$Tesla (TSLA.US)$ I sometimes feel a little frustrated for ...
$Tesla (TSLA.US)$ I sometimes feel a little frustrated for trading (and holding) ONLY Tesla stocks (plus some VIXY shorting/trading to pair and compensate) but then I think that I would not be able to follow more companies of such complexity. In fact Tesla, being vertically integrated is at least 10 companies in one.
Let me explain:
Take Gm (General Motors): at the end they are mainly an engineering, assembling, marketing and servicing company which makes most of its profits (rapidly decreasing) in the financial services to the buyer and in the post-sale services. Their engines are often built by external companies, so as their software, the seats and many, many parts (China, Canada and Mexico dominating). As a result a model Y built in Fremont is almost a whole US-made vehicle, while a Gm it is not. BUT, more than that, Tesla builds in-house the large majority of the components of its cars, including the battery packs and soon (in Austin and Berlin) also the 4680 battery cells for all their performance and long range versions. They make the seats, they make the motors and all the software as no-one does it. That’s why they are so fast in innovation, so profitable, and why no-one can keep up with that speed (practically, no competition at their market level). Some think that in a few years some other brand will be able to produce a million EVs too… Probably YES, but where will Tesla be by then ? I would say 5 times bigger, just because it is way faster; and with a 30+% margin (increasing with the production) while ALL (I repeat ALL) the others struggle to get whatsoever profit.
The CLEAR consequence is that many traditional automakers won’t make it.
SO… I won’t invest in anything I don’t know inside-out as I know Tesla, even if I would like to partecipate in the whole EV development and even if I see great possibilities if growth and value:
BYD second among the rest by production numbers (but WAY less profitable than Tesla)
GEELY, and particularly the owned companies Volvo and Polestar. Speaking of which, I still don’t understand why they have to be separate companies instead of just differentiated brands under the same “roof”: this doesn’t make me so confident for some HIDDEN reason…
But there is ONE I wouldn’t miss: the PORSCHE ipo that the Volkswagen group is planning for the last quarter, in order to raise all the capital the group needs to finance the whole EV transition. I think it will be massive, as Porsche makes real money on each vehicle they sell (including their beautiful EVs) and there is a direct technology transfer (and scale economies) with the group’s brands (VW, Audi, Seat and others, including the most recent acquisition from International harvester: the SCOUT).
VW will make it and will keep his position among the leading car manufacturers in the world.
Others won’t, as the judgement day is coming MUCH faster than they have planned: in the second part of the decade it will be hard to find enough MORONS buying their cars in the developed countries. High priced gasoline, costly maintenance, ZERO used car’s residual value, no on-the-air updating and/or reparation, no self-driving capabilities, will do all the job for the EVs and will determine a very fast collapse of the ICE (internal combustion engine) vehicles.
That’s my note for today. 🥶
Let me explain:
Take Gm (General Motors): at the end they are mainly an engineering, assembling, marketing and servicing company which makes most of its profits (rapidly decreasing) in the financial services to the buyer and in the post-sale services. Their engines are often built by external companies, so as their software, the seats and many, many parts (China, Canada and Mexico dominating). As a result a model Y built in Fremont is almost a whole US-made vehicle, while a Gm it is not. BUT, more than that, Tesla builds in-house the large majority of the components of its cars, including the battery packs and soon (in Austin and Berlin) also the 4680 battery cells for all their performance and long range versions. They make the seats, they make the motors and all the software as no-one does it. That’s why they are so fast in innovation, so profitable, and why no-one can keep up with that speed (practically, no competition at their market level). Some think that in a few years some other brand will be able to produce a million EVs too… Probably YES, but where will Tesla be by then ? I would say 5 times bigger, just because it is way faster; and with a 30+% margin (increasing with the production) while ALL (I repeat ALL) the others struggle to get whatsoever profit.
The CLEAR consequence is that many traditional automakers won’t make it.
SO… I won’t invest in anything I don’t know inside-out as I know Tesla, even if I would like to partecipate in the whole EV development and even if I see great possibilities if growth and value:
BYD second among the rest by production numbers (but WAY less profitable than Tesla)
GEELY, and particularly the owned companies Volvo and Polestar. Speaking of which, I still don’t understand why they have to be separate companies instead of just differentiated brands under the same “roof”: this doesn’t make me so confident for some HIDDEN reason…
But there is ONE I wouldn’t miss: the PORSCHE ipo that the Volkswagen group is planning for the last quarter, in order to raise all the capital the group needs to finance the whole EV transition. I think it will be massive, as Porsche makes real money on each vehicle they sell (including their beautiful EVs) and there is a direct technology transfer (and scale economies) with the group’s brands (VW, Audi, Seat and others, including the most recent acquisition from International harvester: the SCOUT).
VW will make it and will keep his position among the leading car manufacturers in the world.
Others won’t, as the judgement day is coming MUCH faster than they have planned: in the second part of the decade it will be hard to find enough MORONS buying their cars in the developed countries. High priced gasoline, costly maintenance, ZERO used car’s residual value, no on-the-air updating and/or reparation, no self-driving capabilities, will do all the job for the EVs and will determine a very fast collapse of the ICE (internal combustion engine) vehicles.
That’s my note for today. 🥶
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TESLA holder and trader. Economics and tech studies, writer, traveller and chef for passion. FREE in SouthAmerica 😎
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