I've posted rants on Tesla before, but the latest developments merit at least a short note.
As expected the Q3 results were financially disastrous. The 'boldness' of skipping testing and going straight to 'production' (actually, more of a manual assembly) has also proved to be an astonishingly unwise move. I expect more drama coming out of Tesla, as once they sort out more automated assembly, the quality problems will likely follow. They will then have to choose between further delays as they redesign components/processes or ramping up volume and accruing heavy costs of future warranty repairs (even if they won't be properly accounted for at first).
But it go even more entertaining with the fundraising event (aka Tesla Semi and Roadster unveiling). The bold ask for 5-250k deposits shows that it's all about cash management now.
But I think it's too little, too late.
With serious competition arriving shortly from major, experienced automakers and with still tough economics for BEV, I think the prospects for Tesla being profitable are slim at best. After accounting for debt and other liabilities, I simply cannot see it as a going concern.
On the flip side, I am increasingly positive about GM. The core business is strong and disciplined. It seems to be second only to Waymo in autonomous driving. Because of being vertically integrated, I think it's best positioned to deploy commercial self-driving taxis at scale. Sadly, I did not act (enough) on these insights while it was in the (low) thirties. But I also try to learn from past mistakes and I've added to this position even at increased prices. Better late then never.
I'm awaiting the Nov 30th event from GM. Even if it's not ground-breaking, I can hardly see a winner of self-driving different than Waymo, GM, Uber, Lyft or Ford. Baidu will likely follow them up shortly and perhaps will eventually win thanks to being having the cheapest source of batteries and vehicles in the longer run - People's Republic of China. I see Mobileye/Intel as being contained to a the market of privately owned cars. In the long run, this market will be smaller than the (autonomous) taxi market.
Short TSLA, Long GM.
As expected the Q3 results were financially disastrous. The 'boldness' of skipping testing and going straight to 'production' (actually, more of a manual assembly) has also proved to be an astonishingly unwise move. I expect more drama coming out of Tesla, as once they sort out more automated assembly, the quality problems will likely follow. They will then have to choose between further delays as they redesign components/processes or ramping up volume and accruing heavy costs of future warranty repairs (even if they won't be properly accounted for at first).
But it go even more entertaining with the fundraising event (aka Tesla Semi and Roadster unveiling). The bold ask for 5-250k deposits shows that it's all about cash management now.
But I think it's too little, too late.
With serious competition arriving shortly from major, experienced automakers and with still tough economics for BEV, I think the prospects for Tesla being profitable are slim at best. After accounting for debt and other liabilities, I simply cannot see it as a going concern.
On the flip side, I am increasingly positive about GM. The core business is strong and disciplined. It seems to be second only to Waymo in autonomous driving. Because of being vertically integrated, I think it's best positioned to deploy commercial self-driving taxis at scale. Sadly, I did not act (enough) on these insights while it was in the (low) thirties. But I also try to learn from past mistakes and I've added to this position even at increased prices. Better late then never.
I'm awaiting the Nov 30th event from GM. Even if it's not ground-breaking, I can hardly see a winner of self-driving different than Waymo, GM, Uber, Lyft or Ford. Baidu will likely follow them up shortly and perhaps will eventually win thanks to being having the cheapest source of batteries and vehicles in the longer run - People's Republic of China. I see Mobileye/Intel as being contained to a the market of privately owned cars. In the long run, this market will be smaller than the (autonomous) taxi market.
Short TSLA, Long GM.
