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What Battery Costs Mean For Tesla's Margins

|About: Tesla, Inc. (TSLA)
Summary

Recently new information became public suggesting Tesla's battery costs are much higher than many analysts thought.

I use this information together with cost price estimates from Elon Musk and others to compute cost prices of various model 3 variants.

This informations implies profit margins are lower than Tesla's financials suggest.

Together with overvaluation on many metrics, financial distress, increased competition and other facts suggesting accounting and governance issues this is another reason to short the stock.

See my tweets on Tesla (TSLA), captured in images:

To be more precise: Twitter user Subach stumbled on a CNBC interview with Craig Irwin of Roth Capital. Craig Irwin found information of the Japanese government. This information strongly suggests battery costs are $240/kWh. Twitter user KawasakiKR11 verified the story of Craig Irwin.

Musk said this in an interview, see here.

The link to that article is here (in German).

As I wrote on Twitter today you can play with the numbers yourself. Download the spreadsheet here.

Conclusion

There are many signs Tesla's financials do not match reality. This is just one of them. In my previous article I discussed a few others. Stock prices of such companies are unlikely to increase, especially when such companies are financially distressed like Tesla. Also because Tesla is overvalued on many metrics this is a great short. So my recommendation: sell/short Tesla!

Disclosure: I am/we are short TSLA.