Whistleblowing saboteur costs us $167m bellows Tesla’s accountant A former Tesla employee who leaked information about its production problems cost the electric car biz $167m, Musk's crew claims. That is the latest in an increasingly bitter legal battle between the car biz and its former technician Martin Tripp, who Tesla insists on calling a “saboteur,” despite being countersued by Tripp …
There is an old adage that in the short term, the stock market is a voting machine and in the long term it’s a weighing machine.
Musk should know that the long term share price reflects Tesla’s value in the market, anything else is noise. By definition, if Tripp’s revelations affected the long term price they are considered by the market to be true.
If not, then um... keep the money away from the lawyers?
Only if you consider every trade to be a direct result of the information Tripp provided AND you're naive enough to relate share price to an asset of the company which can be realised at face value. This is out and out bullying, nobody with a modicum of sense could surely believe he caused anything but a little embarrassment. If they subsequently removed the batteries, good; Tripp's mission accomplished.
The value of a stock and other metrics do affect the ability of a company like Tesla to borrow money whch they need by the dump truck load. Low share price means junk status and high borrowing costs (due to extra risk)
Tesla is a strange beast. It (and its army of Fanboi's that put Apple's to shame in their level of devotion) thinks that the whole world is against them and would love to see them go TITSUP.
This isn't true but their devotees really don't help the cause of EV adoption with their 'Tesla is the only way' attitude.
I drove a Tesla once and that was enough. Bland interior and shockingly expensive to get repaired. Wallowed around corners but most American cars do that.
Another question that doesn’t seem to have been asked is: even assuming the share price fluctuations were actually caused by what was said (let’s not even get into whether any of it was true), how exactly did this cost Tesla the amounts claimed? Yes, their market capitalisation dropped by those numbers, meaning Tesla’s shareholders lost out, but how many of those shares are owned by the company themselves (even if you include planned share issues)? If Musk were suing for the fraction of this “loss” equivalent to his personal shareholding, that would be one thing, or if this were some kind of class-action where the damages would be returned to all the investors / pension funds / etc that own those shares, that would seem reasonable too but claiming Tesla lost this money is frankly ridiculous.
If any(!) money were recovered by the company it would go into the company's bank account (less whatever the lawyers get) and thus become shareholders' property. The shareholders, however, might reasonably (a) prefer to keep existing funds away from lawyers and (b) want to know more about what Tripp has to say about the way the business is managed. But that's what AGMs are for.
Tesla is valued at $30-60Bn, General Motors at $53Bn, Ford at $37Bn, according to ycharts
Really.
It's valued the same as companies with world wide mfg operations of actual buildings and hardware? Tesla has one factory in CA.
That suggests a very high allocation of bu***hit "goodwill" as accountants put it.
In a case like Tesla, I would guess that it is valued by a combination of:
- the experience of constructing cars around batteries (batteries are from elsewhere, Toshiba AFAIR). I have no opinion on the designs, but their production is somewhat shoddy by most accounts.
- the SW in the car, from battery management to the infamous autopilot. Some people have great hopes here; I am more sceptical and it seems to give a user interface which should not be used while driving a car.
- the brand. You may not like it, but for a lot of people it is likely the only brand that comes to mind if you say electric car.
To me, it is a very high price a for a company that still has to learn car production. If I was in the market for an electric car (which I may well be) I would by from someone who knew how to put a car together.
One technical point: that is not what goodwill is. Definition: https://moneyterms.co.uk/goodwill/ It is not related to market value or market cap but is a balancing number invented by accountants.
As far as the valuation goes, if you compare with Toyota it has a fifth the market cap on about one thirteenth the revenue which is not unreasonable given its much faster growing sales. It depends on how sustainable you think that growth is. If pure electric cars are the future and Tesla hang on to a big chuck of electric car market share then its well worth it.
I wish I had the time to do a proper analysis (I used to do that for a living in my previous career).
But what is stopping Toyota from producing electric cars?
The short answer is, I’m pretty sure if I look, I would find that they probably do sell them.
What do you need to turn a petrol car into an electric car? An electric motor; they’ve been around for ages, and I don’t think Tesla have brought anything new to the table. A battery pack; they use 18650s, a standard part which can be obtained from lots of different suppliers.
If people wanted to buy electric cars in significant numbers, it would not be that hard for other manufacturers to increase production of them.
You need a lot more than that. You can turn a petrol car into a BAD electric car by replacing the engine. For a good electric car, you need to design it from the ground up as electric. Tesla has done this and is known for it. I think a few e-cars from primarily petrol vehicle companies have been as well.
Personally, if fast charging stations were more prevalent and the range per charge was 2-3 times what it currently is, I would absolutely get a purpose-built electric vehicle (very possibly a Tesla).
Regardless on if you like Tesla or not, the Model S is pretty universally regarded as one of the best vehicles available (in the US anyway). Of course, the S does cost just a *tad* more than the 3...
Fast charging stations are for the development version of electric cars. Production electric cars will have easily replaceable battery packs constructed to a universal standard. London Tram Company could change a battery for their trams in 2 minutes in 1910 or so. You will be able to charge your own car but being forced to look at a service station for 1/2 hr is never going to make electric popular.
You will be able to charge your own car but being forced to look at a service station for 1/2 hr is never going to make electric popular.
To be perfectly upfront about it, I think that electric cars with (pure) battery storage is a stupid idea, but having said that I don't think that charging presents a massive or unsolvable problem. If you've ever visited one of the services stations on a motorway (which practically everybody has) then you can see that the places are built around expecting people to be there for longer than half an hour and there are signs up saying that you've got to pay for parking if your there for more than 2 hours, so obviously some people spend quite a bit of time at services (gambling?) as it is.
All it means is that instead of the existing situation where at the moment you fill up with petrol, then park up and walk to the building, then hit the toilets and then get a coffee or food you change the first step to "plug in".
I rarely end up anywhere near the building itself, requiring more than a 2 minute walk. Round trip that's 4 minutes. 2 minutes in the toilet, 6 minutes. Queuing to get a drink can easily be another 5 minutes; i've rarely seen a que much shorter than this in the daytime. So assuming that's right, the batteryon our hypothetical electric car is likely to be a third charged before you even start drinking your coffee with the existing setup, and probably two thirds by the time you've finished your coffee and binned the cup as services are at the moment. Keeping people there for an additional 10 minutes isin't beyond the wit of man and an enforced rest breaks every few hours of motorway driving is not actually the end of the world.
Existing petrol stations would be a bit screwed, since their locations aren't usefully refittable to this sort of standard, but I bet that an awful lot of pubs, cafes and the like that happen to be near highways around the country would do quite well from it.
That having been said, the last serious estimate I saw was that we would need to add an additional 150% of capacity to the grid in the next 20 years to power all of these electric cars; the actual generating capacity is shrinking and no plans have been made to build sufficient generating capacity. Barely anybody is even talking about building sufficient generating capacity; so it's not going to happen in a useful timeframe.
In this context, it would appear to make much more sense to run plug in hybrids that can self charge from the engine while driving to prevent overloading the grid (and save on building new infrastructure)
The service stations are designed for the service station. I've only ever spent more than 10 minutes in one. If I was going to spend more than 10 minutes for a rest I'd go off the motorway and spend an extra 5 minutes finding somewhere to save a fortune and actually be enjoyable to sit and eat in. The only reason I visit them these days is for a piss and wifi to get to http://www.justoffjunction.co.uk/
All it means is that instead of the existing situation where at the moment you fill up with petrol, then park up and walk to the building, then hit the toilets and then get a coffee or food you change the first step to "plug in".
This is not my usual petrol station experience, which involves driving up, getting out, putting petrol in the car, paying at the pump and driving off. Toilet, drink, snack - three things which are better done anywhere other than a petrol station.
"Fast charging stations are for the development version of electric cars. Production electric cars will have easily replaceable battery packs constructed to a universal standard."
That's the sensible solution but it doesn't seem to be the actual case. As far as I know, no production electric cars have this type of battery pack nor are there places to do so.
Unfortunately the focus, in the UK at least, seems to be on increasing charging points rather than changing to replaceable batteries.
They have a long way to go though.
Looked at charging points close to where I work. Turns out there are different type of connector. Then there are different charging times. When you look at where these are in relation to a journey, it quickly becomes apparent you'd be spending as much time trying to find a charge point of use than it would be to do a straight journey by a normal car.
That's not taking into account the broken charge points (there were a couple flagged at the time) and the potential that there are no free charge points when you get there.
You need to plan your journeys carefully, and not get caught out.
"Fast charging stations are for the development version of electric cars. Production electric cars will have easily replaceable battery packs constructed to a universal standard."
It's been tried (the model S was capable of this battery pack swapping in it's first prototype iteration for instance), but it turns out the amount of peripherals you need to do this safely makes the economics of it just not measure up to any gains in efficiency. On top of that, it turns out drivers of electric vehicles aren't too keen on having to rely on an unknown battery pack with an unknown lifetime charge cycle count (And it's very difficult to actually measure how good or bad a battery pack is.)
Toyota are into 'Self Charging Hybrids' not pure BEV's like Tesla or models like the Nissan Leaf, Renault Zoe, the forthcoming VW ID range.
Toyota is riding on the success of the Prius technology from 20 years ago. They do sell a PHEV but like Renault and their Batteries (rent rather than buy) you have to search hard to find one.
The main problem with Car makers producing enough EV's is the lack of Batteries. Tesla have their own battery factory in Nevada. Everyone else outside of China has to buy from 3rd parties at the moment. The market for ICE's in Norway is pretty well dead. There is it BEV or PHEV's.
Once the next tranche of EV's (New Zoe, VW ID-3, Peugeot 208E Vauxhall Corsa), the number of EV's on the road will really start to take off.
Once the next tranche of EV's ... the number of EV's on the road will really start to take off.
Yes it is going to be interesting, as these will be from manufacturers with real understanding of volume manufacturing to a price point.
This will bring with it two things, firstly the commoditisation of necessary components, wich mean Tesla will have to do more to maintain their (Apple style?) brand image and pricing. Secondly, these cars will be in the hands of your average Joe - people who just want a car and don't really care that much about looking after it, hence we should start to see the real problems and faults with these cars and technology.
"What do you need to turn a petrol car into an electric car? An electric motor; they’ve been around for ages, and I don’t think Tesla have brought anything new to the table. A battery pack; they use 18650s, a standard part which can be obtained from lots of different suppliers."
That's a bit of an understatement. Sure, it's possible to take a standard vehicle chassis, add some electric motors in the wheels and stuff some batteries in the space where the engine used to be, and off you go. But designing a car from the ground up to be fully electric is quite different... for example you can put the battery pack in the floor that gains space, puts the weight lower down for better handling, and can use the battery pack itself to increase structural rigidity. You don't need any airflow into the engine bay etc etc.
Sure, Toyota can and probably do produce a decent electric car, and most likely the bodywork, finish and overall build quality would be superior to Tesla's. But Tesla has specific expertise (now over a decade) in the electric drivetrain that very few other car makers have. Plus, Tesla builds it's own battery packs, so by "18650s" maybe you are referring to individual modules - these still have to be put together in a particular way, plus there is a lot of additional equipment and software to manage loading and charging... and so on
Tesla started with 18650s, but are now using a larger size cells (21700) for the Model 3 and Model Y. They've also stated they'll continue using the larger cells for any future models.
It's not easy to scale up manufacture of battery cells. For one China currently has a near monopoly on some of the elements required for battery production, secondly it will require building several MASSIVE factories to come even close to the scaled up demand that is expected. It's a financial gamble and outlay that not many companies can easily do. Not to mention the challenges of actually making lithium (or other type) cells that are actually reliable in the long run.
I would find that they probably do sell them
If you define hybrids as elecric cars then, yes they do. In fact, I drove to work this morning in one..
I suspect that, like most Japanese car manufacturers, they'll be more keen to move into the hydrogen car market than the pure electric car market.
I don’t get the base premise. Share price fluctuations, if they could be attributed to this, would only cost _shareholders_ (not Tesla unless they own stock) $ _if_ they sold during the period of negative influence. Otherwise they’re unrealized losses and mean diddly.
As an harassment/intimidation tactic, interesting. As a basis for sound litigation... meh. Goodwill/brand damage? Possibly, but different calc needed
Only people who should care are those buying or selling.
As others have noted, the stock price affects the company's cost of borrowing money. So it does matter to the firm even aside from actual trades.
That said, I think Tesla's position in this spat is completely ridiculous. It looks like an attempt to punish a whistleblower and suppress similar actions in the future, and the valuations are absurd. But then Musk is a loose cannon who's not a tenth as smart as he thinks he is, and Tesla does not appear to be a particularly well-run company.
In 1999 I was sitting across the desk from a manager as he explained, on the phone, to someone from one of the big three accounting firms that he was prepared to pay 750 per hour for good advice, but didn't like to pay 750 per hour for advice that turned out to be incorrect.
It doesn't seem like the price of bad advice has gone up at all in the last 30 years.
So many companies cut corners and then try to pretend that they didn't later on when it all comes back to bite them on the arse. This is one of the major problems with businesses based on hype. Hype has no substance or reality, so eventually, when it comes time to pay the piper, you'd better have all your stories straight, t's crossed, and i's dotted, and if you don't then you will get what you deserve. I never feel sorry for people, politicians, or companies that get caught lying. If you lie about stuff that matters, don't start crying when you get caught. Far better off to learn the lesson, hold you hand out and take your beating, dial down the porky-pies, and move on.
"The share price was at $320.28 at 1521 on June 6, 2018, the report notes. Then an article saying that Tesla was putting damaged battery packs into new Model 3 cars came out and at the end of the day, that price was down to $319.50."
The sun could come out, the birds could migrate, some random person on a train somewhere could sneeze and the share price could go down / or up. Sometimes a share price adjustment has nothing to do with what is actually going on in the business when there are other factors that can increase/decrease the share price.
A $0.78 drop i(0.243% decrease) is not much on a drop.
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