Originally Posted by
upside_umop
The whole thing that sparked this rally was the q3 earnings showed a profit of $143m.
However, there isn't clarity on a number of items that this comprised of:
1. The warranty provision was adjusted, resulting in a release to profit
2. The loans to build Shanghai were restated based on currency movements also resulting in a one-off profit
You take these two one off items out, it didn't make money.
Then you have had the 37 million of shorted shared being unwound and recycled to the current interest of 26 million shares alongside the hype that the Cybertruck will sell in large quantities (doubtful), TSLA will achieve the same marketshare in China as it does in the US and that it will be able to fund it's gigafactory in Germany from EV pooling with other car manufacturers.
What the media is not concentrating on is:
1. The US sales were down 39% on comp quarter in Q3 (yes, 39%).
2. The Netherlands is rushing to buy TSLA's before the sales tax doubled on 1 Jan 2020.
3. TSLA has now lost all of it's US federal tax credits and there are literally dozens of models coming out this year, that while are not TSLA killers, they will be substantially cheaper as they can utilise $7,500 in tax creds for a lot of vehicles (200,000 in volume). How does TSLA feel about competing against 1,000,000 vehicles subsidised when theirs are not? And that's after sales declined 39%.
4. TSLA cannot maintain a competitive advantage in battery tech (nor does it actually have it) for the long term.
5. TSLA has been able to charge upfront, large cash amounts for the promise of autonomous driving capability....yet they still burn cash. What happens when competitors offer this standard as part of their package? Or a subscription based on model?
It will be interesting to see, but there is a reason that 99% of all car manufacturers that have existed around the world have been bankrupt once or twice. It's bloody hard work.
Still, i do like the cars. Autopilot looks cool and it should be a winner takes all race....but we only hear about how TSLA are going and not the competitors. I mean, GM cruise have been delivering door to door pizzas with their cars for a while on trials now but that doesn't get hyped.