Musk endeavours

[odysseus2000]

$9 billion deal for Tesla to build factory in Shanghai:

http://www.tweaktown.com/news/52791/tes ... index.html

Assuming this is genuine it marks a significant advance for Tesla.

Regards,

[andyalan10]

I read recently an article that suggested Elon Musk's greatest achievement this year has been to distract people from currrent events with a constant stream of blue sky "news" stories. Model Y, Electric large trucks, electric pickups etc.

The below article rebuts the story that Tesla have signed an agreement to build a factory in China. The unconfirmed agreement is not with a chinese car manufacturer, and China has said only existing Chinese manufacturers will be licensed to build electric cars.

http://www.chinadaily.com.cn/business/t ... 798610.htm

And Tesla shares are this afternoon into bear territory (-20% from their peak).

Is my maths right, 15m shares at $300+ each is $4.5bln dollars of shares traded? Time to buy US share brokers?

Andy

[torata]

Tesla seen as likely to build factory in China:

https://www.bloomberg.com/news/articles ... tion-plant

Also interesting how fast Chinese EV use is growing compared to US.

Regards,

I was in Suzhou, near Shanghai, at the end of last year. One of the major eye-openers was that every single moped and almost every motobike that I saw on the streets was fully battery powered. Buses also seemed to be electrically powered, one way or another (i.e battery or via tram cables). I asked about commuting habits in the Chinese company that I was working with, and was told roughly 70% commuted using mopeds (from memory, reason being tax is much cheaper), 15% by bus then metro (less popular because of waiting time/having to transfer), 15% by car.

I can't talk about the rest of China, but it really was incredible.

My overwhelming thought was - this is the way of the future.

torata

[odysseus2000]

There is now intense comment about Tesla.

Commentators tell us that there is a bear market in Tesla shares, but the price at the beginning of 2017 was $214, it is currently nearly one $100 higher. Some bear market!

Meanwhile there is the back and forth over the potential Chinese factory, currently without any official comment either way, everything attributed to folk familiar with the situation. So who really knows.

Then when ever the share price is off one is bombarded with articles about the companies death

When ever the share price is up, one is bombarded with articles about the company being cheap.

Sure Musk is a brilliant stock jockey and recently tweated showing two baby boys with one biting the others hand in response to a negative Wall Street Journal article.

It is impossible for most market players to have a clue what is really going on and the stock is best avoided by most.

However, there does seem to be a clear, as noted in the previous post about Chinese use of electric, the production of the first model 3, the big new solar storage plant in Australia, the successful development of reusable rockets etc etc, some momentum in many of the areas that Musk is involved in.

Potentially this is all world changing technology with huge profit potential, but with the ever present danger that a lot of it is hype that will lead to nothing.

My original opinion was that Musk was the new Henry Ford, perhaps too limiting, with some now saying he is the new Edison.

Based on my own research and studies of industrial revolutions it looks to me as though Musk could change things, but only the future will tell us if he did.

With regard to ways to profit, sure one could use all the stock market hype to buy the brokers as they did well in 1999 which many now argue is the closest similar period to now. Schwab and etrade both cut their commission fees recently and although both took short term hits that were both good buying opportunities, they have both been quite strong over the last 12 months for folk who held.

If the market is to take off like it did in 1999, prices will go a lot higher. For now most p/e are nothing like the levels reached in 1999.

Regards,

[andyalan10]

As Odysseus notes there is intense comment around Tesla, most of it extremely polarised.

One side quotes "the shares are up 50% YTD" , and it seems surprising to me that this is the only share price comparison in any number of articles, a slightly different picture emerges if you look at share price changes over 1 year (+44%) or 2 years (+25%).

I also find it surprising that Tesla can announce "production of Model 3 has started" when they've made one, which has only appeared in a still photograph and so few people seem to be thinking "I bet it's not finished, they've just put out the photo to claim they have met the deadline". Now they've bought themselves another month before they handover any cars to "customers" who I think they have already said will be Tesla employees and carefully selected advocates.

By way of comparison a recent article mentioned that Bentley have built 100 of the new Continentals, some of them on production tooling, and yet the Continental is not going to be launched until much later this year or even early next year.

Andy

[odysseus2000]

Andyalan:
I also find it surprising that Tesla can announce "production of Model 3 has started" when they've made one, which has only appeared in a still photograph and so few people seem to be thinking "I bet it's not finished, they've just put out the photo to claim they have met the deadline". Now they've bought themselves another month before they handover any cars to "customers" who I think they have already said will be Tesla employees and carefully selected advocates.

i have seen this story doing the rounds. It is total rubbish. Why? Because Tesla have already supplied model S cars for crash testing. They can't now deviate from the design without having to under go crash tests again.

I do wonder if this "only made one car" story is designed very much like how Brunel answered his critics over a bridge. Day after the day the critics said the Bridge was un-safe because Brunel had not taken the wooden formers down and Brunel said nothing till the opening when he noted that the bridge had not rested on the formers since the day it was finished, he had just left them there to give his opponents a sense of victory & then they looked foolish.

One sees these games endlessly. Another current example is the iphone 8. The media are full of what it is lacking & that it will be $1200. My bet is that when it is launched it will have lots of things folk like & will not be priced at $1200, very like every previous iPhone launch, not to mention iPad launches etc.

There is money in writing false stories and some outfits like short sellers Citron specialise in writing the bear case while others specialise in the bull case.

Personally I pay little attention to all the media stuff and instead watch the price action which anyhow leads the media. One can be sure of bear case articles if a stock is going down & vice versa.

Regards,

[dspp]

Tesla seen as likely to build factory in China:

https://www.bloomberg.com/news/articles ... tion-plant

Also interesting how fast Chinese EV use is growing compared to US.

Regards,

I was in Suzhou, near Shanghai, at the end of last year. One of the major eye-openers was that every single moped and almost every motobike that I saw on the streets was fully battery powered. Buses also seemed to be electrically powered, one way or another (i.e battery or via tram cables). I asked about commuting habits in the Chinese company that I was working with, and was told roughly 70% commuted using mopeds (from memory, reason being tax is much cheaper), 15% by bus then metro (less popular because of waiting time/having to transfer), 15% by car.

I can't talk about the rest of China, but it really was incredible.

My overwhelming thought was - this is the way of the future.

torata

My other thought is that the Chinese aren't hanging around waiting for the westerners to design something for them to copy. They are just as good engineers as the rest of us and are getting on with it themselves. Any country that thinks it has a premium in innovation vs any other - especially vs China - has got a shock coming.

(and my electric socket has been in place in my front yard for quite a few years, ready for when I decide to get an e-bike or e-scooter)

regards, dspp

[odysseus2000]

dspp
My other thought is that the Chinese aren't hanging around waiting for the westerners to design something for them to copy. They are just as good engineers as the rest of us and are getting on with it themselves. Any country that thinks it has a premium in innovation vs any other - especially vs China - has got a shock coming.

Yes, China has both good engineers and good entrepreneurs. Sure a lot of the stuff that China currently sells does not meet some Western safety levels, but it is cheap and every new generation of product gets better and will soon likely meet all safety requirements and be low cost. Lets not forget that most (all?) iPhones are made in China.

Regards,

[youfoolishboy]

I see the national grid threw a spanner in the works of the righteous electric car fantasists today by pointing out there is not enough capacity for this great revolution even with the nuclear power program we have something the more rational among us have been predicting for a while.

[odysseus2000]

youfoolishboy

I see the national grid threw a spanner in the works of the righteous electric car fantasists today by pointing out there is not enough capacity for this great revolution even with the nuclear power program we have something the more rational among us have been predicting for a while.

Does anyone take the electrical supply industry seriously? The statement by National Grid contains so many, possibilities, options, caveats etc that one can make almost anything out of it. A cynic might even say it was all about deflecting the regulators recent criticism of electrical supply profits than the future.

If I was them I would be seizing the opportunity presented by electric traction & energy storage & making sure National Grid lead the field. But National Grid are another of the lethargic monopolies run by accountants who can't cope with the idea of change & instead scare monger like they know what they are talking about.

Regards,

[TUK020]

youfoolishboy

I see the national grid threw a spanner in the works of the righteous electric car fantasists today by pointing out there is not enough capacity for this great revolution even with the nuclear power program we have something the more rational among us have been predicting for a while.

Does anyone take the electrical supply industry seriously? The statement by National Grid contains so many, possibilities, options, caveats etc that one can make almost anything out of it. A cynic might even say it was all about deflecting the regulators recent criticism of electrical supply profits than the future.

If I was them I would be seizing the opportunity presented by electric traction & energy storage & making sure National Grid lead the field. But National Grid are another of the lethargic monopolies run by accountants who can't cope with the idea of change & instead scare monger like they know what they are talking about.

Regards,

Slightly different perspective: the possibilities/caveats/hedges etc are what you get when you ask an engineering organisation to make a forecast.
They know that the introduction of low carbon technologies such as electric vehicles and heat pumps will massively increase the demand for electricity.
They also know that with so many imponderables, any specific forecast amount/date will be incorrect.
The culture of the organisation will frown upon a wishy washy arm waving answer, so what you will get is a quantified forecast, but hedged with many provisos.

Switching topic slightly: Bigger question than the additional generation required, is how will the distribution network cope?

[odysseus2000]

TUK020
Slightly different perspective: the possibilities/caveats/hedges etc are what you get when you ask an engineering organisation to make a forecast.
They know that the introduction of low carbon technologies such as electric vehicles and heat pumps will massively increase the demand for electricity.
They also know that with so many imponderables, any specific forecast amount/date will be incorrect.
The culture of the organisation will frown upon a wishy washy arm waving answer, so what you will get is a quantified forecast, but hedged with many provisos

Yes, but National Grid is a business, and needs running by business folk, not engineers.

The correct thing to have said was that this is a huge opportunity for us and we are well place to take advantage of it and having got the share price up they could sell some shares to bring in more capital for the build that will be needed. If National Grid handle this well they will make serious money.

Yes, the grid will potentially struggle and will need lots of new stuff and I suspect that we will see dual power households with white goods able to run on DC (like Edison always wanted) and AC to cut down on the poor efficiency of the DC to AC conversion process and that we will also see substantial storage like the recent Tesla schemes in Australia and SouthAfrica. Sure we don't have the same amounts of sun shine, but we have winds and tides and they could all do with storage to collect when rates are low and then sell when rates are high.

Regards,

[TUK020]

Yes, but National Grid is a business, and needs running by business folk, not engineers.

The correct thing to have said was that this is a huge opportunity for us and we are well place to take advantage of it and having got the share price up they could sell some shares to bring in more capital for the build that will be needed. If National Grid handle this well they will make serious money.

Agreed, but with the complication that the capital invested, and return from that, is controlled by a regulator, so messages on this sort of thing need to be targeted to them rather than just investors

[odysseus2000]

TUK020
Agreed, but with the complication that the capital invested, and return from that, is controlled by a regulator, so messages on this sort of thing need to be targeted to them rather than just investors

Its a complicated game and a lot of the effort has to go towards the politicians to whom the regulator has to comply with.

So if I was them I would talk about the massive opportunity of a low carbon future made practical by National Grid expertise and investment in new systems to create electrical energy independence via storage with all its defence implications and clothed in the language of Brexit independence along with clean air for the voters to breathe etc

National Grid have an opportunity here but it is also a dagger at their heart. If they don't start this kind of stuff its almost certain that the politicians will be lobbied by Google, Apple, et al for the right to build competing systems that address the points I have made. A slow and ponderous feet dragging National Grid is likely not going to be around long.

Regards,

[youfoolishboy]

The elephant in the room for any company in the power sector is nationalisation if Corbyn gets in next election which is not impossible if there is a bad Brexit. Why build anything? We could have a freeze on building infrastructure add to that even the Tories want to cap electricity costs and the generators will start thinking there is very little point increasing supply.

[odysseus2000]

youfoolishboy
The elephant in the room for any company in the power sector is nationalisation if Corbyn gets in next election which is not impossible if there is a bad Brexit. Why build anything? We could have a freeze on building infrastructure add to that even the Tories want to cap electricity costs and the generators will start thinking there is very little point increasing supply.

Alternatively if Corbyn is elected and starts spending like he suggests then the newly nationalised industries that he may create will likely get a lot of investment. The folk running them who stay on will likely be sweetened by titles and such handed out to all that play ball with the new regime.

Looking at it from the shareholder perspective will likely get you a different view, but if the industries are going to be nationalised, who cares about the shareholders?

Looks very like a win win to me, so long as National Grid et al embrace the new ways of doing. If they don't they are setting themselves up to be in a very bad place no matter who is in power.

Regards,

[dspp]

I think National Grid are being more astute players than most give them credit for. In my opinion they are quietly informing all the various stakeholders via the relevant channel for the corresponding stakeholder. The general public, the utilities, the DNOs, City, engineering community, academics, press, general government, specific departments (the old DECC etc), the regulators, competitors, technology innovators. They all get stuff aimed at them from NG. I see different strands of that messaging and they are all played carefully.

NG are getting out of gas ahead of the country getting out of gas, whilst the gas network is at max value (perhaps overvalued). That is long range strategic planning that fuses commercial (business) and technical (engineering) understanding. Don't knock it when you see it.

NG are hedged carefully UK-USA. That gives them a lot of options.

An area where NG are weak is that they are currently the monopoly provider of the grid control services. There are various faint rumours going around that the government has realised that and is looking to set up (encourage/promote/require) an alternative. Why is an interesting question. The most likely player would be SSE as they have the strongest position in the corresponding skills/competencies/responsibilities.

There is a general review going on as to the next RIP-X round and how various things (costs, opportunties) get divvied up. At present most DNOs are unwittingly the dinner. NG and the utilities are playing footsie to try and steer towards the outcome they want.

There is more going on than people realise, especially if all they do is look at media-bites about electric cars. Most of the big players are already well informed, and fully engaged in that play. Press releases like this are just trying to position the supporting cast for advantage.

(By the way I puttered by a Tesla model X yesterday. I guess it was doing about 85. It is huge. About the size of a Disco 4. I hadn't realised they were available in the UK.)

regards, dspp

[youfoolishboy]

oddy
celebrating nationalisation is one thing but u do realise that all investment then has to be paid out of government borrowing? The manic money free can only pay for so many freebies and maybe exhausted after paying for all the other promises the revolutionaries are offering as bribes.

[odysseus2000]

youfoolishboy
celebrating nationalisation is one thing but u do realise that all investment then has to be paid out of government borrowing? The manic money free can only pay for so many freebies and maybe exhausted after paying for all the other promises the revolutionaries are offering as bribes.

It is not a question of celebrating one policy, or one politician over another. Recent results have shown that predictions are not reliable and that we will get who ever we get and there will be opportunities who ever is elected. CEO's will try & game things for whatever eventuality. It is our job as investors to try & profit from the situation as is with perhaps some vague thoughts about the future, but mostly focused on what is most likely that we see now.

As it is we have a huge secular move to low carbon power & with that comes a lot of opportunities for many players. We have to figure out how to make money off of this.

Regards,

[odysseus2000]

dspp
(By the way I puttered by a Tesla model X yesterday. I guess it was doing about 85. It is huge. About the size of a Disco 4. I hadn't realised they were available in the UK.)

Yes, you can buy a new model x with a 14 day delivery and there are used also, see link near top of new page & many used model S also for sale, presume immediate delivery:

https://www.tesla.com/en_GB/new?model=mx

As I understand it, all these cars have free super charger use.

For the moment spotting a Tesla in the UK is a rare event, so it will be interesting to see if they become more common.

Regards,