This Article originally appeared on Mott Capital Management’s Blog
Tesla Is Killin’ It
The Tesla ($TSLA) Model S is the iPhone of the auto industry and the last round of delivery data shows just why. While most investors were so focused on the Model 3, they missed the beautiful and impressive delivery data for the Model S and X.
Model S Is The iPhone Moment
It is becoming more evident with every passing quarter, that Tesla is becoming more and more like Apple. I did make one mistake, in my prior analysis, I asked if the Model 3 was Tesla’s iPhone moment. I was wrong, it is not the Model 3, the Model S is the flagship car, and Model S is Tesla’s iPhone moment. The Model S is the iPhone of cars, and it is gaining and taking market share from the big boys, and it likely has nothing to do with whether it is gas or electric. It has to do with the quality and the technology.
This Tiger Cub Giant Is Betting On Banks And Tech Stocks In The Recovery
The first two months of the third quarter were the best months for D1 Capital Partners' public portfolio since inception, that's according to a copy of the firm's August update, which ValueWalk has been able to review. Q2 2020 hedge fund letters, conferences and more According to the update, D1's public portfolio returned 20.1% gross Read More
Bears Dug Their Own Graves
The bears tried to take Tesla down, and they realized how they dug their own grave. That is because when stocks don’t go down on “disappointing” news, it is usually a good indication that the stock will be going in one direction and that is up. Tesla ($TSLA) shares gapped lower, only to recover all the losses and then surge higher into the close. The stock traded as low as $331, before turning and finishing the day higher at nearly $350.
Why You Should Read More Than The Headlines
The bad news was that Tesla only delivered 220 Model 3 when the expectations were for roughly 1,500. But then investors that read the press release decided the shorts and the traders reading only the headline had taken the stock too low and the tide quickly turned.
If you had read the news release, it was pretty clear that Tesla delivered and had more cars in transit that it had produced, which meant the idea of Model S and X demand plateauing and soaring inventory theory came to crashing halt. What is most impressive about this data was the terrible numbers BMW and Audi put up for September and year to date.
You can read more Tesla’s Analysis in my free article found on Investopedia.
Terrible Auto Sales Continue
Year to date, BMW Series 6 and 7 sales have fallen by 24 and 29 percent respectively, while Series 3 sales are down 19 percent. Oh and those two EV’s BMW produces, the i3 and i8, those sales are down 20 and 70 percent, respectively. Audi A8 sales declined by 20 percent. The Chevy Bolt has sold a total of 14k units for the year. Keep in mind the Bolt is half the price of the Model S, and the Model S has sold almost three times as many units this year.
Again, I said this in July, say what you want about Tesla, but they are doing something right. Just ask Audi and BMW.
But now everyone is hopping on the EV bandwagon, with Ford announcing it was cutting cost to funnel saving into EV’s.
Tesla Has Technology
Maybe it isn’t that people want EV’s, as much as they want high-quality cars, which come with little hassle and have state of the art technology. With Tesla you can get your software update pushed out over the air. With everyone else, you have to make an appointment a week in advance to get a loaner car, so you can have some computer update your software.
The Model S is the iPhone X, and Model 3 is the iPhone 8.
Now I’m just wondering which of the auto’s is Blackberry and Nokia? Maybe? Anyone?
Disclaimer: Michael Kramer and the Clients of Mott Capital own shares of Tesla
Mott Capital Management, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.