Sometimes, a picture truly is worth a thousand words. Or, two pictures.
Here's the "lede:"
We have seen the Tesla Model 3 black matte prototype and the silver prototype on a few occasions since the unveiling of the vehicle in March, but the red prototype that was at the event hasn't been seen since… until now and it's beautiful.
Our publisher Seth is at the Tesla Gigafactory for a media event today and he shot a few quick pictures of the red Tesa Model 3 prototype displayed at the plant.
Now, a photo of the underside of that same car:
[NOTE: This is a photo by electrek as well; the original version of this article incorrectly stated it was by someone else. electrek today has acknowledged the prototype was plastic and had a hollow bottom. Its article two days ago hyping the "beautiful prototype" made no mention of these facts.]
I'm told the Tesla Congregation members are already rationalizing and back-filling, explaining the red prototype must be simply for aerodynamic testing rather than for bamboozling the credulous.
I haven't seen any article in electrek explaining that the gorgeous red prototype is hollow. Not for nothing does a friend of mine call electrek "Tesla's Pravda." [NOTE: electrek today acknowledged that the prototype is hollow.]
It's Potemkin Villages all the way down.
Two days ago, Paulo Santos revealed how all the recent construction activity at the Gigafactory is pure Potemkin village.
At the same time, I detailed the multitudinous Gigafactory lies that Musk is sure to tell (and is telling) and that his lapdog media is sure to repeat (and is repeating).
The lapdogs (CNBC's laughable Phil Lebeau leading the pack) have yet to ask any hard questions to either Tesla or Panasonic (OTCPK:PCRFY). Such as:
- Why did Panasonic just sock Tesla with a "Safety Stock" requirement?
- Why are you having a grand opening if your factory is only 14% complete?
- Whatever happened to the promise of a fully integrated factory?
- Where are all the promised Gigafactory "partners" (sub-suppliers)?
- Why are you so far behind the construction schedule you included in your application for $1.3 billion of Nevada subsidies?
- When you claim you'll be recycling at the Gigafactory, what evidence do you have that it's economical to do so for the cobalt, copper, nickel, or aluminum in your batteries? (Everyone already knows the lithium isn't recycled for industrial reuse; instead, it's ground up for use in roadway materials.)
Anyone who believes Musk's claims about either the Model 3 "pencils down" moment or the Gigafactory being "ahead of schedule" should phone their broker and subscribe for that "modest" capital raise that Musk just telegraphed.
These are the facts, and they're ugly:
- Model S demand is terrible.
- Model X demand also is terrible.
- The S60 versions, with their huge price reductions, are cannibalizing sales of higher margin Model S versions.
- The same cannibalization is likely with the X60.
- Q2 financial results will be truly terrible.
- Q3 financial results will be worse.
- Tesla GAAP losses will be more than $1 billion in 2016.
- Even with the price cuts, Tesla is unlikely to meet its low end 2016 delivery guidance of 80,000 cars.
- If it does meet that low-end guidance, the result will be even greater losses.
- The SolarCity (NASDAQ:SCTY) acquisition is a selfish, self-serving, incestuous bailout engineered by a man who has lost his moral compass. (But, as an owner of TSLA puts, I fully support it, and urge TSLA shareholders to vote "Yes"!).
- Tesla will not produce 100,000 to 200,000 Model 3 cars in 2017. It will not produce even 20,000.
- Any Model 3 cars it does produce in 2017 will be problem-laden pre-production models to be sold to Tesla employees, who will act as guinea pig beta testers.
- Another capital raise is coming, and likely coming this year. On top of the one that just happened in May. That one, per Musk only three months earlier, wasn't needed and wouldn't happen.
But, at least, Musk still has $125 million in his trousers.
Even though Tesla will set records for operating losses and cash burn this year, Musk still will have trousered $125 million from his tag-along on the May follow-on offering.
So, while Tesla will finish the year much poorer, Musk will be much richer.
Memo to anyone paying attention: It's been nonsense from Day 1, and there's much more of this nonsense to come.
A Note About My Help
Thanks to notasmidgeon for sending along the photo of the underside of the Model 3.
Disclosure: I am/we are short TSLA VIA LONG-DATED PUTS.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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