Tesla stock withstands a stress test

One of the most debated stocks in the entire market mostly sidestepped the generalized anxiety disorder of 2018, so TSLA’s footing isn’t as tenuous as it may seem. This bodes well for resilience in 2019. TeslaMondo thinks this year will bring more macroeconomic jitters, but Tesla should see positive movement in 2019 despite the negative current:

  • New products — Model Y and solar roof at minimum. And a new in-house microchip.
  • Footprint expansion — D-Day in Europe, meaning Model 3 deliveries, will come in February. Chinese Gigafactory progress mitigates investor fear over US-China tensions. India, will you receive an honorable mention this year?
  • Financials — TeslaMondo thinks Tesla has indeed turned the corner financially and isn’t going back. Even if 2019 turns into a full-on recession, Tesla won’t crumble. It lacks the financial maturity of a Ford, but it has a goose laying golden eggs: image, excitement, green credibility. Also, Tesla’s cost-per-kWh, already the best in the biz, will likely fall faster than a recession can take hold, allowing substantial retail price reductions if demand becomes a problem.
  • Musk — His crib has taller walls this year, per SEC decree. Maybe he’ll make progress with his Tinkertoys instead of throwing stuff and trying to climb out.

Here’s a new-year’s resolution for journalists covering Tesla. Stop pitting everyone’s EV efforts against Tesla, as if the EV market is a tiny shark tank vying for a few minnows. The EV market is as large as the Atlantic Ocean. The top three trade-ins for a Model 3 are the Prius, BMW 3-Series and Honda Accord. Every hybrid or gas driver is an EV convert waiting to happen. That’s a lot of fish for a lot of sharks, and plenty of room to spread out.

What you see vs. what you get

Tesla has avoided the Big Auto habit of showing wild n’ tangy concept cars only to water them down as prototypes, and again for the production version until the dilution washes away the “tang” of the original car. The Porsche Taycan, which Porsche claims is raking in a lot of orders, will become an interesting comparison. Will it dilute?

 

What you see/what you get

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What you see/what you get

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What you see/what you get

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What you see/what you get

 

What you see/what you get

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What you see

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What you get?

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Wisdom starts with admitting ignorance

Journalists recognize Tesla has pushed into virgin territory with unique products built in unique ways, so their journalism experience will not serve them here. Their business-writing acumen, whether that’s two years or 40 years, is moot. It’s impossible for a pundit, or even Tesla’s CEO, to predict with any certainty which of its next steps will be easy or hard, quick or tortuously long. Tesla’s inexperience could help or hurt. Nobody really knows. And so automotive columnists wisely drop their keyboards and STFU instead of claiming to have expertise about a non-existent path forward, right?

Actually, no. They don’t do any of that.

May 10, 2013, Time MagazineTesla Beats the Odds — and the Haters — but Now Comes the Hard Part

April 2, 2016, Business Insider — Tesla is About to Face the Biggest Challenge in its History

May 2, 2017, Barron’s — Tesla Motors: And Now the Hard Part

May 9, 2017, The Banks Report — Tesla’s Retail Model May Be its Biggest Challenge

August 1, 2017, Driving — Tesla’s Model 3 Debuts — Now Comes the Hard Part

November 26, 2017, Jalopnik — Tesla’s New Semi Truck Might be its Biggest Challenge Yet

December 29, 2017, Seeking AlphaTiming Will be Tesla’s Biggest Challenge in 2018

February 16, 2018, Wealth Daily — The Rare Metal Solving Tesla’s Biggest Challenge

October 3, 2018, Seeking AlphaTesla: Q4 Now the Hard Part

December 14, 2018, Teslarati — Tesla Faces Biggest Challenge Yet as Oil Industry Fights to Maintain its Hold on US Auto

December 20, 2018, ForbesTesla Survived Manufacturing Hell — Now Comes the Hard Part

 

Not really digging this

Dig Dug final TeslaMondoLast night, we learned that the Boring Company can do for tunneling what Space X did for space exploration: take a first-principles approach and get vastly improved results for lower cost. This will make life better for water pipes and electrical lines.

But people? Hmmm.

At this early stage, the efficiency gains in tunneling are wasted on an inefficient and dangerous means of human transport. A tunnel is best traveled by something long and tubular, like a subway train, not a teensy pod that carries a handful of people and needs special elevators. Moreover, car tires have no place in an MRI-like tunnel with no margin for error and no means of user-abort if things go wrong. That’s why subways use rails. They’re not perfect, but they sure beat rubber. Better yet, bring on the Hyperloop subway propulsion system already.

Cities are 3D, but the transportation serving them is 2D. That’s the problem, says Musk. Well, cities are 3D above ground, while tunnel systems are 3D underground. If the underground vehicles need to surface, you’ll have bottlenecks. Unless we start building underground cities to complement a renaissance in tunneling, and get the Hyperloop technology working to boot, the Boring capillary system will suffer blood clots and strokes, just like our highway arteries of today. The Boring company will merely turn the highway clusterfucks of today into the tunnel clusterfucks of tomorrow.

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The 60 Minutes transcript, unedited

All of this italicized material ended up on the cutting room floor, the rascals — but TeslaMondo has restored it.


Lesley Stahl: Here are some of the words written about you.

Elon Musk: It’s a lot of words! (LAUGH)

Lesley Stahl: –over this summer. Erratic, unstable, reckless, operatic.

Elon Musk: Operatic? Ah, that’s not bad, actually. Sometimes I wear a dress and perform the Habenera from Carmen.

Lesley Stahl: Is that your favorite, you uncultured swine? I like Cursum Perficio.

Elon Musk: Never heard of it.

Lesley Stahl: It’s Enya.

Elon Musk: She’s considered opera?

Lesley Stahl: Well, she’s operatic.

Elon Musk: Bullshit, but no matter. What are you doing later today? We should get together and listen to some music. I’ll get on my dress and you can be Don Jose. And we’ll see what happens. I’m super-excited about plant-a-seed day.

Lesley Stahl: I’m not even going to ask what you’re talking about. You tweet a lot.

Elon Musk: That’s funny you should say that. I’ve always been nervous about hitting the high notes. Oh, Twitter? Well, I’m sleeping in the factory floor, soaked in stress. I’m stuck in a cage. My Twitter account is the caged bird singing. You’ve heard of that book, right, about why the caged bird sings?

Lesley Stahl: You want to sing for us? Go for it.

Elon Musk: Never mind. Obviously you haven’t read it.

Lesley Stahl: You use your tweeting to kind of get back at critics.

Elon Musk: Rarely.

Lesley Stahl: You kind of have little wars with the press.

Elon Musk: And I’ll have one with 60 Minutes if you mess up the editing. And don’t insert some revvy engine sound over Tesla footage like you did in 2014. Twitter’s a war zone. If somebody’s gonna jump in the warzone, it’s like, “Okay, you’re in the arena. Let’s go!”

His warzone tweeting drew fire when out of the blue in August he tweeted, quote: “Am considering taking Tesla private at $420. Funding secured.” The SEC disputed that claim and charged him with securities fraud. The case was settled with Musk agreeing that his “communications relating to the company… including… Twitter” would be overseen by his board.

Lesley Stahl: Have you had any of your tweets censored since the settlement?

Elon Musk: No.

Lesley Stahl: None? Does someone have to read them before they go out?

Elon Musk: No. But this talk about rebellion is getting me super-excited about plant-a-seed day.

Lesley Stahl: Stop it. So your tweets are not supervised?

Elon Musk: The only tweets that would have to be say reviewed would be if a tweet had a probability of causing a movement in the stock. And since the stock market is now hyper-reactive and computerized to the point where one ill-advised word like “secured” can make billions of dollars go sloshing around, that means every tweet.

Lesley Stahl: And that’s it?

Elon Musk: Yeah, I mean otherwise it’s, “Hello, First Amendment.” Like freedom of speech is fundamental.

Lesley Stahl: But how do they know if it’s going to move the market if they’re not reading all of them before you send them?

Elon Musk: Well, I guess we might make some mistakes.  Who knows?

Lesley Stahl: Are you serious?

Elon Musk: Nobody’s perfect.

Lesley Stahl: Look at you. I’m still trying to picture you in a dress. Do you shave your legs?

Elon Musk: I want to be clear. I do not respect the SEC. I do not respect them.

Lesley Stahl: I’d ask why not, but this is 21st-century journalism. We skip the crucial questions. But you’re abiding by the settlement, aren’t you?

Elon Musk: Because I respect the justice system.

Abiding also meant he had to relinquish his position as chairman of the Tesla board. He’s been replaced by board member Robyn Denholm.

Lesley Stahl: Did you handpick her?

Elon Musk: Yes. She helps me with jewelry and makeup on concert nights.

Lesley Stahl: The impression was that she was put in to kind of watch over you.

Elon Musk: Yeah, I mean that’s not realistic. I mean I’m the largest–

Lesley Stahl: Like a babysitter–

Elon Musk: I’m super-excited about plant-a-seed day.

Lesley Stahl: Stop it. I’m blushing under this quarter-inch layer of ghostly makeup on my face. So do you think you’ll want to go back to being– to being chair?

Elon Musk: No, I don’t think — I actually just prefer to have no titles at all, besides diva, on concert nights.

With or without titles, there’s something larger than life about Elon Musk. He has a cult following. One of Silicon Valley’s most successful and versatile entrepreneurs, he has, beyond cars, built powerful rockets with reusable boosters, this one launched a record 64 satellites into orbit. He’s digging a tunnel deep underground to deal with traffic congestion. And in each case, he started a company.

Lesley Stahl: Did you have a lot of money? Did your family give you a lot of money to start all of this?

Elon Musk: Yes, but I spent it on voice lessons before I left. So the real answer is No.

Lesley Stahl: You grew up in South Africa.

Elon Musk: Yes.

Lesley Stahl: Yeah.

Elon Musk: Yeah.

Lesley Stahl: Yeah what?

Elon Musk: You said yeah.

Lesley Stahl: No, you said it.

Elon Musk: No, I said yes.

Lesley Stahl: What’s the difference?

Elon Musk: Yeah means there’s more to it.

Lesley Stahl: I was hoping you’d talk about what it’s like there, but I don’t want to ask because I don’t know enough about South Africa to ask any smart questions.

Elon Musk: I left when I was 17, by myself. I had a backpack of clothes and a suitcase of books. And that’s it. Well, and lipstick.

Musk was a champion of automation. So his original assembly lines were full of robots. But the robots kept breaking down. Walk along this new line in the tent, and all you see are, well, humans. He tweeted: “Excessive automation at Tesla was a mistake. To be precise, my mistake. Humans are underrated.”

Elon Musk: People are way better at dealing with unexpected circumstances than robots. Although humans bitch and moan to a UAW script. Robots don’t have unions. Although, in the future, they might. That’s when I’m quitting to join the New York Philharmonic.

Musk diva

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D-Day in Europe coming in February

D-Day!D-Day in WWII was a success, albeit a bloody one, due to sheer volume. At least that’s the narrative. “The Axis powers ran out of bullets before the Allies ran out of bodies.”

That’s baloney. The invasion of Normandy might have failed if it weren’t for three years of quiet, behind-the-scenes smarts. Did you know the Allies had deployed a massive decoy army of 1,100 men? This “ghost army” planted hundreds of inflatable rubber tanks to confuse Axis air spotters. It carried on scripted conversations about phony invasion plans, knowing the bad guys would hear it all. It recorded sounds of bridges being built and artillery being loaded, all phony, and blasted that soundtrack using cutting-edge “boomboxes” into a 15-mile radius. The ghost army went to European coffee shops and talked loose about phony strategies — the 1940s equivalent of social media trolling. Historians figure the ghost army saved tens of thousands of lives by diverting some of Hitler’s army to phony hotpoints.

The other under-appreciated part of D-Day was the spontaneous, on-the-fly thinking. At first, the Allies were getting mowed down as soon as they hit the sand — if they could even get to the sand. Thousands drowned. The Allies were discovering too late that the preceding air attacks had missed the enemy fortifications on the hills. The cloud cover had thrown the pilots off by just three seconds, so the bombs went too far inland and blew up some cows.

Seeing the carnage on the beach, Allied destroyers defied orders by steering directly into the melee, risking running aground, and firing point-blank into the dug-in enemy artillery “pillboxes” on the cliffs. See ya. This unscripted move let the ground troops establish a beachhead and move inland.

Tesla’s takeover of Europe in February will also be seen as a crude Model 3 volume invasion, but we’ll never know the years of headaches in the war room that made this vehicle possible. And we’ll know only about the assembly “tent” as a symbol of on-the-fly bravado. Doubtless there’s an entire book’s worth of brain-warping agony that has culminated in Tesla’s imminent move into enemy territory with this Panzer-killer.

H-Hour, whenever it comes, will be a historic moment for the red, white and blue. And it won’t involve a whole lot of enemy fire. Actually, none.

Mike Myers AMG

“Tesla’s market cap is bigger than Daimler’s? That schweinhund Musk!”

 

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My last day at the plant

I missed a company event yesterday because I chose to watch the birth of my child instead. So I’m walking on eggshells this morning as I punch the clock at the Tesla plant. Eggshells? No, as I bend down and look more closely, I see I’m walking through a shallow river of raw sewage flowing across the factory floor.

I duck into the locker room to change my soiled shoes and pants. I can hear muffled moaning. It’s coming from the showers. I peek around the corner. A bunch of black Tesla engineers are scrubbing the floor. They’ve got it easy. At least they have pants on. The white women are forced to scrub the floor wearing nothing but pink thongs every day except casual Fridays, when they’re totally naked.

Back on the floor, the factory seems a little giddy. Everyone is giggling. Of course! The food truck just came. That’s where everyone gets their daily pharma fix. Everyone is happy after the food truck visits, but the error rate goes way up. In fact, last week the piles of defective parts and punctured batteries blocked the food truck. See the vicious cycle?

Wait — I’m being called to the parking lot. That’s ominous. Yes — I knew it. They’ve set up an altar and Elon is putting on his hood. It’s time for a human sacrifice, and it’s me this time. So the recruiter was right when he said working for Tesla would require a bit of human sacrifice. I guess this is my comeuppance for missing that company event yesterday. Oh well. Time to punch out for the day. Or maybe it doesn’t matter at this point.

— This dramatization sponsored by the UAW, based on actual events

Anton Wahlman drains Tesla stores

Tesla’s retail stores have just seen an immediate 30-60 percent drop in foot traffic due to Anton Wahlman, a guy who gets published on financial websites because he’s been published on other financial websites. He is using his immense online credibility to set up his own chain of showrooms strategically located near Tesla’s busiest stores. Customers are flocking to Anton’s Awesome Autos to sample his brutal lineup of Tesla-killers:

  1. The Nissan NV-200 minivan
  2. The Audi A8 diesel
  3. The 2019 RAV4 Hybrid

 

Anton's Awesome Autos

Anton’s Awesome Autos

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Tesla gets a tough lesson in entomology

Tesla products may flout physics, but biology is proving tougher to dismiss. The phylum arthropoda is showing it can stand up to Tesla and its mighty Tesla Torque.™

A few days back, a Tesla Model X piloted by Greg from the Wiggles thoughtlessly stepped on a Lamborghini Mint Leaf Beetle (chrysolina herbacea) owned and piloted by a granary weevil (sitophilus granarius) named Yianni Charalambous.

Squaring off against the Lambo

Preparing to crush chrysolina herbacea

Yianni Charalambous

Yianni Charalambous

But Yianni quickly opened his garage and dispatched a scurrying Lamborghini Six-Spotted Tiger Beetle (cicindela sexguttata) to avenge that loss by skillfully employing its six-legged propulsion system and power-to-weight ratio to defeat the Model X.

Lamborghini Six-Spotted Tiger Beetle

Lamborghini Six-Spotted Tiger Beetle

Greg Page, innocent victim

Greg is always a good sport, and his teeth match his shirt to boot.

But wait! Deep in a California cave, Tesla Laboratory is bio-engineering a very nasty, fleet-footed creature called the Tesla ACR (American cockroach roadster). So this ain’t over, not by a longshot. Everyone knows this bug show ain’t over till the fat castor bean tick (ixodesricinus) sings.

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Model S won’t see a second generation

Criswell predicts TeslaMondoTwo summers ago, Criswell suspected the Model S would enjoy an unfairly long shelf life without a “redesign” or even a significant “refresh.”

  • Redesign — When Big Auto spends a lot of money to update a product.
  • Refresh — When Big Auto spends a little money to feign a redesign.

That’s because the Model S has developed into a far better creature thanks to Tesla’s engineering kaizen and OTA update regimen. It’s not the same car that debuted six years ago, period. Not even close. So it’s fresh where it counts.

Yet the car hasn’t changed visually since birth, besides the schnoz. How long can this sameness continue before boredom creeps in and affects sales? And what would a second-generation Model S look like?

There won’t be a second generation.

The current one will go on for a few more years and then die just as interest starts to wane. Tesla can jettison its big sedan and pare its core lineup to the 3, X and Y without losing many, if any, customers. You want something more airy than the 3? Get the Model Y. You want something bigger still? Get an X. You don’t want the SUV profile? Maybe not this year, but you’re more easily persuaded with every passing year. Criswell knows this about you. Right now an SUV might seem like a sedan hampered by tallness. But five years from now, a sedan will seem like an SUV hampered by flatness.

The only problem with this strategy is the falcon wing doors. Some people don’t like them. They’re too fickle. They’re too showy. They preclude a roof rack. So Criswell hereby predicts that a second-generation Model X, with normal doors, will bow within five years and will negate the need for a second-generation Model S.

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