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Discussion Starter · #1 ·
Wow, since reporting what were amazing Q1 earnings back in April, Tesla stock has fallen 35%, and now Elon says he has a "Super Bad Feeling" about the economy. Considering SpaceX tried to raise $1.7B last week and was met with resistance from the markets, and Tesla's China production for Q2 is likely to be 50% below Q1. Now Musk says Tesla wants to cut 10% of their workforce, which for a growth company, with a lot of development promises hanging out there, it does not seem like the time to be cutting, unless demand is crashing? Are we really in deep trouble with the economy? or is this more related to Tesla, and their growth ambitions? Or is this a smoke screen for something else (trying to weasel out of twitter deal)

For a growth company trading on a valuation more rooted in future growth than current business, major staff cuts and drama are not a good thing.

 

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Discussion Starter · #3 · (Edited)
At the same time he was pissing on people for remote work at Tesla and wanting them back in the office or gone.
He was really hoping some would quit, that way there is no severance. Tesla is shady dealing with employees, nothing new here.

A few points of interest though, Tesla planned in the next year to ramp Berlin and Austin factories, but I had noticed a few things in recent drone videos. Work on the battery plant in Berlin has slowed dramatically the last month, and same in Austin, the last week, work has slowed on the battery cathode plant. Tesla's 4680 program has not yielded many usable battery cells, and has been a drag on initial car production at Austin. I think Tesla is having very serious technical problems with this cell, and the production of it, and it's going to be a while before Panasonic finished their design and production. Panasonic is still looking for land in the USA for a 4680 plant, and so they are 3 years away from production. It takes about a year once they find land for design and permitting, then another 2 years to build a battery plant. So the earliest I see Panasonic having stable, volume (more then their pilot line in Japan) 4680 production is 2025, and that is if nothing goes wrong.

I think we will see Cybertruck and Semi volume production delayed again, at least into 2024.

I think Tesla has real trouble, if they have to delay future product, Model Y is good, but not good enough to compete with all the upcoming competition, and without new product, Tesla risks stagnating their brand.
 

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He was really hoping some would quit, that way there is no severance. Tesla is shady dealing with employees, nothing new here.

A few points of interest though, Tesla planned in the next year to ramp Berlin and Austin factories, but I had noticed a few things in recent drone videos. Work on the battery plant in Berlin has slowed dramatically the last month, and same in Austin, the last week, work has slowed on the battery cathode plant. Tesla's 4680 program has not yielded many usable battery cells, and has been a drag on initial car production at Austin. I think Tesla is having very serious technical problems with this cell, and the production of it, and it's going to be a while before Panasonic finished their design and production. Panasonic is still looking for land in the USA for a 4680 plant, and so they are 3 years away from production. It takes about a year once they find land for design and permitting, then another 2 years to build a battery plant. So the earliest I see Panasonic having stable, volume (more then their pilot line in Japan) 4680 production is 2025, and that is if nothing goes wrong.

I think we will see Cybertruck and Semi volume production delayed again, at least into 2024.

I think Tesla has real trouble, if they have to delay future product, Model Y is good, but not good enough to compete with all the upcoming competition, and without new product, Tesla risks stagnating their brand.
Agree with ya.

My thing with Tesla is that they seem to be awesome at those during production changes/small updates here and there, but they are not good at refreshing the exterior and interior of their cars very easily, without severe disruption... look as S/X that were offline for like a year.

The thing beyond that is people will and do, by nature even, want new looks, new experiences, and their products are getting stale somewhat. I.e. the Model 3/Y look cool for now, but how and when are they going to really make any substantial changes beyond internals, structural battery pack, things that non-Tesla fanboys know about, etc.

That along with their quality is still subpar in assembly and design. Our Model S still even as a new 2022 has issues, feels delicate really. It has a lot of raw metal in spots, aluminum with rough edges in hatch, etc. Lights get water/soap in them, dashboard vibrates/creaks a bit much, the rear seats creak a ton (had to put tape on the metal connectors to stop it), the software is pretty buggy... all the frunks have shrunk lately and are horribly manual and a pain to use/close versus latest EVs coming out, etc.
 

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I certainly agree with Elon about the "bad feeling" on the economy. I graduated from college in the late 70s when we had the peanut farmer president, high inflation and high interest rates. It was not fun, and now I am very close to retirement, and it looks like deja vu.
 

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Discussion Starter · #6 ·
I certainly agree with Elon about the "bad feeling" on the economy. I graduated from college in the late 70s when we had the peanut farmer president, high inflation and high interest rates. It was not fun, and now I am very close to retirement, and it looks like deja vu.
Haha, You think interest rates are high? What do yo think they should be?? I always think of Mortgage interest of 5-7% as normal, lower is artificial to stimulate growth. We have had such a low cost of money for so long, that the economy over revved. I like to think in engine terms, interest rates are the rev limiter, lower the rates and the rpm's increase, but you have to be careful, if rates get too low for too long the engine over revs and throws a rod, that rod is inflation. The inflation we are seeing now is caused by many things, an over revving economy is one of them, another is too much cheap money floating around, and then you have high energy prices, due to supply instability, but the worst thing is the shortage of qualified workers. Hopefully Biden can twist the arm of Saudi to produce more oil, and try to cap the crazy energy inflation. I am just reading Mark Esper's book (A Sacred Oath), and learned a few things about our relationship with Saudi that I did not know. I did not know when Saudi was attacked by Iran's drones a few years ago, we helped them out with their air defenses, and better protected them from further attacks. Saudi owes us one... Mark also talks about geopolitical alliances and why they are so important going forward, this was written before Putin invaded Ukraine, but Esper called out what would happen, and why NATO, our alliances with South Korea, Taiwan, and Japan are so important.
 

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Haha, You think interest rates are high?
They are not high now, but my fear is they will rise significantly. My first home mortgage was 12.5% and that came in the early 80s, which was delayed from the actual inflation start. I have seen the history of how this works, the question is will history repeat.

Yes it is a bad feeling, I am three years from retirement.
 

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Discussion Starter · #8 ·
They are not high now, but my fear is they will rise significantly. My first home mortgage was 12.5% and that came in the early 80s, which was delayed from the actual inflation start. I have seen the history of how this works, the question is will history repeat.

Yes it is a bad feeling, I am three years from retirement.
Certainly there is some risk of further inflation, but the news of job cuts and slowing sales are good news for the overall economy, we need to slow down, and correct financially. It's been too easy to make money. I knew this was coming for a few years, hence shutting down my construction business, and selling my equipment when things were high. The situation for Tesla though is different, Tesla has internal problems unrelated to the economy, and is likely to get hit harder than most.
 
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