The unasked questions from yesterday

  1. The Tesla fleet is about to grow exponentially. The charging network, at least in the US, is about to double. Nice. But what about Tesla service capacity? Isn’t the ratio of cars to service centers about to get pulled into Silly String? Is Tesla banking on a problem-free product? Is Tesla reasoning by analogy by looking at the relatively uneventful recall history of Model S/X? Or is TeslaMondo guilty of reasoning by analogy by assuming Model III is like other cars and will need physical attention like other cars — and will need such attention BEFORE it’s possible to send them back to Tesla autonomously?
  2. If employees are going to drive around this summer in production-spec Model IIIs, what protects them from paparazzi? Even the Gigafactory — a building, folks — attracted aggressive photographers until Tesla put the smack-down on them. Or, seen another way, what’s to prevent these employees from profiting immensely by leaking info?
  3. Why don’t we hear from anyone at Tesla besides the CFO, CTO and CEO? Where’s brand chief Ganesh Srivats, for example?
  4. Why does a powerful technology company like Tesla allow its earnings calls to be force-fed to the public through a raspy audio feed and archived with a cruddy little audio player, so the calls are both hard to hear AND frustrating to rewind/fast forward? Shouldn’t the company that’s tackling massive industries like automotive and electricity show more interest in how it communicates with the investment and journalism communities? Why should it be so effortless to see, hear and manipulate Wonder Woman spin transformations from the 1970s, but so exasperating to study a 2017 Tesla earnings call?




Uneventful earnings call predicted

What to expect TeslaMondoCriswell predicts TeslaMondoHere’s what we’ll hear: Part III of Model III reveal is coming in a few months. We knew that. The company aims to eke out some production units before the shot clock runs out this year, but production ramp healthier than with Model X in 2015. We knew that. Tesla Energy is growing rapidly. We knew that. Expansion into India and Dubai have lots of promise in coming years. Yeah, yeah. The SolarCity acquisition is like a python digesting a cat — taxing in the short-term but ultimately rewarding.

Anything shocking there? No. TeslaMondo predicts TSLA may let off some steam, given the high pressure, but pressure will re-build as the Model III reveal draws near.

The mainstream press and numerous analysts seem baffled about the recent stock run. It’s very simple. Lots of investors made a new year’s resolution to buy TSLA ahead of Model III. Trump initially gave them pause, but it turns out Tesla and Trump kinda need each other, as TeslaMondo predicted last fall. The immense short interest made the long story all the more enticing. Sure enough, a squeeze is already underway. If anyone is losing sleep over this earnings call, it’s the hapless shorts who are still clinging to the balloon rope as it lifts them fatally high.

Tesla is a revolution, not a car


Three years ago this month, Bloomberg published this “view” by Edward Niedermeyer, an auto journalist who gets published on big websites because he’s an auto journalist who gets published on big websites. With three years of hindsight, and with Model III apparently about to start pilot production, let’s revisit his Bloomberg piece, eh?

Niedermeyer, 2014: From the beginning, there have been signs that Elon Musk’s ambitions for Tesla Motors exceeded his grasp on reality — or at least the realities of the car business.

TeslaMondo, 2017: Big Auto is squirming amid a new reality defined by Tesla. Quoth Audi: “I hate to admit it, but Tesla did everything right.” Quoth FCA: “I’m incredibly impressed with what that kid has done.” Tesla’s gobbling of market share has totally transformed the product strategy of, well, just about every automaker. This was Musk’s true intent all along. He told a German audience (27:57) in 2013 : “If the big car companies see that our sales are good, and that we are actually taking a little bit of market share — I mean, we’re a tiny company, you know, a drop in the bucket — but if they see that people are buying these cars, then they will have no choice but to conclude that electric cars are the right way to go, and that will accelerate the transition to sustainable transport.” This is TeslaMondo’s favorite Musk quote, dry as it may be. Why? Because there is none more prophetic. Notice what’s been happening lately:

5/08/2016: Hyundai/Kia announce new EV strategy

6/21/2016: VW announces new EV strategy

8/03/2016: GM announces new EV strategy

11/25/2016: Jaguar/Land Rover announce new EV strategy

11/27/2016: Daimler announces new EV strategy

11/30/16: Toyota announces new EV strategy

12/5/2016: BMW announces new EV strategy

12/17/2016: Renault/Nissan/Mitsubishi announce new EV strategy

1/19/2017: Ford announces new EV strategy

Niedermeyer, 2014: Tesla’s market capitalization is hovering around $30 billion, about half that of General Motors and Ford.

TeslaMondo, 2017: How about $43 billion, or 88% percent of Ford?

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Niedermeyer, 2014: “But wait,” cry the market and financial press with one voice, “Tesla now has the potential to disrupt both the auto industry and the power utilities.” Which is true enough, in the sense that I have the potential to disrupt the world curling rankings.

Bonus: This Bloomberg panelist dismissed Tesla Energy as “jumping the shark,” a 1970s Happy Days reference that would require an overlong explanation here.


If she thinks Musk is like Fonzie, she obviously hasn’t met Nvidia’s CEO.screen-shot-2017-02-16-at-10-34-25-pm

TeslaMondo, 2017: Tesla Energy was profitable in its first quarter and has since made bigger and bigger headlines as it powers bigger and bigger entities, including islands. “It’s growing as fast as we can humanly scale it,” says CTO JB Straubel. Tesla Motors is now Tesla Inc., a three-headed hydra breathing down on autos, battery storage and solar. The auto division is grabbing the attention while the others are in flux due to the recent acquisition of SolarCity. But never mind that stuff. The real news is that Niedermeyer is making notable progress:



Niedermeyer, 2014: In the case of the Gigafactory, Tesla’s ability to disrupt lithium-ion battery production is severely limited by two major factors: first, Tesla itself has no experience manufacturing battery cells; second, Tesla depends on the very companies Musk wants to “disrupt.” Panasonic, Tesla’s main battery supplier and “default assumption,” for his Gigafactory partner, has (for fairly obvious reasons) not committed to Musk’s vision of a plan designed to lower the market price of its product by 30 percent. Which brings us to Tesla’s ability to disrupt the car market. If Panasonic believed sales of electrified vehicles held the sort of growth Musk anticipates, it would far more likely pursue that opportunity with Toyota, its electric-battery partner since 1996. Toyota, the world’s most valuable automaker and the industry leader in hybrid electrification, announced last year that it would increase joint lithium-ion battery production with Panasonic to 200,000 units per year. Having also owned a stake in Tesla since 2010, Toyota could easily have offered to cut Tesla into that deal. The fact that it didn’t supports the long-standing perception among Toyota-watchers that chief executive officer Akio Toyoda invested in an exciting car and brand four years ago, not a potential industry disruptor.

TeslaMondo, 2017: Panasonic is now the pursuer, not the pursued. It just expanded its Gigafactory involvement, and Panasonic’s CEO is telling the press he hopes to land a contract for some of Tesla’s autonomous driving gear. Meanwhile, superman Toyota is now stuck with the SoreEye fuel cell vehicle and the plug-in Prius Prime, neither of which is moving the sales needle or doing anything for the brand. Every month Toyota puts more cash on the hood of the Prime. The rebate is now $1,000 in some regions. Yet a decade ago, the Prius was a marvel of planet-saving engineering that everyone simply had to own. Sound familiar? Unfortunately, Toyota balked at EVs, and now it’s scrambling to catch the EV train that’s long left the station with Musk at the controls. TeslaMondo talks to car buyers every single day. Prius buyers are declaring, “This will be my last gas-powered car.” The Prius, whose name means predecessor, has suddenly become the Pontis, or bridge, to EV ownership. Whose EV will they buy? Gee, guess.

Niedermeyer, 2014: Toyota is no stranger to disruption, having overturned the global car business over the course of decades. But rather than high-concept, visionary technology and hype, it was Toyota’s mastery of the culture of manufacturing that drove it from bit player to industry titan. Toyota emphasizes kaizen, or continuous improvement, not Musk’s mercurial style.

TeslaMondo, 2017: Name one vehicle in the history of vehicles that has come to exemplify kaizen better than the Tesla Model S. It has repeatedly molted into a better and stronger creature. It shares little with its forebear born just a few years ago, in 2012. And that’s without mentioning the software updates, issued over the air. That’s a new type of kaizen that no other automaker can match.

Niedermeyer, 2014: If Musk really believes the Wall Street-Silicon Valley line that Tesla is in a position to seriously “disrupt” decades-old relationships like Toyota-Panasonic, let alone the auto industry more broadly, he’s headed for a stunning fall.

TeslaMondo, 2017: Rather than issue a broad, windy retort about Tesla’s status as disruptor, let’s focus on one unarguable example. Century-old mammoths like BMW and Nissan are now resorting to tapping people on the shoulder — people who are waiting in line for a Tesla Model III — and trying to talk them out of it. If this isn’t disruption, what is? And if disruption isn’t the first stage of a revolution, what is?


Tesla is making chicken shit into chicken salad

India, home to the worst power outages in history, and home to millions of extremely poor people: Tesla somehow aims to debut this summer. United Arab Emirates*, where petroleum cars tend to sell, um, fairly well: Tesla somehow is about to open shop there too. United States of America, where the president thinks being green means rubbing dollars on your skin: Tesla somehow has a key to the White House.

Another day, another surprising boost to sentiment. If this continues, TSLA will be trading north of $500 by year’s end.

*Here’s a must-read account of Tesla demand in the UAE. And if you think gas is super-cheap there, or represents a teensy sliver of household income, both are incorrect.


This represents the TeslaMondo portfolio for now, in proper proportion. Both companies own tollbooths to the future, but Nvidia has more lanes, so TeslaMondo allocates investment dollars accordingly.

There’s blood in the water. Short blood.

model-3-shark-nose-teslamondoWith TSLA short interest at an all-time high, Tesla confirmed today that it’s about to start pilot production of Model III — the very creature that shorts think will never materialize.

Time to bring in Matt Hooper from the oceanographic institute, to talk some sense into them: “I’m familiar with the fact that you are going to ignore this particular problem until it swims up and bites you in the ass.”


But wait — there may be hope for shorts yet. A lone Tesla worker is trying to agitate for a union, just as headlines start to mention Model III. Quite a coincidence. And quite absurd, since Tesla’s job fairs tend to cause stampedes. Conditions can’t be all that bad, now can they?

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Musk should flee Trump before this worsens

Musk should quit Trump’s business roundtables ASAP, while the fallout would still be relatively minor. Sure, Tesla stock may take a hit, but it’s better than the long term implications of rubbing shoulders with a reckless buffoon, a man who apparently never made the childhood mistake of swatting a hornets’ nest. The hornets don’t go away, and your back yard does not become safer. Instead, the episode ends badly for the idiot holding the stick and anyone in the immediate vicinity.  

Musk’s life was already in danger for rattling large, sophisticated institutions. Now he’s flirting with a wholly different kind of danger. Radicals, newly stimulated by Trump’s childish attempt at corralling Muslims, will see Trump’s business roundtable as unprotected Trump cohorts, low-hanging fruit.

Yes, we know that Musk is trying to speak out, trying to add a voice of reason. That provides zero distinction for armed nitwits with insect minds and insect vision. You’re nearby? You’re getting stung. Musk is probably starting to notice that reasoning with Trump is impossible. Reasoning with hornets is beyond impossible. TeslaMondo thinks Elon should turn and sprint.


Such Bold and Beautiful moments

  • A German environmental official drives a Tesla Model S. Meanwhile, Musk owns, or recently owned, an Audi Q7. Breaking rank? How bold and beautiful.
  • Tesla’s new Autopilot chief says he thinks of cars as appliances, and thus wants them to simply function flawlessly and faithfully. A declaration of disinterest in cars, even though he reports to a CEO bent on warping the human brain with g-force? This ranks as a bold and beautiful moment. TeslaMondo has long pointed out the confusing duality of Tesla. It wants to thrill the driver AND remove the driver.
  • TSLA has zipped past $250/share just one day after The Street said, “It could be a bumpy road to get the shares over $250.” Derrrr . . .  A bold and beautiful moment of knuckle-dragging stupidity from the financial press. Who pays these stinky primates, and why?
  • TSLA shorts are probably starting to lose both sleep and money because of this bold and beautiful upward slope in TSLA’s recent chart. Recent longs, on the other hand, bought a stairway to heaven. It’s becoming clearer by the day that President Heat Miser and Trump advisor Peter Thiel, a longtime Musk chum, are nothing short of omnipotent Tesla allies. We could be looking at the opening days of a long, agonizing short squeeze. Whether quick and brutal or slow and tortuous, short squeezes are bold and beautiful.


In the summer of 2015, the Bold and the Beautiful made profuse use of a Model S to punctuate the return of the Ridge Forrester character. Well, just yesterday the same soap slathered a Model X all over the screen. Ridge’s daughter owns one.


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Fixed-price, no-haggle experiment fails

A Toyota dealership in Arizona has just learned the same lesson Ford learned in 1999. No-haggle pricing simply DOES NOT WORK. Customers don’t trust the fixed prices, and rival dealers validate that suspicion by effortlessly undercutting those fixed prices.

So how does Tesla get away with it? Well, every Tesla store is fixed-price, so there’s no interbrand competition. And there’s no intrabrand competition either, because everyone is selling apples to Tesla’s oranges. Who sells anything remotely similar to a Model X?

Ford might be the first, if it ever brings its Big Opening Never-Ending Riser project to fruition.