It’s regrettable — and I say that sincerely as a Tesla shareholder since way back April — that Elon Musk has made such a spectacle of himself in recent years that it’s impossible to discuss his companies without reference to his eccentricities.
Musk is, by his own account, disabled. He wouldn’t use that word, but he’s publicly talked about having Asperger’s, and that’s a developmental disability. So Musk is disabled. And it shows. In his behavior and also very subtly in his appearance. Musk is also the richest human to ever live, and he’s quite obviously a genius.
That combination is, in my opinion, dangerous. There are other Elons wandering around out there. Unfortunately, their circumstances weren’t such that they were able to build rocket ships. Instead, they mutter to themselves about building rocket ships while sleeping in makeshift tents under bridges. Or fantasize about colonizing Mars between swigging cheap vodka and cursing the squirrels in public parks (“I’ll get you one day, you sneaky sons of bitches.”)
In Musk, we have someone who probably wouldn’t be turned away by a mental institution, and he splits his time between NASA contracts, implanting chips in monkey brains, speaking to Vladimir Putin without informing the State Department (allegedly) and flooding the social media platform he bought with increasingly unhinged right-wing conspiracy theories. Again, this person has unlimited financial resources and access to God only knows how much data on humanity through Twitter and Tesla software.
That conjuncture — a man whose disorder appears, to the untrained eye anyway, to be affecting his judgment on a daily basis controlling a quarter trillion dollars while flying astronauts around, building self-driving cars, probing at monkey brains and chatting with dictators — will probably go wrong somehow, one day, and maybe it already has. Musk’s million-dollar, sweepstakes-style get-out-the-vote effort is unnerving on multiple levels, as is his descent into “red pill” delirium.
I wish Musk the best, really I do. I’m sure it’s psychologically exhausting to live in that mind of his every day. And I think he’s just an incredible phenomenon. At the same time, I fear the worst and have for some time. Musk, in my unprofessional opinion, needs medical oversight for the good of himself, but also for the good of humanity.
With that out of the way, Tesla missed on the top-line with results released after the bell on Wednesday. Revenue of $25.182 billion was short of the $25.43 billion the Street expected. It was mostly good news other than that, though. GAAP EPS was ¢62, considerably better than forecasts on what looked like a sizable margin beat, and free cash flow of $2.72 billion compared very favorably to the $1.61 billion expected.
As a reminder that no one needs, deliveries for Q3 were 462,890. Like Q3 sales, that was short of estimates, but as the simple figure shows, both have inflected.
I doubt I need to recap the backstory, so I won’t other than to say the shares came under enormous pressure earlier this year on doubts around the timeline for a new, cheaper model and concerns about Musk’s single-minded commitment to the Robotaxi project.
The grand Robotaxi unveil went — I don’t know — ok? I couldn’t make heads or tails of it to be honest. I’m a control freak. I wouldn’t ride in a car I’m not driving, let alone in one nobody’s driving. So they won’t be for me. But if they’re for everybody else, that’s great. It’s why I still own some of the stock I bought in April: The distinct possibility that Musk will continue to deliver innovations. Well, that and the fact that I bought it very cheap, as some of you will doubtlessly recall.
Wednesday’s slide deck was a bag of goodies for Tesla fanatics. Cybertruck’s apparently profitable (it “achieved a positive gross margin for the first time”), “affordable models” are still on track to “begin launching” in H1 2025 and so on. At the brass tacks level, implied auto gross margin was around 17%, 200bps (give or take) better than expected.
Bottom line: This was a report that had the potential to temporarily appease naysayers. There was certainly enough to like for the Musk fan club. All I’d ask, as a shareholder and as someone who, despite not caring for the guy, is still grateful for his contributions, is that Musk dedicate at least as much time to engineering as electioneering.
I’m constantly receiving 0% financing and free transfer of ‘Fool Self Driving,’ not a typo. Elon is turning over every couch cushion, trying to keep the numbers up a little while longer.
If Kamala gets back into office, we (the USA) really need to think about Musk’s role in our national defense and space programs.
As usual, well said H. My feelings are similar, and I wouldn’t be able to articulate like you. Unfortunately, after buying with you in April I took a quick profit. I’m not considering becoming a share holder again given your track record. Thanks as always.
Not completely dissimilar to another icon of American business Howard Hughes.
He he ended up living out his years in a hotel room with tissue boxes as shoes…
And all of this begs the question, how successful would Tesla be without a Chinese EV import ban? I read this morning that the Ford CEO absolutely loves his Xiaomi EV and doesn’t want to give it up. Chew on that for a minute.
Tesla has been able to monetize an aging product line because there is effectively no competition.
China meanwhile is highly competitive (with itself) in the EV space and would eat Tesla’s lunch, given the opportunity.
How is this ban good for 1) American EV consumers and 2) The domestic EV market more broadly?
It isn’t, it’s good for Elon Musk.
It does appear to be the classic ‘can of worms’ that only good moral guidance can come out of with coherence.
It is morally correct to go with low cost solutions. After a recent EV purchase from Hyundai, my average fuel costs for electricity from local utility is 3 cent per mile. To do that with gasoline would require a vehicle to average 100 mpg.
It is morally correct to focus on plentiful resources which Lithium is. We have enough to supply the world several times over.
It is morally correct to prioritize those technologies which reduce pollutants. Low cost solar does this.
It is morally correct to priortize technologies that benefit ones nation. Solar powered EV’s do just that. We are an energy intensive society, lowering energy costs is in our national interest. Solar is the leading low cost supplier of energy to our economy and EV’s can make use of this energy by independent solar charging or drawing from the grid when solar energy is plentiful.
The current Telsa car business is, in the longer-term, irrelevant to TSLA the stock. The car business can only support a fraction of the market cap. The stock needs FSD, Robotaxi, Optimus, etc.
Musk admitted yesterday that they are “not 100% sure” if FSD can work on “Hardware 3”, the computer, sensor, and wiring package used until the changeover to Hardware 4 in 2023. From what I’ve read, FSD very likely cannot be made to work on Hardware 3 (assuming it ever works on Hardware 4) and upgrading pre-2024 Teslas from HW 3 to HW 4 will be difficult and expensive.
But hey, we’ve moved on to Robotaxi anyway. Which will be deployed in huge numbers, soon. According to “Technoking”.
“There are other Elons wandering around out there. Unfortunately, their circumstances weren’t such that they were able to build rocket ships. Instead, they mutter to themselves about building rocket ships while sleeping in makeshift tents under bridges.”
I met this guy. In college, I was a hard-core night-owl. I and a similarly nocturnal friend, Carye, would typically leave the dorm after midnight and head to the local 24/7 cafe to sip bottomless coffee cups while smoking ultra-lights and playing the same 3 songs on the jukebox. The local homeless folks would come in some times, and Carye, who was a bleeding heart, would invite them over for conversation and a free drink. The most famous one, “The Crazy Lady of M Street,” drank carrot juice. I’m not sure what’s more surprising–a homeless person ordering carrot juice, or a greasy-spoon diner actually having that for sale. She was textbook paranoid-schizophrenic. I always wonder what happened to her.
But there was this one guy… He had a Hitler-stache and hairdo, and it turned out, he was a huge Hitler fan. It was odd, because he was neither racist nor an anti-semite. He was just crazy and latched on to that period of history. He shared with us his “designs.” These were drawings he’d made on napkins, scraps of paper, whatever. He carried them folded up in a greasy drab peacoat that he always wore. He talked about how he was a designer for Hitler, and he designed the rockets. By my guess, this guy was born in the late 50s or early 60s, so he certainly wasn’t a former engineer for the third Reich fallen on hard times, he was just severely mentally disabled and homeless. He had incredibly elaborate diagrams of rockets though. The quality of the lines and proportions suggested he’d taken drafting classes at a minimum. At the same time, these were cartoonish drawings–an 8 year old’s impression of what rockets look like. When asked, he informed me that his primary contribution to the designs was the color palette.
On one occasion he proudly told us he’d been hired to design an automatic sprinkler irrigation system for one of the rich houses. He had some incredible diagrams for that too. It came out though that he wasn’t exactly hired to design the system. His responsibilities started and ended with a shovel. But he did have some lovely drawings.
The last time I saw him, he walked up to another customer, a black man, whom he apparently knew. That guy was super friendly and they seemed to get along well, and then something came out about how great Hitler was. “What?! That’s fucked up man!” The Designer got a look of panic on his face and scrambled out of there, never to be seen again.