Bloomberg on $TSLA Price Drops, $KMX & $CVNA Looks, Other EV Companies' News ($RIVN & $LCID Hit All-Time Lows) + Charts

[PeregrineTrader]

Tesla Inc. is offering US consumers $7,500 to take delivery of its two highest-volume models before year-end, adding to indications the carmaker is struggling with demand.

The discount on new Model 3 sedans and Model Y sport utility vehicles is double what the company was offering earlier this month. It mirrors an anticipated change in how much of a tax credit certain consumers will be eligible for early next year.

It’s highly unusual for Tesla to offer such perks, as Elon Musk has for years enforced a no-discounts policy. The company also departed from its chief executive officer’s insistence against spending on traditional advertising last month by promoting its wares on a local television shopping channel in China. Tesla also has cut prices and production in that market this quarter.

https://archive.vn/8zDpY

[PeregrineTrader]

Geeez, this is developing into something dumbfounding: Ross Gerber, perennial $TSLA long and founder of the suffering tech fund $GK, is now at Twitter war with Elon Musk after years of subervient fawning over his Master’s Voice.

I’ve never seen a brand destructioin as quickly as I am seeing in Twitter, and now the mood is most definitely souring Tesla’s own brand.

Just when I think we are bottoming (I’m the fool who took smaller profits from $TSLQ over a week ago) and I’m getting ready for a $TSLA buy, the bottom floor gives out again:

https://archive.vn/TAlMC

Gerber has posted critical tweets recently, including one telling Tesla’s board it’s “time for a shakeup” after the stock slide. The comments drew the attention of Musk, who tweeted several rebuttals to Gerber, suggesting that he “go back and read your old Securities Analysis 101 textbook.”

Still, the billionaire, who also runs companies including launch provider SpaceX, has acknowledged having too much on his plate. He said Tuesday that he would resign as Twitter’s CEO once a replacement is named, a nod to a poll he posted over the weekend in which a majority of respondents said he should step down.

Despite his criticism, Gerber said Wednesday that he believes Tesla is still set up for “massive growth” and that he’s “perfectly happy” with a focused Musk at the helm.

“Tesla is the most consequential company that’s ever existed,” Gerber said. “I think all this noise will be gone in six months.”

Checking in with the $TSLA action today, I know (from an earlier check) that $TSLA has hit a new 25-Month Low:

On the flip side, here’s $TSLQ which is still kicking upward:

[XMFRob]

@PeregrineTrader

Just when I think we are bottoming (I’m the fool who took smaller profits from $TSLQ over a week ago) and I’m getting ready for a $TSLA buy, the bottom floor gives out again:

Too much uncertainty for me with TSLA at the moment.

Heck, I’m struggling to find “relatively safe” investments ANYWHERE. LOL.

Sold puts on SBUX, OLED, SHOP and ENPH. SHOP… not quite so safe of course.

I was feeling good about selling ENPH puts early this week, especially when the stock popped over 5% right after my sale. Now… ENPH is down nearly 6% today and I may be put to. Surprise! If that happens, it’s fine and I’ll be happy to sell Dec30th calls on Monday for the prior strike price… or more. Just sort of shocking to see the big swings.

But… back to TSLA…

Is demand easing? Too early to tell because there are end of year and consumer tax benefits in play for both US and China. IMO, demand doesn’t suddenly drop like this without an artificial event like I mentioned. But… with my extremely diminished funds, I’m trying to be careful.

My bottom line view: My TSLA muse/analyst expects TSLA EPS to continue rising in 2024 and much more beyond… viewing the current discounts as having reasons similar to what I said above, offset to a minor extent by the multiple new market entries (Thailand, etc). The facts of “demand destruction”… possible… but unclear, IMO. Regardless, it’s obvious there is plenty of momentum downward… and (again IMO) it’s nuts to bet on share price stabilization any time soon.

What’s the bottom? Only the Shadow knows?

I think there is still a LOT of money to be made on TSLA…

…but for my taste, it’s too soon to make a move. Buying puts comes with a worrisome premium…and taking a bullish position seems too much like standing in front of a stampede.

Rob
He is no fool who gives what he cannot keep to gain what he cannot lose.

[pauleckler]

I saw news item that the discounts fill in the gap now that Federal tax credits are delayed until March.

[XMFRob]

Yep. It may make the uncertainty window bigger… or investors may just factor it in… assuming there actually is no demand destruction.

For me, I’ll wait to see China and US December numbers. No rush.

Rob
He is no fool who gives what he cannot keep to gain what he cannot lose.

[Goofyhoofy]

@XMFRob

Is demand easing? Too early to tell because there are end of year and consumer tax benefits in play for both US and China. IMO, demand doesn’t suddenly drop like this without an artificial event like I mentioned.

I’ll give you an artificial event. Musk has engaged in one of the most destructive brand campaigns in recent memory. It’s of his own name, of course, but he is tightly linked to Tesla.

I’m not saying I believe all of it but I read one of the financial publication columns today, which pointed out that the most likely people to rebel against EVs are rurals, downscales, and arch conservatives. The most likely people to buy EVs have, so far, been solar panel loving liberals, and Musk has managed to alienate almost all of them.

(This column caught my eye because one of the guys in the neighborhood is a raving leftie, I don’t like hanging around him (because everything with him is political) but his wife and mine are friends, so… Anyway, he bought a Tesla 6 months ago, loves it, now regrets it. He won’t sell it, of course, but if the timeline were different I suspect he would not be buying one right now.)

I agree with the sentiment that this will blow over in 6 months, assuming Musk goes back to inventing stuff instead of, well, whatever this recent nonsense is.

I wonder if this “$7500 sale” is truly because of reluctance over tax issues; that shouldn’t affect China, where the factories have closed for a couple weeks, should it? Of course these episodes wouldn’t affect over there either, since their press is so suppressed.

Anyway, if you’re looking for “external” stimuli affecting Tesla sales, don’t discount the well publicized and not entirely favorable Muscapades of the recent months. And, of course, there are suddenly 34 other choices in the EV market. That can’t help.

[PeregrineTrader]

$F daily chart started crashing earlier in this week. . . and we well know about Tesla’s divebomber chart, although an early look this morning and $TSLA was up in pre-market. Will today finally be a day where a downtrend reversal raises its head above yesterday’s high?

Ford and Tesla Investors Get Cold Water in the Face. Affordability Is a Problem.

https://archive.vn/skFGX

> Tesla stock was down again Thursday. It has nothing to do with Twitter. The reason is much more serious.
**> **
> The mix of inflation and rising interest rates have made used-car prices too expensive for many buyers.
**> **
> CarMax (ticker: KMX) delivered the news. The company badly missed top- and bottom-line estimates for its fiscal third quarter ended in November. CarMax shares fell 7.1%.
**> **
> The CarMax results look to be dragging down the automotive sector. Ford Motor (F) stock was off 5.1%. General Motors (GM) shares fell 5%. Tesla (TSLA) stock declined 6.9%. The S&P 500 and Dow Jones Industrial Average were down 1.9% and 1.4%, respectively.

$F daily, weekly, and monthly charts shows recent breakdowns on all 3 charts

**$TSLA daily, weekly, and monthly charts.

[PeregrineTrader]

Yeah, here we go, the $KMX charts are turning over into very bearish territory:

[PeregrineTrader]

More on the $KMX story from IBD which I also placed in the $CVNA thread.

Zombie Watchlist: $CVNA Hits New All-Time Low, Trading In Stock Temporarily Halted

Catching Up on $CVNA with all that bad news out of $KMX 9 DEC 22 Carvana Co. bonds were rallying off their worst levels Friday but their deeply distressed levels continued to reflect steep concerns about a potential bankruptcy. The used-car retailer’s most-active 10.25% coupon bonds coming due in May 2030 were trading at about a $45 price on Friday, or near 29% yield, according to BondCliQ. That compares with a price of almost $90 in June for the CCC-rated class of bonds and 12.3% yield. S…

[Goofyhoofy]

@PeregrineTrader

The mix of inflation and rising interest rates have made used-car prices too expensive for many buyers.

This makes no sense. Used car prices have come down substantially in the last month, and even with higher interest rates they’re less expensive than they were at the height last Spring.

[PeregrineTrader]

With car loans almost doubling in interest rates this year, we have now moved into the 8-year car loan in the Keys to keep cars affordable.

**Here’s what I think: $CVNA is going to bankrupt. And when that happens, all used cars on every lot in America will swoon in Kelly Blue Book value soon after.

First-hand observation: the business nearest my house is a Used Car Dealer/new Trailer Reseller. Anyway, this guy’s lot has been at 2-3 cars for sale for the past month, whereas normally he would keep a dozen or more there.

Used-Car Prices Remain High, Making Buying a Challenge - Consumer Reports

After a historic used-car price spike throughout much of 2021, prices have begun to come down. Although they haven’t yet deflated to levels that would fall into deal territory, a recent drop of more than 3 percent may offer hope to used-car shoppers, especially for those paying with cash. Rising interest rates will likely negate the drop in prices for buyers who have to finance, meaning that despite the price drop, they could still end up paying more over the life of the loan.

That said, the luxury of waiting for a sunnier economic outlook isn’t available to everyone. If you need to buy a used car now, Consumer Reports can tell you how to make the best of the current situation with expert advice and market insights from industry insiders.

In good times and bad, Consumer Reports members can search our Used Car Marketplace for vehicles for sale in their area, sorting by the factors that matter most. The listings include CR reliability and owner satisfaction ratings, and there’s a free Carfax report for most of the vehicles. Members can also access ratings and information on used vehicles going as far back as 20 years.According to the Consumer Price Index report from November, used-car prices fell over 3 percent from a year ago but are still about 50 percent higher than they were in February 2020, before pandemic-related disruptions catapulted the economy into turmoil. Quite simply, new-car shortages continue to put pressure on the used market.

[PeregrineTrader]

> CarMax’s reported gross profit per unit sold through retail was $2,237, just about flat year over year. Used-vehicle price were up about 2% year over year. Retail volumes, on the other hand, dropped 21%.
**> **
> Volumes are down because cars are too expensive. “We believe vehicle affordability challenges continued to impact our third-quarter unit sales performance,” read part of CarMax’s earnings news release, “as headwinds remain due to widespread inflationary pressures, climbing interest rates, and low consumer confidence.”
**> **
> It’s an important statement. CarMax is the largest used-car seller in the U.S. It offers an investors an important read on the state of the automotive economy. What’s more, the used-car market is larger that the new-car market, and when the used-car market catches the flu, the new-car market catches cold.

https://archive.vn/skFGX#selection-511.0-519.306

[XMFRob]

@Goofyhoofy

I’ll give you an artificial event. Musk has engaged in one of the most destructive brand campaigns in recent memory. It’s of his own name, of course, but he is tightly linked to Tesla.

IMO, we’ll just have to wait to see if there are long term effects associated with his Twitterness. Of course, it’s larger than that and he seems to increasingly grow less self-restrained.

For me, TSLA is pretty interesting but too many uncertainties for me to invest in. Is the share price stabilized before a resumption to long term growth. Is it a brief respite before further drops? Anyone who feels they know “THE” answer to that… no doubt is invested in a fashion to profit from that expectation… otherwise it’s just venting. For me, my venting is limited to “I don’t know”.

Rob
He is no fool who gives what he cannot keep to gain what he cannot lose.

[PeregrineTrader]

**Does anybody know if analysts ever warn one another earlier in the week what they are about to say on a Friday? Serious question. I’m wondering how analysts talk shop or talk their book to one another or whether it is even allowed?

p.s. WallStCynic is really Jimmy Chanos. He’s an interesting bird to follow on Twitter. I can never tell if he has quit, come back, been suspended, whatever. He just shows up. Glad he pointed out this analysis.**

Diogenes

[PeregrineTrader]

Yeah, looking over this volume from the past six red days in a row, this was mighty big selling going on.

This is the part of the $TSLA chart you don’t see on my cut and pastes. That red line weaving its way through volume bars represents the 90 day EMA moving average which is 96.72 Million Shares.

Today’s end of day volume for $TSLA: 166.26 Million Shares.

This looks like insider or Big Institutional Selling, first glance. Did Ives leak his note early?

[PeregrineTrader]

I cued it at the 225 seconds mark where Colbert starts his Musk monologue. I am putting this up here (eventhough it is nine days old) because Colbert shows this graph at the 279 seconds mark which just opened my eyes wide:

DeSantis Goes Full Vaccine Conspiracy Mode | Musk No Longer On Top | Rubio's Push To Ban TikTok

“Tesla’s Net Favorability With Democrats”

Stay with the image of the graph showing only 25% favorability among Democrats. Watch it fall “off a cliff” and Colbert quipped usually when Teslas fall off cliffs its because it was in self-driving mode.

[PeregrineTrader]

$LCID begins selling in Europe. It also recently scored $1.5 Billion in a secondary.

Lucid Begins Deliveries of Lucid Air Dream Edition to Customers in Europe,...

$LCID hit an All-Time Low this past FRI, 23 DEC 22.

20 DEC 21

Lucid stock pops after the EV maker raised $1.5 billion

[PeregrineTrader]

I'm Bullish on EV Stocks But This Has Me a Little Worried

Ford (F 0.44%) began selling its electric F-150 Lightning in 2021, with a starting price of just $39,974.

But since then, the EV pickup truck has undergone major price increases – three of which have come since August – that have sent the cost of the truck soaring nearly 40% to its current base price of $55,974. The latest increase came just last week with a price hike of about $4,000.

> Research from AlixPartners published over the summer showed that costs of critical EV battery materials have skyrocketed more than 144% over the past two years.

[PeregrineTrader]

**

**

(From article above about EVs)
Of course, Ford isn’t alone in raising prices for its EVs. Tesla (TSLA -1.75%) raised prices across its various models twice in 2022. Rivian (RIVN -2.99%) raised the price of the quad-motor version of its R1T pickup truck in March by $12,000 and also eliminated the entry-level versions of both its pickup truck and the R1S SUV in August.

Why Rivian Hit an All-Time Low Today

Rivian had some encouraging things to say in its third-quarter report, but data from used car retailer CarMax yesterday has investors rethinking the near-term future for Rivian and other early-stage electric vehicle companies.

Rivian’s reservations continued to climb in the third quarter, giving the company a backlog of more than 114,000 R1 platform pickup trucks and SUV offerings. It also expects to hit its relatively conservative goal to produce 25,000 vehicles in 2022, and held $14 billion in cash and equivalents as of Sept. 30.

The report also showed the average price received per vehicle delivered was more than $81,400 in the third quarter. That piece of data is what has investors concerned enough to drive the stock to new lows.

[PeregrineTrader]

I like $AN more than $CMX or $CVNA in that these guys are focusing on repairs and parts to go along with their new/used car sales. I’ve heard nothing but good things from people in the Keys who bought cars from Auto Nation on the mainland. This mobile repair business is somethig to keep our eyes on. I wonder if mobile repairs at your home costs more?

AutoNation Ramps Up After-Sales Business With $190M RepairSmith Acquisition

• AutoNation Inc (NYSE: AN) has agreed to acquire RepairSmith, a Los Angeles-based full-service mobile solution for automotive repair and maintenance company, for $190 million.
• RepairSmith has a significant operational footprint in the southern and western U.S.
• RepairSmith offers customers the convenience of services and repairs at their home, workplace, or on-site for fleet vehicles.
• AutoNation will utilize RepairSmith as a resource for reconditioning and internal services to increase speed to frontline readiness and expedite vehicle delivery to customers.
• "It expands AutoNation’s ability to penetrate the extensive After-Sales service market and conveniently respond to our Customers’ needs by broadening the reach of our existing After-Sales network,” said CEO Mike Manley.
• AutoNation held $442.9 million in cash and equivalents as of September 30, 2022.
• Price Action: AN shares are trading higher by 0.98% at $117.38 on the last check Monday.

**