https://twitter.com/rithesh/status/1028437449318576128
Please consider Bumper Falls Off Brand New Tesla Model 3 After 30 Minutes and Some Rain.
We’ve written about Tesla’s production and quality control issues, especially with the new Model 3, before, but this would be sort of startling even if we hadn’t: a person bought a Tesla Model 3, and, within the first 30 minutes of driving the car back home, the rear bumper cover falls off. That’s, um, not ideal. Update: A Tesla spokesperson said the company is looking into the matter here, and that this “is not how we build our cars.”
Now, cars are generally pretty good at retaining their body panels in the rain, even bottom-of-the-market cars like the Mitsubishi Mirage, but it seems to be a challenge for this Model 3. And not just this Model 3:
Hey, That Looks Like Mine!
That IS How Tesla Builds Cars
Excuse me for pointing out that IS how Tesla builds cars.
Yet, keeping your bumper cover on in pretty much all weather is a very, very solved problem in the automotive industry.
Let’s move on.
Musk Lies or Fantasies?
Musk said he expects buy-ins from existing shareholders. Really?
Reuters reports Keeping Tesla Shares May Not Be an Option for Some Big Funds.
Elon Musk wants to take Tesla Inc private, but some of his big investors may not be able to follow.
Most passive funds would have to drop Tesla if it were removed from stock indexes, experts said on Monday.
Actively-managed funds might need complicated approvals to hold a stake in the company, no matter how much of a mark Musk has made to date as founder and chief executive of the electric carmaker.
Vanguard spokeswoman Carolyn Wegemann declined to comment on Tesla but said by email, “As private companies are not included in indexes, any shares held in an index fund when a company goes private would likely be sold/tendered.”
Class-Action Lawsuits
Investopedia reports Tesla’s Musk Faces Class Action Suits Over Tweet.
Shorts Harmed On Purpose Lawsuit Claims
In one of the two lawsuits, which was filed in federal court in San Francisco by Kalman Issacs, the plaintiff contends Tesla and Musk “embarked on a scheme and course of conduct to artificially manipulate the price of Tesla stock to completely decimate the company’s short-sellers.” The lawsuit alleges the tweets sent the stock up $45.47 above the stock’s closing price the day earlier which cost short sellers, or those that bet a stock will go lower with borrowed shares, billions of dollars in mark-to-market losses. The lawsuits also claim Musk hasn’t lined up the financing necessary to take Tesla private and therefore made false statements.
Second Lawsuit Claims Musk Misled Investors
In a separate class-action lawsuit also filed in federal court in San Francisco, William Chamberlain contends Musk “materially” misled investors between August 7 and August 10 claiming investor support for the deal was secured and that the funding was in place.
Complications Arise
Elon Musk’s surprise tweet last week that he is considering taking Tesla Inc. private only intensified questions about the electric-car maker’s fundraising needs.
The Wall Street Journal reports Musk’s Surprise Tweet Complicates Tesla’s Debt Picture.
Elon Musk’s comments about taking Tesla private are threatening to increase the electric-car maker’s borrowing costs, presenting a fresh challenge for a company already dealing with a dwindling cash pile.
In a blog post Monday, Mr. Musk said that “most of the capital required for going private would be funded by equity rather than debt” and estimated that two-thirds of shares owned by current investors would remain with the company.
Tesla reported $2.2 billion of cash at the end of the second quarter, along with $9.5 billion in long-term debt and capital leases. Over the past year, the company burned through roughly $2.4 billion of cash with interest expense totaling $577 million, according to the research firm CreditSights.
Mr. Musk has repeatedly said the company can start generating cash in the second half of this year and doesn’t need to raise more capital. Some analysts disagree, saying the company likely will need to raise billions over the next few quarters to fund ongoing operations and pay down convertible-debt maturities worth a combined $1.15 billion.
In a report Thursday, Moody’s Investors Service reiterated its view that “Tesla will need to access the capital markets in order to fund its operating requirements” and repay convertible bonds. It called Mr. Musk’s recent statements “a credit negative,” though it maintained the company’s B3 speculative-grade rating.
The details of a go-private deal are important for current Tesla bondholders. Under the terms of the 5.3% bonds, Tesla would have to tender for the notes at 101 cents on the dollar if any investor or group of investors acquires a majority stake in the company and the bonds are downgraded by credit-rating firms. However, Mr. Musk’s comments indicate that a private Tesla might have no majority owner.
Summation
Lies, fantasies, and more lies. Other than that, what’s the problem?
Wait a second. I almost forgot about debt, pathetic tent-manufactured quality with bumpers that fall off in the rain, and batteries that explode randomly.
Mike “Mish” Shedlock
Mish, I am still trying to get my head around this story. R u thinking Tesla bumpers are pasted on with Elmer’s glue? The claim does not seem to withstand the smell test. Have you identified what you believe causes Tesla fenders to melt off? How about an update before I commit to an M3
These class actions by the short sellers are only the first class actions. If the offer to take the company private at the designated price falls through, there will be additional class actions from anyone that bought after the tweet.
It depends for what reasons the deal may fall through.
If by any chance Musk turns out to be liar (unlikely). Yes.
On the other hand I (and many other shareholders who understand potential behind Tesla energy vision) will probably vote against going private unless we can remain as shareholders.
The bumpers are not even among the top 8 Tesla model 3 problems! http://www.cheatsheet.com/money-career/the-biggest-problems-tesla-model-3-owners-have-reported.html/
I think this is much more likely to be the tip of the iceberg on quality rather than a rare case. There are loads of reports of quality issues out there. For example: http://www.latimes.com/business/autos/la-fi-hy-tesla-model3-quality-20180218-story.html#
Mish, ever take a statistics course? You have an n of 1 maybe 2, and make an absurd statement implying this will happen to all Teslas. What’s wrong with a truthful title such as the bumper fell off on one (or two?) Model 3 cars? And check the veracity each claim since bumpers frequently get damaged and removed for repair. Anyone can post an image and make such a claim. Good thing various short proxies/journos and can spread falsehoods in mass media without drawing frivolous lawsuits from blood sucking leeches.
dam* fake news!
That you, Elon?
Well, gliderdude has a point.
I still have not seen from Mish detailed analysis about Gold vs Stock market performance when one takes into account gold maintenance fees and stock dividends.
Musk reminds me of George Castanza driving his in-laws to the Hamptons. Just keep piling lies on top of lies until the other side gives up.
I’ll have to remind myself to not drive behind any Tesla’s for fear of parts falling onto the roadway.
Off topic but does anyone have a yearly graph of the growth in federal debt and the interest payments on that and how they match up? It looks like we will be at 500Billion in interest payments on tax income receipts of 3.4 Trillion. How long before the pain is too much? By that it looks like interest payments are only 2.5%. Does that sound right? Shouldn’t they be more around 3-3.5%?
The vast majority of t-bonds are held by American banks. Interest rates on those bonds are set by the Fed (a government agency) with the goal of providing adequate income to said banks along with fairly stable bond valuations so the banks will provide a desired level of liquidity to US markets. “Should” never really plays into it.
And the interest that accomplishes that, is always, noise aside, decreasing. Once it hits zero, as it did in Japan for a few decades ago, and is now in the West, it will still be kept effectively decreasing by all manners of other Fed shenanigans.
The two important thing being always, as you hinted at: Adequate income for banks, and liquidity enough in the T bond market for the Government to fund itself adequately. Nothing else matters, whatsoever, other than as propaganda and marketing tools to keep the indentured drones pliant and manageable. And, both adequates are always increasing. Always resulting in, what is left over for those outside of government and banks, is always decreasing.
This is what’s called “The System.” Which is what the easily duped and indoctrinated have been, and are, told; must, at all cost, be prevented from “collapsing.” Otherwise, the hobgoblins will drive around in the streets in tanks, and other scary stuff.
It isn’t just the shorts who are going to sue and win over the ill-considered tweet- indeed the pool of people who bought the stock last week thinking $420/share was the floor in the stock are going to be far more numerous and costly to pay off in the civil courts.
They may have a tough argument. They could have sold at any time and at worst, broke even.
Agreed. Not to mention the fact that, anyone who believes a word Musk says deserves what’s coming to them.
Mish, your previous Musk article won’t open for me. Goes to a blank white page:
(I just pasted the link and the preview won’t even load here)
What OS and browser?
Also please paste the link.
Thanks!
“Musk’s Funding Secured May Constitute Securities Fraud”:
Win7. Both Firefox, Chrome and IE try to load for a second and then go to a blank white page. Multiple reloads eventually come up tieh “Error while fetching store data”. All the other articles work.
But…but… it only costs $70,000.
And they will start including free Gorilla Glue with purchase.
If you think it costs $70,000 then you are colossal propoganda victim and you deserve to drive whatever you are driving.
Liar, liar, Tesla on fire!
But Tesla has a self-driving auto-pilot and it’s trucks will replace all long-haul trucking in a few years. So what if the bumpers fall off!
Actually autopilot is quite cool safety feature. Especially, if you drive on long trips. If you fall asleep, then car will keep steering. In 20 seconds it will ask you to give small impulse to steering wheel. If you ignore, then it will start to beep and wake you up.
Unfortunately, there are people who don’t understand that Tesla’s autopilot is just assist feature and not Full Self Driving feature. Hence you must stay alert at all time.
How did the old saying go? Autopilots don’t kill people, it is the people that kill people.
If autopilot should be banned, then guns too.
But hey
“there are people who don’t understand that Tesla’s autopilot is just assist feature and not Full Self Driving feature”
Then why in the hell did he name it “autopilot”? Musk seems to have a bad habit of inventing his own definitions for commonly-understood terms and then calling everyone else stupid for not knowing his new definition.
When shareholders sue, you know that it is an indicator that shareholders were dumb money.
But, when “mom and pop” short-sellers like William Chamberlain sue, you know that short-sellers were dumb money.
Everyone that has anything to do with this colossal fraud as a customer or “investor” is a low-grade moron and deserves what they have coming. Period.
Ah, Wagner. Back to trolling this site again. You should really consider getting a job. A proper one.
Just out of curiosity, I looked to find the closest Tesla service center from my Western North Carolina location. I found three options: Raleigh NC, (3:45 hours); Marietta GA, (3:40 hours) or Jacksonville FL, (6:40 hours). I see a few Tesla cars driving around, but really, do you want to drive 7 hours round trip to have it repaired?
Your issue is that NC is not California. Go go where your market is and I guess climate change hysterics are a bit thin on the ground in your neck of the woods
It’s being picked up all over now. It’s too crazy to make up and does explain the going private tweet:
Did you mean “the story is too crazy to be true”?
No, it seems too crazy a thing to make up. Is Azealia Banks a short too? Can’t say she’s in the pocket of Big Oil now that the Musk Cult is desperate for Saudi oil money. Oh the irony.