Guest essay by Eric Worrall
Tesla is “overvalued” according to the Nordea Global Climate and Environmental Fund.
Tesla Is Dropped by Climate Fund That’s Beaten 97% of Its Peers
By Jonas Cho Walsgard
3 October 2017, 00:13 GMT+10 3 October 2017, 08:01 GMT+10
Tesla Inc. is overvalued, according to a climate fund that has beaten 97 percent of its peers.
“We don’t see upside,” Thomas Sorensen, who manages the Nordea Global Climate and Environmental Fund, said by phone on Thursday. “What’s needed in cash flow generation to get to the current valuation — we don’t see that happening.”
With more and more climate-friendly products and services coming to market, investors are having a hard time valuing new technology. Tesla’s 60 percent share rise so far this year is testament to investor enthusiasm even as it reported losses in both the first and second quarter. But the turmoil created by the electric car’s rise that roiled traditional carmakers now means greater risk for all manufacturers.
“It’s going to be a race to the bottom for the whole industry,” he said. “In this big transition period, it’s very tough to point out the winners and the overall profitability of the sector. The risks are too high.”
…
This is not the first time investors have expressed concern about competition in the electric car market. Back in July this year analysts expressed concern about Tesla’s ability to compete against the likes of Volvo.
… Tesla will soon have more competition coming from major carmakers, Barclays Plc analyst Brian Johnson said.
“We’ve long argued that Tesla as an EV company is not truly disruptive, in that legacy carmakers will eventually wake up and offer fully electric vehicles by the early 2020s,” …
Read more: https://wattsupwiththat.com/2017/07/08/electric-car-maker-tesla-share-price-plunges/
Earlier today WUWT reported about how Tesla “narrowly” missed their Q3 model 3 delivery target by 83%.
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Good he’s been at the trough for too long!
Okay, so short Tesla and go long on Exxon or some microchip producer. AI and byte storage are expanding exponentially faster than Tesla’s slow-creeping production line.
I agree with the man quoted, insofar as Tesla is overvalued and I don’t seen any upside, either.
But I think that because i believe Elon Musk is an extremely clever grifter who’s built an empire out of bilking the government, and I also believe that his act has gone on a bit too long, and the curtain is about to ring down.
There was a Dot-Com bubble. Maybe a Co2-bubble? Time will tell….when it is not financially viable.
Certainly an EV bubble unless they figure out how to recharge them from nearly empty to full in 5 minutes and have a 250 mile range.
Since even Musk can’t seem to figure it out, he might be destined to be
They also need to recharge around 1000 times, a 250,000 mile battery life should be a requirement
Did Musk (rat) ever get around to building all of those fast-charge stations that he has already collected the carbon credits for ?
I was reading an American classic car magazine a couple of weeks ago, I think I have mentioned this here before but it is worth repeating. In the 1890’s cars were becoming popular and there were three types of propulsion available: Steam, Electrical and Internal Combustion. Steam fell out of favour because it took too long to get the water boiling, this left Electric and Internal Combustion. Electric was favoured by ladies due to the difficulties of hand-cranking, but the cars only had a 100 mile range When starter motors were introduced on IC powered cars it put the kiss of death on electrical vehicles. The range of electrical only propelled cars is not significantly greater 120 years later and according to a friend of mine who is a motor mechanic, the contents of a modern battery are highly toxic. As far as I am aware charging a battery at a high current to reduce charging time reduces the lifespan of the battery, it needs trickle charging to ensure its longevity. I am also fairly confident in predicting that battery technology is not going to improve with relatively cheap materials.
I saw an electric car the other weekend. It was in a museum. A 70s idea during the oil crisis that never caught on. Going back to the 1890s, the same battery technology is used in cars today.
Again that Co2 error. It is CO2, not Co2.
Co2 would be a molecule consisting of two atoms of cobalt!
CO2 bubble? I’m suddenly thirsty for a beer.
When one has a business model depending on subsidies, political change is a risk. I would also state that a Tesla is more virtue signalling for the wealthy green than a real transportation choice.
Musk:
the Bernie Madoff of electric cars.
Practically speaking Musk’s business model depends on generating cash flow with pre-paid reservations for cars he can’t produce. The deposits he’s accepted on the new Model 3 number 500,000 at $1000 a pop. Mind you these deposits are refundable, they just guarantee the buyer a “place in line”. If the buyer changes their mind, they just ask and the money comes right back to them. No risk.
Unless Tesla goes tits up, then, oh well. You just bought a place in line for the bankruptcy settlement and you’ll be lucky (very lucky) to get $.01 on that “investment” you made.
I think he’s also selling advanced tickets to Mars…
This guy is shameless.
Not always. The little Tesla Roadster is cute enough that if you have the money, it’s worth buying. I have a rich friend whose garage is full of sports cars – including the Roadster. Hell, if it only cost $30K, I’d have one for running around town. In fact, I thought I was going to buy one, until I learned the $30K was just to hold a reservation.
It may not have the versatility of my Triumph Trophy SE motorcycle, which can (barely) navigate the steep, rutted, dirt road I live on, and can make it to my eye doctor and back without a recharge. But if I had Roadster, I’d keep it in a garage in town, and ride my bike down to pick it up. Of course, I still couldn’t go to the eye doctor, but I could… ride it around Reno and look really cool! I thought I could pick up the mail, but I wouldn’t want the hassle of transferring it all to the bike.
But really – it would be fun to drive!
Tesla is far, far above its reasonable stock value. No rational CEO would let his big institutional buyers get so far ahead of rational value that can’t be met by profit. But we’re not talking about a rational CEO at Tesla.
The evidence is the rational bond market rates its corporate paper at 6 notches into JUNK territory. Meaning the regulated bond market rationally see TSLA ability to repay debt as questionable in the future.
Can its stock be far behind?
“No rational CEO would let his big institutional buyers get so far ahead of rational value that can’t be met by profit. But we’re not talking about a rational CEO at Tesla.”
I do not understand this statement.
As a university student who constantly has to deal with pretentious techies ogling over Elon Musk’s infallibility, I get great pleasure seeing him struggle. Granted, he’s still richer than God, but I hope this puts a dent in his ego.
I imagine Elon Musk would go back and “re-communicate” the latest results. Basically the same communication as was done before.
Inspirational.
Heh, the world needs inspirational people and Musk is one of the best at this. Sometimes inspirational people lead to amazing things. But there is also economics and this is what wins in the end.
Like an evangelical preacher … they keep on handing their hard-earned (in some cases not) cash to him for redemption.
Elizabeth Holmes was inspirational.
Tough to make a case against the modern ICE. It’s practically perfect. I’m driving a 2005 Ford Freestar and the motor works like new.
Trebla.
Same here our second car is a 2000 Ford Focus Station wagon it runs like new, is smooth and very comfortable and is great for loading 2 bikes and 2 small dogs. It keeps ticking and takes a licking and is still my personal favorite car.
Main car a 2012 Toyota is good but not as nice a ride.
TG OMG I drove a 2000 Ford focus wagon for 14 years, great car, it was getting rusty in Michigan, then I sold it in 2014 and bought a new Ford focus 5 door.
I just gave my 1975 Jeep Cherokee with its big V8 to a Jeep reconditioning shop. Still running beautifully after 37 years. I wonder how many EV’s will be running so well with virtually no maintenance other than a couple of starters, tire changes, brake changes and regular oil changes. Had to switch to premium fuels to avoid the dastardly ethanol engine eater, but other than that, it still runs great.
Well, you did some battery chances too did you?
In principle EV are simpler machines and if one takes battery change out of the equation they should not request more maintenance….
Since a battery change costs more than swapping out an ICE, I see no reason why we should take it out of the equation.
I am driving a 1995 F150 with the odometer reading 265,000. This is the Ford big 6 cylinder. I read online that if you do not rev the motor over 3000 rpm, then the motor lasts almost forever.
I’m in love with my GMC Diesel 4WD Canyon (pickup). I’ve always loved power (my last car was a Chrysler 300 SRT), but it didn’t have the clearance – or the traction – to get me to my new house in the country. But this Canyon has awesome torque, decent HP, goes anywhere, anytime, can haul 1,400+ pounds of cargo, and tow 7,700 pounds. In normal usage, I get >23 MPH, and well over 500 range.
Show me a battery vehicle that will do all that. Musk is talking about manufacturing a semi with a 300 mile range. I drove for North American Van Lines (a moving company) during the latter years of my college days, and my dad has been driving semis since 1969. A 300 mile range is useless as most driver get in 500+ miles per day in the allowed 10 hours – unless maybe you can recharge in half an hour to an hour. Most of our tractors had greater than 700 mile range, and his current tractor has a 1400 mile range. That’s necessary in order to be able to pick where you buy diesel – prices of diesel directly impact profits.
So maybe the 300 miler is good for (real) short hauls. Electric truck stops are going to have to be placed next to power stations for long haulers who don’t care how long it takes to get to a destination.
All that to say… I, too, love the ICE.
Tesla… who in 2 years . Stupid money only lasts so long .
Pure gambling/timing play and the music is about to stop .
“legacy carmakers will eventually wake up and offer fully electric vehicles by the early 2020s”
And legacy car buyers will snooze.
So what? Legacy carmakers will offer both ICE and electric vehicles.
Or else
“… a climate fund that has beaten 97 percent of its peers”. But how does this fund do against the market?
“By the end of the year, electric-car maker Tesla Inc. will have burned through more than $10 billion without ever having made 10 cents.”
https://www.bloomberg.com/news/articles/2017-10-02/automakers-plan-electric-car-blitz-even-as-tesla-burns-billions
Who’s money are they using up?
Yours
“…Tesla Inc. is overvalued, according to a climate fund that has beaten 97 percent of its peers…”
97 percent is quite prevalent when it comes to climate.
When 97% of available products are junk, picking the 3% makes a king.
The EV will drop into its’ niche within the next decade. That niche being short haul city transportation. The large manufacturers will eat up and spit out Tesla based on price and value for the money. The much bally hoo’d self driving feature doesn’t make sense in a city environment unless its’ completely autonomous….. and it’s not.
Self-driving cars will seem like a good idea until the first terrorist attack based on them.
“…until the first terrorist attack based on them.” Bingo!
Number 97 (percent) keeps repeating and seeing it everywhere. But it’s not a Fibonacci number
It’s a marketing number. Look up “what is the meaning of 97 percent?” to get an idea. For example, see Alex Epstein:
https://youtu.be/SSrjAXK5pGw
South Australia and our wholly government funded ABC just love Elon Musk.
http://www.abc.net.au/news/2017-09-29/elon-musk-tesla-world-biggest-battery-reaches-halfway-mark/9001542
When I first heard his name I thought it was some sort of after shave lotion.
hahahaha
They must have poured that concrete a while a go to be so far ahead that he will get paid. Concrete takes weeks to properly cure before you can build on it. I sense a bit of a scam here.
Some concrete can be built on the next day. Depends on the concrete. Even ordinary concrete will attain 70% strength in a week. All concrete used on my projects have strength based on a 28 day cure time, but many concretes will beat that time by two to three weeks. High early concretes are specifically formulated to achieve proper bearing capacity in very short times.
Don’t forget the 250 MW of diesel generators they had to commission into service, at the last minute and at great expense. That’s probably one of the least efficient of the cheap and reliable ways to generate grid-scale power, but on the plus side, it will emit lots of CO2, which should help green Australia up a bit. It needs it!
John of Cloverdale:
The words or initials of SA and NSW always make me chuckle. Sad that it is. Course we have idiots in control of Canada at the moment, driving capital straight out of the country. I just liquidated most of my Canadian stocks. Seems so many lefty’s just can’t make the right side of their brains work. Of course no one expected much of our “Hair Boy” trust fund sucking leader so just walking is probably an ordeal for the boy. So you can have a chuckle at our expense too.
A Once Proud Canadian but hiding my head these days…….
Awful isn’t it, Wayne. Not just the feds, which is bad enough, but Ontario is even worse. I suspect the lefties don’t even *want* to make the right side of their brains work. It’s too much trouble for them. And there doesn’t seem to be any way to wake them up until after the collapse. And maybe not even then.
‘Tesla is overvalued…….’ There’s a masterful statement of the blatantly obvious!
According to Teslarati, Musk might leave Tesla after successful release of Model 3 and go on to bigger and better things like Mars.
http://www.teslarati.com/elon-musk-to-leave-tesla-motors-after-model-3-release/
According to WUWT, the Model 3 was successfully released if you elastically define successful.
Given how fast they are being produced, it will take them more than 20 years just to fulfill their 2018 model year preorders
He’s promising economical Mars travel already … he’d make a great test pilot !
might need a post on Elon Musk
I will build a battery for South Australia in 100 days if asked.
Was asked 2 months ago Now announces start date last week.
Some discrepancy here worth a post possibly from Jo Nova’s husband or another Australian with interest?
Admire his chutzpa.
Tesla was amongst the first to market and so has a competitive edge. WUWT loves to promote any article that is in the slightest critical of Tesla and Elon Musk. Customers love Tesla vehicles and they are going to be around for a very long time, so just get used to it…
“Customers love Tesla vehicles and they are going to be around for a very long time, so just get used to it”
But that’s not saying it’s a good thing or that its true;
You could say the same about drugs…
Customers love ‘Crack Cocaine’ and they are going to be around for a very long time, so just get used to it.
or Silly Bandz (google it)…
Customers love ‘Silly Bandz’ and they are going to be around for a very long time, so just get used to it.
Don’t feed the troll.
It is companies like Volvo or an American manufacturer like GM that has the competitive edge.
They have the deep pockets and deep width of models including ICEs which are becoming more and more efficient.
The can afford to play hardball on Musk’s field and drive prices of EVs down until Elon moves on to other ventures or solidifies the miniscule wealthy virtue signaler’s market.
The big boys can then readjust prices and models.
The virtue signaler’s market is nonetheless a market. Global Warming has hung on a long time. I’m sure EV’s and solar will make a lot of people rich … for the relative short term. Never mind the net economic benefit to the customer or net increase in CO2 emissions from their manufacture. Feeling good has always been for sale, or at least a big part of sales. Nothing new here. What ticks me off are the subsidies to play this game.
Elon Musk too has deep pockets and they will become even deeper with projects like this one: http://www.bbc.com/news/world-us-canada-41524220
You support pollution? Tesla is anything but green…
Eva are all part if the mix helping to reduce global CO2 emissions. Air quality in urban environments will be improved through EVs andthe banning or phase outin particular of diesel engines.
This is the real picture of investor sentiment regarding Tesla:
https://www.bloomberg.com/news/articles/2017-10-03/tesla-delays-don-t-faze-investors-banking-on-safe-not-sorry
‘Only when the tide goes out do you discover who’s been swimming naked.’ Warren Buffett
Just been reading a crazy article about how Elon Musk himself is invented. One interesting fact to support the thesis was that he is a fan of Margaret Thatcher. If that’s true I’m warming to the lad!
That old bitch can burn in he’ll. Destroyed the social fabric of the British nation.
ivankinsman, she launched your pet scare in the UN General Assembly.
Margaret Thatcher used the idea of ‘carbon caused global warming’ to break the power of the miners after the Edward Heath 3 day week humiliation,
Destroying the social fabric of the British nation was the outcome.
It’s actually woman made global warming….assisted by Mann !
Some real facts about Margaret Thatcher and how she rescued UK from becoming the ‘sick man of Europe’.
Wilson (Labour) closed far more coal mines of course. You had to be there really to know just how bad it was.
http://www.marketwatch.com/story/the-truth-about-margaret-thatcher-2013-04-09
Apparently, social fabric equals communist unions.
Ivankinsman, the investor sentiment aginst Tesla is gigantic among market professionals. Earlier this year, Tesla was the second most shorted share in the stock market. (http://www.marketwatch.com/story/apple-tesla-shares-are-two-of-the-biggest-shorts-in-the-world-right-now-2017-06-13).
Virtually all the positive market sentiment for Tesla comes from small investors who can’t count.
Elon Musk is a fu@ur momisugly@@ur momisugly@g game changer. He was one of the founders of PayPal which revolutionised payments. He could have sat back and enjoyed his millions from its sale but instead he set up Tesla.
Gone are the days when Americans used to praise entrepreneurs like Musk. On this site it is just snarky comments and prissy evaluations. Not surprising China is overtaking the USA in business activity and cutting-edge technological innovation.
The delusion is strong with this one.
“The delusion is strong with this one.”
No delusion at all, he is correct. Instead of sitting around all day commenting on web sites, Musk is building businesses. Who respects someone who just sits on the sidelines chirping away? Nobody.
@ivankinsman: “Gone are the days when Americans used to praise entrepreneurs like Musk.”
Gone are the days when entrepreneurs would sell, prove, and market their ideas without subsidies. Think Edison, the original Tesla, and JP Morgan. Entrepreneurs know how to more efficiently get to the bottom of the science and technology without risking and wasting taxpayers dollars and thereby bloating the government and creating the self-destructing ever-expanding “new normal”. Entrepreneurs and investors are going to end up making the fortunes (from our purchasing dollar), they should be taking on the full risk.
This is another Solyndra.
He’s building a business that’s losing money hand over fist.
I bet even you could do that if you tried hard enough.
He’s building cars that the government has to pay people to buy. What a revolutionary businessman.
the ? is who invests more money? if the small investors who can’t count, who believe in the green dream, buys more stock, then the professional shorts the stock, then stock price will keep going up. Crazy.
I would conjecture that not one percent of those who parrot the ‘97% of climate scientists agree that…’ could state the total number of scientists or scientific papers surveyed.
Or even more important exactly what it is that they agree on. Hint, not what Obama thought for sure.
Tesla has been indentified as a pretender long time ago:
http://www.marketwired.com/press-release/devonshire-research-group-issues-part-ii-of-research-on-tesla-2127717.htm
Three tesla things
http://www.vukcevic.talktalk.net/3tesla.jpg
in chronological order
– woodworking tool, been around since roman times still going strong
– genius inventor 1856 – 1943
– electric car 2008 – ?
Anyone to hazard a guess what year ? might stand for.
Thank you, I had no idea a ‘tesla’ meant adze. ? is a good question! At which point some may be looking for an ice axe (pick).
Possibly one of Tesla’s ancestors was maker of such tools (blacksmith).
It comes from verb ‘tesati’ (shaping piece of wood by cutting its sides), hence the name of the tool used ‘tesla’.
In number of Slavic languages: Serbian/ Croat/ Czech = tesla & Russian = teslo (cyrillic ‘tесло’ ).
google came with this
“Tesla was originally a surname of Slavic Origin and means “of the axe” or “harvester”. The name dates back to the 7th century when it was used to describe a tool used to harvest timber. This tool is more presently referred to as an adz. A tesla is the SI unit for magnetic flux density (after Nikola Tesla).”
Here’s a copy of a Bronze Age adze being used to build a replica Bronze Age boat.
The adze far predates the Romans (Paleo to Neolithic)
Pragmatic middle class people have a way of seeing through the Muskovites. They ain’t buying…
+1