[Atlant]

It's funny for Musk to be flapping his mouth about this when TSLA seems to be on rather shaky ground.

One of the risks to TSLA BESIDES Musk's big mouth is that civil and criminal penalties are likely to pile up high regarding their exaggerated claims regarding Autopilot and Full Self-Driving. The legal risks may rise to an existential level for TSLA.

 

[mcden]

Every time he mentions competitor x it always means two things.

1. He feels threatened by them and tries to control narrative through public comments, stocks etc.

OR

2. The company doesn't look profitable or is in financial trouble. When you look at a Lucid brand you are looking at it from a luxury brand standpoint so it's low volume, high sticker price etc.

In short this it's similar to the story of Ferrari and Lamborghini all over again only this time is via an ex chief engineer. I am leaning more to the first item but with anything considered a luxury product I wouldn't disagree that in this economy it might be a hard sell especially with EA being your charging network. You are buying a Lucid just to say F Tesla more than for it's practicality.

 

[deepskier]

He just responded to a tweet with an off the cuff remark. The statement benefits him personally so I take it as meaningless. People were saying the same thing about Tesla when they were in ramp mode. Lucid is backed by the Saudi PIF fund, they have deep pockets.

 

[fireboy92k]

I definitely think Tesla is in for a rough ride this coming year. He's been all over the news in the last few days complaining of deflation and how it's affecting his business, etc. But one has to wonder why, in this environment, Tesla feels the need to discount cars? Nobody else is, and even VW seems to be selling most of what they are making in NA from what we can tell, the demand has to still be there one would think. So either his product is too expensive, it's not getting the press he wants as more accidents happen with FSDB, etc., he is becoming a distraction to his own brand, he's saturated the early market for people who want his product at the prices they are selling for, all of the above, and some combination of all the other things I didn't mention.

I see a lot of Model 3's, a few Y's around, but I can't recall the last time I saw someone driving or taking delivery of a new Model S (outside the 1 or 2 Plaid's I've seen) or a Model X. And beyond that, there is nothing new in the pipeline to excite his base buyer. The Cyber truck is still not delivered, they made one delivery of a semi to Pepsi that nobody will talk about on the record, and they continue to tinker with engineering changes that are either fantastic or borderline wild, but it's not always apparent where the line is between useful and engineering for the sake of engineering. I think they are offering discounts because they've reached market penetration and he's finally brought on more manufacturing capacity than he can sell.

That said, any new start to me is always in trouble of collapsing under their own debt weight. Rivian, Fisker, Lucid, etc. are all deeply in debt, selling largely overengineered early builds that are letting them spool production but at a net loss per vehicle sold. That's not sustainable if they can't close the gap, and I'm uncertain how big a market there are for $100k pickup trucks and SUV's, especially that aren't from an established brand.

VW Group will lumber on, if for no other reason than they are too big to fail, especially for the German government that is a partial owner. Eventaully they will probably get it right, the question will be when and how much other will surpass them, etc. in the meantime.

Nobody else seems to be completely betting the near term farm on an EV transition. Ford, Chevy, etc. are bringing out compelling products in many cases, but they are pebbles in oceans in the near term. None of them are likely to go insolvent in my opinion, nor any of the asian manufacturers either for that matter.

 

[MikeQBF]

It's funny for Musk to be flapping his mouth about this when TSLA seems to be on rather shaky ground.

Yeah. His entire market was made on well-to-do "progressives", yet over the past several years has done everything he possibly could to p*ss them off. My super-liberal sister has one of the first Model S cars and tells me frequently these days, "Never again."

That said... I have my concerns about Canoo. I'm invested and am on the waiting list, but aside from announcement after announcement of fleet commitments, their "end of 2022" production promise is so much vapor. I'm not seeing any physical evidence of anything actually making out the door beyond a handful of "gamma" test beds. Not holding my breath.

 

[dougmac20]

I definitely think Tesla is in for a rough ride this coming year. He's been all over the news in the last few days complaining of deflation and how it's affecting his business, etc. But one has to wonder why, in this environment, Tesla feels the need to discount cars? Nobody else is, and even VW seems to be selling most of what they are making in NA from what we can tell, the demand has to still be there one would think. So either his product is too expensive, it's not getting the press he wants as more accidents happen with FSDB, etc., he is becoming a distraction to his own brand, he's saturated the early market for people who want his product at the prices they are selling for, all of the above, and some combination of all the other things I didn't mention.

I see a lot of Model 3's, a few Y's around, but I can't recall the last time I saw someone driving or taking delivery of a new Model S (outside the 1 or 2 Plaid's I've seen) or a Model X. And beyond that, there is nothing new in the pipeline to excite his base buyer. The Cyber truck is still not delivered, they made one delivery of a semi to Pepsi that nobody will talk about on the record, and they continue to tinker with engineering changes that are either fantastic or borderline wild, but it's not always apparent where the line is between useful and engineering for the sake of engineering. I think they are offering discounts because they've reached market penetration and he's finally brought on more manufacturing capacity than he can sell.

That said, any new start to me is always in trouble of collapsing under their own debt weight. Rivian, Fisker, Lucid, etc. are all deeply in debt, selling largely overengineered early builds that are letting them spool production but at a net loss per vehicle sold. That's not sustainable if they can't close the gap, and I'm uncertain how big a market there are for $100k pickup trucks and SUV's, especially that aren't from an established brand.

VW Group will lumber on, if for no other reason than they are too big to fail, especially for the German government that is a partial owner. Eventaully they will probably get it right, the question will be when and how much other will surpass them, etc. in the meantime.

Nobody else seems to be completely betting the near term farm on an EV transition. Ford, Chevy, etc. are bringing out compelling products in many cases, but they are pebbles in oceans in the near term. None of them are likely to go insolvent in my opinion, nor any of the asian manufacturers either for that matter.

Agreed. Tesla will see a huge boost this year (supposedly) from the solar company finally making a big push into real sales instead of theoretical ones too so it will be interesting to see what happens there.

 

[Eric Nay]

Items I'm watching: the lawsuit about Melon taking overly-beneficial stock grants, and US Govt action over FSD. With those to depress stock price, and Melon's need for new cash to dump on the dumpster fire at Twitter, he could very well become violently upside down. He might even have to sell SpaceX to Boeing or Northrop in order to raise funds.

 

[Dougie01]

Lots of other people besides Musk work at Tesla. Even though he controls the board of directors, my guess is that the combination of bad press and lawsuits and shareholder activists will enable them to ease him out. At that point, the company will survive on more conventional metrics like range of product options, quality control, service delivery, and financial metrics. Not to mention the parts supply chain that will start to come into play as the fleet ages.

But I don't see how they can hope to maintain a leadership position with only two products covering the vast majority of their production volume. Roughly 350,000 units per quarter are coming from the closely-related 3 and Y, and only around 20,000 from the S and X. That is a smaller product range even than Ferrari, which offers about a dozen models.

I think Tesla will survive, but will not be the raging success it has been for the past few years. Musk will probably move to Greece or S.A.

 

[matthewsjl]

I definitely think Tesla is in for a rough ride this coming year. He's been all over the news in the last few days complaining of deflation and how it's affecting his business, etc. But one has to wonder why, in this environment, Tesla feels the need to discount cars? Nobody else is, and even VW seems to be selling most of what they are making in NA from what we can tell, the demand has to still be there one would think. So either his product is too expensive, it's not getting the press he wants as more accidents happen with FSDB, etc., he is becoming a distraction to his own brand, he's saturated the early market for people who want his product at the prices they are selling for, all of the above, and some combination of all the other things I didn't mention.

That one is pretty simple. People were delaying purchases to January when the Tesla's would be eligible for the $7,500 Federal tax credit. Tesla is more or less fully ramped up with cars pouring out (and you can't run off the line once it's running). They added incentives in steps as far as I can tell: 1) Free 2 year 10k miles supercharging then 2) $3,750 discount and then 3) a further $3,750 discount making a total of $7,500 - which is not surprisingly the exact amount of the tax credit. Now people have no reason to delay and Tesla doesn't have a year end delivery problem. VW, and other manufacturers, by comparison haven't hit their stride yet for volume and unspoken cars are around but not plentiful yet so demand is definitely there for them.

Once the discount hit $7,500 in-stock units went within a couple of days. Tesla.com is reporting no stock within 200mi of NYC for Model 3 or Y (and there were plenty before the discount so the incentive worked).

I do agree that 2023 will be rough - probably for everybody. Companies trying to push higher cost vehicles may suffer more than the lower end (but with interest rates biting, you may find it affects every manufacturer as it's going to be much harder to finance at a reasonable rate).

The interesting thing will be if Tesla continues the discount into the New Year (doubtful initially IMO). If the market softens then we could see Tesla discount again...... they have proved that there was demand with the end-of-year discount.

John

 

[fireboy92k]

But Tesla in their current state will never be eligible for the $7500 credit. All of their battery components and assembly are done in China. If the law sticks, even if they slack it for trade partners, China will never be on that list.

 

[matthewsjl]

With the delay in battery requirements being enforced, Tesla should qualify until then. Beyond then remains uncertain for the battery but being built in the US should make them eligible for some credit. Again, the current discounting was to ensure that people didn't push their delivery into 2023 and artificially dent the year delivery numbers.

 

[randymac]

Hey Elon - please STFU