Whitney Tilson’s email to investors discussing Tesla‘s enhanced summon feature and why the company’s stock is likely to drift down.
Discussion on Tesla’s Enhanced Summon feature
One of my friends (who’s bullish on Tesla) sent me a link to this web page, Watch this Tesla Model 3 drive to its owner on Enhanced Summon in latest video, which has two videos of Model 3 owners summoning their cars from a parking lot.
Worm Capital July 2020 Performance Update: Up 152% YTD
Worm Capital performance update for the month ended July 31, 2020. Q2 2020 hedge fund letters, conferences and more Long/Short Equity Growth Strategy Net Performance Long-Only Equity Growth Strategy Net Performance
In response, another friend (who’s bearish) wrote: Watch this one try to drive the owner into a construction barrier: http://digg.com/2019/tesla-autopilot-crash”
To which friend 1 wrote:
People kill themselves every day driving regular old fashioned cars just being themselves (horrible drivers). ~90% of accidents are due to human error (and we are actually getting worse with added distractions from smart phones). I think Tesla’s autopilot is already better on highways than the average driver (a low bar) and I have no doubt it will get WAY better eventually and save a lot of lives.
But that wasn’t the point of the advanced summon video. It’s a bit of a useless fun feature that is going to sell A TON of cars. People will buy it just to have this and the other automakers won’t offer this because: 1) They probably won’t have this type of capability for years; and 2) They’ll think it’s stupid because they just don’t get it...
In response, Anton Wahlman wrote:
First, watch this scene from the movie “Telefon” (1977):
For reference, here is the official movie trailer:
Now, with that as background material, here is the argument: The ability to remote-control a car will not be more allowed than your ability to remote-control a drone, which is already very restricted and is likely to become even more restricted in the future.
A remote-controlled car is basically a land-based drone with a 4,000 lbs payload, instead of 4 lbs.
We carefully guard our airports, military bases and city centers from drone use. There is basically a blanket ban on operating a drone within X number of miles away from any airport in the U.S. They try to detect them, and if they find one, they will hunt down the operator like an animal.
The reason Al Qaeda and other terrorists don’t blow up more buildings in the U.S., or jam the Lincoln or Holland tunnels with something that will immobilize the city, is that they can’t find a willing person on U.S. soil to sacrifice himself or herself. However, if they can operate a multi-thousand ton vehicle remotely, what would hold them back then? Nothing.
Then imagine a state hostile actor such as China or Russia -- let alone North Korea or Iran -- with all of their resources.
The reality is that if self-driving cars (driverless) can be made to work, they will be banned as a matter of national security. They are nothing but giant land-based drones that can be used by terrorists and hostile governments to blow up the U.S.A. from a remote location, or simply block all tunnels, bridges, freeways and streets at a moment’s notice. A giant fleet of sleeper cells, just like in the 1977 movie Telefon.
Such a tool has the ability to cause death or injury in a multitude of ways, possibly killing millions of Americans in a matter of one single second. Their lethality is matched only by atomic bombs. It is a distributed weapon of mass destruction, disguised as a taxi, delivery van or other vehicle, ready to be deployed on second’s notice like the ultimate sleeper cell.
I published many articles on this subject over the last four years in particular, such as this recent one from December 21, 2018:
Basically, if driverless cars are ever made to work, they will be banned or severely restricted just like what happened to drones. That’s because they are the greatest national security risk facing our country.
Why Tesla's stock is likely to drift down
From a friend:
One of the simplest and most accurate ways to predict stock price movements, is to see where EPS estimates are going during the investment period. If over the next few days, weeks and months the EPS estimates are going to be rising, chances are that the stock in question is going to increase in value during that period too. In this case, the EPS estimates started coming down on March 12. Only a handful of the analysts covering Tesla have revised their estimates since March 12. I imagine more downward revisions will be coming.
As long as those revisions are coming, the stock is more likely to trade down than up. Then, adding insult to injury, if Tesla *still* misses whatever the consensus will be when they report Q1 financial results -- or pre-announce those results -- then the stock seems more likely than not to take yet another leg down.
Of course, all of this is wrapped into numerous other factors, some of whom are more pronounced in the case of Tesla than with many other stocks. Those factors can shift this basic "rule of thumb" in either direction, depending on the sentiment -- which is itself one of the most major factors.
But if you think that there are more analysts who will be revising their TSLA EPS estimates down over the next few days, weeks or months, then I'd rather bet on this stock drifting down -- as opposed to up -- during that time.
Hey, what do you think we will learn from the other automakers at or in the days leading up to the New York Auto Show, with the main press events taking place April 15-17? I can think of a few things -- none good for Tesla.
@TeslaCharts on Tesla's VIN gap
A very smart thread by @TeslaCharts on the VIN gap: https://twitter.com/TeslaCharts/status/1086978076368691202/photo/1
A lot of smart comments below as well.
Tesla bulls need to address this.
The BEST explanation from a bull’s perspective is that the company is totally incompetent and disorganized – which is hardly good news…
1/ In this thread, I cover much of what I think I know about VINs. If I do my job correctly, you’ll fully understand the ‘aha moments’ that come later. But first, read my disclosures.$TSLA #ExplainTheVINs pic.twitter.com/sKQOrXUNQw
— TeslaCharts (@TeslaCharts) January 20, 2019
Are Teslas safer?
A key question: a Teslas safer or more dangerous than comparable cars? Musk, the company and the bulls claim yes, but after reading these three articles, I’m HIGHLY skeptical:
- Chris Brown of Aristides Capital (aka Midwestern Hedgie): https://medium.com/@MidwesternHedgi/teslas-driver-fatality-rate-is-more-than-triple-that-of-luxury-cars-and-likely-even-higher-433670ddde17
- A friend: The death rate for Tesla is higher than it is for any other modern luxury car. Those stats (which have only worsened for Tesla) are dissected here: https://www.zerohedge.com/news/2018-05-29/are-teslas-self-proclaimed-worlds-safest-cars-actually-among-worlds-deadliest
- Furthermore, the NHTSA stats when properly evaluated show that "Autopilot on" is MORE dangerous than "Autopilot off": https://arstechnica.com/cars/2019/02/in-2017-the-feds-said-tesla-autopilot-cut-crashes-40-that-was-bogus