We Don't Need No Flaming Sparky Cars

| 22 Comments

Solar panel in a coal mine;

Those who think today's stock market is unlike that of 2000, when baseless enthusiasm pushed stocks up to wild valuations, only to collapse in subsequent years, should take another look. Do they remember counting eyeballs as a basis for value? Once again, history and reality are replaced by dreams with little substance. Tesla, in which I have a short position, is becoming the loudest canary in Wall Street's coal mine.

Tesla requires repetitive capital raises to fund persistent operating losses. This requires bullish analysts and holders to keep the stock aloft with projections of imagined earnings from future products, while they overlook existing businesses, which continue to lose vast sums of money.

[...]

Musk is smart and imaginative, but none of his major companies are profitable. Tesla has been around for 14 years and has cumulatively lost more than $3.7 billion, despite the massive subsidies that it and its customers have received. SolarCity, also a beneficiary of alternative-energy subsidies, lost hundreds of millions of dollars before being bailed out by Tesla. As subsidies diminish, and competition emerges, profits will be even more elusive.

Tesla tries to convey the illusion of inexhaustible demand for its cars, yet sales of the Model S and Model X have been flat for four quarters. Tesla's rising inventory and shrinking deposits suggest declining demand.

Tesla claims to have more than 400,000 deposits for the Model 3, but these aren't orders. They reflect a decision by potential buyers to get in line for a $7,500 tax credit at virtually no cost. Shifting $1,000 from a savings account into a refundable Tesla deposit costs only about $1 per year in lost interest.


22 Comments

I have a client who is insisting on paying $30,000.00 + for Tesla solar roof shingles. State and local officials have mandated our project achieve a minimum "Silver" Greenpoint Rating, so photovoltaic solar is virtually mandated by government.
https://www.tesla.com/solarroof
As someone responsible for coordinating the installation of these things ... the Tesla website is completely devoid of any details re: the installation of this product. That is highly unusual. Every building material in the marketplace has DETAILED installation instructions, material specifications, safety data, and architectural details. On this Tesla site ... nada. The only way I can "learn" more about the product is to contact a salesperson.

This just "smells" like FRAUD to me. Yeah, the website is really slick. The product "appears" absolutely "magical". But by necessity (under threat of lawsuit) ... I am forced to live in the REAL WORLD. This film-flam marketing presentation may sway people who WANT to believe in the product, but call me a skeptic. I wanted to be convinced of the products quality ... but I was strategically denied access to any information. I suspect this is much like the EPA "range" calculations for the Tesla automobiles ... FRAUD ... because the numbers do not replicate REAL WORLD driving conditions.

When Tesla Corp. dies with a whimper and weeping of investors ... it will be another dot.con cautionary tale.

So, replacing a superior source of energy - i.e., oil - with an inferior source of energy is a REALLY GOOD IDEA, no?

Most of those people who are in line to buy Teslas probably realize that electric vehicles are junk, are extremely hard on the earth's environment, and use child labour in the Democratic Republic of the Congo to mine cobalt for batteries but those briberies - I mean, subsidies - from governments to buy those cars are too good to pass up.

If someone gave you thousands of dollars to buy a car - and especially if it's not their own money - then wouldn't you buy the car?

This entire concept of electric vehicles is based on the assumptions of the Population Bomb proponents. They don't want the world's population to prosper because they see OTHER PEOPLE as a threat to their world.

Next spring I am very likely to buy a new car and I will be looking electric.

If one had an electric bill of 150/mo in KKKalifornica, then that 30k would take 200 months, plus interest, to pay for itself. 300 months, 25 years if it was 100 month. In a warm climate like the sedition state, that's a more reasonable bill, but 25 years to pay off? Not sure solar panels have that kind of life expectancy. Just more virtue Signalling, at taxpayer expense

Musk states that he will ramp up car production from 1000 a month tenfold, to 10,000 units per month by end of year.
His investors and fanboys must be smoking some fine fine skunk chronic to believe that nonsense. When Tesla has to report in January, it will be interesting to see how flimflam man spins his failure to meet predictions.

Tesla kind of reminds me of an electronic Bre-X.

"As subsidies diminish, and competition emerges, profits will be even more elusive."

This is a logical fallacy.

Subsidies will not diminish. Think of Tesla as a crown corporation.

Competition cannot emerge in an industry that survives on subsidies.

Profits are irrelevant to a government subsidized business.

Think of Tesla as an American version of Air Canada. Is Air Canada really a publicly traded company or an arm of the Canadian government (a crown corporation)? Is it a good investment? Was it ever a good investment? Will it ever go bankrupt? The latter. No. No. No.

Jeremy Siegel, an economics professor who studies investments, has made the case that cutting-edge high-technology companies are rarely worth investing in. Boring consumer products companies like Johnson & Johnson, on the other hand, tend to perform well over time.

Why doesn't Jeremy Siegel, economics professor, own his own island? Or more generally, why do economics professors wear crappy suits?

Gary D., you got a bit off-track there.

1. A superior form of energy for a government is a form that it can control. California cannot control the oil industry. But it can control electricity and therefore solar power. You think that a superior form of energy is the most efficient. That is superior to you, perhaps, but not to the government of California.

2. People in California do not care about children in the Democratic Republic of Congo. But it is refreshing to know the Congo is both a Republic and Democratic.

3. If someone gave you thousands of dollars to buy a car ... funny thing is, it's your money the government is giving to you. Problem is, if you don't take it and other people do, then you are subsidizing other people and not yourself. That's the great thing about government subsidies. It's a form of forced participation.

4. The concept of electric cars is not to reduce world population but to make people more dependent on government services, switching from privately run gas stations to the public energy grid, for example. Governments do not control the oil resources and the refineries. But they do control the electricity grid. When your house and car entirely run on electricity, then the government will be happy.

Financial Post recently had an opinion piece that perfectly described businessmen such as Musk. The piece called them "Subsidy entrepreneurs".

No one I ever talk to has ever heard of zinc bromine flow batteries.

'dot.con'. I like that. very succinct.

Musk is highly intelligent and a risk taker.
He didn't build that.
He's so much smarter than everyone else. Cars, rockets, human vacuum tubes.

I think it's great that people buy these electric thingies as I I know that Tesla's sales forecast alone is more than the current production of cobalt which is essential for lithium batteries.

My lithium and cobalt producer stocks are doing super.

Musk is a subsidy queen. That's where he makes his money. If he wasn't getting subsidized, he would have gone bankrupt a long time ago.

"Tesla Motors Inc., SolarCity Corp. and Space Exploration Technologies Corp., known as SpaceX, together have benefited from an estimated $4.9 billion in government support, according to data compiled by The Times. The figure underscores a common theme running through his emerging empire: a public-private financing model underpinning long-shot start-ups."

http://www.latimes.com/business/la-fi-hy-musk-subsidies-20150531-story.html

Electric Vehicles are pleasant to drive. I prefer to drive my Leaf than my Mercedes SUV for trips


While everyone ... including my near-retirement in-laws were pouring their investment dollars into the "magical" dot.com companies that had no business plan for ever making a profit ... if you remember, back in the 90's, we were in a "new" economy ... where companies "no longer needed to make a profit" ... I was buying up the boring stocks; consumer staples, utilities, industrials, basic materials, etc. The prices of these stocks were super depressed as investors pulled their money out of the "old" economy to pour into the "new" economy. Suffice to say that I survived the dot.con collapse ... and when all the money started pouring back in to the boring old basic industries ... made quite a killing (I only wish I had had more $$$ to invest). Thank you sheep ! But FKCU-you investment counselor who advised my 65yo in-laws to RISK and LOSE a substantial amount of money in the "new" economy. Horrible, self-serving advice for a couple just entering their retirement years.

"none of his major companies are profitable."

This is wrong. SpaceX has been profitable for a decade. And no, NASA isn't their only customer, and no, payment for services rendered is not a subsidy.

Everything Musk has done since he left Paypal (definitely a profitable company) must be viewed through the lens of his dreams for colonizing Mars. SpaceX obviously, but the electric cars and solar panels and the Boring Company are all a part of that goal. He takes whatever subsidies are offered - who wouldn't?

Because describing accurately to the public all the dodgy ways people squeeze money out of each other and the government is an orthogonal skillset to doing it in secrecy...

Full Disclosure: I'm trained as an Economist, though I teach Computer Stuff as it pays better...

Leave a comment

Archives

August 2017

Sun Mon Tue Wed Thu Fri Sat
    1 2 3 4 5
6 7 8 9 10 11 12
13 14 15 16 17 18 19
20 21 22 23 24 25 26
27 28 29 30 31    

Recent Comments

  • E.M.Smith: Because describing accurately to the public all the dodgy ways read more
  • Ed Minchau: "none of his major companies are profitable." This is wrong. read more
  • CreepyClown2.0: https://www.youtube.com/watch?v=KxcrM1ms1U8 read more
  • Kenji: While everyone ... including my near-retirement in-laws were pouring their read more
  • Doug Ransom: Electric Vehicles are pleasant to drive. I prefer to drive read more
  • My Hovercraft is Full of Eels: Musk is a subsidy queen. That's where he makes his read more
  • Gord: I think it's great that people buy these electric thingies read more
  • Anonymous coward: Musk is highly intelligent and a risk taker. He didn't read more
  • historybuff: 'dot.con'. I like that. very succinct. read more
  • Kevin: No one I ever talk to has ever heard of read more