Excluding sunsetting emission credit sales Tesla still loses money, as it has every year in its 17-year existence
Stanphyl Capital commentary for the month of January 2021, discussing Tesla’s European sales declining due to new competition.
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Q4 2020 hedge fund letters, conferences and more
The Biggest Bubble In Modern Market History
We remain short the biggest bubble in modern stock market history, Tesla Inc. (TSLA), which currently has a fully diluted market cap of approximately $844 billion, which is roughly $143 billion more than those (non-diluted) of Toyota ($195 billion), VW ($105 billion), GM ($73 billion), Daimler ($73 billion), BMW ($54 billion), Stellantis ($48 billion), Hyundai ($46 billion), Honda ($45 billion), Ford ($42 billion) and Nissan ($20 billion) combined (!) despite run-rate sales of 720,000 cars a year to their approximately 65 million. The core points of our Tesla short thesis are:
Tesla has no “moat” of any kind; i.e., nothing meaningfully proprietary in terms of electric car technology, while existing automakers—unlike Tesla—have a decades-long “experience moat” of knowing how to mass-produce, distribute and service high-quality cars consistently and profitably, as well as the ability to subsidize losses on electric cars with profits from their conventional cars. Excluding sunsetting emission credit sales Tesla still loses money, as it has every year in its 17-year existence. Unit demand for Tesla’s cars is only increasing via continual price cutting. Elon Musk is a pathological liar who under the terms of his SEC settlement cannot deny having committed securities fraud.In January Tesla reported its Q4 2020 financials, and excluding $401 million of pure-profit emission credit sales (an income stream that begins shrinking imminently then likely disappears after 2021 when other automakers have enough EVs of their own) it lost $131 million, nicely summarized in a graphic from @TeslaCharts:
And if you think Tesla is really “an energy company,” well, that division had a negative gross margin.
Tesla's Q4 European Sales Decline
And for those of you who still think Tesla is a “growth stock,” the most competitive EV region in the world (and a bellwether for what will soon happen in Asia and then North America) is Europe, and due purely to new competition Tesla’s year-over-year Q4 sales declined by 4% there while its EV market share dropped from over 30% to just an estimated 10% (and in 2021 will likely be much lower). Courtesy of Twitter user @fly4dat, here’s a great chart showing that:
And contrary to what bullish Teslemmings may tell you, Q4 European sales were not “production constrained,” as Tesla delivered 181,000 cars in the quarter while its October 8-K reported current quarterly production capacity of 210,000:
Nothing is more amusing than seeing this giant stock promotion of a company try to perpetuate the illusion of being “supply constrained” by continuing to add capacity (expanding its Chinese factory while breaking ground on new factories in Texas and Germany) in order to desperately try to maintain an image of “limitless demand” while it continually slashes prices (including again in January 2021) just to utilize far less than its existing capacity. Tesla’s “plan” is now obvious: keep slashing prices to move as much volume as possible while using the world’s most illicitly creative accounting to maintain razor-thin profitability. But what’s the end game? If Tesla stops cutting prices volume will collapse. Tesla is no longer “a growth story”—it’s a nearly-profitless stock promotion for idiots!
Model 3 Price Cuts
In China during Q4 (and Europe in Q1 2021) Tesla cut its Model 3 price significantly (enabled by the use of an inferior LFP battery formulation that could soon bring a class action lawsuit), and thereby drove an improved Chinese sales number. Yet it still sold fewer than 60,000 cars there while GM sold over 963,000 and Ford sold 191,000. In December Tesla sold 25,500 cars in a Chinese passenger vehicle market of 2.4 million; i.e., with its 1% share, Tesla is just a flea in an elephant-sized market. And now, exactly as in Europe, China’s EV competitive landscape is about to get vicious.
As for Tesla’s newest “hope,” the Model Y, its quality is awful and it faces current (or imminent) competition from the much better built electric Audi Q4 e-tron and Q4 e-tron Sportback, BMW iX3, Mercedes EQA, Volvo XC40 Recharge, Volkswagen ID.4, Ford Mustang Mach E and Nissan Ariya, as well as the less expensive yet excellent all-electric Hyundai Kona and Kia Niro. Meanwhile, Tesla’s Model 3 now has terrific direct “sedan competition” from Volvo’s beautiful new Polestar 2 and the premium version of Volkswagen’s ID.3 (in Europe), and in 2021 from the BMW i4.
And oh, the joke of a “pickup truck” Tesla previewed in 2019 won’t be much of “growth engine” either, as it will enter a dogfight of a market.
And in the high-end electric car segment worldwide, the Audi e-tron now outsells both the Tesla Model S and the Model X, and almost outsells both of them together!
Meanwhile, Tesla ranks second-to-last in the latest Consumer Reports reliability survey:
…and last among 31 brands J.D. Power surveyed…
…while the latest What Car? survey shows similar results with Tesla finishing #29 out of 31.
As for batteries, Tesla has nothing proprietary—it doesn’t make them, it buys them from Panasonic, CATL and LG. And here’s a great graphic from @clausMller17 showing Tesla’s blatantly deceptive range claims:
Regarding safety, the Chinese government recently forced the recall of tens of thousands of Teslas for a dangerous suspension defect the company spent years trying to cover up, and now Tesla has been hit by a class-action lawsuit in the U.S. for the same defect. Tesla also knowingly sold cars that it knew were a fire hazard and did the same with solar systems, and it’s battling an NHTSA demand that it recall a dangerously defective touchscreen. And of course Tesla continues to sell and promote its hugely dangerous so-called “Autopilot” system, which Consumer Reports has completely eviscerated; God only knows how many more people this monstrosity unleashed on public roads will kill, despite the NTSB condemning it as dangerous. In fact, Teslas have far more pro rata (i.e., relative to the number sold) deadly incidents than other comparable new luxury cars; here’s a link to those that have been made public. In other words, when it comes to the safety of customers and innocent bystanders, Tesla is truly one of the most vile companies on Earth. Meanwhile the number of lawsuits of all types against the company continues to escalate, including one proving blatant fraud by Musk in the SolarCity buyout. (If you want to be really entertained, read his deposition!)
Finally, Tesla has the most executive departures I’ve ever seen from any company; here’s the astounding full list of escapees. Telas seemingly hasn’t been able to hire or even retain a high-profile executive from outside in years; clearly no one with any real-world experience wants to work for Elon Musk.
So here is Tesla’s competition in cars (note: these links are regularly updated)…
Porsche Taycan Porsche Taycan Cross Turismo Porsche Macan EV to get Taycan platform and tech Volkswagen ID.3 Headlines VW's Electrified Future Volkswagen ID.4 Electric SUV Available Now in Europe & China, Spring 2021 in U.S. Volkswagen ID 6 to arrive with 435-mile range in 2023 VW accelerates plans for small ID.2 electric car VW Group's first hot compact EV to be launched by Cupra brand VW boosts investment in electric and autonomous car technology to $86 billon Audi e-tron: Electric Has Gone Audi Audi e-tron Sportback Whispers Electric Luxury Audi RS e-tron GT electric supercar to boast around 700bhp Audi Q4 e-tron Will Be the Cheapest Electric Audi Audi adding Sportback version of 2021 Q4 e-tron Audi TT set to morph into all-electric crossover Jaguar’s All-Electric i-Pace Jaguar J-Pace electric SUV to tackle Tesla Model X Jaguar Land Rover to invest £1bn in three new UK-built EVs Mercedes EQS Electric Luxury Sedan Comes to the U.S. Summer 2021 Mercedes EQC electric SUV available now in Europe & China and late 2021 in the U.S. Mercedes-Benz Launches the EQV, its First Fully-Electric Passenger Van Mercedes unveils EQA electric SUV with 265 miles of range and ~$46,000 price Mercedes EQB Small SUV to boost brand's electric line-up 2022 Mercedes EQE electric saloon to rival Tesla Model S Volvo Polestar 2 Is Available Now Volvo XC40 Recharge Is Available Now Polestar 3 will be an electric SUV that shares its all-new platform with next Volvo XC90 GM will offer 30 all-electric models globally by 2025 GM’s electric Hummer GM’s Bolt GM will reveal its Bolt 'EUV' in February GM Launches BrightDrop to Electrify the Delivery of Goods and Services Electric Ford Mustang Mach-E Available Late 2021 The Electric Ford F-150 Will Be Here by Mid-2022 Ford to build two European EVs based on VW’s MEB platform Hyundai Kona Electric: 258-mile range & under $38,000 before subsidies New 2021 Ioniq 5 electric SUV teased with striking concept car design Apple, Hyundai set to agree electric car tie-up Genesis Electric Luxury SUV Coming in 2022 Kia Niro Electric: 239-mile range & $39,000 before subsidies Kia Soul Electric: 243-mile range Kia's new electric crossover could become brand's top-selling EV in Europe Nissan vows to hop back on EV podium with Ariya Nissan LEAF e+ with 226-mile range is available now BMW leads off EV offensive with iX3 BMW i4 will be rival to Tesla Model 3; 373-mile range promised BMW iX Electric Crossover Will Offer 500 HP, 300-Mile Range BMW iX1 Electric SUV set for production BMW 3-series EV coming Rivian electric pickup truck- funded by Amazon, Ford, Cox & others- is on the way Renault upgrades Zoe electric car as competition intensifies Renault Dacia Spring Electric SUV Renault to boost low-volume Alpine brand with 3 EVs Peugeot 208 to electrify Europe's small-car market Peugeot to offer EV version of new 2008 small crossover Electric Mini Arrives 2020 Toyota and Subaru Agree to Jointly Develop BEV-dedicated Platform and BEV SUV Mazda extends MX name to new MX-30 electric crossover Opel sees electric Corsa as key EV entry 2021 Vauxhall Mokka revealed as EV with sharp looks, massive changes Skoda Enyaq iV electric SUV offers range of power, battery sizes Electric Skoda Enyaq coupe to muscle-in on Tesla Model 3 Citroen compact EV challenges VW ID3 on price FCA to invest $788M to build new 500 EV in Italy BYD will launch electric SUV in Europe The Lucid Air Achieves an Estimated EPA Range of 517 Miles on a Single Charge Bentley converting to electric-only brand Rolls Royce to build “Silent Shadow” Maserati to launch electric sports car Meet the Canoo, a Subscription-Only EV Pod Coming in 2021 Two new electric cars from Mahindra in India; Global Tesla rival e-car soon Former Saab factory gets new life building solar-powered Sono Sion electric cars Foxconn aims for 10% of electric car platform market by 2025And in China…
VW Goes Head-to-Head With Tesla in China With New ID.4 Crozz Electric SUV Volkswagen’s ID.3 EV to be produced by JVs with SAIC, FAW in 2021 VW readies 8 ID-series EVs for Chinese market China-built Audi e-tron rolls off production line in Changchun Audi Q2L e-tron debuts at Auto Shanghai Audi will build Q4 e-tron in China Audi in cooperation company for local electric car production with FAW FAW Hongqi starts selling electric SUV with 400km range for $32,000 FAW (Hongqi) to roll out 15 electric models by 2025 BYD launches six new electrified vehicles BYD said to launch premium NEV brand ‘Dolphin’ in 2022 Top of Form Bottom of Form Daimler & BYD launch DENZA electric vehicle for the Chinese market Geely, Mercedes-Benz launch $780 million JV to make electric smart-branded cars Mercedes styled Denza X 7-seat electric SUV to hit market Mercedes ‘makes mark’ with China-built EQC BMW, Great Wall to build new China plant for electric cars BAIC Goes Electric, & Establishes Itself as a Force in China’s New Energy Vehicle Future BAIC BJEV, Magna ready to pour RMB2 bln in all-electric PV manufacturing JV Toyota, BYD will jointly develop electric vehicles for China Lexus to launch EV in China taking on VW and Tesla GAC Toyota to ramp up annual capacity by 400,000 NEVs GAC Aion GAC NIO kicks off delivery of HYCAN 007 all-electric SUV Nio – Ready For Tomorrow Xpeng Motors sells multiple EV models Chevrolet Menlo Electric Vehicle Launched in China Buick Launches VELITE 6 PLUS MAV Electric Vehicle in China Buick Velite 7 EV And Velite 6 PHEV Launch In China General Motors’ Chinese Venture to Sink $4.3 Billion Into Electric Vehicles by 2024 Nissan & Dongfeng to invest $9.5 billion in China to boost electric vehicles Dongfeng’s premium EV-focused “VOYAH” unveiled as independent brand PSA to accelerate rollout of electrified vehicles in China SAIC, Alibaba-backed premium EV brand “IM” makes world’s debut Hyundai Motor Transforming Chongqing Factory into Electric Vehicle Plant Polestar said to plan China showroom expansion to compete with Tesla Jaguar Land Rover's Chinese arm invests £800m in EV production Renault reveals series urban e-SUV K-ZE for China Renault & Brilliance detail electric van lineup for China Renault forms China electric vehicle venture with JMCG Honda Debuts New Everus VE-1 All-Electric SUV, But Only For China Honda to roll out over 20 electric models in China by 2025 Geely launches new electric car brand 'Geometry' – will launch 10 EVs by 2025 Geely, Foxconn form partnership to build cars for other automakers Fiat Chrysler, Foxconn Team Up for Electric Vehicles Baidu to create an intelligent EV company with automaker Geely Leapmotor starts presale of C11 electric SUV on Jan. 1 2021 Changan New Energy WM Motors/Weltmeister Chery Seres Enovate Evergrande Hengchi China's cute Ora R1 electric hatch offers a huge range for less than US$9,000 Singulato JAC Motors releases new product planning, including many NEVs Seat to make purely electric cars with JAC VW in China Iconiq Motors Hozon Aiways NEVS launches electric-car output with Saab 9-3 platform in China Youxia CHJ Automotive begins to accept orders of Leading Ideal ONE Infiniti to launch Chinese-built EV in 2022 Human HorizonsHere’s Tesla’s competition in autonomous driving…
Consumer Reports finds Tesla's Navigate on Autopilot is far less competent than a human driver Navigant Ranks Tesla Last Among Automakers & Suppliers for Automated Driving Guidehouse Insights ranks Tesla last in autonomous driving Tesla has a self-driving strategy other companies abandoned years ago Fiat Chrysler, Waymo expand self-driving partnership for passenger, delivery vehicles Waymo and Lyft partner to scale self-driving robotaxi service in Phoenix Volvo, Waymo partner to build self-driving vehicles Jaguar and Waymo announce an electric, fully autonomous car Renault, Nissan partner with Waymo for self-driving vehicles Cruise and GM Team Up with Microsoft to Commercialize Self-Driving Vehicles Cadillac Super Cruise™ Sets the Standard for Hands-Free Highway Driving Honda Joins with Cruise and General Motors to Build New Autonomous Vehicle Honda launching Level 3 autonomous cars Voyage Partners with FCA to Deliver Fully Driverless Cars Hyundai and Kia Invest in Aurora Aptiv and Hyundai Motor Group complete formation of autonomous driving joint venture Ford's electric Mustang will offer hands-free driving technology in 2021 Ford-VW alliance with Argo could redraw self-driving sector VW taps Baidu's Apollo platform to develop self-driving cars in China Amazon’s Zoox unveils electric robotaxi that can travel up to 75 mph Nvidia and Mercedes Team Up to Make Next-Gen Vehicles Daimler's heavy trucks start self-driving some of the way SoftBank, Toyota's self-driving car venture adds Mazda, Suzuki, Subaru Corp, Isuzu Daihatsu Continental & NVIDIA Partner to Enable Production of Artificial Intelligence Self-Driving Cars Mobileye and Geely to Offer Most Robust Driver Assistance Features Mobileye Starts Testing Self-Driving Vehicles in Germany Mobileye and NIO Partner to Bring Level 4 Autonomous Vehicles to Consumers Lucid Chooses Mobileye as Partner for Autonomous Vehicle Technology Nissan gives Japan version of Infiniti Q50 hands-free highway driving Hyundai to start autonomous ride-sharing service in Calif. Pony.ai raises $462 million in Toyota-led funding Baidu kicks off trial operation of Apollo robotaxi in Changsha Toyota to join Baidu's open-source self-driving platform Baidu, WM Motor announce strategic partnership for L3, L4 autonomous driving solutions Baidu plans to mass produce Level 4 self-driving cars with BAIC by 2021 DiDi completes over $500M fundraising round for its autonomous driving subsidiary BMW and Tencent to develop self-driving car technology together BMW, NavInfo bolster partnership in HD map service for autonomous cars in China FAW Hongqi readies electric SUV offering Level 4 autonomous driving Tencent, Changan Auto Announce Autonomous-Vehicle Joint Venture Huawei steps up ambitions in self-driving vehicles race BYD partners with Huawei for autonomous driving Lyft, Magna in Deal to Develop Hardware, Software for Self-Driving Cars In challenge to Tesla, Xpeng releases autonomous features for highway driving Nuro Becomes First Driverless Car Delivery Service in California Deutsche Post to Deploy Test Fleet Of Fully Autonomous Delivery Trucks ZF autonomous EV venture names first customer Magna’s new MAX4 self-driving platform offers autonomy up to Level 4 Groupe PSA’s safe and intuitive autonomous car tested by the general public Mitsubishi Electric to Exhibit Autonomous-driving Technologies in New xAUTO Test Vehicle Apple acquires self-driving startup Drive.ai Momenta – Building Autonomous Driving Brains JD.com Delivers on Self-Driving Electric Trucks NAVYA Unveils First Fully Autonomous Taxi Fujitsu and HERE to partner on advanced mobility services and autonomous drivingHere’s where Tesla’s competition will get its battery cells…
Panasonic (making deals with multiple automakers) LG Samsung SK Innovation Toshiba CATL BYD Northvolt (backed by VW & BMW) Ultium (General Motors & LG joint venture) PSA And Total Officially Launch Automotive Battery Cell Company UK companies AMTE Power and Britishvolt plan $4.9 billion investment in battery plants Toyota's game-changing solid-state battery en route for 2021 debut Verkor Farasis Microvast Akasol Cenat Wanxiang Eve Energy Svolt Romeo Power ProLogium BMW invests in Solid Power solid-state batteries Ford invests in Solid Power solid-state batteries Hyundai Motor developing solid-state EV batteries DaimlerHere’s Tesla’s competition in charging networks…
Electrify America is spending $2 billion building a high-speed U.S. charging network GM, EVgo partner to expand U.S. charging network Circle K Owner Plans Electric-Car Charging Push in U.S., Canada 191 U.S. Porsche dealers are installing 350kw chargers ChargePoint to equip Daimler dealers with electric car chargers GM and Bechtel plan to build thousands of electric car charging stations across the US Ford introduces 12,000 station charging network, teams with Amazon on home installation Petro-Canada Introduces Coast-to-Coast Canadian Charging Network Volta is rolling out a free charging network Ionity has over 150 European 350kw charging stations E.ON and Virta launch one of the largest intelligent EV charging networks in Europe Volkswagen plans 36,000 charging points for electric cars throughout Europe Smatric has over 400 charging points in Austria Allego has hundreds of chargers in Europe Shell To Acquire Ubitricity, The UK's Largest Charging Network PodPoint UK charging stations BP Chargemaster/Polar is building stations across the UK Instavolt is rolling out a UK charging network Fastned building 150kw-350kw chargers in Europe Aral To Install Over 100 Ultra-Fast Chargers In Germany Deutsche Telekom launches installation of charging network for e-cars Total to build 1,000 high-powered charging points at 300 European service-stations NIO teams up with China’s State Grid to build battery charging, swapping stations across country to compete with Tesla Volkswagen-based CAMS launches supercharging stations in China Volkswagen, FAW Group, JAC Motors, Star Charge formally announce new EV charging JV BP, Didi Jump on Electric-Vehicle Charging Bandwagon Evie rolls out ultrafast charging network in Australia Evie Networks To Install 42 Ultra-Fast Charging Sites In Australia
And here’s Tesla’s competition in storage batteries…
Panasonic Samsung LG BYD AES + Siemens (Fluence) GE Bosch Mitsubishi Hitachi Toshiba ABB Saft Johnson Contols EnerSys SOLARWATT Schneider Electric Sonnen Kyocera Generac Kokam NantEnergy Eaton Nissan Tesvolt Kreisel Leclanche Lockheed Martin EOS Energy Storage ESS UET electrIQ Power Belectric Stem ENGIE Redflow Renault Primus Power Simpliphi Power redT Energy Storage Murata Bluestorage Adara Blue Planet Tabuchi Electric Aggreko Orison Moixa Powin Energy Nidec Powervault Schmid 24M Ecoult Innolith LithiumWerks Natron Energy Energy Vault Ambri Voltstorage Cadenza InnovationThanks and stay healthy,
Mark Spiegel
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