Wednesday, November 8, 2017

Is Tesla in Your Future?

The title is an open question like a blank check. Elon Musk would like you to first think about his electric car as an answer. It is called, "Branding." There was an old test back in the late 50s and early 60s that solidified the idea. It would go like this: Name an aspirin? The branded answer would be Bayer. Name a soda? Again, the branded answer would be Coke. Almost every car company even Ferrari is coming out with an electric car, but Musk wants you to first think, Tesla.
Dear reader, Tesla is a huge company with over 33,000 employees and it is more than a electric car company.
Cobalt Ontario, Canada
Tesla is looking into the depressed mining town because in what its name implies. As you may or may not know Musk built a huge factory in the Arizona desert to develop lithium. Lithium is a rare earth mineral that is used in making 21th century batteries. This is the power source for electric cars. Cobalt is the other earth mineral that is used in making cars light weight and strong as well as other uses. However, any miner will tell you, digging holes in the ground is expensive. I love Elon Musk's mind. He thinks big and as the ability to connect the dots to achieve a goal. Amazon has achieved it in retail. Musk is seeking not just cars, but many venues. This,I fear, could be his down bringing. He is over extending himself and his company. An old saying reveals the flaw, "A jack of all trades and a master of none."
Did You Know 
that Tesla has many divisions in the company? Tesla offers solar panels, powerwalls, solar roofs for residential and commercial. In addition, it offers a full range of services and infrastructure for utilities. Then, Musk has his other hobbies like the hyper-loop and space travel. By the way, I tip my hat to him for his reusable rocket fuselage. The man does get results. His first model electric car is stylish, gets the best range and it is the safest car ever built. However, just like the word "but," there are many problems at Tesla.
3 Models
There are three versions of electric cars from the company. The original Tesla S, Model X and now, Model 3. The last one is for us. It is affordable at $35,000. At least, that is what Tesla is saying. They say a lot of things like place your reservation and sometime in the next 12 to 18 months, you may get your car. They said that their production would ramp up to 1600 a week and then, to 5,000. So far, the number is a dismal 220.
As a result of this production failure, Musk has decided to sleep in the Gigafactory. Then, he fired 700 employees. The UAW claimed that Musk fired people who wanted to form a union. He said it was due to poor performance. I have my doubts, but let's get back to the divisions within Tesla.
is really a storage battery. It is tied to the solar panel in the solar roof. It can provide energy for up to seven days if regular power goes out. The system is based on average Watt usage of 24 per day. Tesla is aiming for a home run in the utility section. They will design and deploy their distributed energy resources to meet your grid needs. I guess the idea is to allow Tesla to provide for utility company expansion with their service. Tesla claims their assistance will reduce demands on distribution and transmission infrastructure. It is like I said, Tesla says a lot of things, but reality says a different answer.
Maybe with my original question, your answer was investing in the company? There are some things you must understand. Tesla burns through cash like a forest fire eats trees. They lose $619 million and rising. They need the government to continue to provide subsidies to the tune of $4.93 billion per year. These are credits for solar energy and electric cars(clean energy). The stock hit a high in September 2017, however it has slowly declined with each negative quarterly report. It gapped down to $293 and closed last Friday at $306. This company has NEVER made money. Negative volume is building. The stock could fall to $242. If more negative news appears, the stock could test $180, which is major resistance. The company has a large short position which makes for volatile action. I think the stock will fall to $141 and then, consolidate. The 50-day moving average has already been penetrated and the 200-day is $241. The latter is the first resistance mark.
Bottom line:
Musk has failed to show that he can mass produce. Like I stated, I love his drive and accomplishments. If Musk wants us to "brand" his electric car, he has to work his thoughts through and that takes time. Success is not an idea nor does it happen in a day. Maybe he should fire himself for "poor" performance?