Jaguar And Audi Beating Tesla Model S And X Sales In Europe

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Jaguar And Audi Beating Tesla Model S And X Sales In Europe
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Whitney Tilson’s email to investors discussing Tesla Model S and X Sales in Europe and Anton Wahlman’s new article.

Play Quizzes 4

1) From a friend:

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Q4 hedge fund letters, conference, scoops etc

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You may want to ask your cousins if they have driven a Jaguar i-Pace, Audi eTron, Hyundai Kona EV, Kia Niro EV -- or for that matter a Chevrolet Bolt EV.  The all-new 243 mile range Kia Soul EV is also barely a month away from California dealerships.

Those are all cars that drive just as well as a Tesla (or arguably better), while having proper interiors and dashboards (not a distracting tablet), Android Auto and Apple CarPlay (Why does Tesla boycott Apple and Android?) and are likely to spend a decimal point less time in the service department.  They’ll also have doors that open and close every time, glass that doesn’t crack, and trunks that doesn’t get filled with water when it rains. You can even run them through car washes!

The reality is that the “basic driving experience” (the so-called “driving dynamics”) is so similar between all of these cars that most people couldn’t pass a blind test.  As a minimum, whatever ultra-tiny difference there is between a Tesla and a different-brand BEV (battery-electric vehicle) is positively meaningless in regular traffic/driving.  Teslas drive just fine (when they’re not spending a few weeks or months in a row at the shop), but so do almost all the other new electric cars as well.

Tesla certainly did a few things right.  First, the design of the Model S was beautiful, no matter what the powertrain is or was (could have been a diesel, and people would have loved the car anyway).  Then again, please take a look at the Jaguar i-Pace and Audi eTron and tell me that those cars aren’t better-looking than any Tesla, by far.

In Europe, where Jaguar -- and to some extent Audi -- are both stronger brands than they are here in the U.S., sales results in recent days, weeks and months are clear: Jaguar has taken a huge bite out of Tesla Model S and X, and since the Audi went on sale a week ago, its deliveries are handily beating Tesla Model S and X in multiple countries (we will have data from more countries after month-end).

You could also argue that the 2020 Kia Soul EV (available in California dealerships near the end of April 2019) is a much more interesting design than any Tesla today.

The other thing Tesla did very well, was the charging network.  No doubt about it -- until just a few short months ago, it was the only game in town for long-distance driving.

However, Electrify America is in the middle of spending $2 billion on its network in the U.S., and just started lighting up its first stations in late 2018.  By July 2019, they will have almost 500 stations around the U.S. interstates -- and many others located in metro areas. It will not have the same density as Tesla’s Superchargers quite yet, but they will be close enough only four months from now: https://www.electrifyamerica.com/locate-charger  So, the Supercharger advantage will soon be close enough to “zero” and eventually invert from a Tesla advantage, to a liability.

Remember what all Tesla fanboys used to tell us for years? “But have you driven one yet?”

Yeah, I’ve driven all of them.  But now the tables have turned. It’s time for the Tesla fanboys to answer the same question: “But have you driven a Jaguar i-Pace or Hyundai Kona EV yet?”

Plus, by the end of 2022 -- any of the other 200+ pure EVs that will be in the market by that time.  Remember, Volkswagen Group alone has announced 70 pure EV models -- PLUS another 30 plug-in hybrids, making their way to production.  That’s 100 different models with a plug. Positively dizzying. And positively lethal for industry profits -- including of course Tesla’s, which will have no gasoline/diesel profits with with to offset this guaranteed-below-zero margin situation.

2) Glenn writes:

I found this quote funny:

Jominy:  The attributes of Tesla are such that they have highly desirable models and a cool factor—and they just happen to be electric.

The whole fanboy mantra is “save the world”, and this guy totally ignores that.

A friend replies:

Well, the reality is that both of those statements can be true -- sometimes overlapping, and sometimes applicable to different people.  In a decade of studying buyer motivation for EVs, I have come to find that there are all kinds:

  1. "Save the world."
  2. "Get laid" -- fast, good-looking car.
  3. Tech experimentation, home research project.
  4. The car is so silent, helping my obsession of running over squirrels when I head out of the driveway in the morning.
  5. I get free electricity from the office (so I never need to charge at home).
  6. Carpool lane privileges (that alone is 50% of the buyer motivation in Silicon Valley and Los Angeles, where 40% of Teslas are sold).

Anton Wahlman's new article

Anton Wahlman with a new article on the SEC's increasing pressure on Tesla and Musk.

I have read plenty of letters from the SEC, and this one REALLY stands out for how pissed they are (as well they should be).

https://seekingalpha.com/instablog/200447-anton-wahlman/5282752-elon-s-last-days

Summary

The SEC’s February 26 letter to Tesla’s lawyer is devastating.

It says Tesla is not responsive to its previous questions.

It also asks new probing questions, all pointing to new lines of attack and aggressiveness.

The key going forward will be if the Tesla board of directors feel like they may be subject to personal liability.

If that equation flips, they may have to force Elon Musk away from the Tesla CEO position -- or more.

2) Another friend's comments:

"Your friend " makes many good points ... but he's completely off base about Tesla's being poorly bulit, in the shop all the time,etc... I've had mine for almost 4 years and 56,000 miles and it only goes in for regular ( every 12,500 miles ) maintenance and virtually zero issues.

I hardly recognize the Tesla your friend is describing. And living in Westport Ct which I believe still holds the record ( at least pre-Model 3 ) for the most Tesla's per capita and knowing so many people who own them, love them and don't have any of the issues he described ... kind of wondering what his agenda is. BTW .. I know Jags no longer have their incredibly well deserved reputation for spending weeks/months in the service department and were so unreliable back in the day that many owners had corvette engines installed to replace the factory issued "engine" from Jag ... so I couldn't help but chuckle when he made reference to Teslas in the service department with a direct comparison to Jaguar.

Yes.. there is a lot of competition coming and as you've accurately pointed out, Tesla has challenges that go beyond the car ( balance sheet, etc ). The question is will the explosive growth predicted for EV's more than compensate for the additional competition. And I suspect that these new entries into the world of Electric vehicles will have their own bugs to work out. And that's coming from a multi-decade Audi owner ( still have a Q7 for my wife ) who has a lot of respect for the brand but remembers the struggles they had with their aluminum engines ( the 100 series ) .. and that little issue with the cars accelerating like the 737 MAX that almost put Audi out of business at one point. And then there's VW and their emission scandal ... etc, etc.

Tesla's charging network advantage is HUGE ... without it you simply can't take road trips in all the other EV's on the market unless you want to spend four or five hours on the side of the road charging ( versus 35-60 minutes at a SuperCharger ) ... and yes, eventually that will no longer be a competitive advantage. In fact, God forbid Tesla goes down, the consortium should make an offer to buy the SuperCharger network and convert it to work for all cars. That would be a huge jump start. In the meantime, building out that network ( like the one they have in Europe ) will take longer than they think. In the meantime, their EV's will be great "second cars" as long as you have something else in the garage to visit your ski house in Vermont or place on the Cape.

I could go on ... and believe me, if Tesla folds or is purchased by some company that screws it up, I'll be heartbroken. But no matter what happens they've changed the automotive business forever ... and having owned a lot of fun cars including my beloved Porsche 911 ... owning and enjoying my Tesla has been a great experience .. one I hope to enjoy for many years to come.

Thanks for all the ink on the topic.

Updated on

Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver
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4 COMMENTS

  1. So I find this article amusing, yes people all have different tastes that’s why some like GM and others like Ford. Also those car manufacturers have had all those problems and more with their cars and various vehicles they produce and still do with Ford’s gas leak in their trucks over about 5 years plus and haven’t really fixed it. As for competition yes bring it on as I would love to see all manufacturers to bring out great EV or BEVs.
    None of them are matching Tesla in all the areas let alone efficiency. Get your facts right if you are writing an article. In sales and technology they yet to catch up let alone sell as many BEVs.
    Not sure who is paying ? your bills but not sure you are independent on this.

  2. …Tesla’s charging network is lagging behind…

    Well, that’s false. The Tesla Supercharger network is the biggest EV fast-charge network in the world, by a mile. No one else is even close. Tesla is rolling out the V3 upgrades to their chargers right now.

    …the world wide standard CCS chargers have a 350KW capacity…

    Misleading statement. The vast majority of CCS chargers being installed are only 150 kw. Only a few are 350 kw, which appears to be only a stunt, as no EVs can charge at that rate (including coming-soon cars).

    Tesla’s newest 250kw chargers – which are getting a wide rollout – can be fully utilized by Tesla’s cars, which can actually charge at that maximum rate. Today’s cars from other makers – so far – all charge at an embarrassingly slow rate, slower even than Tesla’s older charge standard. So Tesla has nothing to worry about yet.

    …98% of EVs use the CCS chargig ptotocol…

    That couldn’t possibly be more false. Tesla is responsible for around 25% of all EVs on the road today. Of the remaining 75%, a large number are older EVs that use older, outdated charging systems like J1772 and CHAdeMO. CCS is a relatively new standard, which undeniably has a future, but is presently nowhere near Tesla for adoption rate.

    Further, Tesla supports CCS in Europe today, meaning Tesla drivers there can charge from EITHER Tesla or CCS stations. The same will happen in the US when CCS gets traction here. This guarantees that Tesla owners will always have twice as many places to charge (BOTH networks) compared to other EV drivers.

  3. Tesla’s charging network is laggingbehind the world wide standard CCS chargers have a 350KW capacity, andwill shortly goto 450 KW and charge teie as fats as the newest Tesla V# Superchargers (250KW max). The fact that 98% of EVs use the CCS chargig ptotocol means that they will have by far the most numerous charging stations the world over.

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