Musk endeavours

[odysseus2000]

Howard What we do know is that VW have been hugely successful at making, marketing and selling cars profitably in the recent past. And they have huge sales in China, Europe and many other countries.

We also know that VW has a culture of [DELETED] as clearly shown by Diesel Gate and as such we have to treat all of their statements with suspicion.

Howard
We also know for a fact that Tesla haven't yet produced a car at a profit. True they have benefited hugely from selling EU permits to ICE manufacturers. This has helped their bottom line but may not continue to 2025.

All major BEV manufacturers are increasing their orders for batteries so this may be an area where Tesla becomes less competitive as their share of BEV markets shrinks. We don't know how significant this factor will become but it may be important between now and 2025.

What we will find out soon are Tesla's sales figures for Germany and China in October. Two massive markets where sales volumes are critical.

Tesla are profitable and that profitability is growing.

Battery supplies are not elastic. Tesla directly and indirectly control over 1/3 of all global battery production.

In terms of car sales it is always about total volumes. End markets may be interest but its the total sales that count.

Regards,

Moderator Message:
Please avoid emotional statements that are potentially libelous etc. By all means be objective and rigorously cite facts, but avoid the other bad stuff. thanks, dspp

[odysseus2000]

Or in more simple terms, this is all marketing meaning nothing.

Regards,

Or on more complicated terms, some of this is marketing, cherry picking the best bits to fit an argument, and whilst it means something it should be treated with care by anyone wanting the full story, be that be for investment or knowledge purposes.

Is that really any different from any other motoring company, or indeed any company with a marketing department? No doubt you would be equally analytical and critical of other manufacturers of non-ICE transport.

Company statements come in two forms.

There are statements made in annual and quarterly reports that are factual and for which falsehoods attract very serious penalties.

There are also statements made in such reports and elsewhere that are forward looking and for which there are disclaimers noting that such forward looking statements should be taken as possibly indicative but which may change substantially for many reasons, i.e. they are guesses subject to huge uncertainties.

VW's or Tesla's opining on what may happen should not be given much weight by investors.

Regards,

[dealtn]

VW's or Tesla's opining on what may happen should not be given much weight by investors.

Regards,

As I said, you would be equally analytical and critical of both.

[BobbyD]

https://twitter.com/auto_schmidt/status ... 0575106050

The Company in front is a Volkswagen!

[odysseus2000]

BMW latest results are out, download from here:

https://www.bmwgroup.com/en/investor-re ... ports.html

Nothing too striking in the results at first glance. Mostly they are seeing declines in sales although China is better for them, but still down year on year at -10%, there is a nice table on page 10 showing that the UK and Italy down 33 and 34% are their worst markets.

Unlike VW who are selling more Bentley cars, Rolls Royce sales were down; pits when even rich folk are scaling back purchases.

On page 23 they give an outlook with "slight decrease" being the best they can manage and that is for their work force.

Moderate decreases are predicted for motorcycle sales and return on equity, with significant decrease for everything else although they are forecasting that margins will not go negative.

As always with BMW the big red flag is the balance sheet on page 30 and measures have been taken to strengthen it with cash and equivalents now over 17, an increase from just over 12 billion Euro. Page 11 states that bonds were issued for a total of 9.2 billion, suggesting that 9.2-(17-12) circa 4 billion as already been used.

Regards,

[odysseus2000]

If Ron Barron is correct, the analyst coverage of Tesla has shown in this tweet is not based on company visits, even before such visits became more difficult due to corona:

https://twitter.com/hikingskiing/status ... 15777?s=20

People on Wall Street are sales people.

Regards,

[dealtn]

BMW latest results are out, download from here:


As always with BMW the big red flag is the balance sheet on page 30 and measures have been taken to strengthen it with cash and equivalents now over 17, an increase from just over 12 billion Euro. Page 11 states that bonds were issued for a total of 9.2 billion, suggesting that 9.2-(17-12) circa 4 billion as already been used.

Regards,

Now if you are going to make an argument about cash and refer to the cash flow statement you either do it properly, or at least when shortcutting to make a point, ensure you aren't making a basic error. By referring to bonds issued, but making no reference to bonds redeemed, and thus looking at net bond issuance, you are making a huge mistake in your "suggestion".

If you look at the cash flow statement and see the cash inflow/outflow from financing activities line it is -3.5bio. So using your logic cash and cash equivalents has risen to over 17bn, from over 12bn, despite a negative contribution of -3.5bn from net bond issuance (and other financing activity). That's not a great argument if you are trying to be critical of this company's performance!

I don't have dog in this fight with no investments in any motor manufacturers, be they ICE or BEV (or whatever), incumbent or challenger. But spurious or illogical claims need to be challenged when made by either side.

[odysseus2000]

BMW latest results are out, download from here:


As always with BMW the big red flag is the balance sheet on page 30 and measures have been taken to strengthen it with cash and equivalents now over 17, an increase from just over 12 billion Euro. Page 11 states that bonds were issued for a total of 9.2 billion, suggesting that 9.2-(17-12) circa 4 billion as already been used.

Regards,

Now if you are going to make an argument about cash and refer to the cash flow statement you either do it properly, or at least when shortcutting to make a point, ensure you aren't making a basic error. By referring to bonds issued, but making no reference to bonds redeemed, and thus looking at net bond issuance, you are making a huge mistake in your "suggestion".

If you look at the cash flow statement and see the cash inflow/outflow from financing activities line it is -3.5bio. So using your logic cash and cash equivalents has risen to over 17bn, from over 12bn, despite a negative contribution of -3.5bn from net bond issuance (and other financing activity). That's not a great argument if you are trying to be critical of this company's performance!

I don't have dog in this fight with no investments in any motor manufacturers, be they ICE or BEV (or whatever), incumbent or challenger. But spurious or illogical claims need to be challenged when made by either side.

Thank you for your comments

The BMW financing is interesting. If you look at page 11 they state:

The BMW Group issued bonds for a total amount of € 9.2 billion during the first three quarters of the year, including a Euro benchmark bond, two Panda bonds on the Chinese capital market and a 144a bond on the US capital market. In addition, ABS transactions were issued or prolonged in Germany, the USA, China, Japan, the UK, Australia and Canada with a total financing volume of approximately € 11.4 billion.

As I understand this they have issued 9.2b in the specified markets. The 144a bonds are trade-able on short time scales between qualified institutional investors of 6m to 12m rather than the normal 24 months.

In addition they have either issued or prolonged Asset backed securities (i.e. to folk who have charge on their assets) for 11.4b

The exact details of all of this are not broken out as far as I understand the accounts. I can see no notes to the accounts which is where I would expect this to be covered in more detail.

Looking at the cash flow statement on page 32, the biggest change between 2019 and 2020 is the change in leased products and receivables from sales financing of +5.8b c.f with -3.1 b in 2019. This accounts for most of the change in cash flow from operating activities. I presume this means that because they have sold less they have done less financing of those sales.

They have also reduced their investment from -5.3b to -1.3b and have a big change in cash flow from financing 4.7 to -3.5b.

What I always look at in accounts is the cash. Most of the rest of the assets do not have the same clarity as to what they really are worth.

Imho BMW’s balance sheet is weak however I look at it, but if you disagree then please put forward your interpretation of the accounts.

Regards,

[TUK020]

I don't have dog in this fight with no investments in any motor manufacturers, be they ICE or BEV (or whatever), incumbent or challenger. But spurious or illogical claims need to be challenged when made by either side.

This board will keep you busy then

[dealtn]

BMW latest results are out, download from here:


As always with BMW the big red flag is the balance sheet on page 30 and measures have been taken to strengthen it with cash and equivalents now over 17, an increase from just over 12 billion Euro. Page 11 states that bonds were issued for a total of 9.2 billion, suggesting that 9.2-(17-12) circa 4 billion as already been used.

Regards,

Now if you are going to make an argument about cash and refer to the cash flow statement you either do it properly, or at least when shortcutting to make a point, ensure you aren't making a basic error. By referring to bonds issued, but making no reference to bonds redeemed, and thus looking at net bond issuance, you are making a huge mistake in your "suggestion".

If you look at the cash flow statement and see the cash inflow/outflow from financing activities line it is -3.5bio. So using your logic cash and cash equivalents has risen to over 17bn, from over 12bn, despite a negative contribution of -3.5bn from net bond issuance (and other financing activity). That's not a great argument if you are trying to be critical of this company's performance!

I don't have dog in this fight with no investments in any motor manufacturers, be they ICE or BEV (or whatever), incumbent or challenger. But spurious or illogical claims need to be challenged when made by either side.

What I always look at in accounts is the cash. Most of the rest of the assets do not have the same clarity as to what they really are worth.

Imho BMW’s balance sheet is weak however I look at it, but if you disagree then please put forward your interpretation of the accounts.

Regards,

I don't have an opinion on their balance sheet. Neither do I have one on Tesla, or any other motor manufacturer. As I said I don't have any investments in this area, so won't have done the usual due diligence. Nor frankly are any of the companies here likely to work their way close to the top of the list of potential investments, but that's not relevant.

I absolutely agree you need to understand the Balance Sheet. But I rarely look at Cash on the Balance Sheet for 2 reasons. Firstly because it is so easy to understand, or has clarity as you put it. That is why the other items are much more important! But secondly, and more importantly cash on a balance sheet is a simple snapshot of a single day and can be meaningless in the context of a company's performance over a period. That is precisely why the cash flow statement is so important (more so than the Balance Sheet and P/L account that make up the accounting triumvirate).

The cash flow statement is the first port of call for me, and why it is important to understand it, and not take liberties in using it, such as only looking at gross, and not net issuance.

[odysseus2000]

dealtn
I don't have an opinion on their balance sheet. Neither do I have one on Tesla, or any other motor manufacturer. As I said I don't have any investments in this area, so won't have done the usual due diligence. Nor frankly are any of the companies here likely to work their way close to the top of the list of potential investments, but that's not relevant.

I absolutely agree you need to understand the Balance Sheet. But I rarely look at Cash on the Balance Sheet for 2 reasons. Firstly because it is so easy to understand, or has clarity as you put it. That is why the other items are much more important! But secondly, and more importantly cash on a balance sheet is a simple snapshot of a single day and can be meaningless in the context of a company's performance over a period. That is precisely why the cash flow statement is so important (more so than the Balance Sheet and P/L account that make up the accounting triumvirate).

The cash flow statement is the first port of call for me, and why it is important to understand it, and not take liberties in using it, such as only looking at gross, and not net issuance.

Thank you! Great points although completely different to what I do.

I always look at the balance sheet first as although it is a snap shot on just one day, unless management want to pull the wool over my eyes which I don't expect for large companies because of the risk of them ending up in the slammer for fraud I tend to be comforted by a good wodge of cash and discomforted by absence of such. I also do not like to see large amounts of intangible assets which I round down to zero, nor lots of stock which I again round down and large amounts of liabilities tend to be a "look elsewhere" signal.

If the balance sheet looks solid I might look at the other two statements, but I get more nervous with them as both can be more easily manipulated imho.

I rarely bother with small cap stocks which in my experience, especially on AIM, are often scams with the accounts works of fiction.

Regards,

[dealtn]

dealtn
I don't have an opinion on their balance sheet. Neither do I have one on Tesla, or any other motor manufacturer. As I said I don't have any investments in this area, so won't have done the usual due diligence. Nor frankly are any of the companies here likely to work their way close to the top of the list of potential investments, but that's not relevant.

I absolutely agree you need to understand the Balance Sheet. But I rarely look at Cash on the Balance Sheet for 2 reasons. Firstly because it is so easy to understand, or has clarity as you put it. That is why the other items are much more important! But secondly, and more importantly cash on a balance sheet is a simple snapshot of a single day and can be meaningless in the context of a company's performance over a period. That is precisely why the cash flow statement is so important (more so than the Balance Sheet and P/L account that make up the accounting triumvirate).

The cash flow statement is the first port of call for me, and why it is important to understand it, and not take liberties in using it, such as only looking at gross, and not net issuance.

Thank you! Great points although completely different to what I do.

I always look at the balance sheet first as although it is a snap shot on just one day, unless management want to pull the wool over my eyes which I don't expect for large companies because of the risk of them ending up in the slammer for fraud I tend to be comforted by a good wodge of cash and discomforted by absence of such. I also do not like to see large amounts of intangible assets which I round down to zero, nor lots of stock which I again round down and large amounts of liabilities tend to be a "look elsewhere" signal.

If the balance sheet looks solid I might look at the other two statements, but I get more nervous with them as both can be more easily manipulated imho.

I rarely bother with small cap stocks which in my experience, especially on AIM, are often scams with the accounts works of fiction.

Regards,

Interesting you think a Balance Sheet is harder to manipulate.

You can have a company with debts, and working capital balances for 300+ days of the year, but "arrange" (quite legitimately - no fraud) for the snapshot on the balance sheet date to have cash, or low debt, and a debtor/creditor position massaged to how you want it represented. A cash flow statement that shows the changes and aggregation over a 6, or 12, month period is much harder to arrange.

Similarly you can choose your balance sheet date to be optimal from the perspective of a seasonal business. Lots of cash and low stock for instance at Dec 31st for a company with huge Christmas sales say.

I'm not saying that applies to companies here, or in the Auto business generally, but whilst fraud isn't likely manipulation of many Balance Sheet components is certainly possible.

I know for certain (because I did it) that (legitimate) Balance Sheet "massaging" took place such that my employer's (current FTSE 100 company) Year End balances weren't representative of the majority of other days. There is a lot to be said for inclusion in statutory accounts of "average" cash, debtors, creditors etc.

[odysseus2000]

Mining an asteroid:

https://www.zerohedge.com/commodities/e ... al-economy

Regards,

[Howard]

Tesla sold 511 cars in the UK in October. With around 13 sales centres that’s about 40 cars each in the month.

And year to date they have sold around 18,500 cars. Market share went down again to below 0.5% ytd. (Total new car sales ytd were 1.4 million)

Sales of BEV vehicles in the UK in October were 9,335 so Tesla’s share of the BEV market segment in October was around 5%.

PHEV sales have been growing. Total plug-in market (BEV + PHEV) sales were 17,110 in October.

October may have been a quiet month for Tesla sales but the overall market saw car sales of 141,000 so not much different from last year. And BEV competitors are building market share fairly quickly.

Obviously Covid lockdowns have had a major effect on the market during the year but Car Distributors have been reporting increasing price trends which are softening the effect of lower volumes. (And the second hand market has been buoyant with rising prices).

Compared with last year, Tesla don’t appear to be sending as many cars to Europe in Q4 at the moment. Delivery quotes are very short as supply appears plentiful. Three ships are on the way from the USA and one from China. Another is loading cars in Shanghai at the moment and should reach Europe mid/late December. Last year seven ships arrived in Q4.

So a quiet October in Europe. We await the October sales figure for China.

regards

Howard

https://www.smmt.co.uk/vehicle-data/car-registrations/

[odysseus2000]

Tesla sold 511 cars in the UK in October. With around 13 sales centres that’s about 40 cars each in the month.

And year to date they have sold around 18,500 cars. Market share went down again to below 0.5% ytd. (Total new car sales ytd were 1.4 million)

Sales of BEV vehicles in the UK in October were 9,335 so Tesla’s share of the BEV market segment in October was around 5%.

PHEV sales have been growing. Total plug-in market (BEV + PHEV) sales were 17,110 in October.

October may have been a quiet month for Tesla sales but the overall market saw car sales of 141,000 so not much different from last year. And BEV competitors are building market share fairly quickly.

Obviously Covid lockdowns have had a major effect on the market during the year but Car Distributors have been reporting increasing price trends which are softening the effect of lower volumes. (And the second hand market has been buoyant with rising prices).

Compared with last year, Tesla don’t appear to be sending as many cars to Europe in Q4 at the moment. Delivery quotes are very short as supply appears plentiful. Three ships are on the way from the USA and one from China. Another is loading cars in Shanghai at the moment and should reach Europe mid/late December. Last year seven ships arrived in Q4.

So a quiet October in Europe. We await the October sales figure for China.

regards

Howard

https://www.smmt.co.uk/vehicle-data/car-registrations/

It is clear from this survey that it is small cars that are selling.

Of the top 10 in October, as far as I know & I don't study these makes much, only the Volvo would not be a compact car, for the entire year they are all compacts.

The compact market is currently not addressed by Tesla so it is not surprising that they are not selling into the theme of the moment.

The most interesting figure to me is the MHEV (mild hybrid electric vehicle) petrol that is up 172%, followed closely by the diesel MHEV up 97% whereas BEV are up 169%.

MHEV are complicated vehicles with an ICE engine making them vulnerable to coming legislation aimed at killing ICE engines and not doing as much as a BEV to reduce pollution nor be as future proof.

IMHO it is now a question of supply. Once more BEV in the sizes folk want to buy become available I expect the engineering dead end of MHEV to die through lack of interest and fear of future legislation.

Regards,

[Howard]

Tesla sold 511 cars in the UK in October. With around 13 sales centres that’s about 40 cars each in the month.

And year to date they have sold around 18,500 cars. Market share went down again to below 0.5% ytd. (Total new car sales ytd were 1.4 million)

Sales of BEV vehicles in the UK in October were 9,335 so Tesla’s share of the BEV market segment in October was around 5%.

PHEV sales have been growing. Total plug-in market (BEV + PHEV) sales were 17,110 in October.

October may have been a quiet month for Tesla sales but the overall market saw car sales of 141,000 so not much different from last year. And BEV competitors are building market share fairly quickly.

Obviously Covid lockdowns have had a major effect on the market during the year but Car Distributors have been reporting increasing price trends which are softening the effect of lower volumes. (And the second hand market has been buoyant with rising prices).

Compared with last year, Tesla don’t appear to be sending as many cars to Europe in Q4 at the moment. Delivery quotes are very short as supply appears plentiful. Three ships are on the way from the USA and one from China. Another is loading cars in Shanghai at the moment and should reach Europe mid/late December. Last year seven ships arrived in Q4.

So a quiet October in Europe. We await the October sales figure for China.

regards

Howard

https://www.smmt.co.uk/vehicle-data/car-registrations/

It is clear from this survey that it is small cars that are selling.

Of the top 10 in October, as far as I know & I don't study these makes much, only the Volvo would not be a compact car, for the entire year they are all compacts.

The compact market is currently not addressed by Tesla so it is not surprising that they are not selling into the theme of the moment.

The most interesting figure to me is the MHEV (mild hybrid electric vehicle) petrol that is up 172%, followed closely by the diesel MHEV up 97% whereas BEV are up 169%.

MHEV are complicated vehicles with an ICE engine making them vulnerable to coming legislation aimed at killing ICE engines and not doing as much as a BEV to reduce pollution nor be as future proof.

IMHO it is now a question of supply. Once more BEV in the sizes folk want to buy become available I expect the engineering dead end of MHEV to die through lack of interest and fear of future legislation.

Regards,

I'm surprised you are surprised at the SMMT statistics showing the popularity of smaller cars. They have always shown the popularity of modest family cars. By the way they aren't a survey, they are a factual record of UK car registrations.

Meeting customers' needs is vitally important as we have discussed.

I have now had a chance to look over my neighbour's VW ID.3. I believe it is a very similar size to the Tesla Model 3. See Electrek article link below.

The VW is amazingly spacious. Whilst it isn't much bigger outside, there is a lot more passenger space than in a Golf. And, as a hatchback, it is very practical as a family car. With the rear seats folded (either completely or in a one third or two thirds configuration) it will take bikes and other bulky stuff. If it performs as well as other VW family cars it will address a big market segment in Europe (and maybe in China too).

VW have clearly done a lot of research to produce a competitive family-orientated car. As have most of the other BEV manufacturers who are beginning to sell cars in volume.

As you suggest, Tesla are missing out on the faster growing market segments at the moment. This has been pointed out quite a few times in the past on this thread. Making a sedan limits sales. We discussed this when the Model 3 was launched. Should Tesla have done a little market research?

If the Model Y can be produced to compete in the price competitive hatchback segment it may achieve sales. But competitors are building market share now. And expecting a quick launch of a cheaper Tesla hatchback looks a bit fanciful to me.

regards

Howard

https://electrek.co/2020/01/07/tesla-mo ... id-3-size/

[BobbyD]

VW have clearly done a lot of research to produce a competitive family-orientated car. As have most of the other BEV manufacturers who are beginning to sell cars in volume.

As you suggest, Tesla are missing out on the faster growing market segments at the moment. This has been pointed out quite a few times in the past on this thread. Making a sedan limits sales. We discussed this when the Model 3 was launched. Should Tesla have done a little market research?

Tesla do what is 'cool'. and hope the market catches up. Musk has boasted of doing 'zero market research whatsoever'... For some reason companies who actually have experience of profitably building and selling millions of cars a year do it differently, but they probably don't know what they are talking about.

It reminds me of Audi being lambasted by the Telarati for producing a car which only did 4 times their average customers daily required mileage on a charge... It was going to bankrupt the company as I recall. When you know what your customers want you don't need to build a car which is capable of doing everything. Then again when you only produce 4 models you can't really afford dealbreakers. That's something else the pro's do differently.

[odysseus2000]

Howard
I'm surprised you are surprised at the SMMT statistics showing the popularity of smaller cars. They have always shown the popularity of modest family cars. By the way they aren't a survey, they are a factual record of UK car registrations.

Meeting customers' needs is vitally important as we have discussed.

All legacy motors assumed that BEV would start with small cars and go up.

Tesla didn't like the margins on small cars and so went for more expensive ones using a Carneige model to use the profits to build kit with the intension of making smaller cars in the by and by and that will be the model 2.

VW look, as far as I can tell, to be selling the ID3 at a loss or very low margins, such is there desperation to get into the market and meanwhile they have lots of rapidly depreciating plant that is becoming obsolete. They have tried to shove out poor quality stuff like the etron which has had all manner of problems and will have put a lot of buyer off future Audi.

Regards,

[odysseus2000]

Chinese car maker xpev rallying strongly:

https://twitter.com/0_ody/status/132436 ... 06817?s=20

Regards,

[Howard]

Howard
I'm surprised you are surprised at the SMMT statistics showing the popularity of smaller cars. They have always shown the popularity of modest family cars. By the way they aren't a survey, they are a factual record of UK car registrations.

Meeting customers' needs is vitally important as we have discussed.

All legacy motors assumed that BEV would start with small cars and go up.

Tesla didn't like the margins on small cars and so went for more expensive ones using a Carneige model to use the profits to build kit with the intension of making smaller cars in the by and by and that will be the model 2.

Regards,

Dear Ody

Did you really mean what you wrote about ICE manufacturers assumptions?

How does this stack up with the following ICE manufacturers initial BEV offerings/

Porsche, Mercedes, Jaguar, Audi - all cheap cars in your view?

And aren't all the other ICE manufacturers offering BEVs at higher prices than their ICE equivalents?

I think they did the opposite to your statement. And, they, unlike Tesla, are probably all making reasonable margins on their BEVs and their distributors are generally supportive because they can see profitable developments to be exploited.

I will stick my neck out and suggest that Porsche are not losing money as they develop their BEV range.

When do you think Tesla will be producing (and selling) Model 2 in large volumes? They could set up a production line or two like VW.

By the way, please correct me if I am wrong but does Tesla now have a production capacity of around 200,000 cars in Q4? Will they sell them all?

regards

Howard