Musk endeavours

[odysseus2000]

Sorry missed todays Aston Martin earnings:

https://www.investegate.co.uk/aston-mar ... 00113203E/

Not a happy read and announcing a rights issue at £4 that has been under written and no electric cars till 2025.

Every financial metric down, save for debt which £559m to £876m, eps -31p to -49.6p, just ugly.

Regards,

[odysseus2000]

For those who do not believe wind power is viable, the is an interesting section from Berkshire share holders letter:

We’ll start with the topic of electricity rates. When Berkshire entered the utility business in 2000, purchasing 76% of BHE, the company’s residential customers in Iowa paid an average of 8.8 cents per kilowatt-hour (kWh). Prices for residential customers have since risen less than 1% a year, and we have promised that there will be no base rate price increases through 2028. In contrast, here’s what is happening at the other large investor-owned Iowa utility: Last year, the rates it charged its residential customers were 61% higher than BHE’s. Recently, that utility received a rate increase that will widen the gap to 70%.
The extraordinary differential between our rates and theirs is largely the result of our huge accomplishments in converting wind into electricity. In 2021, we expect BHE’s operation to generate about 25.2 million megawatt-hours of electricity (MWh) in Iowa from wind turbines that it both owns and operates. That output will totally cover the annual needs of its Iowa customers, which run to about 24.6 million MWh. In other words, our utility will have attained wind self-sufficiency in the state of Iowa.

https://www.berkshirehathaway.com/letters/2019ltr.pdf

This is a remarkable achievement and indicates the potential available in the UK with wind. Combining UK wind generated electric power with electric storage puts the UK in a very enviable place as a modern clean economy far less dependent on external nations for power than at any time since the age of oil began.

Regards,

[Howard]

H,

Do the maths. Look at the evidence.

Any ICE manufacturer that wants a future needs to bet the farm, now. Otherwise the best they can hope for is to harvest the decline for maybe 5-years. After that ICE manufacturers will be begging to give away cars. Pretty much that demand collapse is already happening for BMW/Mercedes/Audi/etc already - just look at the growing Tesla-shaped wedge being taken out of the US top end. And we all know that most of the profit is in the nice creamy top end.

Pretty soon only the poor people will drive a dino juice car. Yesterday my GF and I were sitting in a 3, and discussing how far in the future it will be before Mummy would be too embarassed to collect Beatrice from school in a gas-mobile. It is coming soon.

regards, dspp

dspp

I don't disagree with your comments about the UK market. However, as you say above: "Look at the evidence". Your forecasts surely must be based on historical facts. I'm not sure you have the facts right about the US market. We have discussed this before and it is important to start with hard figures.

As I understand the facts, based on the broadly-accepted Insideevs estimates for Tesla’s U.S. unit sales, they only grew 0.3% in 2019, to 192,250 units from 191,687 in 2018. (And their turnover in the USA was down severely year on year).

Quoting from a review on seeking alpha:

"Several other luxury/premium car brands grew faster in the U.S. in 2019, including BMW, Mercedes, Volvo, Audi, Jaguar, Land Rover, Lincoln and Cadillac.

They all grew faster than Tesla both as measured in absolute units and as measured as a percentage.

In other words, even before we adjust for average selling prices - let alone profitability - Tesla lost market share to these competitors in the U.S. market in 2019."

https://seekingalpha.com/article/431806 ... king_alpha

As a BMW driver, I am possibly biased, but BMW had its best year ever for sales in the USA last year, growing faster than Tesla from a higher base.

You surely have to agree that forecasts should be based on current facts. And your statement above doesn't reflect the current situation. We'll see if Tesla can grow sales turnover in the USA this year, but they didn't last year and their competitors did!

I'm loath to make any forecasts but it wouldn't surprise me, looking at the European sales figures, if Tesla have a poor first quarter. Their sales in the UK should hopefully pick up substantially in February because of the massive UK subsidies but in January they were low. I haven't a clue what their US sales are this quarter, but they will have to be very high if they are to compensate for the collapse in sales in the Netherlands and Norway in the last two months.

Yes, Tesla are a threat to ICE manufacturers, but they have to start making profits and growing their US sales to really damage the premium brands. They may do it, but if it takes too long, the legacy manufacturers may manage to inhibit their success. Who knows, despite the avowed technical superiority of the Model 3 it may be discontinued in its present form before it ever turns a profit?

regards

Howard

Howard,

I think you have to sift the evidence for apples-to-apples. In the premium saloon segment in USA then Tesla did impact the segment - I posted the numbers at various points a year ago I think. But buyer shifting to SUV gave the legacy a swerve. As more models get released then there will be a cross-segment wave. Until then it will be a confused picture. Amidst the confusion the legacy players are seeking refuge, hoping for a continuation of the paycheques.

Time will tell.

regards, dspp

Yes, now that you have limited the success of Tesla to the premium saloon segment, you have a point. I agree on an apples-to-apples basis that Tesla did impact this (unfashionable) segment of the market significantly. And for this reason they maintained their share of the US auto market at around 1.3% last year.

My point is that for about five years the success of Tesla and the demise of ICE manufacturers has been said to be imminent on this forum. You can argue that successful ICE manufacturers have been unfair in not competing with Tesla head-on but have switched production to more profitable segments like the SUV area in the USA and wiped the floor with the Model X, which on an apples-to-apples basis failed to make a significant impact because it was over-engineered with, for example, odd doors. As a successful businessman, surely you would recognise the premium brands' success at being able to spot growth areas of the market and deliver products which meet consumer's needs very profitably.

For all Tesla's obvious technical and engineering skills it has been a bit of a Marketing disaster surely? It hasn't profitably met US consumers' needs, choosing instead to produce the model 3 to compete in a small market segment.

You are probably right that, in the future, Tesla may finally offer a premium product at a profitable price. But languishing in a segment which gives it a 1.3% share of the market and making a loss is a waste of a technical advantage surely?

2020 looks like a bad year for all Legacy motor manufacturers. Tesla really needs to shine in 2020 and make a huge success of the model Y or we may be having this (repeated) discussion in one or two years' time as competitors get their act together. I guess you would agree, it will be ironic if the likes of VW and BMW still make profits in this bad situation and Tesla can't.

regards

Howard

[odysseus2000]

Howard
... surely you would recognise the premium brands' success at being able to spot growth areas of the market and deliver products which meet consumer's needs very profitably.

Legacy are not doing this, they are producing cars at zero to negative margin built to be mostly trouble free for a lease period & then to become money pits for spare parts for the next owner with legacy auto then flogging spares at super high margins to the unlucky punters who have bought this fall apart engineering.

If you take the trouble to read & view what mechanics say about the premium brands that get taken to them for service & repair you will begin to understand how legacy auto has remained profitable based on this business model.

There are grave dangers for legacy in this tactic, the selling of lots of SUV has caused e.g. UK fuel consumption to rise putting legacy auto directly in the politicians cross hairs as targets for CO2 production that needs to come down. The move to BEV & away from the spare part income is a major issue for legacy & is a key reason they are still pushing out last centuries tech and lobbying the politicians about how they are so important that they must be a special case etc.

It is a re run of Steve Balmer and legacy phones reacting to the iPhone by saying how cheap their kit is and how expensive and useless are iPhones.

Yesterday a little girl and her mother came to look at my pony. The little girl was skipping and delighting in life. I thought how ridiculous it was for this young child to have to breathe in ICE emissions when there is now a better and lower cost alternative. Legacy auto can argue lots of things about profit and jobs etc, but to keep going as they are little children like this have to keep breathing in exhaust emissions. How do you think politicians will choose?

Regards,

[vrdiver]

Yesterday a little girl and her mother came to look at my pony. The little girl was skipping and delighting in life. I thought how ridiculous it was for this young child to have to breathe in ICE emissions when there is now a better and lower cost alternative. Legacy auto can argue lots of things about profit and jobs etc, but to keep going as they are little children like this have to keep breathing in exhaust emissions. How do you think politicians will choose?

Regards,

How did the mother and her girl get to your place? I'm willing to bet it was by using an ICE vehicle. If their pleasant day out is disrupted by politicians, how do you think they will vote, given a choice?

Now how do youy think politicians will choose?

VRD (in cynical mode re human self-interest).

[odysseus2000]

Yesterday a little girl and her mother came to look at my pony. The little girl was skipping and delighting in life. I thought how ridiculous it was for this young child to have to breathe in ICE emissions when there is now a better and lower cost alternative. Legacy auto can argue lots of things about profit and jobs etc, but to keep going as they are little children like this have to keep breathing in exhaust emissions. How do you think politicians will choose?

Regards,

How did the mother and her girl get to your place? I'm willing to bet it was by using an ICE vehicle. If their pleasant day out is disrupted by politicians, how do you think they will vote, given a choice?

Now how do youy think politicians will choose?

VRD (in cynical mode re human self-interest).

Actually they walked.

Until recently there was no alternative to ICE, that is no longer the case.

The stone age didn't end because we ran out of stone and the oil age isn't ending because we have run out of oil, but because there are now better, lower cost and cleaner technologies.

Regards,

[Howard]

Howard
... surely you would recognise the premium brands' success at being able to spot growth areas of the market and deliver products which meet consumer's needs very profitably.

Legacy are not doing this, they are producing cars at zero to negative margin built to be mostly trouble free for a lease period & then to become money pits for spare parts for the next owner with legacy auto then flogging spares at super high margins to the unlucky punters who have bought this fall apart engineering.

If you take the trouble to read & view what mechanics say about the premium brands that get taken to them for service & repair you will begin to understand how legacy auto has remained profitable based on this business model.

There are grave dangers for legacy in this tactic, the selling of lots of SUV has caused e.g. UK fuel consumption to rise putting legacy auto directly in the politicians cross hairs as targets for CO2 production that needs to come down. The move to BEV & away from the spare part income is a major issue for legacy & is a key reason they are still pushing out last centuries tech and lobbying the politicians about how they are so important that they must be a special case etc.

It is a re run of Steve Balmer and legacy phones reacting to the iPhone by saying how cheap their kit is and how expensive and useless are iPhones.

Yesterday a little girl and her mother came to look at my pony. The little girl was skipping and delighting in life. I thought how ridiculous it was for this young child to have to breathe in ICE emissions when there is now a better and lower cost alternative. Legacy auto can argue lots of things about profit and jobs etc, but to keep going as they are little children like this have to keep breathing in exhaust emissions. How do you think politicians will choose?

Regards,

I couldn't help dabbing a tear away as I read your final paragraph, Ody.

Hopefully no readers of this forum are driving very old diesels which belch out horrible fumes.

regards

Howard

(A bit like celebs who fly over, first class, from Los Angeles to join extinction rebellion protests in London?)

[odysseus2000]

I couldn't help dabbing a tear away as I read your final paragraph, Ody.

Hopefully no readers of this forum are driving very old diesels which belch out horrible fumes.

regards

Howard

(A bit like celebs who fly over, first class, from Los Angeles to join extinction rebellion protests in London?)

Ha Ha, How true and it was seeing this happy mother and child which made me feel even more awkward about my diesel Volvo.

Yes I am an hypocrite, but I accept it and feel bad about it, but I am too busy with other stuff and have taken to walking for journeys that I used to drive.

If such things are troubling a hardened trader like me how will it trouble impressionable young folk with lots of money?

In the mean time I am slowly rebuilding my Tesla holding into this hard sell off, but I could change and flip at any moment.

Regards,

[odysseus2000]

Perhaps saying that this government is the Aston Martin of governments was not the best metaphor given their results this morning. Maybe they would better as the Tesla of governments:

https://twitter.com/BBCPolitics/status/ ... 98785?s=20

Regards,

[PeterGray]

Legacy are not doing this, they are producing cars at zero to negative margin built to be mostly trouble free for a lease period & then to become money pits for spare parts for the next owner with legacy auto then flogging spares at super high margins to the unlucky punters who have bought this fall apart engineering.

Maybe that's true of some legacy producers. Certainly not my experience. I usually buy new and drive for 10+ years. Two have been from VW and run faultlessly till sold. One was a Vauxhall and one a Citroen, both were pretty problem free, but I've gone back to VW, and no regrets. I had to change the original 10 year old battery in my diesel Golf recently, but that's hardly a surprise or a disaster. That's the only time it hasn't started and run as it should in the time I've had it.

OTOH, you will have to wait quite a few years yet to know if a Tesla would do so well. And there certainly seem to be indications they may be expensive to keep on the road - not least that while they may be well engineered in many respects the impression comes across from many complaints that their lack of experience in mass production of long lasting cars shows at times - in particular in failing to engineer in the ability to repair and replace damaged (and in time worn out) parts cost effectively. Time will tell, but my next car, if I live that long, will be a VW.

[PeterGray]

Perhaps saying that this government is the Aston Martin of governments was not the best metaphor given their results this morning. Maybe they would better as the Tesla of governments:

https://twitter.com/BBCPolitics/status/ ... 98785?s=20

Regards,

Well, they are probably my view of Tesla - but perhaps not yours? Aston Martin is a year or two down the road, after the sh&t really hits the fan.

[dspp]

What with Brexit and Climate Change I am getting an insight into what the end of the slave trade must have looked like.

Horses down, steam engines and railways up, shipping on chaos, sail and galleys down, sugar iffy, etc

Regards, dspp

[johnhemming]

because there are now better, lower cost and cleaner technologies.

One of my things was getting the feed in tariff going in the UK. Prior to that the UK was trying to stop the Germans doing it.

However, "lower cost" tends to be on a short term timescale. We are now making real progress on this, but we have not got there yet AFAIK. I would be pleased to be persuaded otherwise ... over to you.

[odysseus2000]

What with Brexit and Climate Change I am getting an insight into what the end of the slave trade must have looked like.

Horses down, steam engines and railways up, shipping on chaos, sail and galleys down, sugar iffy, etc

Regards, dspp

The added dimension to the time around the end of the slave trade in 1807 was the war between the UK and France, with the end of French naval power at the battle of Trafalgar in 1805 and then the long wait with relentless fear that the French were coming over the channel, before the end of Napoleon at Waterloo in 1815.

The early part of the 19th century must have been extraordinarily difficult with all the information coming slowly by newspapers.

There is an oft quoted story that before the result of the battle of Waterloo was announced, Rothschild was on the floor of the Stock Exchange selling, causing market prices to fall while accomplice were buying the bargains.

Whether this happened or not is still disputed just as whether Rothschild made a fortune or not is unclear, but many have celebrated the event as one of the greatest pieces of stock market manipulation ever.

Compared to those days we all live like kings and have near 'god like' knowledge of what is happening, but very few investors/traders seem to want to exploit the blessing of our time as evidenced by how few people said they owned Tesla in your question of several days ago, even though Tesla has given life changing financial opportunities, it seems opportunities are as much about the person as the time and event.

Regards,

[odysseus2000]

because there are now better, lower cost and cleaner technologies.

One of my things was getting the feed in tariff going in the UK. Prior to that the UK was trying to stop the Germans doing it.

However, "lower cost" tends to be on a short term timescale. We are now making real progress on this, but we have not got there yet AFAIK. I would be pleased to be persuaded otherwise ... over to you.

Most of the opportunity now unfortunately comes down to the politicians. There is no doubt in my mind that BEV, wind, solar and storage can make the UK energy independent and clean and create a manufacturing boom that would dwarf everything that came from North Sea Oil and be on going till something better comes along.

The issue now is will the politicians let these huge opportunities slip to foreign powers which has already happened with a lot of the wind generation hardware and allow the existing generators to continue to rip off consumers by raising rates to pay for this investment, when a market solution of the utilities and other players being capped on domestic pricing and thus forced to raise capital by equity issue would benefit many more people.

It would be a simple matter for the UK to embrace all of this tech and at the same time for the politicians to demand that a lot of the hardware is built on UK soil with UK workers. Now that the UK is free of the EU rules this can happen, but the politicians have to understand the situation and actively go for it.

Regards,

[odysseus2000]

Legacy are not doing this, they are producing cars at zero to negative margin built to be mostly trouble free for a lease period & then to become money pits for spare parts for the next owner with legacy auto then flogging spares at super high margins to the unlucky punters who have bought this fall apart engineering.

Maybe that's true of some legacy producers. Certainly not my experience. I usually buy new and drive for 10+ years. Two have been from VW and run faultlessly till sold. One was a Vauxhall and one a Citroen, both were pretty problem free, but I've gone back to VW, and no regrets. I had to change the original 10 year old battery in my diesel Golf recently, but that's hardly a surprise or a disaster. That's the only time it hasn't started and run as it should in the time I've had it.

OTOH, you will have to wait quite a few years yet to know if a Tesla would do so well. And there certainly seem to be indications they may be expensive to keep on the road - not least that while they may be well engineered in many respects the impression comes across from many complaints that their lack of experience in mass production of long lasting cars shows at times - in particular in failing to engineer in the ability to repair and replace damaged (and in time worn out) parts cost effectively. Time will tell, but my next car, if I live that long, will be a VW.

From my observations and discussions there are clearly some vehicles that are a lot worse than others.

VW GDI (gasoline direct injection) are renown for breaking, the BMW mini brings in enough repair work to keep a local garage happily profitable and the more expensive and sophisticated the car the more they become money pits with age. My own personal experience with a c-class Mercedes was that it was built to break, endless numbers of things made as cheap and flimsy as possible, including the paint job which failed in numerous ways.

Still it is good that some cars have proved to be good investments.

Regards,

[Howard]

https://seekingalpha.com/news/3546575-t ... ent=link-3

According to this report, Tesla's sales in China dropped by 46% month on month in January. This was before Coronavirus hit. Total sales were 3,563 down from 6,643 in December and around two thirds were made in China.

In Norway, Netherlands and Spain total sales were 262 this month down around 9% from January sales (280).

We’ll know February’s sales in the UK within a few days. (January was 396)
Regards

Howard

[johnhemming]

What we dont know is the commercial seasonality in China, however.

[dealtn]

... when a market solution of the utilities and other players being capped on domestic pricing and thus forced to raise capital by equity issue would benefit many more people.

It would be a simple matter for the UK to embrace all of this tech and at the same time for the politicians to demand that a lot of the hardware is built on UK soil with UK workers. Now that the UK is free of the EU rules this can happen, but the politicians have to understand the situation and actively go for it...

How is it a "market solution" when you use words such as "capped", "forced to raise capital", "politicians to demand" etc.?

[odysseus2000]

... when a market solution of the utilities and other players being capped on domestic pricing and thus forced to raise capital by equity issue would benefit many more people.

It would be a simple matter for the UK to embrace all of this tech and at the same time for the politicians to demand that a lot of the hardware is built on UK soil with UK workers. Now that the UK is free of the EU rules this can happen, but the politicians have to understand the situation and actively go for it...

How is it a "market solution" when you use words such as "capped", "forced to raise capital", "politicians to demand" etc.?

I am not sure what you don't follow here, so if this isn't answering your question, please re-ask.

Background:

UK utilities were privatised as near monopolies and then they started to rip off their consumers.

The government introduced regulators who were supposed to prevent rip offs and to some extent did, but the regulators have in general imho been too utility supportive and too supportive of generous dividends and not enough consumer supportive.

Current:

We are now in the middle of the transitions from hydrocarbon fuels to renewables. The regulators have allowed the utilities to pay for the wind turbines etc by substantially raising consumer prices.

An alternative market approach would have been for the regulators to say that as there is a good business case for renewables (see Berkshire recent letter, linked here and on main macro and global page), the utilities must go to the equity markets for the cash, issuing stock or to the bond markets to borrow and not raise consumer prices, creating if necessary new business from these funds whose job it is to create the tech and then run it, or bring in new suppliers. E.g. all the major US tech corporations now have substantial renewable power operations.

The government could say that we want renewables and we want a substantial part of the manufacturing, installation and maintenance done in the UK with UK workers.

If these steps had been followed consumer prices for utilities would not have ramped up, there would be a thriving UK renewables industry and new growth equity in the UK markets which would have benefitted the City.

As I see things the transition to renewable clean power has been handled to the detriment of the UK economy and could have been done in a way that would have helped the UK. Imagine if the renewable build had been done in depressed areas of the country, all the jobs and such created and all the savings from not ramping up utility bills being available for consumers purchases etc. The current situation is creating a substantial transfer of wealth to a very small number of people and many of them foreign nationals.

If you don't agree, then where am I wrong, what am i saying that isn't correct?

Regards,