Musk endeavours

[odysseus2000]

Nissan leaf price. Cut by 18,000 Australian dollars as Nissan sales collapse:

https://www.drive.com.au/news/nissan-le ... australia/

Regards,

Ody, You do post some weird stuff. Your article states that Nissan only sold 484 Leafs in Australia last year. It states that the model is ageing and hence the cuts. If they sold zero this year it's hardly worth commenting on. A micro collapse?

Surely this thread should be covering significant stuff not clickbait like this?

Regards

Howard

It is indicative of how older models are completely out of favor in free markets such as Australia where there is no extra tax on Chinese origin vehicles. In e.g. France there is additional tax on Chinese made vehicles & domestic battery cars are doing quite well. Although there is additional tax on Chinese vehicles, Tesla Chinese cars are still selling well in France. It is all back ground on what is happening to electric car sales.

Regards,

[scotview]

Although there is additional tax on Chinese vehicles, Tesla Chinese cars are still selling well in France. It is all back ground on what is happening to electric car sales.

Regards,

Well, according to Bloomberg, Biden has just slapped 110% tariffs on Chinese EVs. He really wants to start wars with everyone.

Why don't we just celebrate how ingenious, industrious, business savvy, technically competent, long term resource strategic and generally hard working the Chinese are. Why oh why do we keep putting them down.

[odysseus2000]

Although there is additional tax on Chinese vehicles, Tesla Chinese cars are still selling well in France. It is all back ground on what is happening to electric car sales.

Regards,

Well, according to Bloomberg, Biden has just slapped 110% tariffs on Chinese EVs. He really wants to start wars with everyone.

Why don't we just celebrate how ingenious, industrious, business savvy, technically competent, long term resource strategic and generally hard working the Chinese are. Why oh why do we keep putting them down.

Legacy auto pay taxes, campaign contributions & employ voters.

It is far easier to create a narrative of an hostile nation & get kick backs from defense contractors than to support domestic manufacturers to compete with them. For many years we were told uk labour costs were too expensive compared to Chinese labour so that we could never compete. Then Musk creates Tesla in the country with the largest labour costs & competes & then builds a factory in China too.

Uk politicians for many decades have sold the country down while they have personally prospered.

Regards,

[Howard]

A sobering report from Reuters - worth a read.

The inside story of Elon Musk’s mass firings of Tesla Supercharger staff

"charging chief Rebecca Tinucci went to meet with Musk about the network’s future, four former charging-network staffers told Reuters.

The meeting could not have gone worse. Musk, the employees said, was not pleased with Tinucci’s presentation and wanted more layoffs. When she balked, saying deeper cuts would undermine charging-business fundamentals, he responded by firing her and her entire 500-member team.......

.........Despite the mass firings, Musk has since posted on social media promising to continue expanding the network. But three former charging-team employees told Reuters they have been fielding calls from vendors, contractors and electric utilities, some of which had spent millions of dollars on equipment and infrastructure to help build out Tesla’s network."


https://www.reuters.com/business/autos- ... 024-05-15/

regards

Howard

[odysseus2000]

A sobering report from Reuters - worth a read.

The inside story of Elon Musk’s mass firings of Tesla Supercharger staff

"charging chief Rebecca Tinucci went to meet with Musk about the network’s future, four former charging-network staffers told Reuters.

The meeting could not have gone worse. Musk, the employees said, was not pleased with Tinucci’s presentation and wanted more layoffs. When she balked, saying deeper cuts would undermine charging-business fundamentals, he responded by firing her and her entire 500-member team.......

.........Despite the mass firings, Musk has since posted on social media promising to continue expanding the network. But three former charging-team employees told Reuters they have been fielding calls from vendors, contractors and electric utilities, some of which had spent millions of dollars on equipment and infrastructure to help build out Tesla’s network."


https://www.reuters.com/business/autos- ... 024-05-15/

regards

Howard

So here we are again.

First it was Twitter & how the firings would undermine the business which was doomed, but X is thriving.

Now we have Tesla firings will undermine the business.

All of these articles by folk who are either employees or journalists who have never exercised ceo level authority. Any one can write anything, no one has done what Musk has.done & is now doing.

Regards,

[Howard]

I guess investors will be assessing the impact on the charger network. Until now this has been described by Tesla and its supporters as a major competitive advantage. It’s certain that many Tesla drivers consider the network as a major reason for owning the car compared with other brands which don’t have a dedicated network. It doesn’t look as though Elon Musk sees it that way in the medium term. We will have to wait to see how things develop.

So many competitive advantages for Tesla, promoted on this forum in the past, seem to be abandoned or watered down along the way. Is it because their costs are hitting margins?

regards

Howard

[odysseus2000]

I guess investors will be assessing the impact on the charger network. Until now this has been described by Tesla and its supporters as a major competitive advantage. It’s certain that many Tesla drivers consider the network as a major reason for owning the car compared with other brands which don’t have a dedicated network. It doesn’t look as though Elon Musk sees it that way in the medium term. We will have to wait to see how things develop.

So many competitive advantages for Tesla, promoted on this forum in the past, seem to be abandoned or watered down along the way. Is it because their costs are hitting margins?

regards

Howard

As I posted earlier, Tesla still plan to spend $500 million on Superchargers:

https://www.silicon.co.uk/e-innovation/ ... 0#:~:text=“Just%20to%20reiterate%3A%20Tesla%20will,much%20higher%2C”%20he%20wrote

Musk is trimming overheads to maximise the returns for investors and apparently re-hiring a few of the charger team to make the operation efficient. His mantra is that if you don't have to re-hire a few the cuts were not deep enough.

Regards,

[odysseus2000]

Tesla board stepping up efforts to get more votes for pay package on the 13th:

https://finance.yahoo.com/news/tesla-bo ... tiP0SM3N4Q

As I read the situation there is a unknowable chance that the pay will not be approved. If not then Musk may walk and sell his shares and the remaining shares plunge in value. This is now a huge risk for Tesla shareholders.

Regards,

[odysseus2000]

Tesla model 3 long range, achieving 365 miles at highway speeds:

https://x.com/tesla/status/179009965902 ... DCpgdbFBxg

Regards,

[Howard]

The issue below was picked up on this thread more than a year ago and predictions that Tesla margins would be affected adversely have proved to be accurate. This is a developing situation which will have a significant effect in the medium term.

Tesla are having problems with with fleet operators and leasing companies because of their cars' plunging residual values. And reliability issues.

BYD and other competitors like BMW are aware of these issues and taking a different approach.

The article below is well-researched and worth reading in full. It's backed up by a number of similar pieces and is pointing to a trend which is likely to develop further.

"Tesla doing damage-control, discounts for European fleet buyers"

Tesla is working to appease some European leasing companies after the automaker’s repeated retail price cuts tanked their fleets’ value and its slow service and expensive repairs alienated their corporate customers.

The efforts include unofficial discounts on purchases of new cars if they are in stock and efforts to address widespread service, repair and ordering complaints after years in which fleet managers and leasing firms say Tesla has ignored those problems, according to Reuters interviews with nine executives from major leasing and rental-car firms, along with about a dozen corporate fleet managers.

There’s "nothing worse" than continuously dropping the value of a fleet buyer’s assets, said Richard Knubben, director general of Brussels-based Leaseurope, a leasing- and rental-industry group which represents national groups across 31 countries.

"Tesla is now actively telling our members: We can give you discounts and compensate you," Knubben said. "But Tesla's residuals have dropped so fast, I'm not sure the discounts they're offering are enough."

Slow and expensive Tesla service has been another sore point with European leasing companies and their customers, according to Reuters interviews with about a dozen corporate fleet managers. Most declined to be identified because they are actively seeking to resolve problems with Tesla.
Its repairs take too long and cost far more than other vehicles, partly because of pricey parts, they say.

https://www.reuters.com/business/autos- ... 024-05-20/

regards

Howard

[odysseus2000]

The issue below was picked up on this thread more than a year ago and predictions that Tesla margins would be affected adversely have proved to be accurate. This is a developing situation which will have a significant effect in the medium term.

Tesla are having problems with with fleet operators and leasing companies because of their cars' plunging residual values. And reliability issues.

BYD and other competitors like BMW are aware of these issues and taking a different approach.

The article below is well-researched and worth reading in full. It's backed up by a number of similar pieces and is pointing to a trend which is likely to develop further.

"Tesla doing damage-control, discounts for European fleet buyers"

Tesla is working to appease some European leasing companies after the automaker’s repeated retail price cuts tanked their fleets’ value and its slow service and expensive repairs alienated their corporate customers.

The efforts include unofficial discounts on purchases of new cars if they are in stock and efforts to address widespread service, repair and ordering complaints after years in which fleet managers and leasing firms say Tesla has ignored those problems, according to Reuters interviews with nine executives from major leasing and rental-car firms, along with about a dozen corporate fleet managers.

There’s "nothing worse" than continuously dropping the value of a fleet buyer’s assets, said Richard Knubben, director general of Brussels-based Leaseurope, a leasing- and rental-industry group which represents national groups across 31 countries.

"Tesla is now actively telling our members: We can give you discounts and compensate you," Knubben said. "But Tesla's residuals have dropped so fast, I'm not sure the discounts they're offering are enough."

Slow and expensive Tesla service has been another sore point with European leasing companies and their customers, according to Reuters interviews with about a dozen corporate fleet managers. Most declined to be identified because they are actively seeking to resolve problems with Tesla.
Its repairs take too long and cost far more than other vehicles, partly because of pricey parts, they say.

https://www.reuters.com/business/autos- ... 024-05-20/

regards

Howard

Of course leasing companies are unhappy that prices are falling and residual values are declining.

That is the nature of revolutions were incumbents that can't adapt are pained as their existing business models become untenable.

Sure some legacy makers can say they won't reduce their car prices, but the problem with this approach is that they won't sell cars if what they offer costs more than competitors.

Then the greater trouble for car leasing companies is the cyber cab. If it works then the demand for cars will go down adding a murderous headwind to the leasing models.

I expect many leasing companies to bankrupted by the rapid changes in the auto market. Politicians are doing their best to protect domestic makers but there are far more consumers than makers so the politicians run the risk of losing votes to opponents who promise to reverse these policies and bring in cheaper electric cars from China.

Regards,

[Howard]

I wouldn't worry on behalf of leasing companies. Their fleets of ICE and PHEV models are not depreciating as fast as Teslas which are a small part of their portfolios. Broadly speaking the leasing companies are making good profits on most cars. Just look at their results. They have had a good couple of years after COVID when ICE second hand values and residuals went up dramatically.

The manufacturers of premium BEVs are also keeping control of their residuals. They are having to work hard to keep up with demand.

regards

Howard

[odysseus2000]

I wouldn't worry on behalf of leasing companies. Their fleets of ICE and PHEV models are not depreciating as fast as Teslas which are a small part of their portfolios. Broadly speaking the leasing companies are making good profits on most cars. Just look at their results. They have had a good couple of years after COVID when ICE second hand values and residuals went up dramatically.

The manufacturers of premium BEVs are also keeping control of their residuals. They are having to work hard to keep up with demand.

regards

Howard

In investing one looks ahead, not backwards.

Leasing companies are in a situation where their primary product is in a strongly deflationary phase. In the by & by all car prices have to come down as the costs of producing a battery car are a lot less than an ICE or PHEV car.

Clearly there is intense political attempts to stop the dam from breaking with tariffs & anti competitive process & continued subsidies of fossil fuels, but once a dam starts to fail it is only a short time before it breaks. Leasing companies whose business model is low depreciation are sailing towards a tsunami of high depreciation.

Regards,

[tjh290633]

In investing one looks ahead, not backwards.

Leasing companies are in a situation where their primary product is in a strongly deflationary phase. In the by & by all car prices have to come down as the costs of producing a battery car are a lot less than an ICE or PHEV car.


Regards,

Is it? Why is is it that the cost of the unrepairable battery is so much more than the cost of the equipment that it replaces?

TJH

[Howard]

I wouldn't worry on behalf of leasing companies. Their fleets of ICE and PHEV models are not depreciating as fast as Teslas which are a small part of their portfolios. Broadly speaking the leasing companies are making good profits on most cars. Just look at their results. They have had a good couple of years after COVID when ICE second hand values and residuals went up dramatically.

The manufacturers of premium BEVs are also keeping control of their residuals. They are having to work hard to keep up with demand.

regards

Howard

In investing one looks ahead, not backwards.

Leasing companies are in a situation where their primary product is in a strongly deflationary phase. In the by & by all car prices have to come down as the costs of producing a battery car are a lot less than an ICE or PHEV car.

Clearly there is intense political attempts to stop the dam from breaking with tariffs & anti competitive process & continued subsidies of fossil fuels, but once a dam starts to fail it is only a short time before it breaks. Leasing companies whose business model is low depreciation are sailing towards a tsunami of high depreciation.

Regards,

It’s amusing to read your homilies about investing.

Do you think Warren Buffett looked ahead or backwards when he backed BYD?

Surely looking ahead is important only if one takes a rational view and learns from the past?

Dismissing Leasing and Financing companies who know a lot more about car valuation than you and me will almost certainly prove short-sighted. At the moment and in the foreseeable future, they control Tesla’s margins in Europe (and probably in the USA) more than Tesla can even though it is cutting huge numbers of staff.

regards

Howard

[Howard]

As an investor it is important to look forward but looking back can be quite constructive.

If you look back to posts made about a year ago, the forecasts by several posters that Tesla had problems with margins turned out to be pretty accurate. However reality shows that there were some amusingly inaccurate forecasts about the problems for Tesla’s competitors.

In March 2023 Ody wrote:

"Most legacy autos have very ugly balanced sheets & most of them will not survive as they are currently configured. Tesla by contrast as over $20b in cash & like Carnegie steel the new factories are being built out of the cash flow of the existing business. BMW is my first candidate to need a rescue or go bust."

viewtopic.php?p=578487#p578487

This was just before BMW had a brilliant 2023 and a good start to 2024.

And in July 2023 Ody wrote:

"Premium legacy car comapanies are not doing well, they are all in terrible troubles.

All car companies cut prices to boost demand. Sure they don't do it overtly as Tesla does, but there are all manner of incentives that are handed out to garages to sell cars.

Looking at the accounts of BMW leaves me unchanged in my view that they will either have to be rescued or will be bankrupted and there are severe troubles at Toyota.

BYD have not managed to convince anyone that they are not piling up cars in field to get quasi sales, so who knows what is really going on there.

VW are in some strange no mans oceans, sans rudder after Deiss was booted out.

GM have a ceo who is divorced from reality.

Stellantis have only slightly better margins than Tesla and are hardly growing or investing.

The only car company that is doing really well is Tesla."

viewtopic.php?p=605782#p605782

How wrong did those forecasts prove?

Who could have dismissed how successful companies with a range of ICE, PHEV and BEV models were being in meeting customer needs whilst Tesla struggled to compete with BYD whose range of cars have satisfied so many consumers in China.

The comment about BYD piling up cars in fields was fun. Some fields!

Regards,

[odysseus2000]

Charging trees coming to a street near you?:

https://newatlas.com/automotive/gravity ... ing-trees/

Gravity seem to have backing from Google & aim to have a bigger network than Tesla with chargers rated at 500 kW.

Regards,

[odysseus2000]

In investing one looks ahead, not backwards.

Leasing companies are in a situation where their primary product is in a strongly deflationary phase. In the by & by all car prices have to come down as the costs of producing a battery car are a lot less than an ICE or PHEV car.


Regards,

Is it? Why is is it that the cost of the unrepairable battery is so much more than the cost of the equipment that it replaces?

TJH

It is often possible to repair batteries, but it is often cheaper to replace the old battery and recycle and replacement is often mandated by insurance companies.

The whole electric car battery business is an interesting situation. Many argue that car batteries can not be recycled but don't give reasons as to why their assertion is correct. As far as I can tell at least the early and more powerful batteries contain desirable and expensive elements that can be more cheaply recovered than extracted by mining. Cobalt being one example. The coming generation of sodium batteries look to be more easily recycled as the sea is full of sodium in the form of sodium chloride or salt they are also lower cost to make in the first place.

While there is this intense focus and contradictory statement on car batteries as to whether they can be recycled there is very little discussion about smart phone batteries that are often made with cobalt and other expensive materials. Tesla has sold around 5 million cars, the total number of electric cars is around 40 million. By contrast there are over 6.8 billion smart phones:

https://whatsthebigdata.com/smartphone-stats/#

Clearly a car has a much bigger battery than a smart phone, but there are 6.8e9/40e6 approx= 170x as many smart phones and no one seems to bother about what happens to them. Apple intends to make the entire iPhone recyclable and presumably if they can do this with iPhone batteries similar process are possible with car batteries.

By contrast none of the energy used in ICE engines or in producing the fuel by refining can be recovered, nor is it currently possible to remove c02 from the atmosphere at a rate equivalent to the release of c02 from burning fossil fuels.

Added to these facts is the efficiency and performance of ICE engines compared to battery electric. ICE engines efficiency tops out at around 30% and the performance is limited by the ICE pistons having to stop during each cycle and reverse leading to relatively poor acceleration and the need for a gearbox to make the torque useable for practical travel at a range of engine speeds.

When I first understood ice engines I thought I had misunderstood as the whole idea of stopping a piston every cycle seemed crazy. I then discovered rotary engines but they have other issues and after studying thermodynamics the realisation that the efficiency was determined by the hot and cold reservoirs used left me certain that ICE engines were pitiful devices. However, it was only with the development work on metal oxide semiconductors in the 1970's and the later battery work of Dr. Goodenough that battery cars became a practical proposition.

From a physics perspective battery cars are a huge improvement over ICE but as of yet the general public has been persuaded that the reverse is true. In the by and by truth tends to win out.

Regards,

[odysseus2000]

As an investor it is important to look forward but looking back can be quite constructive.

If you look back to posts made about a year ago, the forecasts by several posters that Tesla had problems with margins turned out to be pretty accurate. However reality shows that there were some amusingly inaccurate forecasts about the problems for Tesla’s competitors.

In March 2023 Ody wrote:

"Most legacy autos have very ugly balanced sheets & most of them will not survive as they are currently configured. Tesla by contrast as over $20b in cash & like Carnegie steel the new factories are being built out of the cash flow of the existing business. BMW is my first candidate to need a rescue or go bust."

viewtopic.php?p=578487#p578487

This was just before BMW had a brilliant 2023 and a good start to 2024.

And in July 2023 Ody wrote:

"Premium legacy car comapanies are not doing well, they are all in terrible troubles.

All car companies cut prices to boost demand. Sure they don't do it overtly as Tesla does, but there are all manner of incentives that are handed out to garages to sell cars.

Looking at the accounts of BMW leaves me unchanged in my view that they will either have to be rescued or will be bankrupted and there are severe troubles at Toyota.

BYD have not managed to convince anyone that they are not piling up cars in field to get quasi sales, so who knows what is really going on there.

VW are in some strange no mans oceans, sans rudder after Deiss was booted out.

GM have a ceo who is divorced from reality.

Stellantis have only slightly better margins than Tesla and are hardly growing or investing.

The only car company that is doing really well is Tesla."

viewtopic.php?p=605782#p605782

How wrong did those forecasts prove?

Who could have dismissed how successful companies with a range of ICE, PHEV and BEV models were being in meeting customer needs whilst Tesla struggled to compete with BYD whose range of cars have satisfied so many consumers in China.

The comment about BYD piling up cars in fields was fun. Some fields!

Regards,

As per usual we look at data in entirely different ways.

The decision by the Biden administration to put 100% tariffs on Chinese vehicles is indicative to me that the US is fearful that Chinese makers will dump battery cars in the US, those that are currently sat in fields. German politicians have instituted similar protectionist measures.

IMHO we are in a massive deflationary phase in which car prices will fall significantly and legacy autos will suffer murderous loss of sales. Sure rich folk who lease won't care, but they are not the demographic that matters. Business users will migrate to the lowest cost vehicles and working class folk will in the by and by realise that electric cars are better and cheaper than ICE cars. The fall in the price of second hand electric cars is a blessing for less affluent consumers as there is a limit to how much a car can depreciate and there are now fabulous bargains in second hand electric cars.

Regards,

[Howard]

Sorry Ody but your forecasts always lack data. They are just opinions without any facts to justify them.

As you suggested above , “In investing one looks ahead, not backwards”. However, to gain success from looking ahead it’s important to be sure that the current facts on which you base your assessment are accurate.

Is it time to review your information sources to help you make better forecasts? You regularly predict the demise of BMW and every year the company surprises by growing stronger.

in November 2022 you made one of your regular predictions about the future of legacy manufacturers especially BMW. You may remember I suggested we review your prediction in a year or so. See post:

viewtopic.php?p=547841&sid=473fe89d57d9ef85f244760c4c6cbc7e#p547841

So, whilst Tesla is price cutting and firing layers of staff it’s a good time to again review BMW’s progress in premium segments..

Superior engineering, superior marketing, superior financial control all have contributed to their success at developing a wide range of sought-after premium cars from Minis to Rolls Royces.

As discussed in the past, they set out to develop platforms which accommodate ICE, PHEV and BEV variations and this has enabled them to sell cars at superb margins throughout a range of economic conditions. Customer demand has been strong in China, USA and Europe, so BMW are growing their labour force and also benefiting from the improved profitability which this strategy achieves. The result of their strategy over the last three years has been so much more successful than Tesla.

You need to indicate how this is going to change in the future.

Rather than adopt a product led strategy like Tesla concentrating on just two models, they have listened to customers and developed a range of cars, including 15 BEVs which meet the needs of consumers.

The strength of their balance sheet has allowed them to make large investments in Europe, USA and China. As well as continuing to be one of the biggest auto exporters from the USA, they have produced six million cars in China, one million of them in the last 15 months.

The CEO’s presentation on 15 May included reflections on the company’s recent successes and future plans. Worth a read!

https://www.press.bmwgroup.com/global/a ... -in-munich

"During the financial year, we had revised our guidance upwards. At year-end we met all our targets. We posted solid growth in sales, reaching a new all-time high of more than 2.55 million vehicles. In fact, we are the only German OEM to have regained our pre-pandemic level.

Our sales figures confirm this: BMW is maintaining its leading position in the global premium segment. Our strongest growth last year came from the upper premium and luxury class, as well as our all-electric models,

We are aligning our strategic planning accordingly – and enabling our architectures. In this way, we can respond quickly at all times. More than 15 BEV models will be available this year across all BMW Group brands.”

So Ody, “In investing one looks ahead, not backwards” as you so rightly suggested above - what are your predictions for BMW for the next year?

Hint: Their balance sheet is stronger than ever, so I wouldn’t worry about that.

Hopefully it will be fun to review the accuracy of your forecast in 2025. BMW represent a serious challenge to Tesla, creaming off the more profitable areas of the BEV market and as a major exporter from their USA manufacturing operations and not being dependent on Chinese batteries they are less likely to be affected by US restrictions.

regards

Howard