Elon Musk delivered a terrible quarter and tries to appease Tesla (TSLA) investors with more hype. I offer a musical tribute to Musk. Care to guess it now?
Spotlight Elon Musk
The Wall Street Journal comments Elon Musk Needs Cheaper Teslas to Pay for Everything Else He Wants
Tesla on Tuesday announced something totally unexpected from a company run by Elon Musk: a compromise.
The surprise passage of its highly anticipated first-quarter results came in the outlook statement.
“We have updated our future vehicle line-up to accelerate the launch of new models ahead of our previously communicated start of production in the second half of 2025.”
I see this differently. Musk will say anything to protect share price. How is this different than any of thousands of promises Musk has made and not delivered?
Ans look at the date, always a year away.
Musical Tribute to Elon Musk
The Wall Street Journal continues
This [tomorrow story] is exactly what investors wanted to hear after a wave of doubt about the company’s commitment to producing a new mass-market car. The shares rose about 10% in Wednesday trading.
But there was a twist: The company went on to explain that these new models will combine elements of both its current production platform and its “next generation” one under development. That means cost savings will be lower than previously expected, but so will capital spending as existing production capacity can be adapted to the new products. Tesla won’t be opening new factories dedicated to a cut-price vehicle any time soon.
In other words, Tesla is trading radicalism for speed of delivery and capital efficiency, at least in the medium term. It is a sensible decision from a company that has historically preferred to take the heroic road. Institutional investors will likely love it; the Tesla fan base perhaps less so.
For starters, Tesla has not done anything., Rather Musk has promised to do something, not tomorrow, but next year.
Perhaps he will, this time, if for no other reason than the goal is modest and nebulous. What exactly did he promise anyway?
I wonder if he rushes the “next generation” of vehicles, whatever they are, before they are ready.
Look at Tesla’s ridiculous cybertruck, a total monstrosity. The next generation of car better be better.
Terrible first-quarter results explain why Tesla is reaching for a new approach. With electric-vehicle sales under pressure, the company burned through $2.5 billion of cash—far more than analysts had expected—by combining the lowest quarterly operating cash flow since early 2020 with record capital spending. Carmakers unravel very quickly and expensively when sales fall, and Tesla is no different.
As revenues fell 13% year over year in the first quarter, inventories rose 10% to around $16 billion. These may be parts and unsold Teslas stuck in transit—the scenario emphasized by management on a call with investors—or they may be cars sitting on lots waiting for buyers.
All Hype, No Details
The new plan has a shot at reviving sales growth next year: Musk said that the new models would come “early 2025 if not late this year.” Beyond that, though, he gave few details, pointedly declining to answer analysts’ questions on the topic during the call. That leaves the door open for speculation on all sides, with bulls claiming that the affordable Tesla project is being brought forward and bears emphasizing the compromises.
Refusal to provide details means one thing: Musk has no details to offer.
It’s just more hype that’s perpetually a year away.
FSD Hype
The other wrinkle in the new plan is that Musk still seems much more interested in cracking the code to self-driving vehicles than in making a cheaper electric car. “If somebody doesn’t believe Tesla is going to solve autonomy, I think they should not be an investor in the company,” Musk said when asked by Morgan Stanley analyst Adam Jonas about Chinese competition to produce a low-cost EV.
Musk is right that Tesla’s valuation doesn’t add up without driverless cars, regardless of its growth in deliveries. So it was disappointing that the company gave investors no new ways to track its progress or gain confidence in its technology beyond well-worn assertions that it has the right approach.
No Radar
Tesla is taking a riskier road to autonomy than the likes of Mercedes-Benz and Alphabet, rejecting expensive lidar sensors and leaning into artificial intelligence. The approach should win on unit cost, but only if it actually delivers technologically. Meanwhile, Tesla’s spending on Nvidia’s AI-training chips and data centers is exacerbating its financial strain.
Robotaxi Hype
The company is holding an event to unveil a “robotaxi” on Aug. 8, but its self-driving technology requires constant supervision, suggesting delivery of truly driverless Teslas is still years away. Concrete details of its approach and performance benchmarks could help build investor confidence in what is usually seen as a moonshot, though.
Musk only has eyes for robots and AI, but selling cars is the cash machine capable of funding higher-tech dreams. His first priority must be to fix it.
Musk’s approach won’t work. Artificial intelligence cannot see through heavy rain, snow, and fog.
It’s not that AI is bad. I don’t know one way or another. Rather, cameras alone, AI or not, are insufficient.
Tesla is on the wrong path. Waymo is far ahead. Mercedes-Benz will soon be ahead, if it’s not already.
Tesla’s Deliveries Drop for First Time Since 2020
Tesla’s (TSLA) quarterly deliveries in the first quarter of 2024, are down 8.5% from a year earlier. It’s the first quarterly decline since 2020.
Tesla blames production setbacks for the Decline in Quarterly Deliveries, but falling demand is the bigger issue.
On April 2, I commented Tesla’s Deliveries Drop for First Time Since 2020, It’s Demand Not Supply
Tesla’s heydays of surging demand growth is over. Competition is increasing and relative demand growth, if not absolute demand growth, is falling.
If Tesla can scale up semi production that would be a big boost. But Elon Musk has been promising 50,000 semis a year, every year for four years and has delivered a grand total of 100.
Only 35 Class 8 Truck EV Charging Stations
One of the things holding up use of electric semis is expense. A second is the number of charging stations.
Please note there are 4 Million Semis on the Road, Only 35 Class 8 Truck EV Charging Stations
Electrek says Tesla’s giga factory is only about 30% complete and Tesla hasn’t expanded the facility for years.
Elon Musk Fires 10 Percent of Tesla Workforce
On April 15, I noted Elon Musk Fires 10 Percent of Tesla Workforce, Prepares for “Next Phase of Growth”
In preparation for more growth, Musk issues a memo announcing an workforce cut of 10 percent and two top Tesla (TSLA) executives resign.
One does not prepare for growth by firing staff, pausing construction of the giga semi factory, and repeating the same hollow lies every year since 2016.
Tesla is Dead Last in Autonomous Driving
More Elon Musk Vaporware
On April 8, I commented Tesla’s Robotaxi August Launch Will Be More Elon Musk Vaporware
On August 8, Elon Musk will make an announcement on robotaxis. Tesla lags Waymo so badly that Musk is not even near the ballpark.
On August 8, expect to hear more promises, not for August 9, but for Musk’s tomorrow, always a year away.
Attention Jeff Green…. see what happens if you wait … now they are giving away a Tesla … and will be losing money after they factor in fees and the renovation costs.
We’re selling everything: Beach house comes with free Tesla as family quits NZ
“We had a registered valuation of $2.5m, so the asking price of $2.449m was great value. And now with the car, it’s even better,” Coote said.
He said the vendors had added considerable value to the house since they bought it October 2021, for $2.35m.
link to oneroof.co.nz
No subsidies no sales
link to archive.md
link to qz.com
Whiners link to oilprice.com
Musk’s approach won’t work. Artificial intelligence cannot see through heavy rain, snow, and fog.
People can’t either yet we still drive. I love it when financial people opine on engineering.
To be clear I think electric cars may have a small place as around town runabouts (see Aptera) but are silly elsewhere. I wish Musk would sell all his Tesla stock and concentrate on SpaceX. He certainly has the runs on the board there doing things that the space industry regarded as impossible or uneconomic and is eating all their lunches.
He is also performing a great public service with X. My (Australian) government is revealing themselves as a totalitarian clownshow.
Is the goal to mimic human behavior or to replace it with something better?
Tesla is nowhere close to Waymo accuracy.
Is anybody buying the Waymo tech to put in their cars? IIRC they have had their share of problems.
I don’t hold out much hope for FSD by anyone. On freeways, major roads, sure.
I am no fan of Tesla at all, but Musk has thus far had a way of disproving that company’s naysayers. I wouldn’t be too quick to count him out.
Oh? Like when he promised fully autonomous cars by 2021?
He’s done. This was always going to implode because it does NOT make sense. There is no logic.
EVs are charged using fossil fuels mostly.
EVs are made using fossil fuels exclusively.
Transitioning to EVs is IMPOSSIBLE – because there is not enough grid capacity to make this possible and upgrading would cost trillions — also there are not enough resources to make all those billions of batteries… the list goes on
What cannot continue – WILL STOP.
Let me repeat that – What cannot continue – WILL STOP.
This was from day one inspiring hopium making the herd believe we could ditch oil — so that the herd did not get spooked as we watched oil production in the north sea… alaska … mexico etc etc etc… and now the Permian … head south…
Elon is fake. He is the front man for the bullshit. He couldn’t run a pizza shop. He’s not running any of this… he is an ACTOR.
Tesla is headed for the dumpster.
hahahahaha….
Oh. You again. LOL
The US government can’t call Tesla what it really is, because it would highlight that the US government is essentially the same thing except the octogenarian at the helm making empty promises.
Biden would gladly pay you back in 50 years (long after he has left this realm) for some more weapons for Ukraine today.
Its absurd to suggest that US Treasuries are money good.
News in our region reported this morning Tesla ‘autopilot’ killed again. This time a motorcyclist.
Tesla driver admitted they were watching their phone while the collision occurred. Arrested, then released.
Liar is too mild a term for psychopath Elon Musk.
2010: Tesla = glorified, subsidized golfcarts
2024: Tesla = glorified, subsidized golfcarts
post-IPO “investors” = SUCKERS
The cheap Tesla will be released “Early 2025 if not late this year”. Well, Elon is full of you know what. If a brand new mass-market, mass-production model release was really this close on the horizon then we would have heard about preparations, factory retooling, staff training, etc. by now. Obviously, this is a statement meant to juice the stock up with very little substance behind it. Besides, there are things Elon is good at and things he’s bad at. Meeting self-imposed deadlines is one of those things he’s not just bad at, but very bad at. Of course, the Tesla cult members ate it up nevertheless.
He gets away with this bullshit because he is fake… he doesn’t run Tesla… he was anointed as the Tech Messiah … to make the herd believe that we can solve all problems with tech.
We can’t
I went with Fleetwood Mac’s “Tell Me (sweet little) Lies” as it seems investors know about but still love these lies, like a great-named but short-lived TV show “Lie To Me”. Chuck Prince would say the music’s still playing.
There’s a genuine blast from the past.
“As long as the music is playing you have to keep dancing” something like that. A few week later he was gone as Citybank CEO. Now let’s see how close my memory is.
Very close
link to mishtalk.com
How much computing power does it take to process all the sensor input in real time and make a decision on how to drive the car? And that computer needs to be on board the car. That’s going to be a big drain on the battery.
Actually, Tesla puts pretty powerful chips in their vehicles, more more than other car companies.
I don’t know, but all systems should be fail-safe so that if a sensor dies the folks in the car won’t.
The bigger drain on the battery is the navigation display which controls all car functions if not using voice commands. Pretty much standard in all EVs.
There are some very good arguments against Tesla’s vehicles, but the idea that the electricity consumption by the chips wear down the battery has to be the most insanely stupid argument I have seen in all the years I have followed the company. Congrats! LOL
“Elon Musk delivered a terrible quarter and tries to appease Tesla (TSLA) investors with more hype.”
No ain’t that ever the surprise….
Tesla has always been in the business of selling paper to Fed Welfare Queens. Anything else they may have been engaged in, is just part of the advertising budget.
Hong Kong removed the subsidies on EVs and sales of Teslas went to ZERO.
The government then reinstated the subsidies (no doubt the Global Ministry of Truth had something to do with reinstating)
Electric vehicles in Hong Kong could be adding “20 per cent more” carbon to the atmosphere than regular petrol ones over the same distance after factoring in the city’s coal-dominated energy mix and battery manufacture, a new research report found.
Investment research firm Bernstein also claimed that by subsidising electric vehicle purchases, the government was effectively “harming rather than helping the environment” at the expense of the taxpayer.
“The policy is to encourage drivers to be green, but they are actually subsidising vehicles that create more emissions of CO2 and particulates from power plants,” said Bernstein senior analyst Neil Beveridge.
link to scmp.com
“Whilst the electric vehicles and lithium batteries manufactured by these two companies do indeed help to reduce direct CO2 emissions from vehicles, electricity is needed to power them,” Morgan Stanley wrote. “And with their primary markets still largely weighted towards fossil-fuel power (72% in the U.S. and 75% in China) the CO2 emissions from this electricity generation are still material.”
In other words, “the carbon emissions generated by the electricity required for electric vehicles are greater than those saved by cutting out direct vehicle emissions.”
link to zerohedge.com
There is too much printed money to necessitate due diligence, either in cash equivalents or bubblicious property prices.
Tesla can use FOMO to do as it pleases.
All you need to do to calculate the value of Elon’s promises is look at what was promised for the Cybertruck, and what was delivered.
“But there was a twist: The company went on to explain that these new models will combine elements of both its current production platform and its “next generation” one under development. That means cost savings will be lower than previously expected, but so will capital spending as existing production capacity can be adapted to the new products. Tesla won’t be opening new factories dedicated to a cut-price vehicle any time soon.”
This screams that demand for current models is falling fast. That’s why they can do this because there is slack in demand in the existing factories. Thus new models will be able to be built there using existing production equipment rather than requiring new factories. It’s proof that the falling demand that showed up this quarter is expected to continue into future quarters (years).
I wonder if this cheaper Tesla (assuming it’s even real) will also come with cheaper quality?
Can it get much worse?
Tesla Jumps Four Spots, Still Near Bottom In Consumer Reports’ Reliability Survey
Tesla was rated 19th out of 24 brands this year.
link to insideevs.com
He sells cars to environmentalists, and then goes on a 60 billion dollar performative jackassery rampage trying to become King of the Right Wing Incels.
Not good for sales. New models will not help with this problem. Elon needs to go.
Nail the messiah to a cross hahaha
Nothing New Here . . . Markets always move on Rumors . . .
“Look at Tesla’s ridiculous cybertruck, a total monstrosity.”
What is worse is that he even sold ONE? That is worse than the Gremlin from my Youth, which was the joke of our times.
Worse: I have seen the man interviewed and he REEKS arrogance and self-assurance, which of course if he were BROKE, would be far far different.
I’ll have you know he’s sold almost 4000!
Ugly sure, but futuristic for some.
That’s the only way to stamp steel 1.8 mm thick. The prototype had a body thickness of 3mm (1/8 inch).
How about the yugo?
Musk’s best hope is government tariffs and/or bans on Chinese EV’s including indirect flows of China EV’s via Mexico. In some respects, he is hedged as both Biden and Trump love playing the anti-China card and this will give Tesla a life-line so to speak. I would not write off Tesla just yet. Every OEM has down quarters and years. Tesla will find it difficult though to maintain share in the U.S. as other brands catch up. And they are including foreign brands like BMW, who may be making the best EV right now. The next wave of EV sales uptick will be via technology enhancements and accessibility to charging not to mention price. As to Tesla’s stock price, it was an incredible ride while it lasted.
Robo taxis… a trader mentioned 0 to 60 in 2.9 seconds.
Musk and Tesla are just a microcosm of the U.S. Government and U.S hyper financialized fraud “markets”
We Live In The GOLDEN Age Of Fraud
Fraud NORMALLY requires a bit more subtlety. Musk just is IN our faces, much like Congress with such shit as the Inflation Reduction act. IT WAS AN ACT all right!
Fraud used to require subtlety, but no more. Our border is less secure than most dog parks mid-day but somehow it was more important to give $66 billion to a country best known for being the most corrupt government in Europe with a neo-nazi brigade than closing the border gate and deporting illegals.
The unknown virus of mysterious origin has magically disappeared. No accountability for celery stick joe or his merry band of corruptocrats at CDC or FDA.
10 days ago –
“Mark joins me to talk the Tesla short thesis, macro analysis, why he thinks the market will collapse and craft beer.”
Quoth the Raven #334 – Mark Spiegel | Quoth the Raven (podbean.com)
Already heard it. Good stuff.
My favorite song for the rose colored glasses type syndrome has always been Ray Stevens “Everything is Beautiful”.
…”In its own way………”
went with The Song Remains the Same
I went with Won’t get Fooled Again by The Who