EV demand way up, but ICE may have hit peaked.

[101101]

In the 5th largest economy in the world (California) which is the most competitive auto market in the US which itself is the most competitive auto market globally, people spent more on Model 3 than any other vehicle last quarter and did the same in the 2nd half of last year. Its outselling F150 by a huge amount too in CA and Tesla has basically driven Mercedes and BMW from that market most competitive of markets. Last quarter Model 3 was supposedly selling the same unit volume as Toyota Camry but I have a very strong sense that Toyota is inflating its numbers because Model 3 is outselling the Honda Accord by a good clip and Camry should have seen the same drop due to Tesla's entrance, and I think by the end of the year the Model 3 will be the top selling vehicle in the state of any kind- but again it already radically outsells F150 in the state. Model 3 is all I see in SoCal, its a Model 3 invasion and I essentially never see new BMW's or Mercedes but I see plenty of Tesla f S(s) and X(s.) This bodes ominous for the whole ICE world because those new Tesla customers are never coming back, not for 100 years. The story is even more pronounced in Norway where its total Tesla domination of the total market and Tesla is doing massive sales in Amsterdam and Switzerland- Model 3 best selling car in Switzerland. Tesla is kicking the sht out of ICE. So you have to basically be a f-ing fool to think there is a demand problem. Saw a Forbes article today saying there was a Tesla demand problem but also stating that all the Tesla crashes were due to driver error not Tesla admitting that the crashes were FUD, but the demand problem is FUD- but also trying to insist that Musk be replaced- and why would that be- well because he is utterly destroying the whining sponsors of the magazine, but that is a huge public service. I've realized that Tesla and the Chinese makes or just the Chinese makes if need be can supply the entire world- we don't need any of these ICE companies to survive, I'd be in favor of seeing them all go under as long as their blue collar workers were properly transitioned to the inevitable invincible green economy.

Sales of EVs in April alone in China were at about 80000- way up year on year, and this is zero sum against ICE. I think more than peak ICE they are worked about peak debt because peak debt under this debt based system of control collapses the system- need more debt to pay off old debt each year or collapse.

 

[DaleL]

EV sales are up some 70% in Europe in April over April 2018. However, the overall BEV share of the European car market is still just 1.8%. Picking and choosing small regional markets (Switzerland, Norway) doesn't change the fact that overall, BEVs have a very small market share and Tesla has almost NONE. The leading BEV is the Renault Zoe which is rather like a Nissan Leaf. In April, there were 3,738 the Tesla Model 3 registrations which was 15.6% of all BEV European registrations. Tesla Model 3 total April market share was just 0.28%.

It seems that Tesla sales fell off a bit in April in Europe after the first quarter 2019 rush. Tesla's market capitalization is now about 32 billion dollars which is 1/2 of just six months ago. Volkswagen made 15.5 billion dollars in 2018. If Tesla's stock value continues to slide, the company will become a possible buyout target. To remain independent, Tesla desperately needs to not only have a profitable 2nd quarter, but needs to be profitable this year.

 

[101101]

No that is a pure mischaracterization. Tesla is dominant in Norway, Sweden, Netherlands, Switzerland and doing well in Germany. The stock moves around because of manipulations that make stupid claims about demand, but you clearly have 2 billionaires and you had Apple trying to buy Tesla earlier and on Mercedes and Toyota as early partners and investors and again what you have to look at is California, Camry numbers for Model 3- likely better and in california now for almost a year more money spent on the model 3 than any other vehicle and much more than the F150- Model 3 is a massive success and one the big 3 put together couldn't pull off not in 40 years of trying. I am pretty sure Ford and GM merge. Funny article about GM paying Tesla today, we know there is more too it than pollution credits its also about that electric truck GM won't be capable of making without Tesla's help. Reminds me of when Toyota had to help GM.

 

[bwilson4web]

Perhaps the hypothesis that Musk will take TSLA private has merit only he'll do it by letting the stock fall to historical lows.

Being the majority stock holder, he can hold out for his personal target price. The vulture capitalists will face a difficult problem:

• other SHORTERs who buy their offer ... for a higher price
• Elon and supporters who reject any but Elon's

As for the SHORTERs who 'covered their margin,' nothing could be worse than to hold a lot of TSLA stock and Elon still in charge. YIPPIE, TSLA stock sale! As for Elon supporters ... YEA!!!

Bob Wilson

 

[101101]

Perhaps the hypothesis that Musk will take TSLA private has merit only he'll do it by letting the stock fall to historical lows.

Being the majority stock holder, he can hold out for his personal target price. The vulture capitalists will face a difficult problem:

• other SHORTERs who buy their offer ... for a higher price
• Elon and supporters who reject any but Elon's

As for the SHORTERs who 'covered their margin,' nothing could be worse than to hold a lot of TSLA stock and Elon still in charge. YIPPIE, TSLA stock sale! As for Elon supporters ... YEA!!!

Bob Wilson

I love the sound of that. I wondered about that very thing but I like your excellent analysis, I couldn't puzzle out those bits. But I suspect Musk is getting squeezed too, he might need the help of Ellison and others to do it. That would be short burn of the century and him keep a promise.

 

[DaleL]

Funny article about GM paying Tesla today, we know there is more too it than pollution credits its also about that electric truck GM won't be capable of making without Tesla's help. Reminds me of when Toyota had to help GM.

In 2018, GM made a pre-tax profit of $11.88 billion. Much of the profit was from selling very profitable pickup trucks. In a sense, Tesla helps GM sell gas guzzlers. For years, large car companies have sold fuel efficient vehicles at a loss or near loss to compensate for their gas guzzlers. At some point, if Tesla's value falls enough, GM could buy Tesla instead of just the pollution credits. That would also get GM all of Tesla's intellectual property, including that for an electric truck.

I wouldn't worry too much about Elon Musk. He has his own rocket company which seems to be doing very well.

 

[interestedinEV]

I am hearing of so many bidders for Tesla: In this thread, it is GM or Larry Elision. In another thread it is Apple. @David Green believes it will be Toyota. I also hear about private equity firms. It makes my head spin. At least for now, I do not see Elon relinquishing control to anyone. However, the market may force him to do so if sales do not pick up in the next few months. Also remember, the tax credits reduce by half after June 30th.

 

[David Green]

I am hearing of so many bidders for Tesla: In this thread, it is GM or Larry Elision. In another thread it is Apple. @David Green believes it will be Toyota. I also hear about private equity firms. It makes my head spin. At least for now, I do not see Elon relinquishing control to anyone. However, the market may force him to do so if sales do not pick up in the next few months. Also remember, the tax credits reduce by half after June 30th.

I truly believe once the current equity holders are wiped out (half way there last month) and Tesla reorganizes their debt the company will be attractive to takeover, Toyota being the number 1 lien holder in GF1 with their acquisition / merger of Panasonic automotive batteries division will be in the drivers seat. I think this acquisition totally makes sense for Toyota too, as they can fix Tesla's manufacturing issues quickly, and put the distribution and service through their Lexus channel quickly and easily. Oh, Toyota also has the largest profit, and free cash in the automotive industry, so the rich will get richer.

BTW I posted that Toyota would buy Panasonic 2 years ago before there was ever a whisper of any JV, or merger.

 

[David Green]

Perhaps the hypothesis that Musk will take TSLA private has merit only he'll do it by letting the stock fall to historical lows.

Being the majority stock holder, he can hold out for his personal target price. The vulture capitalists will face a difficult problem:

• other SHORTERs who buy their offer ... for a higher price
• Elon and supporters who reject any but Elon's

As for the SHORTERs who 'covered their margin,' nothing could be worse than to hold a lot of TSLA stock and Elon still in charge. YIPPIE, TSLA stock sale! As for Elon supporters ... YEA!!!

Bob Wilson

Wrong... Elon has over 50% of his shares pledged (Don't you read the 10-Q RISK FACTORS) to secure personal loans (used to fund SpaceX, and the wanna be tunnel company) Those shares have a floor that if they hit triggers a margin call on Elon... Most feel Elon has been forced to pledge more shares over the last month because of the low share price, and possible the reason he exercised more options. I think Elon is in the financial pressure cooker right now.

 

[bwilson4web]

Wrong... Elon has over 50% of his shares pledged . . .

WOW! That is f*ckin' amazing!

I'm still not selling my TSLA stock.

Bob Wilson

 

[interestedinEV]

I truly believe once the current equity holders are wiped out (half way there last month) and Tesla reorganizes their debt the company will be attractive to takeover, Toyota being the number 1 lien holder in GF1 with their acquisition / merger of Panasonic automotive batteries division will be in the drivers seat. I think this acquisition totally makes sense for Toyota too, as they can fix Tesla's manufacturing issues quickly, and put the distribution and service through their Lexus channel quickly and easily. Oh, Toyota also has the largest profit, and free cash in the automotive industry, so the rich will get richer.

BTW I posted that Toyota would buy Panasonic 2 years ago before there was ever a whisper of any JV, or merger.

Toyota has the cash, they have the manufacturing capabilities (which are better than anybody else) and they have stayed away from BEVs till now, claiming the market is not there. So they may have had a change of heart and it is a good strategic fit, no question about it. However there are others who have the money and can bring things to the table that Tesla lacks. Apple can bring in some discipline into driver-less cars development process. GM has money if the shares become attractive and can bring some talent that Tesla lacks. There are hedge funds with gobs of cash and a feeling they can run the world. So while I believe that you are right that Toyota has a strategic fit, I at this time, will not rule out others.

 

[101101]

No way in hell Tesla is a take over target. Up 8% today. Traditional auto makers are actually much worse in the fundamental reality of what they face, peak auto has already began and peak oil if you pay attention to the signs that actually matter and not the fictions the tabloid media prints was a while ago, peak debt and the implosion it causes in our broken debt rigged system is what they have been trying to avoid by propping up fossil fuels in the US (cause of last collapse of course.) Look at this article because it is honest:
https://cleantechnica.com/2019/06/04/wall-street-issues-peak-car-warning/

Read between the lines, its GM and Fiat paying Tesla and that is about more than pollution credits. In the case of GM a lot of that payment has to be for the tech it needs to make an electric truck that it can't pull off on its own and won't do any better with than it did with the Bolt. It will be hilarious to watch the drop in light trucks when electric becomes the standard. Its already happening as the article above shows as light trucks and SUVs were just a scam to sell more oil- but electric terminates that, and the inventory in light trucks and SUVs is massively piling up right now.

Its like the attack by the Trump admin on tech to try to trump up fossil fuels as a hopeful place for investors to run (remember Trump himself ran on the 'energy sector' being in shambles- he meant fossil fuels- but the population doesn't give a damn about fossil fuels and actually hates them and actually needs and wants to make war on them and understands they are terrorism and the source of it and only marginally car about the fossil jobs because they know people can be retired with a program or many tech people can retool to the economy and they are tired of the job creator hostage bs. But when Trump said it and more so today it was Trump being straight for once about a situation but it was wrong to try to rescue it even to save the same corrupt banks that weakened already weak Dodd Frank with bail-ins- fossil fuels have never been weaker and paradoxically some MIT researchers (Fossil Fuel U.) pointed out the fastest way to address climate change is to help the public understand what an inherent permanent train wreck fossil fuels are and how its destroying their economy and society. Wall St. can't socialize anymore fossil fuels losses, its hit a limit. I read China negotiators lectured Trump admin negotiators for a couple hours the other day on how the US was apparently a backwards Mediterranean society, presumably a reference to its nonsense unnecessary reliance of obsolete fossil fuels- I am Saudia Arabia dumped its oil assets- unloading it all, how much of a bigger sign do we need and apparently tried to invest in Tesla. It wasn't just Apple that tried to buy Tesla and Toyota that helped to found Tesla and was an early investor and partner where it actually had Tesla do its electric RAV4 a vehicle which still holds its value great or Mercedes that was also an early investor and partner, no it was the Saudi Sovereign wealth fund trying to help take Tesla private. What does that say. Look at Musk's other company its revolutionizing rocketry and out competing Boeing. Remember loser Romney's complaint against Tesla: it was unfair it was given some tech that would undermine the fossil fuel scam- very telling no?

Fossil fuels are in an incredibly desperate irreversible place, the Trump admin is certainly trying to force China to buy US shale gas that it neither needs nor wants and flat has no use for why would it buy that junk when it can actually get clean energy (natural gas is as dirty as coal) for much cheaper domestically- its like trying to sell china buggies- that's the farse of the trade war. It just like the US initiated tariffs which are defensive to try to offset the US disadvantage against the much lower cost of goods green economies- the US is rolled up in a ball against the ropes because fossil fuels are a pure unmitigated unrecoverable loser against economies that refuse to play the debt control game through artificial scarcity inducement (fossil fuels) and take climate change seriously. The US delusional power down strategy is a total loser. Its just like the Trump admin going after Google in an attempt to bully it presumably into not allowing search results or news that show how puppeted to foreign powers the Trump admin is (would have still been puppeted with Hillary,) but sponsored puppet government is a consequence of allowing sponsored (puppet) media- you can't have sponsored media and think you have anything but spin and censorship- its the most basic conflict of interest imaginable and a democracy destroy hence all in the family when it comes to trying to make the executive branch into an economic royalist haven of spoils, patronage and bribery.

Lets talk about 'cheap gas,' that's pure idiocy because any fool can figure its not cheap in any way no matter what the price is and that it doesn't stay down regardless of supply so there is never every any advantage to any of that moronic blather about summer gas or cheap gas. The fossil fuel industry is utterly helpless. But Tesla doesn't have any of that baggage, its the best hedge there is against the in progress total destruction of the fossil fuel industry.