Ford has delayed some Mustangs Mach-E because of the chip shortage, Polestar likes its chances with the long-range Polestar 2, and Tesla. All that and more in The Morning Shift for August 12, 2021.
Carson Block is the kind of finance guy who is probably Too Much Finance Guy, a short-seller who casts himself as smart money, someone simply out here to call out the frauds and make a buck along the way doing it. Naturally, he has also been a critic of Tesla for years, but as Tesla’s stock price has remained resilient — critics would say irrationally overvalued — Block has now said that he was wrong about Tesla in a letter to shareholders of his firm, Muddy Waters Capital. The letter was obtained by The New York Times.
In the letter, obtained by DealBook from a source familiar with the fund, Block, a longtime critic of Elon Musk, Tesla’s C.E.O., said that his firm’s multiyear bet against the electric carmaker had been sent to “heaven,” with no plans to revive it.
Block said Musk’s “narcissism” drew his disdain and stoked the belief that Tesla’s business would crater. But Block added that he underestimated Musk’s ability to raise capital in huge amounts, reinvent himself and captivate shareholders.
“The market cap, the luster, the élan of Elon, is still there,” Block wrote, in explaining why his bets against Tesla have gone away.
“Tesla shorts have focused on Tesla’s lack of scale to compete in EVs with GM, Ford, VW, etc.,” Block wrote. “They are correct in that lack of scale would have been the death of Tesla. But they were looking at the wrong scale. Tesla is here not because it has scale in terms of manufacturing base or unit sales. It has scale because of its capital base,” he said of Tesla’s $700 billion market cap. He added:
One could look at Tesla’s market cap and think it’s fragile — that reality will shatter it. However, Tesla should be able to raise many billions before its cap becomes sub-scale — and keep in mind that Tesla equity raises tend to push the stock higher. (Those “dumb money” investors actually knew that capital base scale is what mattered all along.)
The thing about going to a casino for the first time is that it is natural to assume that the people at the high-rollers’ tables are smarter than you somehow, simply by virtue of having more money. That isn’t true, of course, but Wall Street works the same way, as people who work there will tell you that, actually, the money doesn’t really matter and it’s really just a way to keep score. Well, by that measure, Elon isn’t losing.
Tesla (TSLA.O) CEO Elon Musk has made clear how important it is for the company to keep to its schedule for the construction of its European gigafactory in the German state of Brandenburg, its Economy Minister Joerg Steinbach said.
Tesla also said it was willing to intensify communication in the site near the town of Gruenheide and involve local citizens more, Steinbach told Reuters after a meeting with Musk in Germany on Wednesday.
Tesla has pushed back the expected opening of its 5.8 billion euros ($6.8 billion) gigafactory near Berlin to late 2021, blaming German bureaucratic hurdles.
Separately, Elon is mad at two chip suppliers in particular.
Another day in the life.
3rd Gear: Ford Has Some Bad News For Some Of Those Looking Forward To Delivery Of Their New Mustang Mach-E
The bad news is that some new Mustangs Mach-E are being delayed for weeks because of the global chip shortage, which has dogged Ford for months.
From Automotive News:
An early version of a letter to customers leaked this week on a Mach-E forum. A Ford spokeswoman on Wednesday said the letter is not yet final and will go out in the coming days, but she did confirm the delay time frame.
Mach-E production at Ford’s Cuautitlan, Mexico, assembly plant will continue; the delay concerns vehicles that have already been built and are awaiting chips.
“The global semiconductor shortage continues to affect global automakers and other industries in all parts of the world,” Ford said in a statement. “We are working closely with all of our key suppliers to address production constraints tied to this global semiconductor shortage so we can continue to build Mach-E vehicles, and get them to our customers as quickly as we can.”
I wonder how often Ford CEO Jim Farley’s dreams are haunted by the chip shortage. It must be a nonzero number right? How many times has Jim Farley woken in a cold sweat and his wife is like, “Chip shortage again, isn’t it?”
McLaren has resorted to numerous measures over the past several months merely to survive, including selling its famous headquarters in a leaseback deal. Automotive News reports that those measures have worked, for now, but there is still a lot of consternation over McLaren’s future.
If McLaren’s debt raise failed it would “cast significant doubt over the Group’s ability to continue as a going concern,” McLaren warned in a report detailing its 2020 finances, filed in May.
The first stage of that was achieved in July when McLaren announced a 550-million-pound equity investment, of which 400 million pounds came from Saudi Arabia’s Public Investment Fund (PIF) and global investment firm Ares management.
There are also, simply put, lots of cooks in the kitchen at McLaren at this point.
The money does not dilute the stake of existing shareholders, led by Bahrain’s Mumtalakat sovereign investment fund, but does give PIF and Ares one seat each on the board, should they choose to take it.
“This successful equity raise is a key element of our comprehensive financial strategy to support the Group’s sustainable growth plans,” McLaren Group Executive Chairman Paul Walsh said in a statement.
Existing shareholders as well as a limited number of new private investors agreed to add another 150 million pounds of capital to bring the total to 550 million.
The existing shareholding structure has been altered with each share subdivided into three, McLaren said in a filing in August, but the shareholding percentages haven’t changed.
Mumtalakat has 56.3 percent of McLaren Group. TAG Group, led by Saudi-born businessman Mansour Ojjeh, has 14 percent, and Nidala, an investment vehicle owned by Canadian Michael Latifi, father of F1 driver Nicholas Latifi, owns 10 percent.
It’s really, really hard to make money making supercars and, in fact, many of the ones at it that aren’t named Ferrari, don’t.
CATL is the world’s biggest battery maker, and a supplier to companies you have actually heard of, like Tesla and BMW, and also some you may not have, like Nio. The Financial Times published a good profile of CATL last night, which details its relentless focus to drive costs down in battery production, including by using sodium instead of lithium as it tries to stay ahead.
Navigating diplomatic friction with the EU and US, as well as trying to keep cost advantages compared with Japanese and South Korean rivals, are all new challenges for the company as it enters Europe, according to [Wu Hui, director of research at the China Yiwei Institute of Economics, a think-tank focused on electric vehicles].
Innovation could be a key differentiator. Last year CATL set up a lab called 21C to work on battery innovations, including solid-state batteries and sodium-ion batteries. It says it has more than 5,000 staff working in research and development.
The company said its young scientists had pioneered the work on sodium-ion batteries, which could help lower costs. Prices of lithium, which is in limited supply, have almost doubled in the past year.
While sodium has a lower energy density than lithium, it is far easier and cheaper to source. CATL said it would start off by combining sodium-ion with lithium-ion cells.
It said its sodium-ion batteries had reached an energy density of 160 watt-hours per kilogramme, just below its current lithium iron phosphate batteries, and that they could charge in just in 15 minutes and work well in low temperature environments.
On August 12, 1964, just four months into his sentence, Wilson, age 32, escaped from Winson Green Prison. He eluded police for several years before being recaptured in Canada on January 24, 1968. He was returned to England, where he served out the rest of his punishment. Wilson later moved to Spain, where he allegedly became a drug dealer, and was shot to death on April 23, 1990.
I am going into the office today for the first time in about a year and half. We have a new one that is apparently across the street from Radio City Music Hall, which is a marginal improvement on the old one, which was in Times Square. It is still in midtown Midtown Manhattan, though, which means rubbing shoulders with boring finance types. Or maybe it doesn’t, maybe they all work from home now or something. I’m excited to see what’s changed.