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New Developments For Tesla

Mar. 19, 2021 5:39 PM ETTesla, Inc. (TSLA)
Ruerd Heeg profile picture
Ruerd Heeg's Blog
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  • More on sudden unintended acceleration events.
  • Chinese military bans Teslas.
  • New factory in Brandenburg (Germany) delayed.
  • Subsidy cut in the UK.

Sudden unintended acceleration events

On my last post I got comments from MaxBear, a Teslemming. He/she basically denied that Teslas suffer from sudden unintended acceleration events. MaxBear is anonymous, as always with pumped stocks. Many comments are basically blank dismissals of my arguments, which is BTW not good practice on Seeking Alpha.

My Twitter links did not count, even though I referred to a highly critical article in the Global Times, the news organization of the Chinese Communist Party ("CCP"). This article described an crash on a parking lot. It is similar to crashes described in many official complaints in the US.

But according to the Global Times article a Tesla (TSLA) technician had a look at this parking lot. He drove exactly the same stretch. And guess what happened? His model 3 also crashed! The crash of the Tesla of the Tesla technician was recorded on video. I think we can rule out the possibility the Tesla technician forgot to press the brakes.

As I wrote in previous posts it is extremely rare cars drive into a building. Yet it happens quite regularly with Teslas. I think most of these accidents are the result of a sudden unintended acceleration event. See here for a recent example. In principle it is also possible Teslas crash into buildings while driving on Autopilot but I think that is less likely. For the CCP it will not be much of a difference anyway.

Chinese military bans Teslas

In China civilians need to find out what the CCP wants and behave accordingly. The problem is often the CCP does not explicitly communicate what it wants. For example I do doubt Chinese are explicitly forbidden to write about how Uyghurs are treated in China. Yet in China few people dare to publicly confirm independent research such as from Amnesty.

So Chinese are sensitive of easily overlooked messages from the Chinese state. That the Chinese military bans Teslas from its compounds is such a message. Implicitly it might simply mean "do not drive a Tesla". See also this Twitter thread.

There might be many more restrictions on using Teslas than just the military ban. See also here. See also this tweet about a new report of GLJ Research. Even at Morgan Stanley Adam Jonas now considers the possibility the Chinese operations are worth zero: see here or here.

New factory in Brandenburg (Germany) delayed

The German TV published a documentary on the new factory in Brandenburg. I do not think there is much new here. Though the documentary is critical several things presented as facts are simply not true and there are important omissions as well. See also this Twitter thread, from Montana Skeptic.

The main bottleneck for this new factory seems to be the water supply. When running at planned production capacity it seems there will not be enough water for the factory, the local inhabitants and the factory workers. Moreover it seems the building is going to be delayed. See this tweet and article. Apparently Tesla has to build a 5 km sewage pipeline. Permits will most likely cause more delays because time consuming checks need to be done since the pipeline will cross "Altlasten", contaminated sites, and will go underneath a highway and a railway.

Subsidy cut in the UK

The UK has just reduced EV subsidies for new Teslas with 3k GBP. I do not think it will affect lease cars much as companies might be less price sensitive. But it will cause a big reduction in sales to individuals. I wonder how Tesla will show good margins if it indeed reduces model 3 prices by the amount the subsidy was reduced. See here and here.

Bottom line

Developments for Tesla were not good since I wrote my last post. In particular the China story is worsening. My opinion on the stock remains strong sell.

Global Deep Value Stocks is a long only newsletter. I do not publish research on stocks like Tesla in Global Deep Value Stocks. See here for examples of what I do at Global Deep Value Stocks. For more information see here or send me a DM.

Analyst's Disclosure: I am/we are short TSLA.

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