Whitney Tilson’s email to investors discussing Stanphyl Capital September letter; is Tesla Inc (NASDAQ:TSLA) losing share?; crisis meeting at Volkswagen; Former Tesla worker speaks out after winning $137M lawsuit; Tesla rolls out full self driving (“FSD”) mode; TSLA employee farewell; Can an EV save you money?
Q3 2021 hedge fund letters, conferences and more
Stanphyl Capital September Letter
1) Attached is the September letter by Tesla bear Mark Spiegel of Stanphyl Capital.
2) Tesla bull Gary Black tweeted:
$TSLA 3Q delivs of 241.3K, up +73% YoY. Seems@like everyone else in the industry is down YoY, which means TSLA is taking huge share. Led by record 67-70K delivs in China, putting to rest any notion China demand is slowing. Watch Street to take up FY’21 and FY’22 earnings ests.
— Gary Black (@garyblack00) October 2, 2021
A TSLA bear replied to me:
For Tesla to grow its unit sales by 73% year-over-year in Q3 means Tesla likely lost EV market share from a year ago.
Why? Because the overall EV market likely grew faster than 73%. I say “likely” because we don’t have the data from all automakers for Q3 yet. I don’t even have reliable August numbers yet from all automakers in all geographies.
For the first 7 months of 2021, the global EV market grew units by 154% -- from 1.2 million units sold to 3.0 million units sold. That’s compared to the same 7 months from the prior year.
Perhaps the EV market growth slowed for all of Q3 -- it may very well have done so. Did it slow down all the way down to Tesla’s 73% year-over-year growth rate? Perhaps, perhaps not. We don’t have that number yet. My guess is that it’s higher than 73%, even if it may not be as high as the 154% that the industry experienced in the first 7 months of the year.
And if the other companies’ EV businesses are growing faster than Tesla’s EV business, shouldn’t they trade at higher multiples than Tesla?
Later, he continued:
We just got the full global EV sales numbers for August. Tesla’s global EV market share was 10%, bringing Tesla year-to-date (Jan-Aug) global EV market share to 13%.
For the first 8 months of 2020 -- year over year -- it was 18%. In other words, Tesla lost 25% global EV market share in 2021 compared to 2020.
The global EV industry grew at 114% and Tesla grew at 86% -- all for the first 8 months of 2021, compared to 2020.
When you grow at only 86% and the competition grows at 114%, you lose 25% market share in a year.
My analyst Kevin DeCamp asked:
Wow, including PHEVs as usual right? Will check BEV market share when I get a chance.
Any opinion on VW management recent comments on Tesla?
My friend replied:
Yes, these are the total EV numbers. EV = BEV + PHEV. Any car with a plug.
It doesn’t make any difference, or at least not any material difference, because we are measuring year-over-year and it was the same definition for the prior period. This is about the change in market share, not market share.
There are 3 possibilities:
-
- BEV outgrew PHEV: Then, Tesla was losing more market share in BEV.
- PHEV outgrew BEV: Then, Tesla was not participating in the faster-growing segment.
- BEV grew at the same rate as PHEV: Then it really doesn’t matter at all.
As for VW’s comments, I did not hear/read them all, other than something to the effect that their first factory (Wolfsburg) is relatively inefficient compared to newer factories such as greenfield factories.
This is true per definition. I have been to Wolfsburg many times and have compared it to other car factories in Japan, Mexico, US, etc. You can’t compare a factory from 1938 that’s located inside a city, with a new factory that has all sorts of space and is located in a huge greenfield area outside the city.
VW knows this not only because it’s obvious anyway, but also because it operates over 100 other car factories world-wide and every single one of them is newer than its 1938 Wolfsburg factory. I was in VW’s factory in Chattanooga, TN, most recently and it’s a very different story than the Wolfsburg factory. Then imagine what the newer ones in Mexico and China look like.
VW sure can handle the manufacturing. There is an inherent “burden” of operating older real estate, but the flipside of that equation is that it is already paid for. In other words, it’s like owning an old city house and renovating it, versus building a brand new house from scratch on a large lot far outside the city.
Crisis Meeting At Volkswagen
3) Kevin writes:
All that time I’ve spend trying to explain the tesla bull case and now VW does it in 2 sentences:
“A Tesla 3 is built in ten hours, more than three times as fast as a VW ID.3 in Zwickau. This puts Tesla in a different dimension when it comes to productivity and profitability.”
According to BI sources Herbert Diess and Brand CEO Ralf Brandstätter called Thursday all 120 top managers in Wolfsburg together for a crisis meeting
Diess stated that compared to Tesla and Chinese manufacturers VW is too expensive, slow and with low productivity not competitive
— Alex (@alex_avoigt) October 1, 2021
Full thread here.
Former Tesla Worker Speaks Out After Winning $137 Million Lawsuit
4) Former Tesla worker speaks out after winning $137 million lawsuit. Excerpt:
Owen Diaz, the former Tesla employee who sued the electric car company over allegations of racism, is opening up about his experience.
“[Tesla] decided not to follow through, they decided to kill investigations,” Diaz said on "Good Morning America" Wednesday. “Tesla, as a company, as a whole, needs to wake up. You know you can't keep treating workers like this.”
Tesla Rolls Out FSD Mode
5) Tesla rolls out full self driving ("FSD") mode:
- https://www.cnbc.com/2021/09/25/tesla-drivers-can-request-fsd-beta-with-a-button-press-despite-safety-concerns.html
- https://www.businessinsider.com/tesla-full-self-driving-elon-musk-beta-update-safety-score-2021-9
- https://www.theverge.com/2021/9/26/22693610/tesla-opens-full-self-driving-beta-software-more-customers
Tesla Employee Farewell
6) A Staff Product Manager at Tesla just tweeted a thread which begins:
I’m bidding a farewell to a company I deeply admire. While much has been written about @Tesla and @elonmusk, I’d like to share a few virtues this experience has instilled in me…??? pic.twitter.com/GRbZ257vyr
— Michael ₿. Rihani ??⚡️?? (@MichaelRihani) September 25, 2021
Can An EV Save You Money?
7) From one of my readers:
I believe in the coming EV (and autonomous) driving future. My wife and I are having this conversation right now and likely going to an EV from gas for the first time.
More support for the predicted future... Does driving an electric car really save you money? A cheapskate runs the numbers - MarketWatch
