Traditional Automakers Aren’t Living Up To Low Expectations | HyperChange


Every other automotive company is
closing plants, freaking out about what they’re gonna do next. They can’t bring
an electric vehicle to market. They don’t have a self-driving strategy. They don’t
know what to tell their investors. They’re still paying out a dividend when
they should be cutting that investing in the future. The other kind of anecdote
tying us all together that I just thought was so funny and I guess kind of
gets overlooked is the Porsche. This news about the Porsche take an its EPA
range for a $150,000 car is 201 miles and it’s sort of
funny as I think this is and how everyone’s pointing out how much better
Tesla specs are. I mean it’s hard to really appreciate how you know, Jim Chanos, all these famous Tesla short-sellers
all the financial media was like ‘oh all these much more well capitalized car
companies are coming. The competition is coming. These car companies are way
better at building cars than Tesla. They’re gonna come out with a better
electric car Tesla’s gonna be screwed.’ the bigger problem is is that Porsche
coming how spent sorry big all this say that again Porsches coming with their
own car or just coming with the mission II and and Jaguar with and so and so is
Audi with the e-tron and these are these are amazing looking cars and and what
Tesla did was made easy sexy and I’ve always said that you end up the Model S
out electric vehicles right electric vehicles but the Model S is seven years
old and and now the big boys are coming and they’re coming with sexy looking
cars at the same price point with better features faster cars great styling. Well
that was a huge part of the thesis and to be honest I didn’t think they were
gonna be able to compete but they’ve performed even worse than I thought they
could – like the Porsche taken has been delayed it’s been delayed. The price is
like twice as high as they said it was gonna be. It’s not $80 grand it’s a
$150 grand. It’s not coming out in 2019. It’s coming out barely in
2020 – probably more like 2021. The range of 200 miles – I can get the same Model S
right now for 373 miles. So Model S is about half the price for twice the range
and that’s Tesla’s oldest technology. Their 18650 cells that in the Model S
are technology that Tesla developed almost a decade ago and Porsche is just
about to start selling this new technology that is way more expensive
and way worse. Imagine when Tesla debuts the plaid mode Model S and its new
battery pack in February or March. It’s gonna be even further ahead.
So this core competency in battery technology, you know, forgetting all
the financials, most other stuff aside, has been more proven than ever and it’s been
proven even more difficult for any car company to replicate than previously
thought and this is a huge roadblock for competing with Tesla is the ability to
be a long-range electric vehicle battery pack for a cheap price. Nobody can do it.
Nobody has figured out how to do this. In the mean time Tesla’s cracked the code
and because the financials are working they’re easily able to raise money and
secure financing to build a ton more factories. If you think about it their
factories are just an extremely profitable you know financial equation.
Well, let’s put up a couple billion in capex to pump out ten or twenty billion
dollars worth of vehicles per year that generate a billion or two in in profit. I
mean the return on invested capital for a Tesla Giga factory is among the
highest manufacturing it’s been you could put in the world from a return
standpoint and that’s why Tesla has been able to build these factories so quickly
and that’s why the other theory of them licensing out this technology is so it
has so much credibility. Tesla said they’re willing t.o Fiat Chrysler said
they’re interested. If they can’t build their battery packs for anywhere near as
good or the prices as Tesla then they’re gonna be forced to just buy them from
Tesla or continue to struggle and so that’s another avenue where Tesla’s
technology hasn’t been monetized. The whole point of this rant that I’m going
on is and as awesome as these financials are is this is looking the rearview
mirror you know I want to look forward as what’s happening I think the value of
Tesla’s technology that battery skateboard has not even fully been
monetized yet the equity price is still undervalued that’s a lagging indicator
and so I think when you think about how many cars they’re soul in the world 90
million cars we’re talking about Tesla be looking cheap if they sell 600,000 I
think tells us on the way to be selling millions of cars could justify a much
higher equity price and so this gets me so so excited we’re not even talking
about what they’re doing in terms of autonomous vehicle software think about
you know Intel Inside powering every laptop think about if Tesla is their
battery and their self-driving software inside powering every autonomous vehicle
in the world that could be 10 20 30 40 50 thousand per car tens tens of
millions for cars and so my point is the opportunity for tests that we all know
it it’s transitioning all of us to electric vehicles without opportunities
and then that future has never been more secured and the financials backing up
Tesla’s a company have never looked more promising and that is the reason the
share price is going up here it’s not because of a short squeeze it’s not
because of an irrational movement it’s not
of some piece of news it’s good Tesla as a business is on fire
in the meantime every other automotive company is closing plants freaking out
about what they’re gonna do next they can’t bring an electric vehicle to
market they don’t have a self-driving strategy they don’t know what to tell
their investors they’re still paying out a dividend when they should be cutting
that investing in the future like all these companies are being run backwards
shutting down shrinking not investing in the future and Tesla is literally
investing in the future a million miles an hour
and yet these companies are selling millions Tesla selling hundreds of
thousands I think in the the pendulum is swinging Tesla is about to be selling
millions these other companies are going to shrink and die and that is the future
that we’ve all been talking about and now is becoming more and more clear by
the day

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