Meltdown Monday #4 - The Cybertruck Looks Like a Dumpster...
...and that's where we found Tesla's latest production and delivery report
Oh yeah, here we are again with another installment of the BEST ELON MUSK THEMED WEEKLY NEWSLETTER ON THE INTERNET.
Dr. Buck is dealing with some sort of hell virus right now that’s a stomach and also flu kinda thing, so a fewer words this week. But the words that are here are good ones.
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For the Week of April 3, 2023
Looking Into This
Have you noticed how often Elon Musk has said he is "looking into it"? He says it a lot! This isn't really surprising when you think about how many companies he ostensibly runs, how many weird conspiracy theories he pushes, and how many "ideas" he is constantly pushing into the public sphere. If it seems like there's no way one person could keep it all straight, that's because there isn't... and "looking into it" is Musk's admission that he can't.
One reason Elon Musk is so popular is that he's a celebrity billionaire who's Just Like Us, by which I mean a chaotic little goblin who bounces from one online trend to the next, endlessly surfing the internet's waves of dopamine. One minute he's stealing memes; the next, he's meddling in the Ukraine conflict. One minute he's making cars and rockets, the next he's also making robots, and neural interfaces, and tunneling machines, and hyperloops, and rockabilly diners, and cave rescue submarines…
The Big Lie about Musk, which has been staring the public in the face since at least 2018, is that it makes any sense that one man can actually deliver real value in all of these areas. Even the smartest person alive, which Musk manifestly is not, would struggle to deliver real value in more than one of these areas. Then again, smart people understand that they have limits, and Musk's entire schtick is that he doesn't.
This reality is starting to become more obvious, as new reporting reveals Musk's pattern of aping Google's ideas and then not really ever bringing them to fruition. A new Semafor report reveals that Musk funded OpenAI because he wildly overestimated Google's progress in the area, just like he wildly overestimated Google's progress with driving automation tech and tried to front-run it with Autopilot. Let’s not forget his rush to create Starlink to compete with the Google-incubated OneWeb.
The point of all this is not just that Musk is a parrot and a guy whose "revolutionary ideas" amount to rushing out knockoffs of Google's work; it's that he's so busy bouncing from idea to idea that he rarely delivers on any of them. Musk's lack of commitment to funding OpenAI left it in the hands of Sam Altman, his lack of commitment to funding autonomous driving development led to Tesla overselling dangerous driver assistance systems, while Starlink thrashes through revision after revision, burning cash all along the way.
Musk fanboys love him because he's living the "idea guy" dream, of claiming credit for every buzzy new tech without doing the hard work of delivering any of them. He's a 21st Century Horatio Alger story, which shows that certain lucky boys can become fabulously wealthy by having an endless stream of super sick ideas rather than boring old hard work and value creation. And when things don't quite work out; when those ideas don't quite come to fruition, all it takes is a quick "looking into it," and the whole world bounces on to the next distraction.
Truly, the ultimate inspo shlock for our shallow, grifty times.
And yes, of course I'm jealous. - Ed
Tesla Deliveries Sucked (and they’re getting worse)
I’m going to start this section with the latest Cybertruck hype video making rounds on the internet:
Just kidding! I know you have to look closely to tell, but the above image is not a Cybertruck, but rather a dumpster that’s on fire floating down a flooded street.
Here’s the real deal, a sweet hype shot spotted on social media.
It’s truly amazing how terrible the Cybertruck looks. An ugly stupid car that will all but certainly cost $100k and only be purchased by the worst people on the planet. Imagine an F-150 “truck guy,” who is also a big “Elon guy.” Terrible.
Anyways, the point of this is that with absolutely zero other new products in the pipeline for Tesla, no S, X, 3 or Y replacement to be seen, the Cybertruck will have to pick up the slack. Because Q1 2023 deliveries were BAD.
As of early last year, analysts were still projecting that Tesla would be selling 470k plus cars in Q1 2023. In reality, they sold only 422k units, a mere 5% increase over Q4 of last year. That’s not even the worst part. In order to pull off such a pathetic gain, with 4 factories supposedly up and running, Tesla had to cut prices by 15% across the board, which is… not good? I don’t think? Per Motorhead’s excellent substack (you should def sub):
On the face of it, Tesla cut global prices by 15% on average in early January. But Zach (CFO) played this down on the earnings call saying that, long backlogs “for most of 2022 at lower prices”, have already lowered the bar with Q4 ASPs (i.e. prices are already low, so can’t fall by double digits in Q1). But the price cuts in the US and China (67% of global sales) versus prices back in Q4 2021 show that the entry-level Model Y has undergone a 15.9% reduction in price.
To keep Auto gross margins (ex-credits and leases) above 20% on a mere 5% decline in ASPs to $47,600 in Q1 2023, Tesla would need to drop COGS/unit by 2% and grow volumes by 6% QoQ. This is no easy task given the ramp up of two new factories, sluggish demand in China and Europe and rising lithium contract prices. There are three simulations in Figure-9, with COGS/unit falling by 2%, then by 1% and then staying flat with Q4 2022’s level. Note that even if a 2% cut in costs is achieved ub Q1 this year, it would still lead to Auto gross profit (ex-credit and leases) to drop 16% versus Q4. Consensus sees Q1 2023 total Auto gross margins (including credits and leases) to rise 1.2% compared with Q4.
That’s a lot of fancy words to say Tesla’s profits are headed straight to the Cybertruck (uh, I mean dumpster).
AND THAT’S NOT ALL!
Model S and X sales were bad! Really bad! They sold 17k of these last quarter, the highest margin, $100k toys, made by the company for tech bros with more money than brains. And the company has no replacement model lined up. It’s wild! Model 3 sales look shakey and if people ever get sick of buying the Model Y, which is still selling quite well at its new lower price, it’s going to be bad!
This car company is dying and yet is somehow still worth more than every automaker on the planet combined. Please make it make sense - Buck
Midjourney Prompt of the Week:
This week’s issuance is from a super janky text-to-video AI model and the prompt was “Elon Musk Doing a Hoedown dance in a barn, plaid shirt”
It’s horrible. I hope you love it.
This week in Elon Musk History
2019: Elon Makes a Harambe Rap Song
Remember Harambe? The zoo gorilla who was killed by zookeepers in Cincinnati in 2016 after a little girl fell in the enclosure? The one that spawned all the memes that were funny for approximately two weeks?
Well, have no fear, Musk made a terrible rap about it with Grimes 3 years later. I did not go back and listen to it, but I remember distinctly it being horrible, cringe and a little sad. Feel free to listen to it. I sure won’t.
2018: Bankwuptcy!
While Tesla, the company, was actually, truly, teetering on the edge of financial collapse in 2018 with the disastrous rollout of the Model 3 making headaches and spilling gallons of red ink for the company, Musk soldiered on, did a bunch of fraud about the company’s finances and yelled at short sellers a lot.
On April 1st (APRIL FOOLS, e.g. The worst American holiday by far), Musk made a little joke about being Bankwupt.
Needless to say, Musk did not go bankrupt.
UNTIL NEXT WEEK….
Let me preface this by saying I have the utmost disrespect for Ed, who blocked me on Twitter in violation of free speech, but I still will read your content because everyone deserves to be listened to. I also don't mind Dr Buck.
Whatever you think about Musk or OpenAI, I'd like for everyone to at least acknowledge that Google is the evilest corporation of the megacaps by a large margin and it is very important that Elon opened competition on several new fronts so they can't claim AI for themselves. While it sucks that Altman betrayed Elon at least Google is going down because of his founding of OpenAI.
This quarters delivery numbers are nowhere as bad as you've been led to believe by the likes of Reuters or Motorhead. Reuters was already forced to recant about their lies by the Twitter community after pretending a beat was a miss, and I hope the SEC will follow up.
That's all I have to say for now, I may come back and give some more specific refutions.
Let me also send a message to dcmix5 who I know reads these: you banned me from Reddit even though I did nothing wrong but I forgive you. It was hard for me to get over it but time heals.
Oh the Harambe meme? It was a three year old boy, and one of the factors driving the meme's popularity was the fact the child was black... the implication being the life of a black child wasn't worth shooting the ape.
Well in South African Zoos...