Tesla quality is ranked dead last among 31 brands, Stock Headed To zero: Shortseller

Excerpted from Stanphyl Capital’s September 2020 letter to investors.

We remain short the biggest bubble in modern stock market history, Tesla Inc. (TSLA), which currently has a fully diluted market cap of approximately $445 billion, roughly equal to those of Toyota, VW, GM, Daimler, BMW and Ford combined despite unprofitably selling fewer than 500,000 cars a year to their nearly 40 million. The core points of our Tesla short thesis are:

  • Tesla has no “moat” of any kind; i.e., nothing meaningfully proprietary in terms of electric car technology, while existing automakers—unlike Tesla—have a decades-long “experience moat” of knowing how to mass-produce, distribute and service high-quality cars consistently and profitably, as well as the ability to subsidize losses on electric cars with profits from their conventional cars.
  • Excluding sunsetting emission credit sales, in 2020 Tesla will again lose money, as it has every year in its 17-year existence.
  • Unit demand for Tesla’s cars is only maintained via continual price cutting.

In early October Tesla will report Q3 unit deliveries for which expectations (following multiple recent price cuts!) are in the 140,000s, well short of the company’s self-proclaimed current quarterly production capacity of 173,000. Nothing is more amusing than seeing this giant stock promotion of a company try to perpetuate the illusion of being “supply constrained” by continuing to add capacity (expanding its Chinese factory while breaking ground on new factories in Texas and Germany) in order to desperately try to maintain an image of “limitless demand” while it continually slashes prices to unprofitable levels (excluding unsustainable emission credit sales and accounting fraud) just to utilize far less than its existing capacity!

This Tiger Cub Giant Is Betting On Banks And Tech Stocks In The Recovery

D1 CapitalThe 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


For Q2 2020 Tesla reported net income of $104 million, which was laughably deceptive as it included $428 million of pure-profit emission credit sales, a revenue stream that will be drastically reduced later this year and disappear completely some time in 2021 when other manufacturers have enough EVs of their own. Excluding that, Tesla lost $324 million, and that’s before accounting for its fraudulently low warranty reserve. As for other blatant examples of nonsensical or unsustainable accounting, @WallStCynic pointed out: “D&A was down (!) Y/Y, despite a new factory coming online. SG&A + R&D was also down Y/Y.” Here’s a great chart from GLJ Research showing Tesla’s awful record of quarterly net income excluding emission credit sales:

As for Tesla’s “China growth story,” that EV competitive landscape is now getting vicious: Tesla’s July China sales were down considerably from June’s and August was up only 800 units over July, while a price war there is just getting started. In fact, Tesla’s brand new Chinese factory has so much excess capacity that it’s now exporting to Europe and elsewhere in Asia! And oh, for perspective: in Q2 Tesla sold approximately 30,000 cars in China; GM sold 713,000, and in August Tesla sold fewer than 12,000 there; lets see how everyone else did:

And for those of you looking for a resumption of growth from Tesla’s Model Y, demand for that car is so poor that Tesla already slashed its price shortly after it was introduced:

This is unsurprising, as its quality is awful, and later this year and in 2021 it will face competition from the much better built electric Audi Q4 e-tron and Q4 e-tron Sportback, BMW iX3 (in Europe & China), Mercedes EQB, Volvo XC40, Volkswagen ID.4 and Nissan Ariya, while less expensive and available now are the excellent all-electric Hyundai Kona and Kia Niro, extremely well reviewed small crossovers with an EPA range of 258 miles for the Hyundai and 238 miles for the Kia, at prices of under $30,000 inclusive of the $7500 U.S. tax credit. Meanwhile, the Model 3 now has terrific direct “sedan competition” from Volvo’s beautiful new Polestar 2 and the premium version of Volkswagen’s ID.3 (in Europe), and in 2021 from the BMW i4.

And oh, the joke of a “pickup truck” Tesla previewed last year won’t be any kind of “growth engine” either, especially as if it’s ever built it will enter a dogfight of a market.

And for those who still think “Tesla is years ahead of the competition,” the most competitive EV region in the world is Europe, and Tesla’s EV market share there has now declined from over 30% to a year-end estimate of 10% (and in 2021 will be in single digits). Courtesy of Twitter user @fly4dat, here’s a great chart showing that:

And in the high-end segment worldwide, the Audi eTron now outsells either of Tesla’s offerings (the Model S and the Model X)…

Meanwhile, Tesla initial quality is ranked dead last among 31 brands J.D. Power surveyed…

…while the latest What Car? survey shows similar results with Tesla finishing #29 out of 31, and Consumer Reports ranks it 23rd out of 30 brands (and that’s with many stockholder/owners undoubtedly underreporting their problems—the real ranking is almost certainly much worse).

And here’s a great graphic from @clausMller17 showing Tesla’s blatantly fraudulent range claims:

Regarding safety, Tesla has been hit with at least one well-documented sudden acceleration class action lawsuit and for years knowingly sold cars that it knew were a fire hazard. And of course it continues to sell and promote its hugely dangerous so-called “Autopilot” system, which Consumer Reports has completely eviscerated; God only knows how many more people this monstrosity unleashed on public roads will kill, despite the NTSB condemning it as dangerous. In fact, Teslas have far more pro rata (i.e., relative to the number sold) deadly incidents than other comparable new luxury cars; here’s a link to those that have been made public. In other words, when it comes to the safety of customers and innocent bystanders, Tesla is truly one of the most vile companies on Earth. Meanwhile the number of lawsuits of all types against the company continues to escalate– there are now over 800 including one proving blatant fraud by Musk in the SolarCity buyout (if you want to be really entertained, read his deposition!).

Finally, Tesla has the most executive departures I’ve ever seen from any company; here’s the astounding full list of escapees. These people aren’t leaving because things are going great (or even passably) at Tesla; rather, they’re likely leaving because Musk is either an outright crook or the world’s biggest jerk to work for (or both). And in January Aaron Greenspan of @PlainSite published a terrific treatise on the long history of Tesla fraud; please read it!

So here is Tesla’s competition in cars (note: these links are regularly updated)…

Porsche Taycan

Porsche Taycan Cross Turismo

Porsche Macan EV to get Taycan platform and tech

Audi e-tron: Electric Has Gone Audi

2020 Audi e-tron Sportback Whispers Electric Luxury

2020 Audi e-tron Sportback Whispers Electric Luxury

2020 Audi e-tron Sportback Whispers Electric Luxury

2020 Audi e-tron Sportback Whispers Electric Luxury

AUDI E-TRON GT FIRST DRIVE: LOOK OUT, TESLA (available 2021)

2021 Audi Q4 e-tron Will Be the Cheapest Electric Audi

Audi TT set to morph into all-electric crossover

Jaguar i-Pace

Jaguar Land Rover to invest £1bn in three new UK-built EVs

Mercedes EQC electric SUV available now in Europe & China and in 2021 in the U.S.

Mercedes-Benz Launches the EQV, its First Fully-Electric Passenger Van

Mercedes EQA electric SUV previewed in exclusive images

Mercedes EQB Small SUV to boost brand’s electric line-up

New 435mile 2021 Mercedes EQS electric flagship to stand out next to new S-Class

Volvo Polestar 2

Polestar 3 will be an electric SUV that shares its all-new platform with next Volvo XC90

Volvo XC40 Recharge, a 408-HP Electric SUV comes in 2020

Volvo confirms electric version of next XC90

Volkswagen ID.3 Headlines VW’s Electrified Future

Volkswagen ID.4 electric SUV revealed with up to 323 miles of range

Volkswagen ID.6 SUV spied testing in the Alps

VW Group’s first hot compact EV to be launched by Cupra brand

VW Group to launch 70 pure electric cars over the next decade

GM Will Have 12 Electric Vehicles Soon, Releases Details on Them

GM Will Have 12 Electric Vehicles Soon, Releases Details on Them

GM Will Have 12 Electric Vehicles Soon, Releases Details on Them

GM Will Have 12 Electric Vehicles Soon, Releases Details on Them

GM Will Have 12 Electric Vehicles Soon, Releases Details on Them

GM Will Have Twelve Electric Vehicles Soon

Hyundai Kona Electric: 258-mile range & under $38,000 before subsidies

Hyundai set to turn Ioniq name into a global EV brand

Genesis Electric Luxury SUV Coming in 2022

Kia Niro Electric: 239-mile range & $39,000 before subsidies

Kia Soul Electric: 243-mile range

New 2021 electric Kia SUV to offer Porsche Taycan pace with 0-62mph in 3s

All-Electric Ford Mustang Mach-E Delivers Power, Style and Freedom for New Generation

The Electric Ford F-150 Will Be Here by Mid-2022

Ford to build two European EVs based on VW’s MEB platform

Nissan vows to hop back on EV podium with Ariya

Nissan LEAF e+ with 226-mile range is available now

BMW leads off EV offensive with iX3

Electric BMW iX1 SUV set for production

The BMW i4 EV Will Be the Most Powerful 4-Series

BMW iX (iNEXT) electric SUV comes in 2021 in three flavors, from 300 to 600 HP

Rivian electric pickup truck- funded by Amazon, Ford, Cox & others- is on the way

Renault upgrades Zoe electric car as competition intensifies

New all-electric Renault SUV to arrive in next 18 months

Peugeot 208 to electrify Europe’s small-car market

Peugeot to offer EV version of new 2008 small crossover

Electric Mini Arrives 2020

Toyota and Subaru Agree to Jointly Develop BEV-dedicated Platform and BEV SUV

Mazda extends MX name to new MX-30 electric crossover

Opel sees electric Corsa as key EV entry

2021 Vauxhall Mokka revealed as EV with sharp looks, massive changes

Skoda Enyaq iV electric SUV offers range of power, battery sizes

Electric Skoda Enyaq coupe to muscle-in on Tesla Model 3

Citroen compact EV challenges VW ID3 on price

FCA to invest $788M to build new 500 EV in Italy

BYD will launch electric SUV in Europe

The Lucid Air Achieves an Estimated EPA Range of 517 Miles on a Single Charge

Maserati to launch electric sports car

Bentley Will Offer Hybrid Versions of Every Car It Makes and Add an EV by 2025

Lucid Motors closes $1 billion deal with Saudi Arabia to fund electric car production

Meet the Canoo, a Subscription-Only EV Pod Coming in 2021

Two new electric cars from Mahindra in India; Global Tesla rival e-car soon

Former Saab factory gets new life building solar-powered Sono Sion electric cars

 

And in China…

Volkswagen, Chinese ventures to invest 15 billion euros in electric vehicles

SAIC Volkswagen kicks off production at MEB NEV plant

China-built Audi e-tron rolls off production line in Changchun

Audi Q2L e-tron debuts at Auto Shanghai

Audi will build Q4 e-tron in China

Audi negotiating electric vehicle joint venture with FAW

FAW Hongqi starts selling electric SUV with 400km range for $32,000

FAW (Hongqi) to roll out 15 electric models by 2025

BYD launches six new electrified vehicles

Daimler & BYD launch DENZA electric vehicle for the Chinese market

Geely, Mercedes-Benz launch $780 million JV to make electric smart-branded cars

Mercedes styled Denza X 7-seat electric SUV to hit market

Mercedes ‘makes mark’ with China-built EQC

BMW, Great Wall to build new China plant for electric cars

BAIC Goes Electric, & Establishes Itself as a Force in China’s New Energy Vehicle Future

BAIC BJEV, Magna ready to pour RMB2 bln in all-electric PV manufacturing JV

Toyota, BYD will jointly develop electric vehicles for China

Lexus to launch EV in China taking on VW and Tesla

GAC Toyota to ramp up annual capacity by 400,000 NEVs

GAC Aion

GAC NIO kicks off delivery of HYCAN 007 all-electric SUV

Chevrolet Menlo Electric Vehicle Launched in China

Buick Launches VELITE 6 PLUS MAV Electric Vehicle in China

Buick Velite 7 EV And Velite 6 PHEV Launch In China

General Motors’ Chinese Venture to Sink $4.3 Billion Into Electric Vehicles by 2024

Nissan & Dongfeng to invest $9.5 billion in China to boost electric vehicles

Dongfeng’s premium EV-focused “VOYAH” unveiled as independent brand

PSA to accelerate rollout of electrified vehicles in China

Fiat Chrysler, Foxconn Team Up for Electric Vehicles

Hyundai Motor Transforming Chongqing Factory into Electric Vehicle Plant

Polestar said to plan China showroom expansion to compete with Tesla

Nio

Jaguar Land Rover’s Chinese arm invests £800m in EV production

Renault reveals series urban e-SUV K-ZE for China

Renault & Brilliance detail electric van lineup for China

Renault forms China electric vehicle venture with JMCG

Honda Debuts New Everus VE-1 All-Electric SUV, But Only For China

Honda to roll out over 20 electric models in China by 2025

Geely launches new electric car brand ‘Geometry’ – will launch 10 EVs by 2025

Mazda to roll out China-only electric vehicles by 2020

Xpeng Motors sells multiple EV models

Changan New Energy

WM Motors/Weltmeister

Chery

Seres

Enovate

Evergrande Hengchi

China’s cute Ora R1 electric hatch offers a huge range for less than US$9,000

Singulato

JAC Motors releases new product planning, including many NEVs

Seat to make purely electric cars with JAC VW in China

Iconiq Motors

Hozon

Aiways 

NEVS launches electric-car output with Saab 9-3 platform in China

Youxia

CHJ Automotive begins to accept orders of Leading Ideal ONE

Infiniti to launch Chinese-built EV in 2022

Leapmotor

Human Horizons

 

Here’s Tesla’s competition in autonomous driving…

 

Consumer Reports finds Tesla’s Navigate on Autopilot is far less competent than a human driver

Navigant Ranks Tesla Last Among Automakers & Suppliers for Automated Driving

Tesla has a self-driving strategy other companies abandoned years ago

Fiat Chrysler, Waymo expand self-driving partnership for passenger, delivery vehicles

Waymo and Lyft partner to scale self-driving robotaxi service in Phoenix

Volvo, Waymo partner to build self-driving vehicles

Jaguar and Waymo announce an electric, fully autonomous car

Renault, Nissan partner with Waymo for self-driving vehicles

Voyage Partners with FCA to Deliver Fully Driverless Cars

Hyundai and Kia Invest in Aurora

Aptiv and Hyundai Motor Group complete formation of autonomous driving joint venture

Cadillac Super Cruise™ Sets the Standard for Hands-Free Highway Driving

Honda Joins with Cruise and General Motors to Build New Autonomous Vehicle

SoftBank Vision Fund to Invest $2.25 Billion in GM Cruise

Ford’s electric Mustang will offer hands-free driving technology in 2021

Ford-VW alliance with Argo could redraw self-driving sector

VW taps Baidu’s Apollo platform to develop self-driving cars in China

Amazon Buys Driverless Startup Zoox, Cites Ride-Hailing Goal

Nvidia and Mercedes Team Up to Make Next-Gen Vehicles

Daimler’s heavy trucks start self-driving some of the way

SoftBank, Toyota’s self-driving car venture adds Mazda, Suzuki, Subaru Corp, Isuzu Daihatsu 

Continental & NVIDIA Partner to Enable Production of Artificial Intelligence Self-Driving Cars

Mobileye and Geely to Offer Most Robust Driver Assistance Features

Mobileye Starts Testing Self-Driving Vehicles in Germany

Mobileye and NIO Partner to Bring Level 4 Autonomous Vehicles to Consumers

Nissan gives Japan version of Infiniti Q50 hands-free highway driving

Hyundai to start autonomous ride-sharing service in Calif.

Pony.ai raises $462 million in Toyota-led funding

Baidu kicks off trial operation of Apollo robotaxi in Changsha

Toyota to join Baidu’s open-source self-driving platform

Baidu, WM Motor announce strategic partnership for L3, L4 autonomous driving solutions

Baidu plans to mass produce Level 4 self-driving cars with BAIC by 2021

DiDi completes over $500M fundraising round for its autonomous driving subsidiary

BMW and Tencent to develop self-driving car technology together

BMW, NavInfo bolster partnership in HD map service for autonomous cars in China

FAW Hongqi readies electric SUV offering Level 4 autonomous driving

Tencent, Changan Auto Announce Autonomous-Vehicle Joint Venture

Huawei steps up ambitions in self-driving vehicles race

BYD partners with Huawei for autonomous driving

Lyft, Magna in Deal to Develop Hardware, Software for Self-Driving Cars

Deutsche Post to Deploy Test Fleet Of Fully Autonomous Delivery Trucks 

ZF autonomous EV venture names first customer

Magna’s new MAX4 self-driving platform offers autonomy up to Level 4

Groupe PSA’s safe and intuitive autonomous car tested by the general public

Mitsubishi Electric to Exhibit Autonomous-driving Technologies in New xAUTO Test Vehicle

Apple acquires self-driving startup Drive.ai

Momenta – Building Autonomous Driving Brains

JD.com Delivers on Self-Driving Electric Trucks

NAVYA Unveils First Fully Autonomous Taxi

Fujitsu and HERE to partner on advanced mobility services and autonomous driving

Lucid Chooses Mobileye as Partner for Autonomous Vehicle Technology

Nuro’s Robot Delivery Vans Are Arriving Before Self-Driving Cars

 

Here’s where Tesla’s competition will get its battery cells…

 

Panasonic (making deals with multiple automakers)

LG

Samsung

SK Innovation

Toshiba

CATL

BYD

Northvolt (backed by VW & BMW)

Ultium (General Motors & LG joint venture)

PSA And Total Officially Launch Automotive Battery Cell Company

UK companies AMTE Power and Britishvolt plan $4.9 billion investment in battery plants

Verkor

Farasis

Microvast

Akasol

Cenat

Wanxiang

Eve Energy

Svolt

Romeo Power

Solid-state batteries on track at Toyota

ProLogium Technology Will Produce First Next Generation Lithium Ceramic Battery For EVs

BMW invests in Solid Power solid-state batteries

Ford invests in Solid Power solid-state batteries

Hyundai Motor developing solid-state EV batteries

 

Here’s Tesla’s competition in charging networks…

 

Electrify America is spending $2 billion building a high-speed U.S. charging network

GM, EVgo partner to expand U.S. charging network

Circle K Owner Plans Electric-Car Charging Push in U.S., Canada

191 U.S. Porsche dealers are installing 350kw chargers

ChargePoint to equip Daimler dealers with electric car chargers

GM and Bechtel plan to build thousands of electric car charging stations across the US

Ford introduces 12,000 station charging network, teams with Amazon on home installation

Petro-Canada Introduces Coast-to-Coast Canadian Charging Network

Volta is rolling out a free charging network

Ionity has over 150 European 350kw charging stations

E.ON and Virta launch one of the largest intelligent EV charging networks in Europe

Volkswagen plans 36,000 charging points for electric cars throughout Europe

Smatric has over 400 charging points in Austria

Allego has hundreds of chargers in Europe

PodPoint UK charging stations

BP Chargemaster/Polar is building stations across the UK

Instavolt is rolling out a UK charging network

Fastned building 150kw-350kw chargers in Europe 

Aral To Install Over 100 Ultra-Fast Chargers In Germany

Deutsche Telekom launches installation of charging network for e-cars

Shell starts rollout of ultrafast electric car chargers in Europe

Total to build 1,000 high-powered charging points at 300 European service-stations

Volkswagen-based CAMS launches supercharging stations in China

Volkswagen, FAW Group, JAC Motors, Star Charge formally announce new EV charging JV

BP, Didi Jump on Electric-Vehicle Charging Bandwagon

Evie rolls out ultrafast charging network in Australia

Evie Networks To Install 42 Ultra-Fast Charging Sites In Australia

 

And here’s Tesla’s competition in storage batteries…

Panasonic

Samsung

LG

BYD

AES + Siemens (Fluence)

GE

Bosch

Mitsubishi Hitachi

Toshiba

ABB

Saft

Johnson Contols

EnerSys

SOLARWATT

Schneider Electric

Sonnen

Kyocera

Generac

Kokam

NantEnergy

Eaton

Nissan

Tesvolt

Kreisel

Leclanche

Lockheed Martin

EOS Energy Storage

ESS

UET

electrIQ Power

Belectric

Stem

ENGIE

Redflow

Renault

Primus Power

Simpliphi Power

redT Energy Storage

Murata

Bluestorage

Adara

Blue Planet

Tabuchi Electric

Aggreko

Orison

Moixa

Powin Energy

Nidec

Powervault

Schmid

24M

Ecoult

Innolith

LithiumWerks

Natron Energy

Energy Vault

Ambri

Voltstorage