Whitney Tilson’s email to investors discussing Tesla owner comments; More info on Polestar 2; How Tesla defined a new era for the global auto industry; Tesla’s stock price discounts temporal wormhole into the future.
Tesla Owner Comments
1) My friend at Stansberry Research, Jared Kelly, loves his Tesla and made some good points in this email he sent me today:
Seth Klarman: Investors Can No Longer Rely On Mean Reversion
"For most of the last century," Seth Klarman noted in his second-quarter letter to Baupost's investors, "a reasonable approach to assessing a company's future prospects was to expect mean reversion." He went on to explain that fluctuations in business performance were largely cyclical, and investors could profit from this buying low and selling high. Also Read More
Another interesting to thing to look at is subsequent car purchases post an initial EV purchase. There has to be a study done somewhere.
For me… I will NEVER buy a non-electric car again.
I was in Napa last week and I rented a Porsche Panamera through Turo (the AirBNB for cars). It was awful – I couldn’t stand driving it. The tech was outdated, the car was sluggish, it was a tight fit… After about 5 hours, I swapped it for a Tesla Model X. In Napa, I’d say that every 10th car was a Tesla. And every winery has a charging station and the hotel I stayed out had 3. So it was free to drive around.
Once you get used to driving an electric car, there is just no way you’d want to go back to a gas-powered vehicle.
I think the perfect analogy is that it’s like going from a PC to a Mac…. And look at where Apple is today…
Taking it one step further… I think I’ll have to keep buying Teslas as opposed to a different EV. I have invested in a Tesla charger for my garage, so getting another Tesla only makes sense. It really reminds me of how I’m Apple committed. I have this huge iphone/Macbook app infrastructure in place. The cost for me to switch to Android would be immense and a huge pain in the ass. That’s why I don’t see Tesla’s market share getting eroded by competition. I seriously doubt they will lose that many customers over time. Especially, since Tesla just announced they are rolling out an App store soon. Which means third-party developers will be making Tesla’s even better and I’ll be buying apps for my car – further committing myself to Tesla and making change that much harder.
More Info On Polestar 2
2) Replying to Friday’s email about the Polestar, a friend added:
In Tesla-terms, the Polestar 2 has a body which sits in-between the Model 3 and the Model Y.
Compared to the Model 3, there are two meaningful differences:
- It is approximately two inches taller.
- It has a hatchback (just like the Tesla Model Y and S), instead of being a sedan.
Compared to the Model Y, there are two major differences:
- It is approximately 5.5 inches lower.
- There is no optional 3rd row, which the Model Y says it will offer some time in 2021.
One might say that the Polestar 2 combines some of the best body attributes of the Tesla Model Y and 3.
The Polestar 2 is, to my knowledge, the first car to reach consumer deliveries that has the full embedded Google/Android interface. That’s different from Android Auto, although I find the practical significance to be modest as of yet. Android Auto really gives the user everything he wants, in my opinion.
Deliveries of the Polestar 2 were supposed to start in China July 1. I don’t have confirmation yet, that it actually did happen on time.
Polestar 2 deliveries were supposed to start in Europe next week. I don’t know yet if that will happen on time, or whether it’s delayed.
Polestar 2 deliveries were supposed to start on the U.S. West coast in September and on the East Coast in November. I don’t know yet whether that will happen on time either.
Final point: The Volvo sister vehicle, made in Belgium
Volvo will make an XC40-based sister version of the Polestar 2 in Belgium, starting in the fourth quarter of 2020. It’s a taller, more square and slightly shorter vehicle than the Polestar 2. Under the skin, it’s fundamentally the same car as the Polestar 2, however. The XC40 version gets a less sporty tuning than the Polestar 2, much of it via software. It will also be a few thousand dollars less expensive than the Polestar 2.
How Tesla defined a new era for the global auto industry
3) An interesting story about Tesla’s early partnerships with Daimler and Toyota: How Tesla defined a new era for the global auto industry.
Tesla's Stock Price Discounts Temporal Wormhole into the Future
Tesla's market capitalization just crossed $300 billion. It’s the largest car maker in the world, even larger than Toyota, which produced almost nine million cars in 2019 and had a market capitalization of $200 billion. Tesla market cap implies that the market believes that its production will go up more than 20-fold from the 400,000 cars a year it produces today to … ten million cars.
As the market valuation of Tesla raced to the moon, its debt rating remained as junk (Toyota is A+, GM is BBB). The largest automaker in the world is junk-rated.