Tesla Is The Underdog In The Electric Car Revolution – Forbes

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If youre not first youre last.

You may recognize this quote from fictional racecar driver Ricky Bobby. But it could easily be straight from a business school lecture.

Many professors preach the importance of being first in business. But I have to tell you its mostly a lie.

Microsoft introduced the first tablet computer in 2000. Apple didnt unveil the iPad until a decade later.

The iPad has sold 360 million units while the few Tablet PCs Microsoft sold are buried in junkyards.

Friendster started the worlds first major social network. Facebook didnt come along until years later. Today, Facebook is the worlds 6th largest public company. Friendster shut its doors in 2018.

So much for being first. I could go on and on with examples, but heres the thing More often than not, the first movers advantage turns out to be a curse.

The most successful companies the likes of Amazon, Google, Apple that handed investors big gains were not first movers. Again and again, the second... third and fourth movers are the ones that get rich.

Tesla Is a Cursed First Mover in Electric Cars

As you probably know, Tesla pioneered electric cars.

In 2008, it released the Tesla Roadster, the worlds first highway-legal electric car.But the real breakthrough was the iconic Tesla S, its first all-electric sedan launched in 2012.

For the first time, an electric car was not just a toy but a real vehicle folks could drive every day. Tesla S has quickly become the standard of electric cars. Over 500,000 cars were sold.

Since the Tesla S release, Tesla stock shot up 670%...

Source: RiskHedge

Like all first movers, Tesla initially enjoyed little competition. Until not long ago, there was no electric car model that could compete with the Tesla S.

But everything has changed.

Car giants have woken up. They started releasing one electric car after another, quickly crowding Tesla out.

Most people dont know this, but Tesla is no longer the leader in electric cars. As Ill explain, its becoming an electric car underdog that may soon be just another failed first-mover.

This may surprise you...

Let me show you the most important chart about the electric car industry It shows the number of electric cars sold in the US, Japan, China, and the rest of the world in recent years.

Source: RiskHedge

For a long time, America dominated in electric cars, thanks to Tesla. But in 2016, Chinas push towards green energy started a massive electric car boom.

Today China makes up more than half of the global electric market.

Last year, 1.1 million electric cars were sold in China, compared to just 358,000 in the US, according to The Conversation. And get this... Chinas capital city Beijing has more electric car charging stations than the entire US.

Tesla Is a Dog in China

China has been flooded with electric car makers. And Tesla is now battling withswarmsof Chinese companies.

There were 486 electric car makers in China as of March this year. (Yes, 486. This is not a typo.) Every other day, a new electric car company is founded in China, according toSouth China Morning Post.

Unless you live in China, chances are youve never heard of the worlds biggest electric car maker, BYD

In the first half of 2019, BYD sold 145,653 electric cars in China. Thats as many as Tesla soldgloballyduring the same period.

No surprise, local car makers capture 93% of the market in China, according to Fast Company. Meanwhile, Tesla has a puny 6% share.

See the big picture?

In the worlds largest and most lucrative electric car market, Tesla is a dog. And its quickly losing whatever is left. Worse, China will slap a 25% tariff on Teslas later this year as part of the brimming trade war between China and the US.

Tesla Is a Dog in Europe, Too

Europe is the worlds second-largest electric car market.

Today, 1.3 million electric cars zip around European roads... compared to 1.1 million in America, according to HybridCars.

But Europes electric car boom has just started. With new EU rules for automakers designed to reduce carbon emissions, Europe is making a full-on shift into electric cars.

In some parts of Europe, more than 50% of new cars sold are electric, according to NPR. But with the new rules in effect, electric cars will become a common sight on most European roads.

Its estimated that the number of electric car models available in Europe will shoot up 75% by the end of 2020, according to The Driven.

Let me show you another important chart. (Viewer discretion advised for Tesla investors.) It shows the number of electric car models coming to the European market:

Source: RiskHedge

Just like China, Europe will soon be flooded with electric cars.

Today, only 4% of all electric car models in Europe are made by Tesla. In the next five years, Teslas share will shrink to a tiny 1.2%.

Please, Dont Buy the Dip in Tesla

Have you seen Tesla stock lately?

It has been beaten to death in the past year, crashing almost 30% since the end of last year. A couple of my readers asked me if its a good opportunity to buy it for cheap.

In all fairness, Elon Musk has pulled off what seemed to be impossible not so long ago. Tesla has paved the way for electric cars and will go down in history for that.

I respect his accomplishments but Tesla is a terrible investment. The stock is fueled by hope, and hope is fading.

Giant car makers are coming for Tesla and as youve seen, all signs show they have the upper hand.

My recommendation: Stay away from Tesla. There are better, safer, and higher-upside ways to earn money in the stock market.

Get my report"The Great Disruptors:3 Breakthrough Stocks Set to Double Your Money".These stocks will hand you 100% gains as they disrupt whole industries.Get your free copy here.

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Tesla Is The Underdog In The Electric Car Revolution - Forbes

Tesla Model S Plaid Spied Testing Aggressive Body At The Nurburgring – Motor1.com

The Tesla Model S Plaid continues its development at the Nrburgring. The one in this spy video appears to have some slight design tweaks in comparison to earlier ones.

7 Photos

In front, this Model S wears a black splitter that juts out from below the fascia. Presumably, it works with the rear diffuser to balance downforce between the two ends.

In this video, it also appears that the clear rear spoiler has a steeper angle of attack than the piece on other pre-production examples. The element's design would make the job easy for the engineers to alter the slant and tweak the aerodynamics.

Judging from this car's shape, Tesla appears to have a high-downforce setting for the Model S here. Since the company can apparently remove or modify the splitter and spoiler, it's possible the company is evaluating the ideal amount of downforce for the Nrburgring's many curves without too much of a detriment on straight-line speed.

Rumors suggest that theModel S Plaid uses a three-motor powertrain making slightly in excess of 800 horsepower (597 kilowatts) and use a 130-kilowatt-hour battery. Better thermal management could keep the cells running cooler by using abigger refrigeration system.

It's not yet clear when Tesla intends to send the final version of the Model S Plaid around the Nrburgring and release a lap time for the hotter model. At this stage, there isn't much question about the vehicle lapping the Nordschleife quicker than the Porsche Taycan's7:42, but there's still the mystery of how low Tesla can take the time.

Presumably, Tesla also intends to sell the Model S Plaid to the public, but we don't know when. Rumors suggest that it could be sometime in October or November of 2020. Although, Elon Musk later tweeted the timeframe could be as soon as next summer.

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Tesla Model S Plaid Spied Testing Aggressive Body At The Nurburgring - Motor1.com

Tesla will roll out a software update that will make the Model S even faster – BGR

For years, Tesla CEO Elon Musk lamented the fact that Tesla had no real competition in the EV space. Sure, there is no shortage of EVs on the market today, but youd be hard-pressed to find a vehicle that comes anywhere close to matching the style and performance offered by Teslas luxury Model S.

The launch of the Porsche Taycan changed all that. Years in the making, and fueled by the success Tesla saw with the Model S, the Porsche Taycan is an incredibly sleek EV with incredible performance. As Porsche executives boasted over the past few months, the Taycan isnt so much an electric vehicle as it is a Porsche that just so happens to be an EV.

With a real competitor now entering the fray, Teslas Model S at long last has some legit competition. Over the past few days, weve seen a number of videos pitting the Taycan against the Model S in a variety of race conditions. The most widely circulated video in this regard comes from Top Gear and features a $200,000+ Taycan Turbo S going up against a $100,000 Model S Performance in a quarter-mile drag race. When the dust settled, the Turbo S had a time of 10.69 seconds compared to the Model S time of 11.08 seconds.

Truth be told, these tests are beyond irrelevant and have no real bearing on the driving experience, especially given that the times arent all that far apart. Having said that, there have been subsequent reports claiming that the numbers Top Gear used were old, and thus rendering the test results suspect.

All that aside, theres no question that the Taycan has definitely had an impact on Elon Musk, with the Tesla CEO recently commenting on Twitter that the company is planning to roll out a new software update that will provide the Model S with additional 50 horsepower.

Theres a software upgrade for Model S coming out that increases peak power by 50HP, Musk said, so Model S should beat Porsche Taycan Turbo S by a wider margin in 0 to 60 & 1/4 mile races.

Again, this is largely irrelevant to most everyone, but apparently, for Musk, its a serious source of pride.

Image Source: Sessions/Future/REX/Shutterstock


Tesla will roll out a software update that will make the Model S even faster - BGR

Tesla Demonstrates The Power Of The Internet Of Things – Forbes

The logo of Tesla model 3 is pictured at the Auto show in Paris, France, Wednesday, Oct. 3, 2018, ... [+] 2018. All-electric vehicles with zero local emissions are among the stars of the Paris auto show, rubbing shoulders with the fossil-fuel burning SUVs that many car buyers love. (AP Photo/Christophe Ena)

As evacuees lined up at gas stations to flee Florida in the weeks before Hurricane Dorian, Tesla (NASDAQ: TSLA) CEO Elon Musk announced that the company would boost the range of its Model 3 cars, enabling residents to travel further out of the range of the storm. The manufacturer, which has also provided free charging in the lead up to previous storms, was able to extend the range of its vehicles for a short period of time.

Tesla wasnt alone in remotely assisting those in Dorians path. General Motors provided enhanced OnStar services for customers, including those with lapsed registrations. That technology can help with directions, free calls, in-vehicle Wi-Fi and more.

In fact, Tesla and OnStars moves reflect a deeper shift. Consumer and business-facing infrastructure is growing increasingly connected in an Internet of Things, with more devices connecting each day: The Economist reports that 1 trillion internet-connected devices may be online by 2035. For some consumers, some of these IoT gadgets may seem superfluous in actually improving our lives (see Amazon's smart microwave). However, as Tesla owners have learned, IoT devices can be a lifeline.

While Teslas news applied specifically to Florida, climate change is impacting homeowners up and down the southeastern coast (and more recently in California), as a warming planet intensifies the Atlantic hurricane season and the Santa Ana winds. As storms grow stronger and more frequent, theyll not only cause more damage to seaside communities, but also the power grid that plays an increasingly vital role in our day-to-day lives.

Less discussed in the news around Tesla was how the companys PowerWalls helped to mitigate electricity loss for residents.

In the past, homeowners who had installed net-metered solar panels were stuck without power when the grid went down, even though their solar panels frequently survived the storm. In recent years, some PV solutions offered homeowners the opportunity to plug directly into an inverter that supplied direct power. While that solution allowed homeowners to temporarily power their homes during a blackout, solar power failed once the sun went down.

Homeowners seeking to power their homes around the clock turned to Teslas Powerwalls, which can include energy storage (batteries) that can power a home when power is unavailable. In tandem with rooftop PV panels, Powerwalls can power home essentials, like refrigerators, sump pumpts, lighting and air conditioning, when grid power is knocked out by high winds or falling trees.

In advance of storms, Tesla can remotely engage a software feature called Storm Watch, which fully charges the unit so that it can power customers homes for an extended period. Once the storm passes, users systems automatically return to their regular settings.

In this Oct. 27, 2016 photo, Rhonda "Honey" Phillips poses next to a Tesla Powerwall battery and ... [+] inverter connected to a solar panel array in her yard in Middletown Springs, Vt. Phillips is one of the growing number of Green Mountain Power customers using the Tesla battery to store solar energy when her panels aren't collecting it. GMP has been working to link solar energy with battery storage on both a large and small scale. (AP Photo/Dave Gram)

Tesla is not the first electric vehicle manufacturer to help its customers optimize their electricity usage in times of need. In the wake of the 2011 Thoku earthquake and tsunami, Nissan (OTCMKTS: NSANY) unveiled a function that allowed owners of its Leaf electric car to use their cars as a backup battery for their homes. This year, the company announced plans to expand the program to Australia, while rival Mitsubishi (OTCMKTS: MSBHY) unveiled a similar technology earlier this year. However, Teslas technology is unique in its ability to remotely provide additional aid to homeowners in times of crisis.

What is critical to all of these solutions is remote control and management. The power of IoT is that it provides the possibility for companies, like Tesla, to tailor services to their customers and respond in real-time to unforeseen events. And by collecting data from these devices, the companies can optimize their performance going forward.

A good example of this is GE (NYSE:GE), which has begun installing IoT sensors in its aircraft engines, allowing mechanics to remotely monitor the health of individual components and collect data on use, helping to not only prevent engine failure, but also to better monitor usage and wearing tear. Armed with data, airlines can better plan preventative maintenance, reduce downtime and more efficiently deploy their fleet of aircraft, lowering costs and reducing passenger delays.

IoT is a gamechanger in powering our lives. Coupled with cleantech, IoT is offsetting some of the impacts of climate change. While there has been much hype around the B2C applications of this technology (everything from smart refrigerators to smart doorbells), it is in the B2B infrastructure applications where there is even greater potential for IoT to positively impact our lives and meet the sustainability goals we have for the generations to come.

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Tesla Demonstrates The Power Of The Internet Of Things - Forbes

What Drove Teslas Surprise Third Quarter Profit? – Forbes

Signage for Tesla Inc. is displayed outside one of the company's showrooms in Beijing, China, on ... [+] Friday, May 10, 2019. Beijing has vowed to retaliate after U.S. President Donald Trump followed through with his threat to raise tariffs Friday on $200 billion of Chinese imports to 25% from 10% percent. Photographer: Giulia Marchi/Bloomberg

Tesla (NASDAQ: TSLA) posted a surprise Q3 profit, reporting an adjusted EPS of $1.86. Wall Street was projecting that the company would post another quarterly loss. While the companys revenues were slightly lower on a sequential basis due to lower average selling prices and slower delivery growth, it likely benefited from more efficient manufacturing of the Model 3 sedan, with gross margins for the auto business rising by 390 bps sequentially to 22.8%. Separately, Tesla was also able to recognize revenue of about $30 million related to the Smart Summon feature that it released in September. This cash the company collected from this software feature was previously recorded as deferred revenues in its balance sheet. The company also sold regulatory credits worth $134 million over the quarter. Below, we take a look at some of the trends that drove the companys results and what could lie ahead for Tesla.

View our interactive dashboard on What Drove Teslas Surprise Q3 Profit?

Model 3 Deliveries Grow 3% Sequentially While Model S&X See Declines


Model 3 deliveries saw a 3% sequential improvement, with deliveries standing at 79.6k units. Although the growth is not very encouraging, considering that the company now sells variants starting at ~$40k, the numbers should pick up over Q4 as Tesla indicated that it saw record net orders over Q3, with the backlog increasing.

Model S & X deliveries continued to remain lackluster at 17.4k units, marking a 1.5% sequential decline. While Tesla recently lowered the base price and introduction of an upgraded drivetrain and suspension setup on these vehicles, it is likely that they are being impacted by saturation in the premium end of the market and cannibalization by the Model 3.

Tesla Automotive Revenues Remain Almost Flat, Amid Slower Delivery Growth

Teslas Automotive revenues remained almost flat at $5.4 billion this quarter. While deliveries have grown marginally from 95.2k units in Q2 to 97k units in Q3, average revenue per vehicle declined, from $56.5k to $55.2k due to the higher mix of Model 3s and lower starting prices.

Teslas Total Revenues For Q3

Teslas total revenues stood at about $6.3 billion for the quarter. Other revenues, which include revenues from Teslas Service operations and renewable energy segment stood at about $950 million.

Teslas Margins See An Uptick, Helping It Return To Profitability

For more details on Teslas margins and whats driving its return to profitability, view our interactive dashboard analysis.

Whats behind Trefis? See How Its Powering New Collaboration and What-Ifs ForCFOs and Finance Teams|Product, R&D, and Marketing Teams More Trefis Data Like our charts? Exploreexample interactive dashboardsand create your own


What Drove Teslas Surprise Third Quarter Profit? - Forbes

Teslas Q3 profit is being scrutinized by analysts and some dont like what they see – MarketWatch

A week after Tesla Inc. surprised investors by reporting a quarterly profit, some on Wall Street have started to question the quality of the beat.

The latest, from analysts at Cowen, highlighted that some of the positive aspects of Teslas knockout third-quarter may not be repeated and, worse, it is setting investors up for future disappointment as Tesla sales are expected to remain sluggish in the next few quarters.

The stock has performed well on the headline (third-quarter) profitability results, but we continue to see Tesla as significantly overvalued given the challenging prospects the company is facing with its current product lineup (S/X/3) and our skepticism of the narrative shift to future growth drivers, including the Model Y, the Tesla Semi freight truck, and its solar products, the Cowen analysts, led by Jeffrey Osborne, said in a note Wednesday.

Tesla TSLA, -0.51% filed more detailed quarterly statements with regulators on Tuesday, leading to the heightened scrutiny.

Read more: Teslas stock rally is costing short sellers $1.4 billion

The third-quarter beat was low quality, the Cowen analysts said. Some of the improvements in third-quarter auto gross margins were largely around warranty accounting and a renegotiated agreement with Panasonic Corp. 6752, +6.97%, which makes Teslas battery cells, rather than operational improvements, the analysts said.

The trajectory of the stock this week seems to bear some of that questioning: The shares were on pace for their third straight loss, down 5% in the past three sessions.

They were holding well above $300, a place they hadnt been since late February, catapulted to that mark by gains of nearly 18% on Thursday, a day after the quarterly results, and of more than 9% on Friday.

See also: Tesla bull praises Picasso-like quarter, but others question whether profit can be sustained

On Tuesday, analysts at Roth also cast doubt on the quality of Teslas third-quarter beat and zeroed in on the warranty adjustments and other one-time items as the drivers of the surprise quarterly profit.

The Roth analysts knocked down their ratings on Tesla shares to sell, from their equivalent of hold, and said they remained cautious on the stock as they expect delivery growth to slow down in 2020.

Related: GM stock soars as investors look past messy outlook

Tesla shares have lost more than 6% this year, contrasting with gains of 21% and 16% for the S&P 500 index SPX, +0.97% and the Dow Jones Industrial Average. DJIA, +1.11%

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Teslas Q3 profit is being scrutinized by analysts and some dont like what they see - MarketWatch

Did Tesla release an unfinished Smart Summon just to pull an accounting trick? – Digital Trends

On October 23, Tesla surprised investors by posting a $143 million profit for its third quarter. During the accompanying public call with investors, both CEO Elon Musk and Chief Financial Officer Zach Kirkhorn emphasized the release of its self-driving Smart Summon feature as a major contributing factor to that profit.

Tesla released Smart Summon on September 26 just before the end of its third financial quarter as part of a far-ranging software update named Software Version V10 or simply V10. The feature allows owners to beckon their car to drive to them autonomously from up to 200 feet away in a private parking lot or driveway.

However, since its release, this self-driving feature has collected an outsized amount of criticism for causing accidents and is now being looked into by federal transportation authorities for the dangers it may pose to the public at large. The controversy has some speculating that Tesla pushed it out early, before it was ready for the public, in order to show a larger profit on the companys balance sheet.

The question is, did they release it too early? Gene Munster, managing partner of Loup Ventures, told Digital Trends. If you take Apple or a traditional car company as a comparison, the release was too early. But Tesla prefers to release and improve by evolution rather than revolution.

The V10 update was pushed to Tesla vehicles on September 26, and the quarter ended for the company on September 30. In other words, the company released V10 on the last weekend possible for it to record the revenue in its upcoming report to investors.

During the Q3 earnings call with investors, company leaders called out $30 million of the $143 million profit recorded was due to the release of Smart Summon on September 26. Every Tesla buyer can pay $6,000 for the ability to add self-driving to their vehicles and many did: The company has collected roughly $500 million in total from customers for self-driving features.

But because no Tesla is actually fully autonomous yet, the company cannot, under general accounting rules and practices, count all of that money as revenue. Instead, it must hold those monies in a special accounting category called deferred revenue. As portions of the self-driving functionality are released, they can release a portion of the money and count it as revenue.

Ross Gerber, president and CEO of Gerber Kawasaki Wealth and Investment Management and a Tesla investor, highlighted the timing: By releasing Smart Summon on the last weekend of the quarter, Musk was able to realize some of that deferred revenue, Gerber told Automotive News shortly after Teslas earnings report. Essentially, releasing the feature allowed them to unlock some of that Self Driving revenue and put it on their balance sheet.

Tesla has a team of certified accountants that have mapped out how much money they can recognize for each feature they complete as it relates to Auto Pilot, he told Digital Trends. This is why Elon is pushing so hard for Auto Pilot completion.

Upon the release of Smart Summon, reports began to flood Tesla forums, Reddit, and YouTube with examples of crashes, fender benders, and near misses linked to Smart Summon. Consumer Reports, Forbes, Wired, and others have all labeled the feature as not ready for public release and a possible safety hazard. I tried using it in a parking lot today and it immediately started to drive forward into the parking curb + wall is not an uncommon story. Comments like, I tested it out and it wanted to split 2 parked cars where I couldnt discern if it was going to hit anything or not, and This wasnt user error, its the software that isnt ready are common throughout Reddit and forum threads on Smart Summon.

The National Highway Traffic Safety Administration (NHTSA) is even looking into Smart Summon, and had this to say when reached for comment:

NHTSA is aware of reports related to Teslas Summon feature. We are in ongoing contact with the company and we continue to gather information. Safety is NHTSAs top priority and the agency will not hesitate to act if it finds evidence of a safety-related defect.

Other investors do not agree with the assertion that Smart Summon was released purely for financial gain, however. The timing has nothing to do with forcing deferred revenue recognition. said Galileo Russell, a closely watched investor and YouTuber. It was only $30M. Wouldnt have moved the needle either way. Even without recognizing it, Tesla would have crushed Wall Street estimates by a massive margin.

Tesla did not respond to our request for comment about Smart Summons release. During the Q3 investor call, the company reported that Smart Summon had already been used 1 million times. Tesla has already had to publish several updates to the Smart Summon feature since September 26, with more updates expected over the coming months.

Revenue recognition is an art, added Munster. Indeed, many accounting procedures have a logic all their own that can run counter to public expectations. What remains to be seen is if Teslas release of Smart Summon, and the subsequent accidents, will have a negative impact that outshines the revenue recorded by its release.

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Did Tesla release an unfinished Smart Summon just to pull an accounting trick? - Digital Trends

What Does The Tesla Model 3 Have In Common With A Cheap Toyota Etios? – InsideEVs

They both get no paint in some areas because nobody can see it. But is this ok?

You probably have never heard of the Toyota Etios. It is the cheapest Toyota car for sale in India and Brazil. With proper introductions made, we ask you: what does it have in common with the Tesla Model 3?

The pictures in this article will give you this answer but will raise many more. Especially this one: What role did paint have in reducing material costs Elon Musk referred to in the Q3 Earnings report call with analysts?

The image below came out precisely when this report first appeared. It is at the Investors Relation section of Teslas website, inside the Q32019 Update PDF. Pay attention to the front strut towers, still not covered by the frunk structure. Did you see it lacks paint?

In fact, what it misses is part of the paint job. Automotive paint itself comprises three steps: primer, base coat, and clearcoat. It comes after a series of treatments on the body panels, such as phosphate and E coat. These steps are the preparation for painting.

Despite what some still think, the Model 3s body is mostly made of steel, as we already showed in August 2017. That means it goes through the same preparation and paint stages a regular vehicle endures.

While the primer is responsible for the body-in-white protection, it usually is not visible in most cars apart from in some developing countries. That is where the Toyota Etios comes in. Check out the image below, taken by Marlos Ney Vidal, a good friend from the Brazilian website Autos Segredos. He kindly allowed us to use it in this article.

It shows the Etios engine bay, where the Tesla has its covered frunk. Did you notice how similar they are? The Etios front strut towers also lack the base coat, to be more precise. Ironically, that was something Toyota tried to hide in all ways possible in its press materials.

Check the images below. Toyota released them from the presentation until its refresh in Brazil. All shots try to hide the fact that the car does not have the base coat on the engine bay. Savvy photographers or a company request?

Apart from the combustion engine and the motors, the Model 3 differs essentially from the Etios. While the latter was meant to be affordable, the Tesla is seen as a luxury car sedan, facing the likes of BMW 3 Series and Mercedes-Benz C-Class.

The Model 3 hides this lack of base coat in other ways. Not only under the frunk but also beneath the fenders. This image from a recent video from the Rich Rebuilds YouTube channel demonstrates that.

Tesla released another image from the Gigafactory 3 that show more parts of the car lack base coat. See it below.

The image shows the base coat is missing in many inner body structures. That proves the cars pictured before did not have a flaw per se. They have been fully painted only where Tesla decided to do so. Like Toyota did with the original Etios.

Tesla die-hard supporters will ask: So what? They should remember paint was one of the major complaints Model 3 owners had and still have about the car. The real question should be "Now what?" in the sense that it is necessary to discover whether this sort of manufacturing decision affects the quality of the paint or not.

We have tried to interview BASF about it. The chemical company supplies paints to Tesla. BASF declined to make any comments.

We then contacted many other specialists from the US. None had replied until moments before we were to publish this article. That was when we received a message from Al Steier. He is the Director of the Benchmarking Innovation Center at Munro & Associates. And he had something we would never expect to have in such detail.

"We borrowed a coatings thickness instrument and took readings in various parts of the car including the strut tower for you. Please see attached. For your information, there is one slide where we captured the rear quarter panel. Looking at the picture, it is hard to tell as there was a lot of background reflections in it."

The PowerPoint presentation had seven slides. They deserved an entirely new gallery that you can see below. It reveals the exact points of the body that lack a base coat.

All the internal parts of the structure, the ones that receive any sort of finishing, come only with primer. Besides the strut towers, the floor pan is in the slideshow, but the pictures reveal the firewall and the internal parts of the columns also lack base coat. Primer thickness at the strut towers is 25.4m. The floor pan primer is31.8m thick. The video below measures the external body panels. The ones that receive the base coat.

As you can see, the paint presents different thickness depending on where it is measured. It goes from 69 m to 114 m and is very uneven all over the body. We have asked Steier if that is an acceptableprocedure in the automotive industry at least for developed countries. His answers will probably deserve an entirely new article.

The only person that sent us answers to generic questions on automotive paint was Marco Colosio, director and member of the Materials Commission at SAE Brasil, with more than 30 years of experience in the automotive industry. According to Colosio, it is unlikely to see cars that have no base coat in any part.

The primer is a physical barrier, but you will always have base coat over it. It is very unlikely that you will only have primer in any body panel.

As Colosio states, all of them should have that paint layer but some dont, as the Etios and the Model 3.

What, then, would be the explanation for the paint defect some Tesla owners are having with their cars? This video shows a Model 3 paint being tested.

We asked Colosio how thick good quality paint should be. Heres what he had to tell us:

That depends on many test factors, but it usually has 100 m. Thickness depends on what each carmaker sets as a resistance requirement for the product considering corrosion, UV exposure, etc.

We also asked him what else could interfere with good quality paint, such as the drying process.

Baking time should not alter that, but the layers application and the surface preparation are crucial for that.

Owners affected by paint problems on the Model 3 are still trying to get Tesla to fix their cars under warranty. The Toyota Etios had no complaints regarding paint except that this lack of base coat made it look cheap(er). Toyota has apparently started to paint the cars entirely after a facelift. We can't tell for sure because the company only produces this sort of standard engine bay picture when the body color helps hide an eventual lack of pigments.

The Model 3 and the Etios have one last thing in common: a central dashboard. The Etios received a digital one after the restyling.

The first analogic one pictured above presented a terrible parallax problem. At least Toyota has corrected it. We hope Tesla decides to do the same regarding the Model 3 paint even if it does not paint parts people normally do not see. Not only for new Model 3 units in Gigafactory 3, but also for the ones that already left Fremont long ago.



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What Does The Tesla Model 3 Have In Common With A Cheap Toyota Etios? - InsideEVs

Will FCA-PSA Buy Tesla Batteries And Drivetrain? – InsideEVs

The release of FCA's Q3 earnings came amid the news of the merger with PSA. Despite our concerns with electrification under Carlos Tavares' guidance, the company promises to achieve a grand scale electrification. That is what FCA's CEOMike Manley promised analysts while discussing results. Not only that: he suggested they could do that by buying Tesla's batteries and drivetrain.

According to Business Insider, Manley said FCA could buy a skateboard platform from Tesla. That would be possible because the customer will be agnostic to batteries and drivetrain in electric vehicles.

A brands character in electric cars would be determined by tuning the suspension and handling. That way, FCA could suit them to the brands it wanted to electrify right away.

FCA has a history of rapid car development, but the fastest one we have ever seen from the company took 18 months from concept to presentation. Manley said the pooling deal with Tesla would end in 2021. Would the company be able to buy and create an EV over Tesla hardware before that? Would the end of the pooling deal interfere with the production of a car that would be sold for at least six years?

There are more questions this strategy will raise in case it goes through.

If the pooling efforts will end in 2021, that is because FCA will already have an electric vehicle of its own by that time. Maserati promised to have a fully electric version of the Alfieri in 2020, built over an aluminum spaceframe.

Wouldnt that suit other FCA vehicles right away? Why buy anything from Tesla at this point? It would only make sense if FCA and Tesla were already working on this prior to Manley saying anything, which is not unlikely.

This FCA-Tesla cooperation on new products would make perfect sense for top-end products from Chrysler, Maserati, Alfa Romeo, Dodge, Jeep, and RAM. But would Tesla be able to deliver the quantities required by FCA? Will Gigafactory 3 in Shanghai help with that?

Mostly focused on A and B marked segments, Fiat would be covered by the eCMP platform coming from PSA. That will be the high-volume EV solution and the grand scale electrification Manley promises, which would leave eventual Tesla-powered products as niche vehicles, even if profitable ones. Will that make sense to resort to Tesla instead of developing an in-house solution? Is buying cheaper than developing in the long term?

Again, it is still very early to know what will happen. Manley even talks about the PSA merger as a possibility, not as something sure, undoubtedly because of the many challenges it will have to get approved by regulatory bodies.

What we know at this point is that, if all goes well, FCA and PSA may talk to Tesla as a battery and drivetrain supplier. We'll keep an eye on this to see how it will end.

Source: Business Insider

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Will FCA-PSA Buy Tesla Batteries And Drivetrain? - InsideEVs

Tesla Roadster Gets The A-Team Treatment In Retro Face Car Renders – InsideEVs

The new Tesla Roadster has been rendered to take on the form of the Face car from the hit 80's show The A-Team. Check it out right here.

3 Photos

Yesterday, we posted on the rad Tesla Semi render seen in these images too. The Semi is envisioned as the Model A, a large electric van for The A-Team reboot (not likely to actually happen). But included with the Semi renders was a few images of this slick, retro-styled Tesla Roadster.

The Roadster is envisioned as Face's car by artist Martin Hajek on Behance. Face was one of the main characters in the 80's show The A-Team. Face always drove the fancy cars (Corvettes), while the rest of the A-Team mainly traveled in a full-size van.

What we find interesting in these renders of the Roadster as an A-Team car is the fact that the car itself lends well to a retro look, despite the fact that it's possibly one of the most advanced cars ever made.

The real-life Tesla Roadster is an insane electric machine. Here are some of its specs:

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Tesla Roadster Gets The A-Team Treatment In Retro Face Car Renders - InsideEVs

Tesla: Are the Bears Reaching to Make a Negative Case? – Market Realist

Tesla (TSLA) bears are rearing their heads once again following the companys release of its form 10-Q on October 29. Earlier this month, the company released its third-quarter earnings results, beating market expectations. It also announced expedited project timelines, making bears and short sellers reel.

We discussed in Is the Tesla Short Burn Musk Predicted Finally Here? that on October 24, short sellers lost $1.4 billion. This short squeeze happened as TSLA surged about 29% in the two days following the release of its earnings results on October 23. On October 29, however, the stock fell about 3%, bringing its YTD (year-to-date) losses to 6.5%. Its peers Ford (F) and General Motors (GM) are still in the green with YTD gains of 11.7% and 12.5%, respectively.

In its 10-Q filing, Tesla provided additional insight as to its revenue and costs. Teslas overall revenue, for example, fell 8% YoY (year-over-year) in the third quarter. However, it reported a wide variation in revenue growth among different regions. Tesla achieved growth of 64% in its revenue in China. On the other hand, its US revenue tanked 39% YoY during the quarter. This statistic provided a lot of fodder for Tesla bears.

Roth Capital Partners downgraded Tesla stock from neutral to sell on October 29. This downgrade came after Tesla released its form 10-Q. On the day, MarketWatch reported that Roth Capital Partners saw Teslas third-quarter margins as unsustainable. Roth analysts led by Craig Irwin further stated, We expect decelerating deliveries growth in 2020 to drive multiple compression and are cautious at current levels.

While a lot of analysts have listed sustainable profitability as a cause for concern regarding Tesla, not many are worried about its deliveries. After back-to-back quarters of record deliveries, Tesla might be on its way toward another record quarter in the fourth quarter. Moreover, going forward, other drivers should lead to higher deliveries for the company.

We discussed in Tesla Model Y: Could It Be the Real ICE-Killer? that the Model Y is expected to hit a sweet spot that should drive Teslas volumes as well as its profitability. In fact, during Teslas third-quarter earnings call, Musk said, I think its quite likely to just my opinion, but I think it will outsell Model S, Model X and Model 3 combined.

Musk told Ron Baron a few months ago that everything should come together by June next year. This optimism is most likely due to the expected start of Model Y production. The company now expects production for the vehicle to start by summer 2020 compared to its previous expectation of fall. Its China Gigafactory has also progressed well so far and is expected to start production ahead of schedule.

Another bearish argument regarding Tesla is the way its treated its warranty expenses. In the second quarter, Tesla recognized $153 million, or 2.9%, of its revenue in warranty expenses, but this amount fell to 2.7% in the third quarter. Many market observers saw this accounting treatment as a way to jack up its profits. However, according to Barrons, Teslas warranty expenses compared to those of other automakers dont show any cause for concern. Barrons also reported that based on its research, the industry average, based on recent financial filings, is about 2.5%.

Analysts had expected a change not in the extent of Teslas revenue distribution but in the variation of its revenue distribution. This variation came as the company began shipping out its most popular Model 3 to international markets in 2019. Due to pent-up demand for the Model 3 in other regions, mainly China and Europe, sales soared. This might have led to the apparent revenue discrepancy between the US and the rest of the world.

Additionally, the decline in the tax credit at the beginning of the third quarter in the US was one of the drivers of Teslas higher revenue. This same driver will also be available for its US revenue in the fourth quarter. The US tax credit expires for Tesla cars at the beginning of 2020.

There are certainly concerns regarding Tesla going forward. These include the sustainability of its long-term profitability, its production timeliness, and the ramp-up of its Model Y and China Gigafactory. We believe, however, that the bears are reaching for a negative company narrative that might not exist.

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Tesla: Are the Bears Reaching to Make a Negative Case? - Market Realist

Elon Musk says monster Tesla seen on racetrack will go into production by summer 2020 – Mashable

Tesla is back at Nrburgring.

Two Tesla Model S cars have been spotted (via Teslarati) on the legendary German race track, and while there are no official lap times for them yet, the cars themselves are interesting.

Back in September, when Tesla cars were first spotted at Nrburgring, Tesla CEO Elon Musk said that their (unofficial) track times will be "beaten by the actual production 7 seat Model S Plaid variant that goes into production around Oct/Nov next year."

While we can't say whether they're 7- or 5-seaters, the new Tesla cars seen whizzing on the race track (see video below) have some new features, including air vents on the front and a big rear diffuser (only on the blue Model S, though).

Again, Elon Musk chimed in on Twitter to say that the final configuration that will be used at the racetrack is the car that will actually go into production by summer 2020.

It's unclear, however, whether the production version will be configurable to have all the details we've seen on these cars in Germany, including the wide body kit, spoilers, air vents, and diffusors.

Tesla's mission at Nrburgring is quite simple: The company is trying to beat the 7:42 Nrburgring Nordschleife lap time recently set by Porsche's electric Taycan, and if possible take some kind of crown there, perhaps for the fastest electric sedan. Last month, Tesla allegedly did the lap in 7:23, but that's not an officially measured result.

Meanwhile, a Porsche Taycan Turbo S beat a Tesla Model S P100D in a drag race, though it's worth noting that we don't know what kind of tires were used on either car. The rivalry lives on.

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Elon Musk says monster Tesla seen on racetrack will go into production by summer 2020 - Mashable

Tesla owners in California receive warnings to recharge amid blackouts – CNN

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Tesla navigating land mines that zapped rivals – Fox Business

Fox News senior judicial analyst Judge Andrew Napolitano provides insight into Tesla's defense of Elon Musk's pay package.

Tesla is winning the battle of attrition in the electric-vehicle market.


For years, investors have been concerned that Tesla must eventually face a wave" of competing all-electric vehicles that would"substantiallyerode its market and competitive position, wrote Morgan Stanley analyst Adam Jonas.

Here we are more than seven years after the Model S launch and, while there have indeed been new product introductions from the likes of Jaguar, Porsche and VW," the state of play in the market remains fairly peripheral," Jonas wrote. Global automakers such as Toyota and Ford don't even sell all-electric vehicles, he added.

Additionally, a number of electric-vehicle makers have found their business models in question in recent weeks, according to Jonas. He points to Nio, Dyson, Harley-Davidson and Faraday Future as evidence.

Nio, often referred to as the Tesla of China, has been burning through cash and last month was forced to raise $200 million from CEO William Li and the Chinese gaming giant Tencent, one of its largest shareholders. The company struggled to keep up with its delivery targets in the past, though it topped them in the third quarter. Shares have lost more than 75 percent of their value this year.

Meanwhile, Dyson, the high-end vacuum and luxury appliance maker, last week killed its $3.1 billion electric-car project, with founder Sir James Dyson saying he simply can no longer see a way to make it commercially viable.

And on Monday, Harley-Davidson announced it was temporarily idling production of its $30,000 electric motorcycle LiveWiredue to battery-charging problems. The production stoppage is a blow to Harley, which is counting on the motorcycle to help rejuvenate sales. Additionally, Jia Yueting, founder of the Chinese electric-car maker Faraday Future,filed for Chapter 11 bankruptcy protection with liabilities of up to $3.6 billion.

Thats not to say that Tesla hasnt had its share of problems. The electric-vehicle maker has been burning through cash at a scorching pace. The third and fourth quarters of 2018 were the only time Tesla has posted back-to-back quarters of profitability, and even so, the company lost $2 billion last year.

On its second-quarter earnings call, CEO Elon Musk said he expects a return to profitability later this year.

From a profitability standpoint, we expect to be probably around break-even this [third] quarter and profitable next quarter," he said. Tesla in its second quarter lost $408 million, down from $702 million the previous quarter.

Tesla has also had to navigate the go-private saga in which Musk, in August 2018, tweeted that he had secured funding to take the electric-vehicle maker private at $420 a share. Musk settled with the Securities and Exchange Commission in April of this year, agreeing to pay a fine and to step down as Tesla chairman.

According to InsideEVs, Tesla controlled about 78 percent of the all-electric car market in the U.S. through September, more than 10 times the portion of its next-biggest competitor, the Chevrolet Bolt, the analyst said.The sector is also referred to as the battery-electric vehicle, or BEV, market.

Jonas has an equal-weight rating on Tesla and a $230 price target more than 10 percent below where shares settled on Monday.


Tesla is set to report its third-quarter earnings on Oct. 23. Analysts surveyed by IBES are expecting a loss of 41 cents a share on revenue of $6.37 billion. Shares have tumbled 21 percent this year.

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Tesla navigating land mines that zapped rivals - Fox Business

Tesla: Why Demand Could Be a Concern – Market Realist

Teslas (TSLA) demand trends across all its models (Model 3, Model S, and Model X) began to decrease after its October earnings. To assess Teslas trends, I used web-based tools, which suggest that demand is falling.

In addition, an analysis of the options market suggests that some traders are actively betting the stock will plunge in the coming weeks. In this article, Ill take a closer look at Teslas Internet traffic trends, technical chart, and options activity. So, lets start.

Over the past 90 days, TSLAs website ranking has decreased to 1,856, which is down from 1,543. This trend suggests that fewer people had visited the website today than 90 days ago, meaning that the demand for information about its vehicles has decreased.

In comparison, the Alexa ranking for the Ford (F) website has increased to 3,481 from 3,493, and the Chevrolet website increased to 6,735 from 10,199 during the same period.

Even with falling Internet traffic, Tesla has a better rank in comparison to Chevrolet and Ford. In addition, the average daily time on site decreased by 8% over the past three months.

Google Trends suggests that the search term Tesla Model 3 has decreased in the US and worldwide since the beginning of October. This downtrend suggests lower interest and possibly lower demand for the vehicle. Moreover, the search trends for Tesla Model S and Tesla Model X havent widely fluctuated over the past year, which suggests a steady low interest for these models.

The implied volatility for the options, at a $250.00 strike price that expires on November 15, stands at 57.33%. This number means that investors are expecting an event that could cause substantial movement in one direction or the other.

Looking at the November 15 options, I see a bid/ask for the $245.00 call option of $15.45/$18.00. Also, I see a bid/ask for the $245.00 put option of $12.65/$15.50. Keep in mind that the options strike is closest to the previous TSLA closing price of $247.89. We can calculate the expected price move using the mid-prices of these options:

14.075 (245.00 put) + 16.725 (245.00 call) = 30.8/247.89= 12.42%

As you can see, the options imply that TSLA stock could rise or fall by ~12% by the November expirations from the $245.00 strike price using the long straddle strategy. This assessment would place the stock in a trading range of $215.60$277.70 by the expiration date. Moreover, the puts at the $245.00 strike price outweigh the call options about 2:1 with 3,471 open puts to 1,801 open calls.

The options, which expire on November 15, saw increased put buying over the past few weeks. According to Barchart.com, the open interest for the $230 puts rose by 1,735 contracts to a total of 7,535 open contracts. For the buyer of the $230 puts to earn a profit, the stock would need to fall to around $219.00.

Also, the open interest levels for the November 15 $220 puts increased significantly over the past week. According to Barchart.com, the open contracts rose by 22,629 contracts to about 24,945. Its a large, bearish bet, as the open interest represents a total dollar value of about $14.3 million. For the buyer of the $220 puts to earn a profit, the stock would need to plunge to around $214.

Looking at the daily chart, we can see whats going on with TSLA. The technical chart for TSLA is bearish and shows a technical pattern knows as a triple top. The pattern suggests that if the stock fails to break out the $250 technical resistance level, the equity could fall to the technical support level, which comes in at a $230 price level.

According to TipRanks, TSLA is a hold with an average price target of $250.50, representing a 1.05% upside. Among the 26 analysts covering TSLA, only seven recommended it as a buy. Eight recommended it as a hold, and 11 recommended it as a sell.


Tesla: Why Demand Could Be a Concern - Market Realist

Why Tesla Stock Looks Better Than You Think – Barron’s

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Tesla stock has had a difficult year, but maybe the electric vehicle pioneer deserves a break. It turns out it is hard to make electric cars.

Just look at three potential competitors for Tesla (ticker: TSLA). The privately held maker of high-end home appliances Dyson, start-up Faraday Future, and 2018 electric-vehicle initial public offering NIO (ticker: NIO) are all hitting bumps in the road.

First of all, Dyson is no longer making electric vehicles, and was unable to find a buyer for its technology.

The Dyson Automotive team have developed a fantastic car; they have been ingenious in their approach while remaining faithful to our philosophies, read a company news release on Thursday. However, though we have tried very hard throughout the development process, we simply cannot make it commercially viable.

When Dyson unveiled plans to make an electric vehicle in 2017, it was hailed by many as a signal that traditional [auto makers] would face a lot more competition as the world moved more towards electric vehicles which were simpler to make, wrote RBC analyst Joseph Spak in a Sunday research report. Replacing the internal combustion engine isnt simple, according to the analyst.

As for Faraday, its founder Jia Yueting is bankrupt, though the company said in a news release on Sunday that will not affect any of [Faradays] normal business operations. In fact, the company says the matter will help facilitate an eventual IPO.

Shares of Chinese EV maker NIO have struggled too, dropping about 76% year to date. They are down almost 90% from their all-time high. The stock started out this month on a strong note, jumping nearly 10% October 8 after reporting 4,799 vehicles were delivered during the third quarter. Shares, however, have given up all gains since then.

All that news makes Teslas year look OKeven with CEO Elon Musks SEC issues and the companys weaker-than-expected deliveries. Tesla stock is down 23% year to date, worse than the 5% gain of the Russell 3000 Auto & Auto Parts Index and the 15% gain of the Dow Jones Industrial Average over the same span.

Tesla will report its full third-quarter numbers on October 23 after the market closes. Telsa stock declined early in October after the company disclosed 97,000 deliveries for the third quarter. It will take about 105,000 deliveries in the fourth quartera company recordto meet the full-year guidance given earlier in 2019.

Write to Al Root at allen.root@dowjones.com

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Why Tesla Stock Looks Better Than You Think - Barron's

Tesla Update May Have Lowered The Model 3’s Range As Well – InsideEVs

Wed love just to report Teslas scores in human personal mobility, as we have done multiple times, but it would not be right to omit its fouls. If they are many, that is not a campaign against the company. It's just showing the facts as they present themselves.

Despite already being sued for reducing the range of Model S and X battery packs, Tesla has apparently done it again. Only now with the Model 3. Our first source on this is somewhat unsuspected since he's a huge fan of the brand: Bjrn Nyland.

11 Photos

EVANNEX presents the YouTuber as an EV evangelist. One that has won four Teslas just due to the referral program. That says a lot about the sort of support he has offered the company over the years.

Despite that, Nyland found it very strange that his Model 3 delivered much less range all of a sudden, so he published the video above. It is a report of his investigation on the reasons for that, and it makes you understand why he is such a respected member of the EV community. He really knows what he is talking about.

We invite you to watch the whole video and to check his math and his conclusions. If you want to do it before continuing to read, we will give spoilers on this one because they are fundamental to our report. Ready? Now you can keep on reading. Please dont say we did not warn you.

Nylands main conclusion is that Tesla restricted the amount of energy his Model 3 Performance battery pack delivers. It used to have 74.5 kWh, and now it has 69.6 kWh or 4.9 kWh less that it used to have. He assumes that Tesla tried to hide it in all possible ways. Including changing the energy consumption constant.

The YouTuber digs even deeper in his analysis and discovers that Tesla concealed this amount of energy at the bottom of the recharging process, not at the top. If the car showed 100 percent of charge and still had a lot of regenerative braking available, that would mean the 4.9 kWh turned into a hidden buffer closer to full charge. However, that is not the case.

Nyland concludes that it is not due to degradation, but that it was done on purpose by Tesla through an over-the-air update.

Model S and Model X owners have identified which update did that with their cars. It happened after software updates 2019.16.1 or 2019.16.2. David Rasmussen is currently suing Tesla for having done that to his car without telling why. There is strong evidence that the restriction relates to fires on Model S, such as the one that happened in April in Shanghai.

The Model 3 has not presented any similar problem of battery fires. Yet, it is apparently subject to energy restriction as well. Ironically, users at the TeslaMotorClub forum started to talk about the Model 3 battery restriction in the same thread about the software updates 2019.16.x.

People on the forum are really upset about this. They mention Tesla stole 5 kWh from Bjorns Model 3 and ask the company the following:

Tesla, open a dialog with us. You dont need to fight your base.

That is also a complaint from Nyland.

I know that Tesla is watching my videos. It would be great to get an answer from Tesla because this is not a bug. This is not a failure. It is an intentional change from Tesla. It is very sad that Tesla does not give you this information. They will brag about new features, like the fart mode, but they will not tell you about negative updates like this. They are just silent and hiding. No one knew about this until I discovered it. Hopefully, someone else also discovered this. Please, Tesla, what the heck is going on? I want to know what you guys did and why.

We have been trying that, Bjrn. Repeatedly and to no avail. We hope you are luckier getting the answers you need.

Transparency is the key here. As we have said before, many Tesla owners would probably accept the restriction gladly if they were informed about it. The ones that won't still might feel better to be given the option not to accept it, even if that voids the warranty. Some even suggested MCUs are normal wearing parts, and replacing them is no big deal That shows many are willing to put up with whatever Tesla decides.

Less unconditional fans may also do that, but only if they are properly informed. Some have given up waiting and have come to their own conclusions. Many report similar range-restriction issues.

It is interesting to notice Porsche has a 93.4 kWh battery pack for the Taycan Turbo and Turbo S. Anyway, it says the usable amount is 84 kWh. That is a protective measure to avoid degradation and prolong the battery packs usable life.

We could say Tesla felt compelled to do the same. The thing is, it followed a joke Elon Musk made when speaking about the Master Plan and decided not to tell anyone about that. At least this is what Nyland believes has happened. And he promises new videos about the issue. With an official answer from Tesla or not. Prepare to be called a FUDster, Bjrn.

Continued here:

Tesla Update May Have Lowered The Model 3's Range As Well - InsideEVs

Here’s how Tesla’s cars stack up against the best of the competition from the world’s top automakers – Business Insider

In just over 15 years, Tesla has gone from an ambitious idea about electric cars to selling almost 250,000 vehicles a year and challenging the world's top automakers.

That in and of itself is an impressive achievement, but Tesla's vehicles are actually quite good. I've driven them all, and I can vouch for their quality and performance. Sure, they have some quirks, and Tesla has definitely endured some growing pains. But there's no discounting the fact that Tesla is the first successful new American auto brand to emerge in decades.

Still, the traditional auto industry is no slouch it's game has probably never been better. Over the years, I've driven hundreds of great cars and trucks. So I thought it would be fun to put the Tesla fleet up against some of my favorites from the petrol-burning world.

Here's how it went:

More here:

Here's how Tesla's cars stack up against the best of the competition from the world's top automakers - Business Insider

California’s Power Outage Demonstrates the Biggest Flaw With Tesla’s Plan to Sell Everyone an Electric Car – Inc.

Tesla is sending a warning to its Northern California customers: Charge up your vehicle now. If you don't, it's hard to say when you'll next have a chance. That's because Pacific Gas and Electric, the electrical utility for most of Northern and Central California, plans to shut off electrical service to almost a million people as a public safety measure to prevent starting wildfires.

Let's start by giving credit to Tesla foralerting its customers, especially since most drivers only charge their battery to 80 percent to extend overall battery life. Depending on your daily driving and the length of the shutoff, that could make a real difference. But I think the entire episode points out a fatal flaw in Tesla's plan to have everyone buying electric cars.

First, we obviously depend on electricity for just about everything we do every day. I wouldn't be writing this column right now without electricity. You wouldn't be reading it right now without electricity. We're long past the point where electricity is a novelty;it's just something we take for granted.

And, if you drive a Telsa (or a Volt or a Leaf), you need electricity to charge your battery. Most of you probably do that at homeor at one of Tesla's Supercharger stations spread across the country. But in parts ofCalifornia, you won't be doing either during the shutoff.

To be fair, Tesla says that it plans to eventually have all of its Supercharger stations equipped with batteries that will allow them to continue to provide charging capacity during blackouts. But according to Elon Musk this morning on Twitter, the company is still waiting on the go-ahead to install them across the effected areas in California.

I reached out to Teslafor comment, but did not immediately receive a response.

Second, our electrical grid is far more fragile than most of us truly understand. The fact that you can plug in a toaster and make breakfast in the morningis almost luck. It doesn't take much to cause that luck to run out--a storm, a power surge, or a branch falling on a power line.Or, apparently, a utility with such outdated equipment that the only way it can be sure it won't starta wildfire that could burn down most of California is to just shut everything offfor a few days.

But just because it's a little windy in the Bay Area, people still needto go to work, still need to makelunches before sending their kids off to school,and still need to do all of the other things they would normally do. No one is evacuating. Which, I guess is a good thing since they'd only get a few hundred miles before their Teslas all run out of juice.

Tesla makes great cars--not just great electric cars.Still,without electricity, you're not going anywhere inone.

This means electric cars will never be a truly viable alternative to internal combustion engines until someone figures out how to dramatically increase the reliability of our electrical grid. I'm not suggesting that gasoline is a better long-term strategy (gas stations still require electricity as well), but outside of Tesla's most devoted fans, most people stillfind it's a far more reliable and convenient option.

That's bad news for Tesla and for the idea thatelectric cars are the future. Because, as this power outage makes clear, that future is entirely dependent on a power grid still stuckin thepast.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.

Originally posted here:

California's Power Outage Demonstrates the Biggest Flaw With Tesla's Plan to Sell Everyone an Electric Car - Inc.

Tesla (TSLA) Expected to Beat Earnings Estimates: Can the Stock Move Higher? – Yahoo Finance

Tesla (TSLA) is expected to deliver a year-over-year decline in earnings on lower revenues when it reports results for the quarter ended September 2019. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price.

The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on October 23. On the other hand, if they miss, the stock may move lower.

While management's discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price change and future earnings expectations, it's worth having a handicapping insight into the odds of a positive EPS surprise.

Zacks Consensus Estimate

This electric car maker is expected to post quarterly loss of $0.12 per share in its upcoming report, which represents a year-over-year change of -104.1%.

Revenues are expected to be $6.60 billion, down 3.3% from the year-ago quarter.

Estimate Revisions Trend

The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.

Investors should keep in mind that an aggregate change may not always reflect the direction of estimate revisions by each of the covering analysts.

Price, Consensus and EPS Surprise

Earnings Whisper

Estimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. This insight is at the core of our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction).

The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.

Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only.

A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP.

Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell).

How Have the Numbers Shaped Up for Tesla?

For Tesla, the Most Accurate Estimate is higher than the Zacks Consensus Estimate, suggesting that analysts have recently become bullish on the company's earnings prospects. This has resulted in an Earnings ESP of +116.67%.

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On the other hand, the stock currently carries a Zacks Rank of #3.

So, this combination indicates that Tesla will most likely beat the consensus EPS estimate.

Does Earnings Surprise History Hold Any Clue?

While calculating estimates for a company's future earnings, analysts often consider to what extent it has been able to match past consensus estimates. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number.

For the last reported quarter, it was expected that Tesla would post a loss of $0.54 per share when it actually produced a loss of $1.12, delivering a surprise of -107.41%.

Over the last four quarters, the company has beaten consensus EPS estimates just once.

Bottom Line

An earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss.

That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.

Tesla appears a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free reportTesla, Inc. (TSLA) : Free Stock Analysis ReportTo read this article on Zacks.com click here.

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Tesla (TSLA) Expected to Beat Earnings Estimates: Can the Stock Move Higher? - Yahoo Finance