Stick a fork in $TSLA. Its days are numbered.

First Production Model 3 pic.twitter.com/TCa2NSUNI3

— Elon Musk (@elonmusk) July 9, 2017

In-production Chevrolet Bolt. Tesla-killer?

Back in June, the LA Times posted an article referencing the above tweet from Tesla CEO and carnival barker Elon Musk. Everything Musk does is taken verbatim, accepted as truth. P.T. Barnum wished he had been so lucky.

CNBC dutifully published more fake news, this time revolving around the ‘Boring Company’, an empty shell masquerading as something real:

Elon Musk just posted a bunch of pictures of his tunnel and ‘Boring’ equipment
Elon Musk said his Boring Co. has begun digging.
Musk posted several photos of the equipment on Twitter.
The effort is aimed at building tunnels under Los Angeles.

Musk said it, therefore it is true, according to CNBC:

Elon Musk has begun digging under Los Angeles.

The entrepreneur posted Friday several pictures of equipment meant for digging tunnels beneath Los Angeles.

The project is one of Musk’s latest ventures, which was inspired by a desire to alleviate “out of control” traffic in Los Angeles

This is all pure horseshit, of course. Elon Musk and his magical boring machine have not begun digging anywhere. The pics and video in the articles are “renderings”. One truly has to be on the far side of the moon to think companies can just start digging tunnels underneath existing infrastructure purely on the conjecture and fantasy of a corporate CEO who is annoyed at the time he wastes commuting from LAX to San Francisco.

Without government subsidies, Tesla and affiliates would not have built one single car, space rocket, or “boring machine”. None. Zero. Zilch. Nada. And none built without Supreeme Leader Musk shilling at fancy parties,

…or less fancy outings for adoring Millenials and blue jean -wearing middle aged hipsters.

Musk is cool, man. And he is a hero because you know the electric car is so environmentally correct despite the enormous amount of industrial waste involved in producing massive batteries that sooner or later will have to be discarded somewhere, as well as the inconvenient fact that electricity generated from coal and fossil fuels are what powers the EV market.

There has not been a successful launch of an American car company in almost a century, and even the successful ones burned out after a few years.

The list of failures is a mile long, with many a storied name alongside some forgettable ones: https://en.m.wikipedia.org/wiki/List_of_defunct_automobile_manufacturers_of_the_United_States

There is no reason why Tesla should not have followed Solyndra as an example of government waste in the name of junk science. No reason but a huckster with the odd name of ‘Elon Musk’.

Now I think the Tesla Model X is a cool car, don’t get me wrong. I still remember the day I first saw not one, but two of them cruising along the Merritt Parkway in tony Fairfield County, CT. At first I thought they were Jaguars until I noticed the odd logo on the deck lid.

But the economics of building an expensive, limited production electric vehicle are far different from mass-producing tens of thousands of cheap vehicles on an assembly line, especially when you have no experience doing it.

Tesla is in the process of finding that out as we speak, as barely a trickle of the new Model 3 have been produced and Musk is on record claiming they would be cranking them out at an astounding rate of 30,000/month by December. Matters that would be trivial to an established car company, such as welding steel frames, are proving to be problematic. Musk brushed aside criticism as is his style, but the stock market did not, punishing the stock from it’s airy highs in 2017 down below $300/share (still an absurd price for a massively money-losing operation).

And the image of Elon Musk, Cool Guy took a hit in October when, due to the failure of the Model 3 assembly and less than anticipated sales of the Model X and the SUV, the company fired hundreds of workers. Musk tweeting that night about hosting a small cookout on the roof of the factory the night of the firings did not do much for his image. I am not sure about hanging with goofy John Oliver, either. No, I cannot imagine GM’s Bob Lutz in this picture, either.

And stories have been popping up about the fit and finish on the flagship Model X, with claims of interior panels that do not fit, along with rattles and squeaks that would doom the reputation of any mainstream car company. Let us not forget what happened to the Italians and the French in the U.S. market back in the 1970’s and 1980’s. I still have fond memory of driving my 1984 Alfa Romeo while various interior bits woukd literally fall into my lap along the way. That failure of the head gasket barely 300 miles past the 36000-mile warranty and the clutch failure at 45000 miles are also burned into my brain. I wish all the best to Alfa and FIAT as they attempt to reenter the US. The new Alfas in particular  seem well-built with stunning specs but then again, FIAT is now one of the largest if not the largest carmaker on the planet.

But it is not manufacturing woes that will doom Tesla Motors. It is competition, something Tesla has been immune up to this point in time due to it’s early entry and those billions of dollars in government largesse.

Daimler-Benz just announced they will be building factories in the US to produce EV’s and the batteries to power them. Billions of dollars have been earmarked. BMW is already building both the utilitarian i3 and the stunning i8 models. The Mercedes concept is much cooler than a Tesla. The Coolness Factor is huge and unquantifiable.

But it is General Motors that has fired the first salvo in the takedown of Tesla Motors. The Bolt EV will be a huge success. Nissan has also redesigned the boring Leaf EV, making it quite similar to the Chevy in design and less of a space-nerd rendering of what an EV is expected to look like.

You also of course have hybrids, which are gaining in popularity and are no longer defined by the wimpy Toyota Prius but rather by the hairy-chested Porsche 918 and the gorgeous and potent Acura NSX.

Then you have European countries mandating 100% electric vehicle usage by 2030 and other assorted nonsense. The internal combustion engine is not going to simply disappear. I love my 2017 Corvette Grand Sport and it’s 460hp V8 that happens to get 27mpg on the highway in Eco Mode with cylinder deactivation.  It will never be replaced with an EV. No. Fucking. Way.

Peter Tertzakian, an energy economist for ARC Energy Institute, argued in recent commentary that even with bans put in place by every country in the world and deep penetration of EVs beyond 2030, the number of ICE vehicles in 2050 will be only slightly lower than today’s number.

 

 

If you enjoy the content at iBankCoin, please follow us on Twitter