During the last couple of days there were several important developments for Tesla (TSLA). Let's start with a thread on Twitter suggesting any battery related intellectual property from the Maxwell acquisition is unlikely to result in a mass marketed product anytime soon.
Fire at stamping machine in Fremont
Another issue is the big fire at one of the stamping machines in Fremont. See here, here, here and here. This machine was located outside, although under a roof, with higher chances of aluminum dust mixing with rainwater. When that happens such dust can start a fire easily. So maybe having this machine outside was not a good idea. I suppose this machine was damaged much by the fire. Allegedly Tesla has another stamping machine in Fremont. So I am not sure whether this fire will affect production much.
Another sudden unintended acceleration event
But what I think is the most important development is another (allegedly) sudden unintended acceleration event in China. See here and here. This looks like a small accident with only minor damage. As before Tesla denied everything.
I am sure in China there are dozens of accidents with similar damage every day. So why does the Chinese Global Times pay attention?
The Chinese Global Times looks at the big picture. Accidents like this one usually cause little damage but can be very dangerous. The Global Times also mentions there were "more than 10 reports" of similar incidents in China in 2020, "according to incomplete statistics" and there were hundreds of similar incidents in the US.
Now, why is this more important in China than in the US and Europe? To live in China one has to give up a lot of freedom. Chinese want to get something back for this: a stable society and more importantly safety. This is very similar to what has happened in many European countries. For example in Netherlands we have temporarily given up a lots of civil rights in return for a working health system and maybe some reduction in the number of corona deaths. So because of the "social contract" between rulers and the rest of the Chinese society Chinese rulers find traffic safety much more important than those in the US and Europe.
I do not think Tesla will fix the sudden acceleration issues soon. Otherwise it would have done it already, especially after hundreds of complaints in the US. I think any fix is very difficult, technically. So with every extra Tesla sold in China and possibly with further aging of Tesla's already on Chinese roads chances on sudden acceleration events increase.
I do not think Tesla can ignore articles in the Global Times like the one I discussed above. Yet it seems to be doing just that. But as every Chinese knows: the CCP can make or break you. So I expect Chinese sales to suffer much if Tesla does not properly address the sudden unintended acceleration issues. And that will not be good for the stock price since revenue from China is an essential leg for the stock. So my opinion on the stock is still strong sell.
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