AMIRZA786

As you mentioned at the top, hindsight is 20/20. When the roadster first came out, I thought it was just a rich guys toy (which is was). When the S came out, the only people buying it were wealthy executives at the top, so naturally I didn't take Tesla seriously. When the Model 3 came out, I began to have a change of heart, but when I saw people I knew waiting 2 years plus for delivery, I thought, yeah, another pipe dream. WAS I WRONG!

LeX2K

The investments by Toyota and Mercedes were very small for those companies they both blow far more per year on advertising. No way to sugar coat it, massive failure of leadership they were stuck in their ways couldn't see past their own plans.

AMIRZA786

That's true but the investment probably did save Tesla. They used it to learn to fish and build better nets

lexusnyca

Interesting video:

AMIRZA786

I'll watch this when I get a chance, but just quickly, the car industry needs a wrecking ball. Especially when it comes to dealerships

AMIRZA786

Will Tesla Wither Or Flourish? The Status Of The EV Revolution In The USA

Shares in Tesla were pummeled in 2022. Will 2023 see a resurgence? CNBC asks analysts to weigh in on that questionnvesting in Tesla is not for the faint of heart. The stock is down about two thirds from where it was a year ago. Some of that is attributable to wars, supply chain issues, inflation, and other factors beyond the company’s control. But some is directly attributable to the words and actions of the mercurial Mr. Musk, who decided last year that he and he alone should be the final arbiter of who can say what on social media, much to the consternation of many of his supporters who were shocked to find their hero was an authoritarian wingnut.

Despite all the sturm und drang surrounding Tesla this year, Bloomberg (via Autoblog) points out that Tesla still has a bigger market valuation than Ford, General Motors, and Toyota combined. Maybe we should all take a breath, stop wringing our hands about Elon’s politics, and focus on what the future holds for the company. The question of the hour is whether Tesla is a stodgy automaker or a high-growth technology company? Wall Street seems to be split on what the correct answer is.

CNBC Reads The Tesla Tea Leaves

CNBC asked several financial experts for their input. With the economy at an inflection point between receding inflation fears and broad expectation of a recession beginning in 2023, the market doesn’t seem to know what to make of moves like Tesla’s big price cuts, first in China and then on January 13 in the US and Europe. Guggenheim Securities analyst Ronald Jesikow told CNBC it could push Tesla’s profit margins 25% lower than Wall Street consensus and drain profits from all of Tesla’s competitors. But optimists like Wedbush analyst Dan Ives think it’s the right move to jumpstart the EV transition during a period of significant uncertainty. “Many dot-coms didn’t make it,” he said. “There’s no stress test for a severe recession for an industry that’s in its infancy.”

Most US economists and CEOs think a recession is likely this year, although the market gains of the last week may reflect the beginnings of a sunnier investor outlook. Either scenario would likely hurt car sales in general, which were the worst in a decade in the US last year.

The outlook from China is murky. The International Monetary Fund (IMF) said China will avoid a recession and grow its economy by 3.8% this year — but that was before reports of staggeringly high deaths from Covid began to leak out, despite the government’s efforts to suppress them. A recession does not necessarily mean EV sales will fall. Most models saw big sales gains last year in both the US and Asia. It’s more a question of whether EV companies will grow fast enough to keep adding jobs and for companies other than Tesla to turn profitable before they run out of cash.

Reflections On The Dot-Com Bubble

CNBC says the situation is reminiscent of what happened to Amazon at the beginning of 2001. A stock selloff occurred then just like the steep declines that afflicted EV companies like Tesla, Fisker, and Lucid last year. Weaker players like Lordstown Motors, Faraday Future, and Canoo were scrambling to avoid running out of cash by cutting costs or raising more money from investors.

“We look at a combination of balance sheet stability and ability to raise more capital,” said Greg Bissuk, CEO of AXS Investments in New York. “We think it will be rocky,” particularly for mid-level EV makers. Revenue at dot-com companies kept rising fast and the businesses that were destined to survive began to turn profitable between 2001 and 2003. Today, EV sales in China are rising, even as Covid continues to hamper its economy. In the US, EVs posted a 52% sales gain to capture 6% of the US light vehicle market. By comparison, online sales in the US were only 1% of the market at the end of 2000. For EVs, a recession will likely translate into slower growth but an increase in market share.

CFRA Research analyst Garrett Nelson tells CNBC that Tesla is in the best position to weather any coming economic storms. The company is still expected to generate about $4 billion in late-2022 cash flow and had about $21 billion in liquid assets at the end of the third quarter. “We think the stock rebounds quickly this year,” he said, and named Tesla as his top pick among all automakers. After the price cuts announced recently, Nelson said the company will see narrower profit margin but will sell more cars. “It should widen the company’s competitive advantage and make many more Tesla vehicles eligible for the $7,500 federal EV tax credit.”

Goldman Sachs analyst Mark Delaney wrote on January 2 that Tesla’s vehicle deliveries should accelerate by midyear, helped by lower cost structures at its newest factories and an increase in Chinese sales after the latest round of price cuts. “Now is a time for leadership from Musk to lead Tesla through this period of softer demand in a darker macro, and not the time to be hands off, which is the perception of the Street,” Ives said. “This is a fork in the road year for Tesla where it will either lay the groundwork for its next chapter of growth or continue its slide.”

Companies like Faraday, Canoo, and Lordstown that need to raise more capital could find the path blocked by a more skeptical capital market than the one that financed them during the special purpose acquisition company boom, CFRA’s Nelson said. Weaker players include Electro Mechanica, Arrival, and Green Power Motor, a Canadian electric bus maker, he added. He also includes Fisker, Lucid, and Rivian among those at risk from tighter markets. “They had a business plan but no business, and they got absurd amounts of capital,” Nelson said. “In our opinion, you’ll see many additional bankruptcies, but the market will return to balance. But it’s hard to imagine we’ve seen the bottom.” He does believe the electric car boom is for real, however, and that Tesla is this year’s best bet in the overall auto industry. Still, CNBC is somewhat skeptical because after the dot-com bubble burst, it took Amazon 10 years to match the stock price it established in 1999.

The Effect Of The Inflation Reduction Act

Ives said the Inflation Reduction Act may throw the industry a lifeline as companies arrange to do enough domestic manufacturing to qualify all of their vehicles. Arrival said in November it is refocusing its business from the UK to America because the IRA offers credits of up to $40,000 for buyers of commercial vehicles. “The pressure in 2023 is less about EVs than the overall macro environment,” Ives said. “The IRA is not a small point.”

Greg Bassuk offered CNBC this last word on the EV revolution. Long term, he said, EVs are coming, recession or not. “Those with the capital to get through 2023, we’d bet the farm on.” It just so happens that Tesla fits that scenario perfectly.

https://cleantechnica.com/2023/01/16...on-in-the-usa/

LeX2K

IRA delays the EV transition by tossing money at cars that have no business being put in the same category as pure EVs.

Elon and Tesla have to be the most talked about person and company in history there are dozens of articles daily, that all say the same thing. We barely hear anything about other EV start-ups why is that? Rivian's stock has been totally wrecked did their CEO engage in wrong think?

AMIRZA786

Well Rivian was in the news last week, unfortunately it was regarding top executives leaving the company....

swajames

Rivian/Lucid stock got pummeled in part because Tesla was getting pummeled. That's just how the market works when the industry leader is seen as vulnerable. The weaker players in that industry get impacted to an even greater extent. Tesla stock would have dropped regardless along with the overall market, but the drop was more pronounced because of Musk. He's destroyed, for now, the Tesla premium with his erratic behavior, the twitter lunacy and his lean into not just politics but into a particular brand of politics. The underlying Tesla business, however, remains fundamentally rock solid. Literally the only thing Musk has to do to ensure TSLA bounces back quicker than the market will bounce back is stop making himself the story.

AMIRZA786

LOL I couldn't agree more. I think regardless Tesla would have been pummelled, but Elon didn't help things the narrative was created. But the stock will be back up, as you mentioned the fundamentals are all positive

patgilm

LOL people are so fickle. When he’s on your side he’s the savior and when he changes he is evil. I couldn’t care less either way, I just want him to build a quality product which he partially has. Tesla needs to do better and even if he turns off some fringe people so be it, just build a better car.

patgilm

Oh yeah and stop dropping prices LOL, my car’s value dropped $55,000 in one year. Talk about a depreciating asset!

AMIRZA786

You should see the discussion on the price drop on the Polestar forum. It's hilarious. I never thought EV owners and advocates would have so much built up bile and hate. To this moment, nobody has answered me as to why they hate Elon. Indirect answers like he's an a hole, a fake genius, his political leanings, the stupid stuff he says, but when I ask what impact that has on their lives or the lives of others, just crickets

AMIRZA786

Cars are depreciating assets, and that's why when I buy one, it's usually for the long term so I can milk every little bit it has to offer. I think most knew the used car market was a bubble that was going to burst sooner than later. Just enjoy your Plaid. Put the pedal to the floor, and everything will be right as rain

lexusnyca

I guess the buyers felt they were buying a brand like Porsche or Ferrari - where the price increases of new models plus production caps, lift the resale value of their used cars to crazy levels.