"BYD’s shares sharply lower after China EV maker’s earnings miss"

Making and selling electric vehicles is a tough business. 

Dow Jones Newswires via MarketWatch, Aug 31/Sept 1: 

BYD’s shares were sharply lower after the Chinese electric-vehicle maker reported weaker than expected earnings as well as a narrower profit margin.

Its Hong Kong-listed shares fell 5.6% to 108.00 Hong Kong dollars early Monday, equivalent to $13.85, in early trade Monday, even while the benchmark Hang Seng Index rose 2.0%. BYD’s Shenzhen-listed shares were down 4.0%.

The losses came in the wake of the EV company’s first-half earnings report late Friday with both net profit and revenue in the second quarter missing market expectations.

The results added to concerns that it wouldn’t hit its full-year sales goal. Softening domestic demand in July coincided with Beijing’s campaign to reduce what it considered unhealthy price competition , making it difficult for Chinese automakers to entice buyers.

Already, margins have narrowed. The world’s top EV seller said its first-half gross margin slipped to 18.01% from 18.78%, weighed by its EV businesses....

....MUCH MORE 

As noted exiting May 29's Whoa!—Chinese Electric Vehicles: "The Evergrande of the automotive industry already exists; it just hasn't collapsed yet.": 

Our out-the-door comment on October 2024's "Chartology — Breakout or Breakdown: Tesla (deliveries reported tomorrow, robotaxi etc.) TSLA":

One quibble. The line "Tesla has relied on price cuts since late 2022..." reads like a bad thing but the fact of the matter is that the entire industry has been cutting prices and Tesla getting out in front of that reality has kept them competitive in the battery-electric-vehicle business.

As we've been saying for quite a while now, Mr. Musk saw something a couple years ago that led him to a) the price cuts and production efficiencies that are proving crucial to survival in not just EV's but in the wider automobile market as well. Volkswagen talking about possibly laying off 30,000 of their German employees was inconceivable five years ago. And b) whatever it was he saw also led to the emphasizing of things they been working on for a decade: robotaxis and AI and supercomputers and robots.

So, for patient reader, having read this far, here's my two cents worth: 

Deliveries will be in-line this month and the next few months and the robotaxi unveil will be written up as a bust. The people who write the headlines hate Elon Musk and nothing he does will ever, ever change that. The financial question is: will the self-driving taxis be contributing to sales and earnings in two years?

Based on the fact that Waymo is now booking 100,000 rides per week I think the answer is yes but your mileage may vary. To repeat the comment on the April earnings call transcript:

Personally I think Musk is going to pull it off, but that's just me—perhaps informed by posting on the company and its stock since before the June 2010 share flotation (which, adjusted for the 5:1 and 3:1 stock splits gives a $1.133 IPO price)—however, there are plenty of other opinions to choose from if one doesn't care for that one....

Earlier in 2024:
"Biden slaps tariffs on nonexistent Chinese EV imports"
*****

....And that is why Elon Musk was so focused on the cost-cutting that allowed the price-cutting that kept Tesla competitive for the last eighteen months.

In January 2023 this bit of nonsense was making the rounds:

Tesla is about to experience the seven perils of discounting

It went in the same folder as 2015's:

Tesla's Battery: No Thanks

 One more, also 2024:

"Tesla’s in China – It’s just a question of how long" (TSLA)

The writer appears to think Mr. Musk is a naïf or even a Candide, blissfully unaware that all may not be for the best in this best of all possible worlds.

Wrongo, Bucko. Musk has a minor depression, possibly akin to Churchill's “Black Dog” that leads him to catastrophize worst case scenarios without succumbing to the debilitating effects (learned helplessness, hopelessness, suicide) you'd look for in a victim of a major depression.

He would be a good risk manager. The ketamine probably helps.....

and the outro:

As Intel's Andy Grove famously said:

“Business success contains the seeds of its own destruction. 

Success breeds complacency. Complacency breeds failure. 

Only the paranoid survive.”

Mr. Musk has his blind spots but China sneaking up on Tesla probably isn't one of them. He knows that Western companies will eventually lose the battle for electric vehicle dominance and something that he saw sometime in the last couple years seems to have scared him into action on the fronts where Tesla has a competitive advantage: access to some truly brilliant people; artificial intelligence facilitated by a long history with Nvidia and autonomous vehicles.

So again, we wish him luck, and think he'll succeed but this stuff is serious business.  

Again, we wish him luck.

Also August 2024'a "Robots: "Powered by Nvidia and AI, humanoid ambitions take shape" (NVDA; TSLA)":

Part of our pitch on Tesla over the last couple years is the supposition that Elon Musk is privy to information about the electric vehicle business that scared him.... 

The Education Of Elon Musk: The Ontario Years

From Toronto Life, January 3, 2023:

Before he was the egomaniacal, influential and just plain weird owner of SpaceX, Tesla and Twitter, he was an awkward kid who built computers and chased girls at Queen’s University.

THE ONTARIO YEARS OF THE WORLD’S MOST ABSURD BILLIONAIRE

Few people draw as much attention to themselves as Elon Musk.

In some ways, he can’t help it. When a person is worth about $150 billion—making him, at age 51, one of the wealthiest individuals on the planet—people are bound to be curious. But Musk is also the type of guy who wants you to look. The type of guy who, in April 2022, struck a $44-billion deal to buy Twitter, bragged that he did it so he could “help humanity,” then spent the summer very publicly trying to get out of paying up. The type of guy who, two days before finally closing the headline-making purchase in late October, changed his Twitter bio to “Chief Twit” and posted a video of himself walking into the company’s San Francisco headquarters carrying a white porcelain sink, captioning it, with a resounding comedic thud, “Let that sink in!” And the type of guy who proceeded to ruthlessly jettison half of his inherited staff, ominously warning everyone else to work harder (something he calls “being hardcore”). Musk is so odd, so ambitious and so mercurial that it’s easy to forget he’s also brilliant. Can all of those extremes coexist in one human? Normally, no. But Musk is not normal. He’s earned nearly everything he has by being smart—and by possessing a lifelong, near-maniacal sense of self-belief.

Musk is like an alien doing his best impersonation of a human. Unsurprisingly, he has always been somewhat of an outcast. He was born in Pretoria, South Africa. His mother, Maye, was a dietician and model. (She’d go on to become a CoverGirl and appear in a Beyoncé video.) His father, Errol, was an engineer who worked in property development and emerald mining. Musk has said that he was raised first by books—particularly Isaac Asimov’s Foundation sci-fi series—and then by his parents. When he was eight, they divorced. Musk and his younger siblings, Kimbal and Tosca, went to live with Maye. By the time he was 10, he’d started to feel sorry for Errol, who seemed sad and lonely without his family. Musk decided to join his dad in Lone Hill, a suburb of Johannesburg. The move turned out to be a terrible mistake. Musk has since described his father as someone who “will plan evil.” Errol, in his defence, has said he’s been accused of many things, among them being a “rat” and a “shit,” but stresses that he loves his kids. (Musk once tried to mend things with his father as an adult, but it didn’t go well. He has since severed their relationship.)

School was hardly a respite. Musk was mercilessly bullied as a teen. While his nerdy exploits hinted at his nascent talent—by age 12, he’d sold a space-themed PC game called Blastar to a computer magazine for $500—they weren’t exactly cool. Plus, he was small, the youngest in his class, and he struggled to fit into the school’s macho culture. Gangs of kids hunted him through the hallways, intent on pummelling him. Once, a group of brawny boys threw him down a set of stairs, resulting in a trip to the hospital and a week out of school. The constant harassment didn’t ease until Musk turned 16, hit six feet and began learning karate, judo and wrestling. After puberty, he got into a fight with the biggest bully in his school and, at least in Musk’s telling, knocked him out with a single punch. It taught him a lesson: never try to appease a bully; it’s better to slug them in the nose. (The irony, of course, is that these days Musk is the bully.)

At 17, he fantasized about escaping apartheid-era South Africa, moving overseas and chasing the American dream. Canada was the closest he could get, at least initially. Maye was born in Regina, and branches of her family remained scattered across the country. Musk’s plans hinged on staying with a great-uncle in Montreal—a man who, he discovered upon landing at the Montreal airport in June 1988, had since moved to Minnesota. Unbothered, Musk bought a cross-Canada hop-on, hop-off bus ticket for $100. He travelled over to Swift Current, Saskatchewan, and hitched a ride to his second cousin’s house, where he got to work shovelling out grain bins at a nearby farm. When that got old, he moved on to splitting logs in Vancouver and then cleaning a lumber mill boiler room for $18 an hour. But hard labour wasn’t what Musk envisioned for his future.

Two years later, in the summer of 1990, he landed a sales internship at Microsoft Canada, travelling around southern Ontario and meeting with potential clients. It was a slog, but Musk found the challenge invigorating. His boss, David Carter, expected the 19-year-old to be intimidated, at least at first, but he was fearless, excitable and wildly enthusiastic. Carter remembers him returning to the office at the end of each week carrying a stack of leads ripped out of the Yellow Pages. He’d circle every company he met with and scrawl his observations next to each. To break the ice with dealers, he’d do card tricks. He’d talk about any new technology to anyone who would listen. In the burgeoning tech world, Musk saw boundless opportunity. He’d tell his boss, You could do it that way, or you could build this new thing. Officially, Musk was just an intern, but he didn’t act like one. As Carter put it to me, “He didn’t shy away from having an opinion.”

Come fall, Musk was ready to start university. He debated studying either physics and engineering at the University of Waterloo or business and commerce at Queen’s University. After visiting both campuses, he chose Queen’s—not because of the academics but because it had more girls, and Musk didn’t want to spend his college time with, as he would later put it, “a bunch of dudes.” His next years in Kingston would prove to be formative. There, Musk met his first wife, Justine Wilson, his best bud, Navaid Farooq, and the fellow computer programmers who would go on to help him build his early companies. It was also where he contemplated the big ideas that would eventually turn him into the tech industry’s most controversial rock star: electric vehicles, solar energy, space travel and galactic colonization. By the time he finished his post-secondary studies, Musk had decided that he could do whatever he wanted. Make a fortune. Become famous. Shape the world....

....MUCH MORE

Whoa!—Chinese Electric Vehicles: "The Evergrande of the automotive industry already exists; it just hasn't collapsed yet."

Following on and expounding upon Monday's "Chinese EV Stocks Tumble After BYD Slashes Prices Up to 35%".

From ZeroHedge, May 29:

"Race To The Bottom": BYD Price Slashing To Prompt Chinese EV Consolidation 

BYD’s aggressive discount campaign is shaking up China’s EV market, pushing rivals to slash prices and raising concerns of an industry-wide “race to the bottom,” according to Nikkei Asia.

Since January, BYD has launched repeated limited-time offers. Its latest, running through June, cuts prices by up to 34% across 22 EV and hybrid models, with its Seagull now starting at just $7,700. Morningstar’s Vincent Sun said investors are worried this signals a prolonged price war. “I believe sales targets are the main driver behind this,” he said.

BYD aims to sell 5.5 million vehicles in 2025, including 800,000 overseas. But its stock fell over 8% Monday and continued sliding Tuesday after the discount news.

Great Wall Motor chairman Wei Jianjun hinted at growing debt in the industry, saying, “The Evergrande of the automotive industry already exists; it just hasn't collapsed yet.” Many believe he was referring to BYD, whose debt ratio stood at 70.7% in March. BYD’s Li Yunfei appeared to hit back with a cryptic social media post: “A dog can bite a person! But a person cannot bite a dog!”

Nikkei writes that other carmakers quickly followed BYD’s lead. Geely’s Galaxy brand launched deals with discounts up to 20,000 yuan, while Changan and Leapmotor also cut prices. Rising inventories are partly to blame—China had 3.5 million unsold vehicles in April, a 57-day supply, the highest since late 2023. BYD alone reported 154.4 billion yuan in inventory, up 33% from the previous quarter....

....MORE 

Our out-the-door comment on October 2024's "Chartology — Breakout or Breakdown: Tesla (deliveries reported tomorrow, robotaxi etc.) TSLA":

One quibble. The line "Tesla has relied on price cuts since late 2022..." reads like a bad thing but the fact of the matter is that the entire industry has been cutting prices and Tesla getting out in front of that reality has kept them competitive in the battery-electric-vehicle business.

As we've been saying for quite a while now, Mr. Musk saw something a couple years ago that led him to a) the price cuts and production efficiencies that are proving crucial to survival in not just EV's but in the wider automobile market as well. Volkswagen talking about possibly laying off 30,000 of their German employees was inconceivable five years ago. And b) whatever it was he saw also led to the emphasizing of things they been working on for a decade: robotaxis and AI and supercomputers and robots.

So, for patient reader, having read this far, here's my two cents worth: 

Deliveries will be in-line this month and the next few months and the robotaxi unveil will be written up as a bust. The people who write the headlines hate Elon Musk and nothing he does will ever, ever change that. The financial question is: will the self-driving taxis be contributing to sales and earnings in two years?

Based on the fact that Waymo is now booking 100,000 rides per week I think the answer is yes but your mileage may vary. To repeat the comment on the April earnings call transcript:

Personally I think Musk is going to pull it off, but that's just me—perhaps informed by posting on the company and its stock since before the June 2010 share flotation (which, adjusted for the 5:1 and 3:1 stock splits gives a $1.133 IPO price)—however, there are plenty of other opinions to choose from if one doesn't care for that one....

Earlier in 2024:
"Biden slaps tariffs on nonexistent Chinese EV imports"
*****

....And that is why Elon Musk was so focused on the cost-cutting that allowed the price-cutting that kept Tesla competitive for the last eighteen months.

In January 2023 this bit of nonsense was making the rounds:

Tesla is about to experience the seven perils of discounting

It went in the same folder as 2015's:

Tesla's Battery: No Thanks

 One more, also 2024:

"Tesla’s in China – It’s just a question of how long" (TSLA)

The writer appears to think Mr. Musk is a naïf or even a Candide, blissfully unaware that all may not be for the best in this best of all possible worlds.

Wrongo, Bucko. Musk has a minor depression, possibly akin to Churchill's “Black Dog” that leads him to catastrophize worst case scenarios without succumbing to the debilitating effects (learned helplessness, hopelessness, suicide) you'd look for in a victim of a major depression.

He would be a good risk manager. The ketamine probably helps.....

and the outro:

As Intel's Andy Grove famously said:

“Business success contains the seeds of its own destruction. 

Success breeds complacency. Complacency breeds failure. 

Only the paranoid survive.”

Mr. Musk has his blind spots but China sneaking up on Tesla probably isn't one of them. He knows that Western companies will eventually lose the battle for electric vehicle dominance and something that he saw sometime in the last couple years seems to have scared him into action on the fronts where Tesla has a competitive advantage: access to some truly brilliant people; artificial intelligence facilitated by a long history with Nvidia and autonomous vehicles.

So again, we wish him luck, and think he'll succeed but this stuff is serious business.  

 Again, we wish him luck.

Robots: "Powered by Nvidia and AI, humanoid ambitions take shape" (NVDA; TSLA)

From Yahoo Finance, August 12:

When the Department of Defense commenced its robotics challenge in 2015, the stated goal was to develop ground robots that can aid in disaster recovery with the help of human operators. Each android was given an hour to complete eight tasks, which included driving a car and climbing some stairs.

Nearly a decade later, generative AI is accelerating that learning curve, pushing human-like machines to pick up new tasks in real time.

“The holy grail for us is what we call zero-shot learning, or the ability to show the robot what to do, and it can do it the same way that you do that task,” said Jeff Cardenas, co-founder of Apptronik, an Austin-based robotics maker.

That vision is slowly becoming reality. Last week, OpenAI-backed Figure unveiled the latest iteration of its humanoid robot. The robot is equipped with a vision language model that allows the machine to reason visually and self-correct learned behavior, according to the company’s claims.

And in June, Tesla (TSLA) presented an updated version of its Optimus robot at Tesla’s Investor Day and showed it roaming a factory floor. CEO Elon Musk touted the robot’s potential, saying it had the ability to push the company’s market cap to $25 trillion.

Robotics have been integrated into factory floors and warehouses to improve efficiencies for years. But current machines in use have largely been limited to moving from point A to point B and tackling a handful of tasks.

Humanoids that can adapt to existing environments have long been seen as the ultimate test if they can work alongside humans in spaces built for them.

“If you want a versatile robot, then having a robot that can retrofit into our environment so you don’t have to change anything seems important,” said Cardenas. “Today, three to six [times] the price of the robot is spent just integrating that robot into a new workflow.”

Nvidia's humanoid ambition....

....MUCH MORE

Part of our pitch on Tesla over the last couple years is the supposition that Elon Musk is privy to information about the electric vehicle business that scared him. Here's a June 18 post that touches on this conjecture:

"Elon Musk predicts robots, not cars, are Tesla’s $20 trillion future" (TSLA)

The outro from a May 22 post:

....As Intel's Andy Grove famously said:

“Business success contains the seeds of its own destruction. 

Success breeds complacency. Complacency breeds failure. 

Only the paranoid survive.”

Mr. Musk has his blind spots but China sneaking up on Tesla probably isn't one of them. He knows that Western companies will eventually lose the battle for electric vehicle dominance and something that he saw sometime in the last couple years seems to have scared him into action on the fronts where Tesla has a competitive advantage: access to some truly brilliant people; artificial intelligence facilitated by a long history with Nvidia and autonomous vehicles.

So again, we wish him luck, and think he'll succeed but this stuff is serious business.   

Outro now intro! Here at Climateer Investing we recycle! (and still don't know what Elon sees that spooked him.)....

As a side note, Intel would have been well-advised to listen to their former chairman.

On August 11 Yahoo Finance relayed a Motley Fool story where the addressable market got an extra zero attached to it:

Elon Musk Just Said Tesla Has a $200 Trillion Opportunity in Front of It. Here's What It Would Take to Get There.

Marketing is one of the hardest things to do in business. At its core, marketing is a form of storytelling. If brands fail to craft compelling stories, then it's hard to resonate with consumers.

One company that notably doesn't rely on hefty advertising, however, is Tesla (NASDAQ: TSLA). Despite intense competition, Tesla has one thing that none of its competitors do. And no, I'm not talking about more sophisticated technology or loads of intellectual property (IP).

I'm talking about the company's outspoken CEO, Elon Musk. Very few leaders in the business world command the same kind of presence as Musk. No matter the context, it seems that the world listens nearly every time Musk opens his mouth.

Recently, Musk posited the idea that Tesla is staring down a $200 trillion opportunity called Optimus. The best part? It has nothing to do with the company's core electric vehicle (EV) business.

Let's dig into Musk's remarks and explore how real the opportunity is.

What is Tesla Optimus?
Most people are familiar with Tesla because of the company's EVs. But what you may not know is that Tesla also has several ambitions in the realm of artificial intelligence (AI).

One of the company's biggest AI projects revolves around humanoid robotics, which it calls Optimus. Essentially, Tesla is using machine learning to train human-sized robots on how to perform basic tasks.

The vision is that Optimus bots will become handy enough to supplement the human workers in Tesla's factories....

....MUCH MORE

The next day Yahoo Finance returned with:

Why Nvidia, Tesla are betting on AI-powered humanoid robots

The Yahoo Finance coverage is reminiscent of that song "For what it's worth". We know TSLA and NVDA are doing something but don't yet know what

"There's something happening here
But what it is ain't exactly clear
There's a man with a gun over there
A-telling me I got to beware..."

 

Credit: Ramzan Kadyrov | Telegram via Teslarati

 

There's something a bit surreal about giving a photo credit to the warlord/President of Chechnya but then the Chechens are crazy mofos and Teslarati may have been concerned about the country's intellectual property enforcement policies.

The article says Musk "has not commented on how or if Kadyrov actually “received” the Cybertruck from him." while Turkey's Andalou Agency is headlining their story with:

Elon Musk denies giving Cybertruck to Chechen leader
Ramzan Kadyrov pulls off apparent new prank, thanking Musk for 'sending' him Tesla Cybertruck

So we shall see where all this ends up. 

For what it's worth. the May post with the Andy Grove quote may be of interest to longs, shorts and anyone else fascinated by this world in which we live:

"Tesla’s in China – It’s just a question of how long" (TSLA)

"Elon Musk Says Optimus Robots to Make Up About 80% of Tesla’s Value" (TSLA)

From the Wall Street Journal, September 2:

Musk has encouraged investors to focus on a future of autonomous vehicles and robots

Elon Musk said Tesla’s humanoid robot Optimus will eventually be driving most of the company’s value, as the tech giant shifts its focus to robots.

In a post on his X account, Musk wrote that “80% of Tesla’s value will be Optimus” in response to a user asking about the Austin, Texas, company’s long-term strategy.

In the second quarter, automotive revenue made up about 74% of total sales, but profit fell as its vehicle sales continued to slide downward. The company is also set to lose several electric-vehicle incentives due to a new U.S. budget bill, which Musk has criticized.

Musk instead encouraged investors to focus on a future of autonomous vehicles and robots, which he believes would be the source of much of the company’s revenue going forward. Tesla launched a fleet of robotaxis in June.

The electric-vehicle company aims to scale its Optimus production to 1 million units a year within the next five years, Musk said during a Tesla earnings call in July. Optimus 3 prototypes are due to launch by the end of this year, he said....

....MORE 

Again, he saw something a few years ago that spooked him about the long-term viability of the Western EV business. 

"Tesla robotaxi event was long on promises, but investors wanted more details" (TSLA)

In early pre-market trade the stock is down $13.99 (-5.86%) after closing down $2.28 (-0.95%) on Thursday. $224.78 last.

From Reuters via MSN, October 11:

For a businessman who perpetually struggles with broken promises, Elon Musk gave himself quite a to-do list Thursday night at Tesla's long-awaited Hollywood unveiling of its driverless robotaxis.

After traversing the fake streets of the Warner Bros movie studio set in a sleek, silver two-door "Cybercab" prototype, Musk promised that the company's popular Model 3 and Model Y vehicles would be able to operate without driver supervision in California and Texas by next year.

He said the company would start building the fully autonomous Cybercab by 2026 at a price of less than $30,000, and showed off a robovan capable of transporting 20 people around town - products he said would reshape cities by "turning parking lots into parks."

Later came the dancing humanoid robots that also mixed drinks at the bar. Tesla will sell those, too, Musk said, eventually for $20,000 to $30,000 a piece. "I think this will be the biggest product ever, of any kind," he declared.

Thursday night's electronic dance music-infused event had the signature trappings of Musk's salesmanship, but some Tesla investors and experts said they were hoping for more concrete details on how the company plans to transform from an automaker into an autonomous driving and artificial intelligence titan with a solid business plan.

Tesla shares fell 5% in premarket trading on Friday.

"His vision is lovely, but somebody has to actualize it," said Ross Gerber, a Tesla shareholder and CEO of Gerber Kawasaki Wealth and Investment Management. "For now, for the next 24 months, Tesla has to sell EVs. Why aren't we focused on that?"

Gerber said he was happy to see products like the Cybercab and the robovan, but hoped to also see a more traditional, lower-priced mass-market vehicle that the company could sell in the near future.

Musk had for years pledged to sell a car expected to start at about $25,000, a promise that investors saw as critical to winning new customers. Reuters reported exclusively on April 5 that Tesla had abandoned this project, initially sending Tesla shares down. Musk responded by posting later that day on X that Tesla would unveil a robotaxi on Aug. 8, which was later delayed to October.

'YEARS BEHIND'

Tesla is aiming to leapfrog incumbent self-driving players, including Alphabet's Waymo, by pursuing a lower-cost technological path that Musk believes will allow the company to scale up its autonomous vehicles far quicker than rivals.

Tesla's strategy is simpler and much cheaper than that of its rivals, but has critical weaknesses. Chief among those is that the AI technology underpinning its self-driving system makes it nearly impossible to pinpoint why a crash or other failure occurred - something that could concern regulators.

"Tesla software is at least years behind where Waymo is. That's the hard part. No flashy vehicle design is going to change that," said Matthew Wansley, professor at New York's Cardozo School of Law.

Tesla's rivals use similar AI and camera technology, but layer on so-called redundant systems and more-expensive sensors as a safety precaution....

....MUCH MORE

Our thoughts on the robotaxi, from October 2's "Tesla sinks as Q3 deliveries fall short" (TSLA)":

...Deliveries will be in-line this month and the next few months and the robotaxi unveil will be written up as a bust. The people who write the headlines hate Elon Musk and nothing he does will ever, ever change that. The financial question is: will the self-driving taxis be contributing to sales and earnings in two years?....  

For what it's worth the deliveries "miss" was

...Tesla reported 462,890 deliveries and 469,796 vehicles produced in Q3 2024. Analysts, based on FactSet StreetAccount estimates, had expected 463,310 deliveries for the quarter ending September 30. 

Missed it by 420 vehicles.

Which could be Musk doing the "420" thing again.

Just kidding.

"Tesla RESIDENTIAL rooftop solar panels catch fire, and the lawsuits start flying" (TSLA)

This is the answer to a question posed by the FT's Izabella Kaminska a couple days ago.
More on that after the jump, first up, the Los Angeles Times:

One evening last year, David Burek noticed charred wood and a burning smell in his attic, near his young sons’ bedroom. He climbed a ladder and saw a melted connector wire from the solar panels installed on the roof of his North Dartmouth, Mass., home. Firefighters rushed over and discovered that flames had burned through the shingles, the roof and a support beam. Luckily, a recent rain had doused it.

A month later, a fire broke out on the roof of Ken Tomasello’s home in Waldorf, Md., sending a section of the ceiling crashing onto a bed. It ultimately caused so much fire, smoke and water damage that Tomasello and his wife lived in a hotel for more than a year.

The two homes had something in common: SolarCity, now a unit of Elon Musk’s Tesla Inc., had installed their rooftop panels. While these are just a pair of relatively small incidents at a company with some 400,000 solar customers — one of the biggest such portfolios in the U.S. — they add to the growing concern about the safety of Tesla’s solar systems.

In the past couple weeks, both Walmart Inc. and Amazon.com Inc. have said that Tesla systems caused roof fires at their stores or warehouses. Those were commercial installations. The Burek and Tomasello episodes show there are potentially also problems with residential systems, a much bigger part of the company’s sputtering solar business.

Further underscoring those worries, Tesla has reached out to homeowners across the U.S. to tell them they need preventive maintenance. The company says the remediation effort is designed to ensure that systems last 10 to 20 years. (Business Insider previously reported this program, known internally as Project Titan.)

In an interview, Burek said he heard from Tesla in October 2018 — about five months after his panels had been removed. “When I called Tesla back, they said our system had been flagged for bad connectors,” Burek said. “I told them there was no system to maintain because they’d already caused a fire on my roof.”...MORE

And from FT Alphaville:

Alphaville’s resident Tesla watcher is away on holidays, but Bethany McLean’s “He’s full of shit” drop in Vanity Fair last weekend about the House of Musk’s dubious SolarCity investments should not go ignored.

According to Tesla much of McLean’s piece is erroneous. But frankly, we’re mainly interested in just one specific part of the piece and we’re pretty confident McLean is right on this; she does have a knack for homing in on instances of grave corporate misdirection.
And, as her piece hints, none was arguably greater than the highly lauded ‘launch' of Tesla’s Solar Roof on the set of Desperate Housewives on October 28, 2016 -- something Alphaville has always been somewhat curious about.

The timing of the ‘launch’ was awfully convenient, occurring just weeks before a critical shareholder vote on a controversial proposal for Tesla to acquire SolarCity, a related Musk corporate. It’s fair to say, on that basis, establishing a grand vision of how the two companies might complement each other was never going to hurt Musk.
[bolding: Climateer]

But, as McLean notes, concerns about the substance of the spectacle, which you can still watch in its entirety on Vimeo, began to appear almost from the outset:

That October, as Musk was making his pitch about the Solar Roof, a former Fortune 500 executive was watching it online at a friend’s barbecue. The former executive, who had spent years researching solar technology, understood what it took to make the Solar Roof work—and he was confident that Musk hadn’t figured it out. “He spewed total BS,” says the executive, who asked not to be identified. “I was flabbergasted. I was convinced in the moment that the shingles were fake.”

The allegation of fakery is important. From the perspective of the world, the roof tiles unveiled by Musk on the day were real and revelatory. Not only were they going to make integrated sustainable electric living possible -- they were set to solve solar’s aesthetic eyesore problem, and in so doing accelerate solar energy adoption.

Nothing said at the ‘launch’ indicated that the featured panels might actually be dummies or that the tech underpinning them had not yet been figured out.
To the contrary, Musk said things like: “The houses you see around you are all solar houses.” A definite suggestion they were being powered by functional solar energy, then.
But he also said things like:

...we’re transitioning from day to night - it’s dusk - and so what’s happening is that the houses are transitioning from the roofs generating power to the battery pack, the Powerwall, producing power.

And:

So this is the before shot of that house and now that’s all solar. Yeah. And here we’ve got some close up shots we can show. [VIDEO SHOWS THE TILES UP CLOSE PLAYS ON SCREEN] And if you look carefully you can actually see the solar cells behind the glass. [HOLDING A TILE ON STAGE] This is a textured glass tile, and if you look carefully you can see the solar cells: yeah you can see that. 
Now take a look at the next house; right, so that house is also solar, and that’s sort of a style of a French slate which is one of the hardest things to do; it’s considered one of the best roofs you can possibly do as a conventional roof. So we said if.. can we make a French slate roof that’s solar that looks as good or better than a conventional French slate roof and we were able to do that as well.

Bolstering the impression the tiles were already functional Musk also told reporters on the day: “We expect to start installing these roofs sometime next year.”

Corporate-issued supporting materials and videos demonstrating how tough the tiles were soon went viral. (Alphaville remembers the media storm well because we were caught on the receiving end of a fair chunk of vitriolic shares by fanboys who were keen to assert the demo proved Musk was indeed a genius). And from that point of view there’s no doubt the event was deemed a PR triumph -- and of course, the Tesla/SolarCity acquisition was approved less than a month later.
And yet, uncomfortable curiosities about how the whole thing was managed began to leak almost immediately....MUCH MORE

Izzy's comment on the timing of the great reveal in relation to the SolarCity merger in the bolded para squares perfectly with our (almost) contemporaneous note:
Nov. 1, 2016
Tesla, SolarCity Tumble Ahead Of New Merger Financials (TSLA; SCTY)

Attentive reader may have noticed we didn't cover Mr. Musk's press conference on the roof tile solar panels last Friday. We've been at the market long enough to recognize a master magician's "hey, look at this" misdirection. The tiles aren't going to matter to anyone for at least a year, probably two, and by then I would expect the market to have changed to the  point that they will be recognized as a niche at best.

The oohing and ahhing from the assembled journos was kinda funny though; in a naïve, never had to bet real money sort of way.
TSLA $189.85 down $7.88 (-3.99%); SCTY $19.00 down 0.60 (-3.06%). Nasdaq down 1.05%.

After last Wednesday's earnings announcement the stock (very) briefly traded as high as $216.48 (16:18:30 PM).
That's down 26 bucks in four trading days. As the retail guys say "And Mr. Bigg, if you annualize that..." 

Final note: While Ms Kaminska was specifically focused on the roof tile system and the LAT article appears to be focused on the more traditional panels that SCTY was touting, the connections between the individual solar units are very, very similar.
And much more numerous on the roof tiles because of the tiles' smaller size.

Tesla's Earnings Call Has Ended, The Stock Is Up $25.15 (+11.77%) TSLA

$238.80 last I saw.

Bloomberg was doing a liveblog, some of the headlines:

Tesla Expects to Roll Out Ridehailing Next Year

• Tesla aims to roll out autonomous ridehailing in 2025
• Musk sees 20% to 30% vehicle growth next year
• Company still sees 2025 production of cheaper model
• Cybertruck has reached profitability for the first time
• Musk bullish after 3Q profit, margins top estimates

Musk says Tesla Won’t Make a Non-Robotaxi Version of More Affordable EV

56m ago17:05

Musk clarifies that when it comes to an “affordable” EV, the company is targeting sub-$30,000 in bringing something to market.

But Tesla will NOT be making a non-robotaxi version of the car. He stresses the company has made it clear that the future is in autonomous driving.

This seems (it’s really hard to say) to be Musk saying there’s not going to be some stand alone, new $25,000 EV model with a traditional steering wheel or pedal -- which is what many are still calling for.

 

1h 24m ago16:39

MUSK SAYS CYBERCAB WILL REACH VOLUME PRODUCTION IN 2026

ELON MUSK AIMS FOR 2 MILLION TESLA CYBERCAB UNITS PER YEAR

1h 27m ago16:36

Musk reiterates that they will deliver more affordable models in the first half of 2025. He gives a rough estimate of 20-30% vehicle growth next year.

....MUCH MORE

 

And more to come.

From the Company:

32 page slide deck

https://digitalassets.tesla.com/tesla-contents/image/upload/IR/TSLA-Q3-2024-Update.pdf

"Elon Musk predicts robots, not cars, are Tesla’s $20 trillion future" (TSLA)

The outro from a May 22 post:

....As Intel's Andy Grove famously said:

“Business success contains the seeds of its own destruction. 

Success breeds complacency. Complacency breeds failure. 

Only the paranoid survive.”

Mr. Musk has his blind spots but China sneaking up on Tesla probably isn't one of them. He knows that Western companies will eventually lose the battle for electric vehicle dominance and something that he saw sometime in the last couple years seems to have scared him into action on the fronts where Tesla has a competitive advantage: access to some truly brilliant people; artificial intelligence facilitated by a long history with Nvidia and autonomous vehicles.

So again, we wish him luck, and think he'll succeed but this stuff is serious business.   

Outro now intro! Here at Climateer Investing we recycle! (and still don't know what Elon sees that spooked him.) 

From the Boston Herald, June 16:

Elon Musk responded in kind to Tesla Inc. investors reapproving his massive compensation plan, offering outlandish predictions that he can enrich shareholders all over again.

After Tesla’s general counsel confirmed Thursday that investors supported awarding stock options to Musk worth as much as $55.8 billion, the chief executive officer said the company’s robot-making effort may one day dwarf its car business.

Tesla has all of two humanoid robot prototypes plucking battery cells off the end of a production line in California and placing them in shipping containers. “Quite a few” others are cruising around the company’s offices in Palo Alto, Musk said during the company’s annual meeting.

The CEO isn’t expecting the bot — called Optimus — to go into limited production until next year, when Tesla could put a few thousand to the test in its own factories. He nevertheless offered a pie-in-the-sky projection that Tesla may one day make around $1 trillion of profit annually from the product, without offering a time frame.

“If the price-to-earnings multiple is, say, I don’t know, 20 or 25, something like that, that would mean a $20 trillion market cap from Optimus alone,” Musk said. “It’s within the realm of possibility for Tesla to achieve a valuation 10-times that of the most valuable company today.”

Work on robots was at the center of an ultimatum Musk laid down earlier this year. The CEO openly pressured Tesla’s board to boost his stake in the company to around 25%, saying that he otherwise preferred to build artificial intelligence and robotics products elsewhere....

....MUCH MORE

"Tesla’s in China – It’s just a question of how long" (TSLA)

The writer appears to think Mr. Musk is a naïf or even a Candide, blissfully unaware that all may not be for the best in this best of all possible worlds.

Wrongo, Bucko. Musk has a minor depression, possibly akin to Churchill's “Black Dog” that leads him to catastrophize worst case scenarios without succumbing to the debilitating effects (learned helplessness, hopelessness, suicide) you'd look for in a victim of a major depression.

He would be a good risk manager. The ketamine probably helps.

From Asia Times, May 22:

A foreign company lasts until the party perceives there’s no more utility to be gained, then the hammer comes down 

One day the Tesla experience in China will be a business school case study, though not in a good way.

Elon Musk thinks he has a special relationship with powerful Chinese officials. There is evidence, he says. He cites Tesla as the first foreign automaker not required by the Chinese government to take on a local partner.

However, the Chinese communists are highly skilled at playing world-renowned elite to their tune. And the “special relationship” reels them in every time.

This has nothing to do with the global slowdown in electric vehicle sales.

China’s foreign business ‘utility timetable’
In Musk and Tesla’s case, the “takeover” was scheduled when Tesla started sniffing around the idea of locating in China. The clock then started ticking on what a friend with decades of experience in China calls the Chinese Communist Party‘s (CCP’s) “utility timetable.”  

The history of foreign ventures in the People’s Republic of China (PRC) goes like this: 

• Foreign company flourishes with unlimited local support. 
• Foreign company builds a market. 
• Foreign company becomes the operating model for local providers to copy.
• A local company and its stakeholders build up proficiency at some level of sustainability, sometimes by poaching key employees and intellectual property. 
• Foreign company starts coming under pressure whose goal is driving it out of the market or forcing it to sell its assets to the local company.
• Local company takes over the market with second-rate products. 
• Foreign company exits China.

1. 
   

A foreign company lasts as long in China as it provides utility to the party.  

When the party perceives no more utility to be gained, the hammer comes down.  

By the time Tesla went into China this had happened so many times before that it should have been obvious. Now, the CCP’s  “utility timetable ” for Tesla seems to be accelerating.

Reeling In Tesla
Part of the timetable – a key inevitable telltale sign the end is coming – is the foreign company is pressured to put its China operations under the control of a Chinese citizen. This citizen is also subject to the country’s national security laws, including the 2017 National Intelligence Law. That law requires Chinese citizens and companies to support PRC intelligence operations....

....MUCH MORE

 Our readers know the risks the writer lays out. Most recently:

March 17, 2024
"India Tailors Electric-Vehicle Tariff to Lure Tesla" (TSLA)
Mr. Musk has to thread the needle on this one lest his Chines supply chain begin experiencing, ah, slowdowns. Alternatively, he goes big fast, in which case he might just leave the Chinese market to BYD and the other half-dozen Chinese EV manufacturers that will be among the survivors of the coming shakeout....

May 17, 2024
Reuters Exclusive: Musk pushes plan for China data to power Tesla's AI ambitions (TSLA)
Mr. Musk is walking a tightrope between American and Chinese national security concerns and more probably the use of faux concerns as an excuse to rein him in should doing so seem like the thing to do for either government.

We wish him luck and think he will succeed with the autonomous vehicle push but the risks increase with dependency on governmental goodwill.

The point is deadly serious, you had better know what you are up against when venturing into the big kids' sandbox. Our first inductee into the Climateer Hall of Fame was deadly serious as well:

...As always, heed the wise words of our first inductee into the Climateer Hall of Fame....

*****

....On the issue of the Chinese government attitude toward controlling information, its uses and its flows, the October 2019 post "So You Want To Do Business In China Do You? "China’s New Cybersecurity Program: NO Place to Hide" embedded in a post last week is a quick primer on what the Party and government think.

As Intel's Andy Grove famously said:

“Business success contains the seeds of its own destruction. 

Success breeds complacency. Complacency breeds failure. 

Only the paranoid survive.”

Mr. Musk has his blind spots but China sneaking up on Tesla probably isn't one of them. He knows that Western companies will eventually lose the battle for electric vehicle dominance and something that he saw sometime in the last couple years seems to have scared him into action on the fronts where Tesla has a competitive advantage: access to some truly brilliant people; artificial intelligence facilitated by a long history with Nvidia and autonomous vehicles.

So again, we wish him luck, and think he'll succeed but this stuff is serious business.  

Chartology — Breakout or Breakdown: Tesla (deliveries reported tomorrow, robotaxi etc.) TSLA

First up, the stock, bumping up against resistance for the third time:

FinViz

The instanalysis of resistance lines is that each approach to the level absorbs more stock that sellers are willing to let go, eventually resulting in a situation where the selling stops and the stock pops (it doesn't always work but is worth noting where the levels are). The reverse is also true in theory. A stock continually hitting a support level absorbs buyers' cash and at some point there is no more money available to purchase at that price and the stock falls.

As noted July 8 with the stock at $249.07: "Chartology: Tesla Stock Now Has A Very Wide Range To Churn Through (TSLA)". And September 5 A Word Of Caution On Tesla's Stock (TSLA):

Now don't get me wrong, I'm as much into Elon's/Baidu's/Nvidia's vision of flying cars and robotaxis as the next person and haven't changed this opinion on the company from April 24's "Tesla Q1 2024 Earnings Call Transcript (TSLA)":

...In pre-market action the stock is up $17.47 (+12.07%) at $162.15.

Below are the words that are adding billions ($50+) to the company's valuation. 

Personally I think Musk is going to pull it off, but that's just me—perhaps informed by posting on the company and its stock since before the June 2010 share flotation (which, adjusted for the 5:1 and 3:1 stock splits gives a $1.133 IPO price)—however, there are plenty of other opinions to choose from if one doesn't care for that one....

Emphasis added.

However. There is a giant gap on the price chart, July 23 - 24 which exuberant buyers seem bound-and-determined to fill:

TradingView

~$246 down to ~$225 with today's last trade at $231.62.

This could be setting up to be a "buy on mystery, sell on history" type of thing with the robotaxi unveil in October. 

In the meantime, if one can step back from the minute-to-minute action the stock has been  churning in that $180 to $260 range since July, alternatively wiping out shorts, then longs.

Well, the stock filled the gap without reversing and here we are right back at the top of the range. And here are some considerations to factor into the dreamscape. 

Barron's, September 29: Tesla’s Delivery Numbers Are Due. Wall Street Has Taken All the Fun Out of It:

Wall Street’s obsession for uncovering any shred of data that might give it an edge in predicting outcomes has made Tesla’s quarterly delivery report a little less exciting over time.  

Tesla is slated to report third-quarter delivery figures on Wednesday. They should be good. Just don’t expect a big positive reaction from the stock.

Wall Street has taken some of the fun and mystery from Tesla’s quarterly release with its obsession for uncovering any shred of data that might give it an edge in predicting outcomes.

Better, more reliable information, of course, is a good thing. What the evolution of analyst tracking means, however, is investors should pay more attention to the stock before delivery numbers are released. That is becoming more indicative of how things are going at the electric vehicle maker than the reaction to the actual delivery number.

Take first quarter delivery numbers. Tesla delivered about 387,00 cars, missing some of the lowest Wall Street estimates by about 10%. Shares dropped almost 5% after the disappointment. That’s not too bad considering the magnitude of the miss. But shares dropped almost 14% in the month coming into the delivery report, when analysts started to size up how the quarter was going.

Things turned out better in the second quarter. Tesla delivered some 444,000 cars. That was a little better than expected and much better than the first quarter. Share rose about 10%, but they rose almost 18% in the month leading into the delivery report.

Investors seem to have a better indication of how things are going to go than in the past. One reason: The Street is doing better. Analyst reports previewing Tesla’s quarterly deliveries now include references to app downloads, weekly car registration data in China, monthly car sales in the U.S. and Europe, and vehicle identification numbers from U.S. assembly plants, among other things.

The goal is to produce an estimate as close as possible to the actual outcome, which should lower stock volatility and give analysts with the best estimates bragging rights.

Beyond anecdotes, there is some evidence analysts are getting more accurate. In 2018 and 2019, analyst estimates missed Tesla delivery numbers by about 5% on average. That number is down to about 4% over the past two years.

One consequence of better estimates appears to be Tesla stock reacting more ahead of delivery release. If deliveries miss, the stock is more likely to be down in the month leading into the result than it is the day after the report.

That kind of trading action shouldn’t surprise investors too much. The stock market is always forward-looking, with investors reacting to changing estimates, and what they hear from analysts, heading into any delivery report.

Coming into Monday trading, Tesla stock has rallied about 22% over the past month. So third quarter delivery numbers should be fine. Most of the Wall Street preview reports indicate sales are up from the same time a year ago, partly on the strength of Chinese deliveries....

....MUCH MORE 

And from Investor's Business Daily, September 28 a very deep dive:

Tesla Nears Breakout As Deliveries, Robotaxi Event Loom; BYD Races Through Buy Points 

Tesla (TSLA) and BYD (BYDDF) are the world's largest electric-vehicle makers.

In 2022, China EV and battery giant BYD's vehicle sales raced ahead of Tesla's and are now well more than twice as high. For all-battery electric vehicles (BEVs), BYD seized the crown in Q4 2023. However Tesla has regained that title in 2024.

Third-quarter sales are due for Tesla and BYD in early October.

Tesla earnings have tumbled for several quarters, missing lowered views most of the time. CEO Elon Musk is placing more emphasis on robotaxis and robots, with a robotaxi event set for Oct. 10.

Tesla has relied on price cuts since late 2022 to offset weaker demand due to an aging lineup and rising competition. New "affordable" EVs may be coming, but they may be variants of existing models.

BYD has also cut prices, but margins remain high. Sales are rising thanks to a next-generation hybrid system and a variety of new and refreshed models. It recently opened its first full assembly plant outside of China, with several more overseas plants coming.

Tesla stock round-tripped a huge gain amid the Q2 earnings miss, but is running back toward a buy point.  BYD stock has surged to a 52-week highs, clearing multiple buy points.

Tesla delivered 443,956 EVs in Q2, beating lowered estimates. That was up sharply from Q1's 386,810 vehicles but down from Q2 2023's 466,140.

Along with delivery numbers, Tesla reported record energy storage deployed in Q2.

BYD announced record Q2 sales of 986,720, up 58% vs. a year earlier and 40% vs. Q1's 626,236 EVs. It's also double Tesla's Q2 total.

However, all Tesla vehicles are BEVs, while more than half of BYD sales are plug-in hybrids now. BYD delivered 426,039 passenger BEVs in Q2.

Tesla will report Q3 deliveries and energy storage figures on Oct. 2. BYD will release Q3 sales figures in early October....

....MUCH MORE

One quibble. The line "Tesla has relied on price cuts since late 2022..." reads like a bad thing but the fact of the matter is that the entire industry has been cutting prices and Tesla getting out in front of that reality has kept them competitive in the battery-electric-vehicle business.

As we've been saying for quite a while now, Mr. Musk saw something a couple years ago that led him to a) the price cuts and production efficiencies that are proving crucial to survival in not just EV's but in the wider automobile market as well. Volkswagen talking about possibly laying off 30,000 of their German employees was inconceivable five years ago. And b) whatever it was he saw also led to the emphasizing of things they been working on for a decade: robotaxis and AI and supercomputers and robots.

So, for patient reader, having read this far, here's my two cents worth: 

Deliveries will be in-line this month and the next few months and the robotaxi unveil will be written up as a bust. The people who write the headlines hate Elon Musk and nothing he does will ever, ever change that. The financial question is: will the self-driving taxis be contributing to sales and earnings in two years?

Based on the fact that Waymo is now booking 100,000 rides per week I think the answer is yes but your mileage may vary. To repeat the comment on the April earnings call transcript:

Personally I think Musk is going to pull it off, but that's just me—perhaps informed by posting on the company and its stock since before the June 2010 share flotation (which, adjusted for the 5:1 and 3:1 stock splits gives a $1.133 IPO price)—however, there are plenty of other opinions to choose from if one doesn't care for that one....

In late pre-market action the stock is trading up $1.17 (+0.45%) at $262.80 after closing Monday at $261.63 also up $1.17 (+0.45%).

Media: "The Prophets - Marshall McLuhan"

A couple years ago I intro'd a post on McLuhan, "The Oracle of Mass Media: Remembering Marshall McLuhan", with:

Sometimes I think McLuhan could see the future:

“World War III is a guerrilla information war with no 

division between military and civilian participation.”

– Marshall McLuhan (1970), Culture is Our Business, p. 66 (HT: AZ Quotes)

And from The Free Press, the first of their Saturday series, The Prophets, March 2:

Introducing a New Saturday Series: The Prophets

Meet the messengers from the past who saw the future and explain our world today. First up: Marshall McLuhan. 

Emily Yoffe, senior editor at The Free Press, here. Last year while scrolling on X, I came across a post that caught my attention. It was a short clip of an interview with Marshall McLuhan, a Canadian philosopher and English professor. I had vague memories of McLuhan—who died in 1980—as a semi-famous intellectual of his day. The young writer who posted the clip, Benjamin Carlson, promised it was “one of the most mind-bending riffs on identity in the digital age I’ve ever heard.” 

As I listened, I got a rush from the prescience of McLuhan’s words. It was as if this man, now more than 40 years dead, was a messenger from the future who had been sent to our past, and now was explaining to us the world we live in today. 

I wanted to know more about what McLuhan foresaw, and the fascinating essay below from Benjamin Carlson is the result. 

Meanwhile, we at The Free Press started talking about whether there are other McLuhans from the past, people who predicted our current moment. That is, people whose words, work, and life illuminated something essential about the increasingly strange times we find ourselves in today. 

That’s how our new limited series, The Prophets, was born. Every Saturday for the next several weeks, we will bring to you an activist, scientist, writer, or thinker who somehow knew what would happen years or decades after their deaths. None of them were right about everything. Indeed, some were significantly wrong about significant things. But they all saw something important coming. 

And because every prophet deserves their own brilliant scribe, we asked some of our favorite writers to bring you the stories of our prophets. Many of these writers have been experiencing—and covering—the very issues the prophets predicted. 

We hope our new series delights, inspires, and occasionally even infuriates you. Ultimately, though, we think these essays make our times easier to understand—and will help you feel less alone in our crazy, fractured world.

You are reading this essay because Marshall McLuhan, in some sense, planned for it.

In the mid-1960s, when he exploded onto the American pop-cultural scene—which was also planned; more about this in a moment—he decided to embrace television.

This was not because he was born for TV. He was too “hot” for the medium (in the McLuhanesque sense of being uptight), as he famously said of Richard Nixon about his presidential debate loss to the “cool” John F. Kennedy.

Rather, McLuhan used TV because he, more than anyone of his time, understood how electric technology was transforming society and, even then, had already transformed it.

He knew that whether he liked it or not, TV was where he had to be. His mission was to wake people up—to “needle the somnambulists,” as he put it. (This one phrase gives you a flavor of his style: deadpan and unabashedly esoteric.) If TV was as revolutionary as he understood it to be, his message had to run on TV to have any chance of influencing the present—and being revisited in the future.

I first stumbled upon Marshall McLuhan a year ago on YouTube. Within a minute or two of watching a clip, I was amazed: here was a man who, in 1977, seemed to be describing the dislocating experience of living in 2023, and he did so with more insight than people living today. That the words were coming from a craggy, mustachioed man in a rumpled suit only enhanced the eerie feeling. Here was a professor-as-prophet. McLuhan says, in part, to his TV host: 

Everybody has become porous. They’ve got the light and the messages go right through us. By the way, at this moment we are on the air, and on the air we do not have any physical body. When you’re on the telephone, or on radio, or on TV, you don’t have a physical body. You’re just an image on the air. When you don’t have a physical body you’re a discarnate being. You have a very different relation to the world around you. And this, I think, has been one of the big effects of the electric age. It has deprived people, really, of their private identity. Everybody tends to merge his identity with other people at the speed of light. It’s called being mass man. 

I shared the clip on Twitter and it went viral with more than 6 million views —including both of Twitter’s father figures, Jack Dorsey and Elon Musk—suggesting I was not alone in my reaction. 

Something about Marshall McLuhan has struck a chord—has resonance, as he liked to say. (He believed the electric age was fundamentally acoustic; a confusing concept, but roughly meaning that everything occurs simultaneously.) The long-deceased Canadian scholar—he died in 1980—who first blew people’s minds in the mid-1960s, is blowing people’s minds again.

This is not because he predicted specific devices or apps, but because he understood, with a poet’s intuition, the effects of the electronic age on human psychology.

He did not get everything right. But those things he did get right stemmed from his deep insight into the shift from the mechanical age (of which print was a part) to the electronic era, whose implications are still unfolding....

....MUCH MORE

If interested see also: 

• McLuhan Nailed It: "America’s New Post-Literate Epistemology"
• RAND Corporation on Fourth Industrial Revolution Technologies And Influence Campaigns/Information Warfare

"The Longest Unprofitable Short I’ve Ever Seen"

Have I mentioned our general "Don't Short Tesla" admonition?
From Institutional Investor, August 18:

Betting against Elon Musk’s Tesla
is the widow-maker trade of 2020

In July 20, Tesla did something that no company had ever done before: It saw the volume of bets made by its “haters” — the term co-founder Elon Musk uses to describe investors who bet that the electric-car company’s stock will fall — cross $20 billion.

To this day, those bets are a painful reminder that the “haters” have been consistently wrong. The company’s shares sped to a new high on August 17 — rising 11 percent from the record set the previous day of trading — to close at about $1,836 each. Their climb continued Tuesday to an unprecedented $1,887.

“It’s a picture of the perseverance of the short-sellers that are left,” says Ihor Dusaniwsky, managing director of predictive analytics at S3 Partners, a financial-analysis company that shared data with Institutional Investor. The magnitude of losses short-sellers have endured is “just absurd,” he says, compared to bets against other companies, with Tesla “by far the longest unprofitable short I’ve ever seen.”

Yet Dusaniwsky saw no mad rush for the exits as Tesla’s shares skyrocketed almost 300 percent on the year to close at a then-record high of $1,643 on July 20. With the company’s market value soaring past price targets set by Wall Street analysts, he says, “it’s by far and away the largest short.”
Why?

It’s not short-sellers covering their positions that’s been driving up Tesla’s stock price, according to Mark Spiegel, who runs a small hedge fund that’s short the company. But he does have other suspicions.

“Some entity — I don’t know who — was executing a strategy of buying massive quantities of out-of-the-money call options,” forcing call-option sellers to buy enough stock to hedge their exposure, Spiegel, founder of hedge fund firm Stanphyl Capital Partners, suggested by phone. “This thing just kind of spiraled its way up.”

Another driver has been widespread enthusiasm among individual investors buying Tesla shares this year through trading apps like Robinhood, according to Spiegel. “There was this whole gambling mentality that took place,” he says, “partially because people got stuck at home” during the pandemic with stimulus checks to spend.

While huge losses have forced some investors to cover their bearish bets against the Musk-led carmaker, a dramatic short squeeze did not materialize in July, according to Dusaniwsky. He saw the percentage of shorted shares relative to Tesla’s publicly traded total hold about steady last month, even as the pain inflicted by its soaring stock price intensified....

....MUCH MORE

Related:
Manipulating Equities Through The Use of Derivatives
Capital Markets: All Is Unfolding According To Plan
"FINAL REPORT ON STOCK INDEX FUTURES AND CASH MARKET ACTIVITY DURING OCTOBER 1987 TO THE U.S. COMMODITY FUTURES TRADING COM'MISSION"

Indonesia's President Jokowi ‘confident’ Tesla Will Invest (TSLA)

We've been pitching Indonesia for a while. The introduction to June 2021's "Indonesia and Coal":

An indigenous battery industry would capture some of the value-added from the country's world-class nickel resource. Elon Musk went to New Caledonia to secure a supply. He should have gone to Indonesia. And maybe built a gigafactory.

As we saw back in April regarding Sulawesi:

Tesla Inc.’s Elon Musk has said nickel is the metal that concerns him most as he looks to scale up battery-cell production, and last year he promised a “giant contract” for miners to encourage production. Without new sources of supply, the robust EV industry could face a critical shortage within a few years.....

Capture some of the downstream profits and you have a bit more wiggle room to deal with the coal.

Now we have two stories via Mining.com. First up, the headliner from Reuters, February 1:

Indonesian President Joko Widodo is confident Tesla Inc will finalize a deal to invest in a production facility in his country, having offered the US car maker incentives ranging from tax breaks to a concession to mine nickel.

Southeast Asia’s largest economy has been wooing Tesla to invest in battery and car manufacturing since 2020, seeking to leverage its rich reserves of nickel ore, which can be processed for use in EV batteries.

The president, widely known as Jokowi, has held talks with Tesla Chief Executive Elon Musk twice, meeting him in person at his SpaceX facility in Texas last year and a telephone call, to try to secure a deal.

“I said to him that if you invest in Indonesia, I will give the concession of nickel,” Jokowi said, referring to Indonesia’s offer of a mining concession.

Other incentives include tax breaks and a subsidy scheme on EV purchases to build a market for Tesla in the world’s fourth most populous country, he said, adding that his ministers were finalizing the subsidies.

The president said he was “confident” Indonesia had the edge over other countries Tesla might be considering for investment because it has the largest nickel reserves and a big domestic market.

Jokowi said it was up to Tesla to take up the offer to mine nickel, underlining that Indonesia is open to investment in the EV battery and electric car supply chain.

“If they want to start from EV battery, it’s OK,” he added....

....MUCH MORE

And February 6:

Like Musk, nickel-rich Indonesia has high electric vehicle ambitions

Armed with the world’s largest reserves of nickel and a ban on the export of nickel ore, Indonesia is making itself indispensable for the electric vehicle industry, which uses the metal extensively.

In just three years, Indonesia has signed more than a dozen deals worth more than $15 billion for battery and electric vehicle production in the country with manufacturers including Hyundai Motor, LG Group and Foxconn.

Next up is the mammoth Tesla Inc, the world’s most valuable automaker. President Joko Widodo has pulled out all the stops to convince CEO Elon Musk to manufacture electric vehicles or batteries in the sprawling Southeast Asian archipelago.

“I’m very confident this industry will grow quickly, will grow very fast,” the president, popularly known as Jokowi, said in an interview last week.

Indonesia has a total of 21 million tonnes in proven reserves with nickel content, according to the US Geological Survey. That is nearly a quarter of the world’s reserves.

The country mined 1.4 million tonnes of nickel in January-November last year, according to the International Nickel Study Group. That’s far ahead of the second-biggest producer, the Philippines, which mined 290,000 tonnes in the same period, and more than double Indonesia’s output of 606,000 tonnes in 2018.

Jokowi banned exports of nickel ore in 2020, but allowed export of higher value nickel products – forcing companies to process and manufacture onshore.

Indonesia’s exports of processed nickel then swelled to more than $30 billion in 2022 from about $1 billion in 2015.

Indonesia is expected to account for half of the global production increase in nickel between 2021 and 2025, according to the International Energy Agency, as demand for electric vehicles surges. Each vehicle uses up to 40 kg of nickel....

....MUCH MORE
Previously on Indonesia:

• "As Supply Chains Shift, Indonesia Should Get a Serious Look".
• "Tesla Supplier CATL To Invest $6 Billion In Indonesia Battery Project"
• Indonesia’s PT Vale, China Firm Sign $2bn Nickel Plant Deal
• UAE Makes A Big Bet On Indonesia

 And very related:

• "Get ready for a new wave of resource nationalism"
• Copper: "Peru's natural resources:—CIA-linked US ambassador meets with mining and energy ministers to talk 'investments'"
• "Rio Tinto–backed firm InoBat plans to build battery gigafactory in Serbia"....Although the story of why the deposit has not been mined is complicated (see links in intro if interested), one thing is certain, these resource-rich little countries want to be left with something much higher up the value chain than just a hole in the ground.