The growth in demand for Tesla's cars has slowed to a crawl

(MENAFN- ValueWalk) Q2 2021 hedge fund letters, conferences and more

We remain short the biggest bubble in modern stock market history, Tesla Inc. (TSLA), which currently has a diluted market cap of nearly $770 billion, 85% of the $903 billion (non-diluted) combined market caps of Toyota ($251 billion), VW ($166 billion), Daimler ($96 billion), GM ($82 billion), BMW ($66 billion), Stellantis ($60 billion), Ford ($60 billion), Honda ($55 billion), Hyundai ($44 billion) and Nissan ($23 billion), despite annualized sales for Tesla of around 800,000 cars a year to their over 50 million. The core points of our Tesla short thesis are:

Dov Gertzulin's DG Capital is having a strong year. According to a copy of the hedge fund's letter to investors of its DG Value Partners Class C strategy, the fund is up 36.4% of the year to the end of June, after a performance of 12.8% in the second quarter. The Class C strategy is Read More

• Tesla has no“moat” of any kind; i.e., nothing meaningfully proprietary in terms of electric car technology, while existing automakers—unlike Tesla­—have a decades-long“experience moat” of knowing how to mass-produce, distribute and service high-quality cars consistently and profitably, as well as the ability to subsidize losses on electric cars with profits from their conventional cars.
• Excluding sunsetting emission credit sales Tesla is barely profitable
• Growth in sequential unit demand for Tesla's cars has slowed to a crawl
• Elon Musk is a pathological liar who under the terms of his SEC settlement cannot deny having committed securities fraud .

In July, thanks to a suspiciously high gross margin and very“non-growthy” reduced R & D expense, Tesla reported an improved Q2 2021, claiming to have earned $788 million excluding $354 million of pure-profit emission credit sales (excluded because they'll almost entirely disappear some time next year when other automakers will have enough EVs of their own ). Taken at face value (a dubious assumption), this amounts to earnings of .70/share, which annualizes to $2.80/share. An auto industry PE multiple of 12x would thus make TSLA worth around $34/share (admittedly, considerably more than the“$0” I previously expected). A“growth multiple” of 20x would value it at $56, approximately a 92% discount to July's closing price of $687. (Before you tell me that a 67% premium to the industry's PE ratio isn't high enough, keep in mind that Tesla's actual Q1 to Q2 sequential unit growth was only 16,000 cars, a rounding error for any real car company. In fact, one could argue that Tesla's multiple should carry a discount, considering the massive legal and financial liabilities continually generated by its pathologically lying CEO, speaking of which…

On the earnings call Musk said he'll skip most future calls ; will he get out before it all falls apart again ? Also on the call, Musk admitted that the so-called“Full Self Driving” he's been selling for five years doesn't work, something which in a saner regulatory environment is called“consumer fraud.” Will there be major write-downs and refunds given, killing the company's slight“profitability”?

For several years now, one of the favorite hype stories from Tesla fans has been“the China market .” Sadly, that government's love affair with Tesla is over and Q2 Tesla sales there were down 10% from Q1, while its EV market share declined from around 17% to 11%. In fact, because of faltering Chinese sales growth, in July Tesla was forced to introduce a much cheaper base Model Y (which will undoubtedly have extremely low margins) and slash prices on the Model 3 . Despite once claiming it would need multiple Chinese factories, Tesla now has so much excess capacity there that it's shipping even more cars to Europe and Australia (where it was also forced to slash prices ). To be clear, because of the price cuts I fully expect Tesla's Q3 Chinese sales to bounce from the level of Q2, but so what if there are minimal (or no) profits to accompany that bounce?

Another favorite Tesla hype story has been built around so-called“proprietary battery technology.” In fact though, Tesla has nothing proprietary there—it doesn't make them, it buys them from Panasonic , CATL and LG , a nd it's the biggest liar in the industry regarding the real-world range of its cars. A recent story has been the supposedly imminent arrival of a new“4680” design that Teslemmings and their sell-side Wall Street shills claim will allow Tesla to“leapfrog” the batteries of its competitors. Sadly for them though, in a June interview with the CEO of Tesla's primary battery supplier Panasonic, we learned that not only are these cells still in the“production testing” phase (and thus nowhere near ready for commercial production), but that if they *do* work, Panasonic will sell them to anyone. And then news broke that Tesla extended its current battery supply deal with CATL until the year 2025. If those great proprietary 4680s were coming any time soon, why would Tesla need to do that? Obviously it wouldn't, which explains why in the Q2 earnings press release (and on the call) Musk admitted they don't know how long (if ever) it will take to get those 4680 batteries into production. Oh well… I guess it's on to the next nonsensical stock pump!

Meanwhile, the quality of the Model Y—is awful , and that car faces current (or imminent) competition from the much better built electric Audi Q4 e-tron , BMW iX3 , Mercedes EQA , Volvo XC40 Recharge, Volkswagen ID.4 , Ford Mustang Mach E , Nissan Ariya , Hyundai Ioniq 5 and Kia EV6 . And Tesla's Model 3 now has terrific direct“sedan competition” from Volvo's beautiful Polestar 2 and the premium version of Volkswagen's ID.3 (in Europe), and later this year from the BMW i4 , plus multiple local competitors in China.

And in the high-end electric car segment worldwide the Audi e-tron and Porsche Taycan outsell the Models S & X (and the newly updated Tesla models with their dated exteriors and idiotic shifters & steering wheels won't change this), while the spectacular new Mercedes EQS and Audi e-Tron GT make any Teslas look like a Yugo.

And oh, the joke of a“pickup truck” Tesla previewed in 2019 (and still hasn't shown in production-ready form) won't be much of“growth engine” either, as it will enter a dogfight of a market ; in fact, in May Ford formally introduced its terrific new all-electric F-150 Lightning and it got 100,000 pre-orders in less than a month, while the semi-truck has now been delayed until at least 2022 (and possibly forever, as it depends on the aforementioned“4680” batteries that don't exist).

And now the Tesla“autonomy story”—presumably responsible for hundreds of billions of dollars of its market cap—is falling apart. In May there was yet another deadly“Autopilot” crash (now made even more deadly via the removal of radar sensors —for all known Tesla deaths see TeslaDeaths.com ), Consumer Reports calls it outright dangerous , and the 2021 overview from Guidehouse Insights rates Tesla dead last among autonomous competitors:

In fact, now Tesla itself admits it may never achieve full autonomy , as does Musk personally :

In reality, that's just the Fraudster-in-Chief's whining excuse for not using LiDAR, radar and high-definition maps in his cars (unlike the rest of the industry). So for once I agree with Musk: with the current (and promised future) Tesla hardware suite, none of its cars will ever achieve full autonomy. Yet that doesn't stop him from charging $10,000 for a product he explicitly calls“Full Self Driving.” Where are the FTC and SEC on this? As the Wall Street Journal reported: nowhere.

Meanwhile, Tesla quality ranks 30th among 33 brands in the latest J.D. Power survey…

…and second-to-last in the latest Consumer Reports reliability survey :

…while the most recent What Car? survey shows similar results with Tesla finishing #29 out of 31, and now quality is slipping in China .

Regarding safety, as noted earlier in this letter, Tesla continues to deceptively sell its hugely dangerous so-called“Autopilot” system, which Consumer Reports has completely eviscerated ; God only knows how many more people this monstrosity unleashed on public roads will kill, despite the NTSB condemning it. Elsewhere in safety, in 2020 the Chinese government forced the recall of tens of thousands of Teslas for a dangerous suspension defect the company spent years trying to cover up , and now Tesla has been hit by a class-action lawsuit in the U.S. for the same defect. Tesla also knowingly sold cars that it knew were a fire hazard and did the same with solar systems , and after initially refusing to do so voluntarily, it was forced to recall a dangerously defective touchscreen . In other words, when it comes to the safety of customers and innocent bystanders, Tesla is truly one of the most vile companies on Earth. Meanwhile the massive number of lawsuits of all types against the company continues to escalate.

(note: these links are regularly updated)

• Porsche Taycan
• Porsche Taycan Cross Turismo
• Porsche Macan Electric SUV Officially Coming in 2023
• Volkswagen ID.3 Headlines VW's Electrified Future
• Volkswagen ID.4 Electric SUV Available Now in Europe & China, Spring 2021 in U.S.
• Volkswagen ID 6 to arrive with 435-mile range in 2023
• VW's Cupra brand counts on performance for Born EV
• Cupra, VW brand to get entry-level battery-powered cars
• Audi e-tron: Electric Has Gone Audi
• Audi e-tron Sportback Whispers Electric Luxury
• Audi E-tron GT flagship EV guns for Tesla's Model S
• Audi attacks EV mass market with Q4 e-tron
• Audi Q6 e-tron confirmed for 2022 launch
• Audi previews long-range A6 e-tron EV
• Audi TT set to morph into all-electric crossover
• Hyundai Ioniq 5 Kicks Off EV Lineup In Eye-Catching Style
• Hyundai Kona Electric
• Genesis says first EV will have sporty acceleration and a generous range
• Genesis Electric Luxury SUV Coming in 2022
• Kia Niro Electric: 239-mile range & $39,000 before subsidies
• Kia EV6: Charging towards the future
• Jaguar's All-Electric i-Pace
• Jaguar to become all-electric brand; Land Rover to Get 6 electric models
• Daimler will invest more than $47B in EVs and be all-electric ready by 2030
• Mercedes EQS: the first electric vehicle in the luxury class
• Mercedes EQC electric SUV available now in Europe & China
• Mercedes-Benz Launches the EQV, its First Fully-Electric Passenger Van
• Mercedes-Benz unveils EQA electric SUV with 265 miles of range and ~$46,000 price
• Mercedes adds boxy-styled EQB to its EV lineup
• Mercedes preps debut of EQE EV, a Tesla Model S rival
• Ford Mustang Mach-E Available Now
• Ford F-150 Lightning electric pick-up available 2022
• Ford set to launch 'mini Mustang Mach-E' electric SUV in 2023
• Ford to offer EV versions of Explorer, Aviator, 'rugged SUVs'
• Volvo Polestar 2
• Volvo XC40 Recharge
• Volvo C40 electric sedan to challenge Tesla Model 3, VW ID3
• Polestar 3 will be an electric SUV that shares its all-new platform with next Volvo XC90
• Chevy updates, expands Bolt EV family as price drops
• Cadillac All-Electric Lyriq Available Spring 2022
• GMC ALL-ELECTRIC SUPERTRUCK HUMMER EV
• GM to build electric Silverado in Detroit with estimated range of more than 400 miles
• GMC to launch electric Hummer SUV in 2023
• GM will offer 30 all-electric models globally by 2025
• GM Launches BrightDrop to Electrify the Delivery of Goods and Services
• Nissan vows to hop back on EV podium with Ariya
• Nissan LEAF e+ with 226-mile range is available now
• BMW leads off EV offensive with iX3
• BMW expands EV offerings with iX tech flagship and i4 sedan
• 2022 BMW iX1 electric SUV spied
• BMW 3-series EV coming
• Rivian electric pickup truck- funded by Amazon, Ford, Cox & others- is on the way
• Renault upgrades Zoe electric car as competition intensifies
• Renault Dacia Spring Electric SUV
• Renault to boost low-volume Alpine brand with 3 EVs
• Renault's electric Megane will debut new digital cockpit
• Stellantis to invest more than $35.5B to electrify lineup; Dodge, Ram vehicles to play major role
• Peugeot e-208
• PEUGEOT E-2008: THE ELECTRIC AND VERSATILE SUV
• Peugeot 308 will get full-electric version
• Citroen compact EV challenges VW ID3 on price
• Maserati to launch electric sports car
• Mini Cooper SE Electric
• Toyota steps up electric vehicle push with plans for 15 new models
• Mazda extends MX name to new MX-30 electric crossover
• Opel sees electric Corsa as key EV entry
• 2021 Vauxhall Mokka revealed as EV with sharp looks, massive changes
• Skoda Enyaq iV electric SUV offers range of power, battery sizes
• Electric Skoda Enyaq coupe to muscle-in on Tesla Model 3
• Skoda plans small EV, cheaper variants to take on French, Korean rivals
• Nio to launch in five more European countries after Norway
• BYD will launch electric SUV in Europe
• The Lucid Air Achieves an Estimated EPA Range of 517 Miles on a Single Charge
• Bentley converting to electric-only brand
• Rolls-Royce is working on EV called 'Silent Shadow'
• Aston Martin will build electric vehicles in UK from 2025
• Meet the Canoo, a Subscription-Only EV Pod Coming in 2021
• Two new electric cars from Mahindra in India; Global Tesla rival e-car soon
• Former Saab factory gets new life building solar-powered Sono Sion electric cars
• Foxconn aims for 10% of electric car platform market by 2025

• How VW Group plans to dominate China's EV market
• VW Goes Head-to-Head With Tesla in China With New ID.4 Crozz Electric SUV
• Volkswagen's ID.3 EV to be produced by JVs with SAIC, FAW in 2021
• 2022 VW ID.6 Revealed With Room For Seven And Two Electric Motors
• China-built Audi e-tron rolls off production line in Changchun
• Audi Q2L e-tron debuts at Auto Shanghai
• Audi will build Q4 e-tron in China
• Audi in cooperation company for local electric car production with FAW
• FAW Hongqi starts selling electric SUV with 400km range for $32,000
• FAW (Hongqi) to roll out 15 electric models by 2025
• BYD goes after market left open by Tesla with four cheaper models for budget-conscious buyers
• BYD said to launch premium NEV brand 'Dolphin' in 2022
• Top of Form
• Bottom of Form
• Daimler & BYD launch DENZA electric vehicle for the Chinese market
• Geely announces premium EV brand Zeekr
• Geely, Mercedes-Benz launch $780 million JV to make electric smart-branded cars
• Mercedes styled Denza X 7-seat electric SUV to hit market
• Mercedes 'makes mark' with China-built EQC
• BMW, Great Wall to build new China plant for electric cars
• BAIC Goes Electric, & Establishes Itself as a Force in China's New Energy Vehicle Future
• BAIC BJEV, Magna ready to pour RMB2 bln in all-electric PV manufacturing JV
• Toyota, BYD will jointly develop electric vehicles for China
• Lexus to launch EV in China taking on VW and Tesla
• GAC Aion about to start volume production of 1,000-km range AION LX
• GAC Toyota to ramp up annual capacity by 400,000 NEVs
• GAC kicks off delivery of HYCAN 007 all-electric SUV
• Nio – Ready For Tomorrow
• Xpeng Motors sells multiple EV models
• SAIC-GM to build Ultium EV platform in Wuhan
• Chevrolet Menlo Electric Vehicle Launched in China
• Buick Launches VELITE 6 PLUS MAV Electric Vehicle in China
• Buick Velite 7 EV And Velite 6 PHEV Launch In China
• Dongfeng launches the all-electric Voyah 
• PSA to accelerate rollout of electrified vehicles in China
• SAIC, Alibaba-backed EV brand IM begins presale of first model L7
• Hyundai Motor Transforming Chongqing Factory into Electric Vehicle Plant
• Polestar said to plan China showroom expansion to compete with Tesla
• Jaguar Land Rover's Chinese arm invests £800m in EV production
• Renault reveals series urban e-SUV K-ZE for China
• Renault & Brilliance detail electric van lineup for China
• Renault forms China electric vehicle venture with JMCG
• Honda Debuts New Everus VE-1 All-Electric SUV, But Only For China
• Honda to roll out over 20 electric models in China by 2025
• Geely launches new electric car brand 'Geometry' – will launch 10 EVs by 2025
• Geely, Foxconn form partnership to build cars for other automakers
• Fiat Chrysler, Foxconn Team Up for Electric Vehicles
• Baidu to create an intelligent EV company with automaker Geely
• Leapmotor starts presale of C11 electric SUV on Jan. 1 2021
• Changan forms subsidiary Avatar Technology to develop smart EVs with Huawei, CATL
• WM Motors/Weltmeister
• Chery
• Seres
• Enovate
• Evergrande Hengchi
• China's cute Ora R1 electric hatch offers a huge range for less than US$9,000
• Singulato
• JAC Motors releases new product planning, including many NEVs
• Seat to make purely electric cars with JAC VW in China
• Iconiq Motors
• Hozon
• Aiways
• Skyworth Auto
• NEVS launches electric-car output with Saab 9-3 platform in China
• Youxia
• CHJ Automotive begins to accept orders of Leading Ideal ONE
• Infiniti to launch Chinese-built EV in 2022
• Human Horizons
• Chinese smartphone giant Xiaomi to launch electric car business with $10 billion investment
• Lifan Technology to roll out three EV models with swappable batteries in 2021

• Waymo ranked top & Tesla last in Guidehouse leaderboard on automated driving systems
• Tesla has a self-driving strategy other companies abandoned years ago
• Fiat Chrysler, Waymo expand self-driving partnership for passenger, delivery vehicles
• Waymo and Lyft partner to scale self-driving robotaxi service in Phoenix
• Volvo, Waymo partner to build self-driving vehicles
• Jaguar and Waymo announce an electric, fully autonomous car
• Renault, Nissan partner with Waymo for self-driving vehicles
• Cruise and GM Team Up with Microsoft to Commercialize Self-Driving Vehicles
• Cadillac Super Cruise™ Sets the Standard for Hands-Free Highway Driving
• Honda Joins with Cruise and General Motors to Build New Autonomous Vehicle
• Honda launching Level 3 autonomous cars
• Volkswagen moves ahead with Autonomous Driving R & D for Mobility as a Service
• Volkswagen teams up with Microsoft to accelerate the development of automated driving
• VW taps Baidu's Apollo platform to develop self-driving cars in China
• Ford's electric Mustang will offer hands-free driving technology in 2021
• ARGO AI AND FORD TO LAUNCH SELF-DRIVING VEHICLES ON LYFT NETWORK BY END OF 2021
• Hyundai and Kia Invest in Aurora
• Toyota, Denso form robotaxi partnership with Aurora
• Aptiv and Hyundai Motor Group complete formation of autonomous driving joint venture
• Amazon's Zoox unveils electric robotaxi that can travel up to 75 mph
• Nvidia and Mercedes Team Up to Make Next-Gen Vehicles
• Daimler's heavy trucks start self-driving some of the way
• SoftBank, Toyota's self-driving car venture adds Mazda, Suzuki, Subaru Corp, Isuzu Daihatsu 
• Continental & NVIDIA Partner to Enable Production of Artificial Intelligence Self-Driving Cars
• Mobileye and Geely to Offer Most Robust Driver Assistance Features
• Mobileye Starts Testing Self-Driving Vehicles in Germany
• Mobileye and NIO Partner to Bring Level 4 Autonomous Vehicles to Consumers
• Lucid Chooses Mobileye as Partner for Autonomous Vehicle Technology
• Nissan gives Japan version of Infiniti Q50 hands-free highway driving
• Hyundai to start autonomous ride-sharing service in Calif.
• Pony.ai raises $462 million in Toyota-led funding
• Baidu kicks off trial operation of Apollo robotaxi in Changsha
• Toyota to join Baidu's open-source self-driving platform
• Baidu, WM Motor announce strategic partnership for L3, L4 autonomous driving solutions
• Volvo will provide cars for Didi's self-driving test fleet
• BMW and Tencent to develop self-driving car technology together
• BMW, NavInfo bolster partnership in HD map service for autonomous cars in China
• FAW Hongqi readies electric SUV offering Level 4 autonomous driving
• Tencent, Changan Auto Announce Autonomous-Vehicle Joint Venture
• Huawei teams up with BAIC BJEV, Changan, GAC to co-launch self-driving car brands
• GAC Aion, DiDi Autonomous Driving to co-develop driverless NEV model
• BYD partners with Huawei for autonomous driving
• Lyft, Magna in Deal to Develop Hardware, Software for Self-Driving Cars
• Xpeng releases autonomous features for highway driving
• Nuro Becomes First Driverless Car Delivery Service in California
• Deutsche Post to Deploy Test Fleet Of Fully Autonomous Delivery Trucks
• ZF autonomous EV venture names first customer
• Magna's new MAX4 self-driving platform offers autonomy up to Level 4
• Groupe PSA's safe and intuitive autonomous car tested by the general public
• Mitsubishi Electric to Exhibit Autonomous-driving Technologies in New xAUTO Test Vehicle
• Apple acquires self-driving startup Drive.ai
• Momenta – Building Autonomous Driving Brains
• JD.com Delivers on Self-Driving Electric Trucks
• NAVYA Unveils First Fully Autonomous Taxi
• Fujitsu and HERE to partner on advanced mobility services and autonomous driving

• Panasonic (making deals with multiple automakers)
• LG
• Samsung
• SK Innovation
• Toshiba
• CATL
• BYD
• Volkswagen to Build Six Electric-Vehicle Battery Factories in Europe
• How GM's Ultium Battery Will Help It Commit to an Electric Future
• Ultium (General Motors & LG joint venture)
• GM to develop lithium-metal batteries with SolidEnergy Systems
• Ford, SK Innovation announce EV battery joint venture
• BMW & Ford Invest in Solid Power to Secure All Solid-State Batteries for Future Electric Vehicles
• Stellantis And Total Officially Launch Automotive Battery Cell Company
• Renault signs EV battery deals with Envision, Verkor for French plants
• Nissan to build $1.4bn EV battery plant in UK with Chinese partner
• UK companies AMTE Power and Britishvolt plan $4.9 billion investment in battery plants
• Toyota's game-changing solid-state battery en route for 2021 debut
• Verkor
• Farasis
• Microvast
• Akasol
• Cenat
• Wanxiang
• Eve Energy
• Svolt
• Romeo Power
• ProLogium
• Hyundai Motor developing solid-state EV batteries
• Daimler
• Morrow

• Electrify America is spending $2 billion building a high-speed U.S. charging network
• GM, EVgo partner to expand U.S. charging network
• Circle K Owner Plans Electric-Car Charging Push in U.S., Canada
• 191 U.S. Porsche dealers are installing 350kw chargers
• ChargePoint to equip Daimler dealers with electric car chargers
• GM and Bechtel plan to build thousands of electric car charging stations across the US
• Ford introduces 12,000 station charging network, teams with Amazon on home installation
• Shell Plans To Deploy Around 500,000 Charging Points Globally By 2025
• Petro-Canada Introduces Coast-to-Coast Canadian Charging Network
• Volta is rolling out a free charging network
• Ionity Europe
• E.ON and Virta launch one of the largest intelligent EV charging networks in Europe
• Volkswagen plans 36,000 charging points for electric cars throughout Europe
• Smatric has over 400 charging points in Austria
• Allego has hundreds of chargers in Europe
• PodPoint UK charging stations
• BP Chargemaster/Polar is building stations across the UK
• Instavolt is rolling out a UK charging network
• Fastned building 150kw-350kw chargers in Europe
• Aral To Install Over 100 Ultra-Fast Chargers In Germany
• Deutsche Telekom launches installation of charging network for e-cars
• Total to build 1,000 high-powered charging points at 300 European service-stations
• NIO teams up with China's State Grid to build battery charging, swapping stations
• Volkswagen-based CAMS launches supercharging stations in China
• Volkswagen, FAW Group, JAC Motors, Star Charge formally announce new EV charging JV
• BMW to Build 360,000 Charging Points in China to Juice Electric Car Sales
• BP, Didi Jump on Electric-Vehicle Charging Bandwagon
• Evie rolls out ultrafast charging network in Australia
• Evie Networks To Install 42 Ultra-Fast Charging Sites In Australia

• Panasonic
• Samsung
• LG
• BYD
• AES + Siemens (Fluence)
• GE
• Bosch
• Hitachi ABB
• Toshiba
• Saft
• Johnson Contols
• EnerSys
• SOLARWATT
• Schneider Electric
• Sonnen
• Kyocera
• Generac
• Kokam
• NantEnergy
• Eaton
• Nissan
• Tesvolt
• Kreisel
• Leclanche
• Lockheed Martin
• EOS Energy Storage
• ESS
• UET
• electrIQ Power
• Belectric
• Stem
• ENGIE
• Redflow
• Renault
• Primus Power
• Simpliphi Power
• redT Energy Storage
• Murata
• Bluestorage
• Adara
• Blue Planet
• Tabuchi Electric
• Aggreko
• Orison
• Moixa
• Powin Energy
• Nidec
• Powervault
• Kore Power
• Shanghai Electric
• Schmid
• 24M
• Ecoult
• Innolith
• LithiumWerks
• Natron Energy
• Energy Vault
• Ambri
• Voltstorage
• Cadenza Innovation
• Morrow
• Gridtential
• Villara
• Elestor

Thanks and stay healthy,

Mark Spiegel

MENAFN02082021005205011743ID1102556174

Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.