A Comprehensive summary on how not only Tesla’s stock price but also Musk’s promises are disconnect from reality:
“With the cost of making batteries stubbornly high, Tesla has relied on stock and bond markets, along with government subsidies, to keep afloat. The company earned a $16-million profit in the first quarter this year selling zero emission air pollution credits to other automakers. Musk cut worker pay and bonuses in this year’s second quarter, which will also help profits.
Unable to count on making money from selling cars, Musk has relied on other strands to weave his growth narrative. Last year he predicted Tesla would have 1 million driverless robotaxis on the road by the end of 2020. Autonomous car experts were, to be kind, skeptical. With six months to go Musk has stopped tweeting about it.
In 2017, he said Tesla would begin producing electric semi-trucks in 2019. Thus far there is no factory, and beyond a couple of prototypes, there are no trucks. Four years ago, he introduced a product called a solar roof — solar cells integrated into attractive roof tiles to generate electricity for the home. In July 2019, he tweeted Tesla was “spooling up production rapidly” to manufacture 1,000 roofs a week by the end of 2019. Apart from some prototype sites, a commercial product business does not exist, and the government-subsidized Buffalo, N.Y., factory where the roofs are supposed to be made has yet to spool.
Early this month, he said, “we will have the basic functionality” for driverless cars that can roam on their own anywhere in the world — by the end of this year. He did not define “basic functionality.”
No industry expert outside Tesla has expressed a belief the company is anywhere close to deploying driverless cars. In fact, a court in Munich, Germany, this month ruled Tesla misleads customers into believing the company’s Autopilot driver-assist technology is more capable than in fact it is. The court banned Tesla from including “full potential for self autonomous driving” and “Autopilot inclusive” in its German advertising. Korea officials are reportedly considering a similar move.
Musk’s unfulfilled claims about Tesla are part of a broader pattern. Another Musk company, Neuralink, is developing computer chips to be implanted in human brains. Musk has said the chip will “solve” brain and spine injuries, and “address epilepsy,” too, in the “near term.” He’s released no data to support such claims, which remain theoretical. Publicly announced plans to build networks of transportation tunnels through Musk’s Boring Co. in Chicago, the Northeast Corridor and elsewhere have been abandoned. Boring Co. is finishing a project that will provide paid rides in Tesla cars through a 4,500-foot tunnel near the Las Vegas Strip.”
Full article by Russ Mitchell:
Hey Andrew, I can support you by sharing how I learnt to read financial statements and create a story behind securities' valuation methods. But I would rely on people who spent time professionally and have the right credentials to educate about investing.
Two of my favourite bubbles have merged! :)
Bitcoin transactions consume close to 100TWh energy per year, most of it produced in coal-fired plants. It will be harder for Musk to pretend it is all about saving the planet.
But it is not completely unexpected - losing market shares, revenues stagnate, can’t make profit selling cars, what is there left to do? Speculate in cryptocurrencies, of course.