ to the right,
we could watch your water reclamation project in real-time.
Tell Bradley I said “Hello”
What fascinates me is when you find some bit of info that shows some details of how businesses operate.
In the case of Tesla Gigafactory if you have a look at a very short 1min 30sec) imbedded video posted here:
https://www.rgj.com/story/news/2018/12/10/reno-sparks-nevada-tesla-gigafactory-factory-model-3-sedan-jobs/2211115002/
The Reno Gazette has stumbled up some interesting information, I will print the words spoken by Chris LIster ( vice president of
operations at the gigafactory) on the video:
Chris Lister ” from a big picture perspective, we’ve located suppliers on site, THEY bring THEIR raw materials in, THEY process them into finished product and then they supply us ( tesla) with that product, whether thats cooling tubes, whether thats cells, whether thats cans for making the cells. These pieces come into the operation and what comes out of the gigafactory ( is ) powerwalls, powerpacks, battery packs for the model 3 and drive units for the model 3. ”
So it would appear what the gigafactory is, is not really a tesla factory at all, it is more like a rented space where various suppliers can produce parts used by tesla. Whether or not the suppliers pay rent I have no idea, but it is not really Tesla producing these parts!!
Tesla appears to facilitate the location and space for suppliers to work from, the parts are of course branded as tesla parts.
I would imagine that each supplier has to pay its own workers etc, so would the workers in the gigafactory be employed by tesla or by the suppliers? My guess is that its the suppliers.
This is a business model that I have not seen discussed before in regard to tesla, I realise that this is the way car makers and other businesses run. I would imagine that most people would assume the TESLA gigafactory is actually run by tesla, but in reality its full of suppliers doing the producing for tesla. People are always saying tesla builds everything from the ground up, but its not really that way at all, tesla uses other companies to do the building, they might be better seen as the final assembler of the cars. But do they actually do the assembling or is the fremont factory also full of other companies doing the assembly?
For me this is very interesting information. Its a bit like if I was selling say some chinese brand battery ( or any other product) and I get them to put my company name on the battery, then its very easy for me to give the impression that my company actually built the items.
Would you say that for GM to claim it produces American-made cars, it’s necessary for GM to own the site that mines the iron ore, has GM employees mining it, and sends the ore to GM owned steel mills staffed by GM employees? How would Tesla-branded parts come out of the Gigafactory were it not for Tesla owning the manufacturing process? As you said, you realize that this is the way car makers run, so why do you emphasize the statement, ” . . . It is not really Tesla producing these parts,” with two exclamation points?? (See what I did there?)
When I buy store-brand products at my local grocery store, I’m well aware that they don’t process the food themselves. Branding products produced in another company’s factory is done everywhere. As long as the processes are completed in Tesla facilities, they are, in fact, American-made, fully under the auspices of Tesla.
Tesla seems to be working exactly like any car manufacturer would, especially one making products with thousands of parts, EXCEPT that Tesla had the sense to know that having the other companies’ facilities right inside the Tesla plant increases the efficiency of JIT (just-in-time) manufacturing by a substantial multiplier.
I guess I don’t see the point you’re making very clearly. I sense that it’s pejorative, but from my reading, it just heaps kudos on Tesla.
I think its absolutely amazing what tesla has achieved, credit to those involved, they are indeed changing the world, it does appear to me
that the gigafactory is seen as a tesla entity, Of course its well known that panasonic was involved in some way, but it does suprise me that the modus operandii might be multiple companies each doing there own section of product supply. That is quite a surprise to me.
Thank you Jack for this thoughtful analysis. Couldn’t agree more
I’ve sat in every Tesla model and I must say the build quality and fit and finish is not quite there yet. Of course given the sheer accomplishment, you can forgive the cosmetics.
What I haven’t heard much about is anyone using the open source of its technology that Tesla claims to have given away, to build a better mousetrap.
For example I would think that the larger chassis of classic 70’s American cars like the 1973 Buick Riviera would be ideal for a Tesla conversion. Maybe this is a job for Chip Foose?
Great artickle – we agree with the oily end of this shtick… and hope you is correcto about the outcome. ‘Cause if ever there was a bunch of slimey dipsticks showing water in the oil the 27% oil depletion allowance, the giveaways of Arctic Drilling sites, the endless wars in the middle east and disruptive tactics in Kazakstan to support more oil could not disprove you theory. The U.S. Gov is totally invested in Petroleum Dollars and will do everything to avoid losing that investment including endless destabilization in the Middle East – endless brushwars and death for American soldiers and a permanently lockjawed and lockstepped march toward Climate oblivion for a few “dollars more”.
Interesting article in Green Car Reports
https://tinyurl.com/y5r8gen8
Jack’s not the only one…
Thanks for the ‘heads up’ on Jack R. Interesting guy! Me? I’m a retiree on a fixed income and only ‘dream’ of owning/driving one of Elon’s creations. LoL. Best I can do will be to buy a few Tesla shares toute de suite !
I think that Camel just sneezed.
It would appear so. As I’ve said for 10 years, we’re only one Camel sneeze away from a real mess. Fortunately, we have become in the interim a net exporter of energy. But the price is the price and apparently we’ll be seeing significant increase in gasoline prices in coming months. If the Saudis and the the Iranians go to war, it could be much higher.
If you notice, the artificially imposed $4.50 per gallon of 2008 has strangely gone away coincident with the advent of the Tesla and the Leaf and the Volt. It may be back here pretty soon.
They wouldn’t actually DO that would they? https://www.politico.com/story/2019/09/16/oil-industry-electric-car-1729429
Thanks for the link Stan.
A man after my own heart.
I think competition wasn’t on the ball when I read their announcements. But now that some of them are out, it looks like they got on the ball with the Mercedes EQC, Audi E-Tron, Kia E-Niro, and Jaguar I-Pace, despite their executives’ desperate pleas to fail at those. It’s as if their engineers didn’t know how to fail in what had to be one of the most exhilerating markets they entered. EQC and E-Tron are both quieter, more comfortable, less harsh, and better pocketed (I mean door pockets) than Tesla, and all of the cars I mentioned go further than my Tesla Model S60D that always seemed to run out of energy just short of my destination. They meet the sweet spot of range, even though it isn’t fantastic range like the Model 3. Yet, the Model 3 is still a bumpy ass pocketless car that we don’t fully own and can’t program shareware into, not letting us buy third party products, not able to bring it to 3rd party repair shops, Elon acting like a monarch about it, precisely the people we want to jettison, hiring the likes of toxic feminists and more monarchs that even own their own ISLANDS they are so sick for his Board of Directors, all of which have massive conflicts of interest (meeting the SEC definition of “non-conflicted” in opposites-land).
Elon needs to be a full time CEO, and he is only a half time CEO.
I also think that it’s quite possible much of what you predict is at least largely true if Elon is still able to steamroll over his evil board of directors, and that we will have to break Tesla up into pieces due to competition concerns.
But in the end, I don’t think it will just be Tesla. It can’t be. I offered to help make it a great company, and they shot the other direction as much as they could go, giving only occasional partial subsets of lip service to whisps of the things that would make them much better and more successful. But more than that, we need competition, and if they take too much market share, we will have to break them up.
As for electric cars? Don’t get in their way; it’s hard enough to implement them in the marketplace as it is. But also don’t put them where the market isn’t ready; they should just sell them as fast as they can make them and sell them, and not worry about it. Eventually we will get there, in time. We are solving the pollution problem (not global warming; that’s fake). It’s not YET solved, and it WILL be solved, because we ARE going to electric, which means we choose the energy type, not the old plants and animals, so we CAN go clean, and also, we WILL go clean.
I just watched EVTV from inside my EV! YouTube on release 10.0 on the model 3 works great.
Thank you! Pleasure to read. Long 26 shares 🙂
And Nobel prize in chemistry goes to John B. Goodenough, M. Stanley Whittingham and Akira Yoshino.
https://www.kva.se/en/pressrum/pressmeddelanden/nobelpriset-i-kemi-2019
I wonder where the big weapons contractors fit in all this, namely those selling to Saudi Arabia,. ..after all they presumably stand to lose a lot of business once the Saudis are no longer raking in the oil money to splurge on their military.
Jack are you ill? No post since August 10 – or, God forbid, have the determined defenders of the status quo secured your silence through threats of violence upon your family?
Yup big oil threatened his life but Jack killed them instead.
Two interesting Tesla articles.
https://www.greencarreports.com/news/1125896_report-from-germany-tesla-years-ahead-german-automakers-falling-behind
https://www.greencarreports.com/news/1125415_will-tesla-s-purchase-of-battery-maker-lead-to-proprietary-cells
Tesla pickup reveal
Not your dad’s F-150
https://www.greencarreports.com/news/1126152_tesla-cybertruck-revealed-39-900-starting-price-up-to-500-miles-of-range
I think I’m older than Jack and this is a great letter. Can’t wait to live on Mars, Trailer07
Best article I’ve read about Tesla and I’ve read a lot.
Tesla will definitely prevail more in the coming years! My uncle who used to hate the fancy tech of the newest vehicles now starting to like the latest Tesla models.