Here’s the dynamic that explains Musk’s Twitter outburst: Tesla is clearly struggling to reach production levels that will justify its valuation. Musk has no facts with which to counter the media reports, and it is illegal for him to lie about these numbers. (Hype is one thing; lying to investors is another.) His Orwellian solution is to convince Tesla fans that what they are reading is not true. The stakes are high. Tesla’s $1 billion-per-quarter burn rate makes it very likely that the company will need to raise a couple billion dollars in the fourth quarter of this year.
Musk literally cannot afford for investors to believe a negative storyline. Only his optimistic, visionary narrative will convince potential investors that Tesla is a good bet, rather than a bubble preparing to pop.
Nothing is more dangerous than criticizing Elon Musk, but the cold and harsh facts laid out in this article are very difficult to argue with, other than appealing to some vague sense of Musk wanting to help the planet or whatever, as if that negates Tesla rapidly running out of money and never meeting expectations or failing to keep its promises. We should all want Tesla to succeed, but the recent outbursts from Musk do not bode well for the future of the company.
Twitter randos who could never afford a Tesla might be easily swayed by Musk’s Trumpian “boohoo the press hates me” nonsense, but the kinds of billion dollar investors Tesla needs will see right through it.
Regardless of the motivations behind it, the media still deserves all the criticism it’s receiving. The press’s coordinated counter-attack against Musk is just a reconfirmation of the poor state of journalism these days. That said, it does seem like there’s more going on here than meets the eye. Musk is very PR savvy and making an uncharacteristic move like this definitely makes it seem like there’s a hidden ulterior motive behind all of it.
Edited 2018-05-30 16:15 UTC
Coordinated by whom?
There are “investers” out there that make their money from “shorting” – so they need negative Tesla stories to get to their goal. Lots of the press do not relate the whole story, they just publish the contentious bits for sensationalism and never present a balanced story. There are journalists out there that have had their balanced report turned into a negative report.
More often than not, a perceived lack of balance by the reader stems not from media being inaccurate, but from the reader’s own cognitive dissonance stemming from the uncomfortable facts they’re being faced with.
That’s why you don’t see anyone actually disputing the facts presented here; people just flail their arms about screaming about “muh mediuh” without any shred of rhyme or reason.
What facts? The article focused 100% on the negative news around Tesla and 0% on the positive. That is not journalism. They don’t discuss the massive short interest that drives negative stories. They don’t discuss the fact that despite missing every target they set for themselves, Tesla is by far the leader in the EV space. They don’t discuss the fact that Model 3 production has ramped up substantially recently. They claim that Tesla will need to raise a couple billion in the fourth quarter despite having no evidence for that claim. Heck they don’t even discuss the merits or lack thereof of the story that caused Elon musk to cry foul on media coverage. There is no serious attempt here to get at any truth.
This article that you claim is full of facts is instead a cherry picked hit piece. By no stretch of the imagination is it a balanced examination of Elon Musk or Tesla’s performance over time. Surely you realize that.
Edited 2018-05-30 18:47 UTC
That is one huge 800lb gorilla in the room to despite
Not really. What matters is results. Elon sets insane targets and routinely misses them. Yet the end result is far outpacing all other car companies in EV technology and deliveries.
Other car companies set modest EV targets and either meet them or fall short (inventory shortages for both Bolt and Ioniq).
Which approach is better? Well the results don’t lie, Tesla is currently the leader despite getting a lot of flack for missing targets.
So how long are you prepared to wait for Mr Musk to come true on his promises? And if (when?) he knocks on the investment money door again, would you be prepared to put your own money in?
The timeline is irrelevant to me. I will likely never own a Tesla because I have no need to spend that much on a car. However I drive a used Leaf EV and I am extremely interested in seeing EVs succeed in the market. Tesla has been critical to showing the rest of the automotive market that EVs are both feasible and desirable.
As for my own money, I don’t invest in individual stocks on principle, so I will be investing in Tesla only indirectly via global market ETFs.
You are avoiding the real question a little bit: millions of people shorten Tesla shares because they think he isn’t going to deliver. Those millions of people don’t do that because they think they can talk Musk down in the media, but because they genuinely think he won’t succceed. You still seem to think he will pull it off.
When is Tesla a failure? You seem to think it never is and credit Musk with changing our mindframe about electric cars. I beg to differ: electric cars are inevitable considering fossil fuel prices will only increase over time. Musk just made it sexy.
I very much like to take down that reality distortion field that Musk has (it seems to be even stronger thanm Jobs ever was) and look at the hard cold facts: losing a lot of money can’t last forever.
When it goes bankrupt. Which is something that the shorters have been predicting for 10 years and it never happened
Let’s be candid, here. US Media is largely consolidated. One only has to look at the recent Sinclair Media “dangerous to our democracy” news script parroted by talking heads all around the States in perfect synchronicity.
There is no “balance” to its reporting, only a centralized narrative that is driven by ad capital. Big Oil is a player there, Tesla is not.
Vox has to echo this narrative as a client outlet to their big media investors, NBC Universal, Comcast Ventures.
Tesla *is* in fact struggling and it may yet tank, but that doesn’t mean it is not being targeted.
Tesla was criticizing the Center for Investigative Reporting, a non-profit organization that does investigative journalism, not clicky bait or corporate reporting.
Before you start spewing bull, get informed.
Coordinated by a “good ol’ boy” network of journalists, many who live in the same parts of the country, know eachother, are friends with eachother, use the same talking points, share the same political views, and rally together whenever someone challenges their views or their profession.
It happens all the time in other professions so it’s no surprise when journalists do it as well.
See: https://en.wikipedia.org/wiki/JournoList
Edited 2018-05-30 19:51 UTC
See, the problem is, you’re confusing “coordinated attacks” with “a history of not meeting proclamations”.
It’s OK if you’re a politician and over-promise and under-deliver.
If you’re a business, it can be fatal– and tricks that might have worked for Microsoft in the 1990’s won’t necessarily work here.
Musk has yet to show that he can *really* compete with the big boys– GM has entire testing facilities for heat, cold, leaks, fitment– Sure, it’s news that Tesla was able to update the brakes on the model 3 remotely– but GM didn’t have to update the Bolt’s brakes. They shipped them right the first time.
You (and Trump), need to understand that sometimes, when someone shouts “Fire”, it’s not because of coordinated attacks– it’s because there’s effin’ smoke!
This is an important article to understand before jumping to conclusions. Musk and Tesla have a complex path to follow. They are designed to make a profit and they have spent a LOT of money. What they have however is a solid lead considerably beyond any competitors.
They are essentially a battery and SW company at this point. Their batteries appear to be the best in the world and continue to improve. Right now they have to focus on making cars and they are doing it. Sure there are lots of problems but few enduring ones, steadily they progress and path to profit has never been closer or more clear.
Not to worry about the high costs so much, it is only temporary but it is very important to sell the more profitable models right now.
Check out this article that addresses several of the present issues that are getting buzz.
https://www.dailykos.com/stories/2018/5/29/1767826/-The-War-on-Tesla…
The linked blog post is predominantly lacking in content and you don’t make a coherent point as to why it has useful information for this discussion. It starts out with a conflict of interest – beginning with ‘We, Model 3 owners’ and goes further into fandom by referring to all ‘controversies’ around the company and the man as -gate and even uses quotes around words that Musk doesn’t consider legitimate. Cool aid.
You cannot point to investor and trading behaviours and say that any criticism must be stock manipulation… that’s not to say people in the market don’t respond to news, but to expect everything to be a conspiracy?
Beta says The linked blog post is predominantly lacking in content and you don’t make a coherent point as to why it has useful information for this discussion.
I stand by my comment that it is an important article to understand before jumping to conclusions. It is detailed, lengthy and comprehensive without drowning in number.
Media companies make millions advertising for other auto companies but Tesla does no advertising. Banks make millions in fees funding corporate loans but Tesla has stated they don’t think they need more loans. Short sellers have placed a bet well in excess of 5 billion dollars that forces aligned against Tesla Inc. will be successful in destroying the company stock through various roadblocks intended to slow Tesla down until their CAPX liabilities overwhelm them. These are real concerns that have an influence.
If Tesla is successful and ramps up manufacturing approaching 6,000+ per week toward the end of the 2018 then they will have the capital to continue making Gigafactories around the world and it will be hard to catch up to them. Looks like VW has recently figured this out.
Here is another important bit of info that fits into the above existential risk that Tesla presents to some established companies. Take a listen to this interview by venture capitalist John Calacanis at about 28 minutes in. He notes at 33 minutes that there are bots targeting anything positive he says about Tesla. Just a fact for him.
https://www.recode.net/2018/5/4/17317824/jason-calacanis-facebook-ma…
So there is an involved history and story and plan committing a lot of money at risk if Tesla delivers as they seem to be doing. They are not perfect but they are committed to succeed and they might do it.
I think critical articles of Tesla, or really any company, are entirely appropriate.
Musks point – and I tend to agree – is that there is a disproportional criticism of Tesla simply because such criticism generates a bunch of traffic ( and hence ad revenue ) to media organizations.
A clear example of this is Autopilot crashes. The number of these, as a proportion of vehicular crashes ( with and without driving assistance features enabled ) is infinitesimal. Yet US national media almost never reports on any crashes other than Tesla ( the one time Uber had a fatal crash being an exception ). We hardly even hear about Waymo crashes.
US national media even reports autopilot crashes when everyone walks away. You’d think Autopilot would just kill you as soon as you turned it on but given there are 300k cars on the road and 70% of all miles driven are on autopilot it’s an extremely reliable technology.
The autopilot crashes are important because Tesla has been lying about the autopilot and overselling it, and that with just the crashing reported in the news, the autopilot is already 3 orders of magnitude more unsafe as a driver than an average human.
[Citation needed]
[Citation needed]
[Citation needed]
Assuming you only need a citation for the last statement, otherwise you are trolling, or blind.
Assume the Autopilot is less advanced than Waymos fully self-driving cars, and widely considered the technological leader. Those cars have according to Waymo an average of 50 miles between needing human intervention as they say, which is to say it has 50 miles between instances where the car would try to cause an accident without a test pilot. The average distance driven between accidents is 50000 miles, which is three orders of magnitude higher.
Edited 2018-05-30 22:10 UTC
You made three claims:
1. Tesla has been lying about the autopilot
2. Tesla has been overselling autopilot
3. Autopilot is 3 orders of magnitude more unsafe than an average human.
The second one is a subjective statement and so cannot be proven one way or the other. The other two require citations to support the claim.
1 and 2 are the same. Autopilot in Teslas are an abuse of a buzz word. Selling it as “autopilot” should be illegal. Everyone thinks of autopilots from planes when they hear the word, yet it is much closer to Lane Assist than Autopilot in a Tesla.
Nope. Autopilot in planes is in fact a perfect analogy to Autopilot in cars. Autopilot in planes requires constant attention from the pilot, and can only handle a limited subset of flying. The issue is that many people in fact don’t understand what autopilot in planes is, so they expected that Tesla Autopilot = Autonomous car, which is clearly is not.
The autopilot on an airliner actually flies to the destination airport and enters a holding pattern with no pilot intervention needed (in fact this has happened when the crew has been disabled). It can even land the aircraft by pushing a couple of buttons. The pilots manually fly the airaft for an average of 40 SECONDS per flight.
The Telsa ‘autopilot’ does little more than maintain the vehicles position within the traffic lane.
Edited 2018-06-01 09:28 UTC
Not necessarily “unsafe”, but definitely being “over hyped”.
https://www.zdnet.com/article/volvo-engineer-blasts-tesla-autopilot-…
Short version: Tesla is automation level 2+, and 4 is required for an actual “auto pilot”.
Side note (the cause for a Tesla ramming the back of a parked firetruck):
When took a model S out for a test drive the salesperson explained exactly the limitations. He would not let me take my hands further that 20mm from the steering wheel.
The problem is that the name “Autopilot” gives people a false sense of security.
Unfortunately the words that accurately describe such as “driver assist” and so forth have already been taken by other manufacturers to describe substantially lesser systems.
“The number of these, as a proportion of vehicular crashes ( with and without driving assistance features enabled ) is infinitesimal.”
That’s kind of obvious isn’t it? You’re comparing the number of self-driving cars on the road to regular cars. If every single Tesla in existence crashed it would still be an infinitesimal amount compared to regular cars. That wouldn’t make it ok though.
You assuming the investors are smarter than twitter randoms? I think you are making a Trump voter mistake by equating wealth with intelligense. It should be obvious by now why that is a huge fallacy.
I can’t assess the validity of Elon’s attacks on the media, but the idea that there isn’t an insane short interest in Tesla that is fueling a lot of the media attention is incredibly naive. This article is massively one sided.
If the financial fundamentals of Tesla’s balance sheet changes for the better then that short interest will dwindle.
Can’t fight cold hard numbers. If the company hasn’t imploded now under debt, then at some point in the near future it will. Unless of course they raise capital.
Sure, but they have raised capital many times so far. Company says they won’t need to, but even if they do, there is no indication that they won’t be able to.
With a net loss of $710 Million, I don’t know where the capital will come from. They are bleeding almost a billion dollars a quarter. Not a good investment if you ask me.
Sure, and i’m not investing. But the big picture is much more complex than that. Valuations are based on future expectations, not current situation. Clearly the market expects future profits from Tesla despite current losses.
It was a general statement and wasn’t directed at you personally.
Further, the big picture is only “much more complex” if you don’t understand it. The expectation can be inflated in a valuation just like any other security, Tesla stock is no different. At some point the mountain of debt, the hundreds of millions in dollars in losses per quarter, and the failure to deliver on its self imposed production rates will catch up to them.
Everything else is just unfounded hope that the company will succeed.
Musk is a criminal. He has repeatedly committed crimes by making false disclosures to the SEC and defrauded investors by making misleading claims about Tesla growth projections and production.
If Musk gets 5-10 years in a federal prison for securities fraud I won’t be surprised.
Edited 2018-05-31 01:45 UTC
If he doesn’t like the attention, then he should stop betting his name on things. Without the Musk name, Tesla would just be an unkown car company and no one would recommend buying from a company with no earnings as that company would normally disappear quickly. He leverages his name to promote businesses that likely would have failed without it, so it’s too late to be complaining of negative press when they were also the reason he had any success in the first place. If Tesla succeeded just on merit and people didn’t know he was involved, there would hardly be any press. This is just a direct consequence of his marketing method, so I don’t feel sorry for him in the least.
“Nothing is more dangerous than criticizing Elon Musk”
Really? Corrupt media? War?
“but the cold and harsh facts laid out in this article are very difficult to argue with”
No, it’s easy if you do some research.
“other than appealing to some vague sense of Musk wanting to help the planet or whatever”
But he does.
“as if that negates Tesla rapidly running out of money and never meeting expectations or failing to keep its promises.”
Stretch goals. Everybody understands that. They are not running out of money.
“We should all want Tesla to succeed”
Well said. Should is the key-word.
“but the recent outbursts from Musk do not bode well for the future of the company.”
What? do some research. Start with #erinbibi #Pravduh. Then TopGear (Shell).
It has nothing to do with Tesla.
“Twitter randos who could never afford a Tesla might be easily swayed by Musk’s Trumpian “boohoo the press hates me” nonsense”
Even a fool understands that this is not the case. You have no idea what you are talking about.
“but the kinds of billion dollar investors Tesla needs will see right through it.”
I have a Tesla Model S, and a Model 3 preordered. I have Tesla stocks. I did my research. You didn’t do yours. In this case you are a perfect example on what is wrong with the “media”.
Old (oil) money fears Elon Musk. They control the media. It’s so obvious.
Yes, I’m a big fan of “Elon Musk” and everything he is doing. Yes, I’m biased. Don’t trust me – do your own research.
Forget yourself, focus on seeking the truth. People read your stuff – it’s important.
After reading the comments, I know where the Apple fanboys went.
Which is odd, since the last I heard, Woz prefers the Bolt.
http://gmauthority.com/blog/2017/06/apple-co-founder-steve-wozniak-…
He isn’t.
There was one journalist who wanted his attention, and all he said was “why did you think Trump won”.
She then posted “If Elon Musk’s followers harassed you please email me”.
The put her twitter account into protected mode and then deleted all her tweets.
Elon Musk just said “Rich people control the media” nothing else.
Never owned an Apple product. Never will. You guys are sheep.