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Nonsense from John Petersen

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#101
Nicu.Mihalache said:
I know most of you guys have an allergy to Petersen's articles, but those who choose the red pill should go and read it (there is a chance of at least 95% that he is not payed for your click). Just strip out his comments and interpretations and take a hard look at the numbers. I almost feel responsible for the existence of this article, as I have privately asked him few days ago if he has any info about the total number of ZEV credits.

His info is not perfect, but the best I have seen to date - I would be grateful to anyone who finds more up to date or more precise knowledge.
Click to expand...

peterson is a moron. all he's doing is rehashing someone else's guess. and he doesn't even do that very intelligently.

go back through the 2013 q1 earnings thread. you can imply out what the credits must be based on the management guidance around all the other metrics. i posted a table which showed the relationship of average revenue per vehicle, gross margin, and profit in that thread. that will get you a lot closer to the total credits than any of peterson's boneheaded analyses.

the impact of zev credits wears off through the year as we know from the 10-k. the ghg credits do not wear off through the year. we don't know the breakdown between zev and ghg credits.

as i said in the other thread, i posted my detailed analysis of q1 earnings starting march 18th and backed it with my own dollars. it has proven to be far more accurate than peterson's publicly posted spewings which have not been backed by any of his own capital.

had peterson put his money where his mouth was, he probably would have done what he recommended others do: buy exide and short tesla. this genius idea would have lost him all the initial capital he put into the trade and more as exide has been a total disaster and tesla has massively outperformed.

sorry for the rant but that comment of "peterson's info is the best i've seen to date" regarding just about anything tesla related is something i find insulting.

i know for a fact at least capitaloppresor and myself have posted much better info than him.
 
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#102
luvb2b said:
sorry for the rant but that comment of "peterson's info is the best i've seen to date" regarding just about anything tesla related is something i find insulting.
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Maybe you have misunderstood my comment. I was talking strictly about ZEV credits. And he posts some independent data. You are proposing your guess instead (which may of course be accurate or otherwise). Do you have a link that explains any of ZEV and GHG rules, market and dynamics?

Moreover, if you had payed attention to my comment, I said to ignore his comments, reasoning and bashing and just look at the numbers. I see that even very intelligent investors are quite emotionally charged when it comes to JP, which is generally a bad sign.
 
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#103
Nicu.Mihalache said:
Maybe you have misunderstood my comment. I was talking strictly about ZEV credits. And he posts some independent data. You are proposing your guess instead (which may of course be accurate or otherwise). Do you have a link that explains any of ZEV and GHG rules, market and dynamics?

Moreover, if you had payed attention to my comment, I said to ignore his comments, reasoning and bashing and just look at the numbers. I see that even very intelligent investors are quite emotionally charged when it comes to JP, which is generally a bad sign.
Click to expand...
Luvb2b is spot on. Why would anyone with any intelligence use or trust any numbers provided by someone with an obvious agenda AND a proven money losing track record? It's insanity to even look at his pay-per-click nonsense.
 
#107
This belongs in JP Nonsense thread.

As usual, JP is wrong, and his most recent article shows how he doesn't do proper due diligence or any significant research. He should be embarrassed.

Here's CA's document on the credits. The table for specifying how many credits a car gets is on page C-12. In his article, JP includes speculation on that, then dismisses it. He didn't bother to find out for himself. Another article on it is here. Note that there are 11 states participating in the program (Here's a doc from NJ), and the other 10 follow CA's rules. Also note that the GHG credits are Federal, while the ZEV credits are by state.

JP also insists that analysts and investors for the most part not paying attention to the credits. The evidence easily available the web disproves that. For instance, in the recent Q4 2012 Conference Call, the following exchanges occurred:

Ben Schuman - Pacific Crest Securities
Hi guys. Thanks. Can you give us any idea of what the regulatory credit revenue was in Q4?

Deepak Ahuja - Chief Financial Officer
I think for us, the way we looked at regulatory credit is that it’s great to get that, it’s a positive stream of revenue, but it’s unpredictable, and as we look forward, we are much more focused on getting to profitability and achieving our target without the benefit of the regulatory credits.

Elon Musk - Chairman, CEO, and Product Architect
Yes. Exactly. Exactly. And in fact, maybe just to clarify further, as people may recall, there were three firm things that I promised we would do, that we would start production last year earlier than July and we started in June, and we would get to 20,000 units a year and that by the -- sorry, that we would deliver 20,000 units in 2013, and that by the end of 2013 we would exceed 25% gross margin. And I want to be clear that that 25% does not include regulatory credits.

and

Amir Rozwadowski - Barclays
So, I guess given where you are in terms of your production now, and some of these issues seem to be in the rearview mirror, I mean, what is your sort of comfortability in sort of meeting or even exceeding that 25% target?

Elon Musk - Chairman, CEO, and Product Architect
I’m highly confident that we will be above 25% gross margin without considering zero emission credits by the end of this year.


Furthermore, in Tesla's recent 10K there's this:

Our current agreements provide for the sale of a portion of the total ZEV credits that we will earn from the sale of vehicles that we plan to manufacture in 2013. Our current agreements also provide for sale of substantially all of the GHG credits we will earn from the sale of vehicles that we manufacture in 2013 and 2014.
Click to expand...

Note that the GHG (Green House Gas) credits are all already pre-sold. Tesla made $40.5 million from credit sales in 2012. It should be pretty easy to divide by the number of Model S's and Roadsters sold to figure out the per vehicle income in 2012.

And do a web search for "Tesla ZEV Credits" and you'll find lots of articles talking about it. Heck, here's one from 2010 saying that
Tesla won't get as much revenue in 2011 and future years as they did in 2009 (which was $13.8 million). So, concerns about the stability of the regulatory credit revenue aren't new.

JP's "Danger Will Robinson" flailing is tiresome and distracting to real investors. JP wrote an article predicting that by the end of 2012 a share of Exide's stock would be worth more than a share of Tesla's stock. Tesla is above $50, Exide is about a buck now. In Sept 2011, JP predicted that a share of Axion's stock would be worth more than a share of Tesla by the end of June 2013. Doing the exact opposite of what has JP recommended the past few years would have made you rich.
 
#110
smorgasbord said:
No, you are making a grave mistake trusting anything JP provides. He twists numbers like my ex-girlfriend twirled a baton.
Click to expand...

We are talking about links, i.e. information sources. No matter who provides that, it has to be taken into account. I am grateful that you have provided some links too. But as usual legalese goes, those lengthly documents are not much use for a general audience. As you have seen, I have started another dedicated thread hoping some collaboration would give us a better picture of the situation.

Don't you agree that investing and emotions do not make a happy home?
 
#111
Nicu.Mihalache said:
Maybe you have misunderstood my comment. I was talking strictly about ZEV credits. And he posts some independent data. You are proposing your guess instead (which may of course be accurate or otherwise). Do you have a link that explains any of ZEV and GHG rules, market and dynamics?

Moreover, if you had payed attention to my comment, I said to ignore his comments, reasoning and bashing and just look at the numbers. I see that even very intelligent investors are quite emotionally charged when it comes to JP, which is generally a bad sign.
Click to expand...

and once again, i will repeat that i already posted a table with the numbers. a bit of logic and deductive reasoning leads you pretty close to where the credits have to be.

you can try to figure these things out from scattered industry sources, or you can take a look at what the numbers given by management must mean for where the credits will be during the first quarter.

i'd bet you the latter approach is more accurate, but i've already bet enough on that through my choice of investments.

the emotional charge is coming from your implication that the doofus knows more than people on this board who have done a hell of lot more work on the subject. if that's what you believe, i suggest a simple course: follow the doofus.
 
#112
Nicu.Mihalache said:
We are talking about links, i.e. information sources. No matter who provides that, it has to be taken into account.
Click to expand...

The links JP provided are not very useful, as you have realized.


Nicu.Mihalache said:
As you have seen, I have started another dedicated thread hoping some collaboration would give us a better picture of the situation.
Click to expand...

It's hard to follow you around. You delete your own posts, you start threads, then branch off mid-stream to new threads. You're making life harder on the mods and those that want a serious discussion.


Nicu.Mihalache said:
Don't you agree that investing and emotions do not make a happy home?
Click to expand...

Coming from you, that statement is puzzling.
 
#113
smorgasbord said:
It's hard to follow you around. You delete your own posts, you start threads, then branch off mid-stream to new threads. You're making life harder on the mods and those that want a serious discussion.
Click to expand...

I have deleted only one post, when I realized I was wrong. I have explained immediately after where I was wrong and thanked you for pointing that out. Any complains?

I have started another thread about ZEV as a prolonged discussion about that in the short squeeze thread did not seem appropriate.

smorgasbord said:
Coming from you, that statement is puzzling.
Click to expand...

You are not the only one who claims to completely ignore information that are in any way related to some sources. When someone points to some potential error that I may do, I dig deeper and I report my findings no matter the result - nobody is perfect, but those who refuse to learn cannot get any closer to the right answer, no matter what. What was your question again?
 
#114
Nicu.Mihalache said:
You are not the only one who claims to completely ignore information that are in any way related to some sources.
Click to expand...

JP is not a source of information. He's a blogger, desperately trying to keep his own personal investment afloat. In 10 minutes I found more authoritative articles on the subject than Petersen included in his SA article. It's embarrassing for him, and to you for supporting him.

MODS: Can we get these exchanges moved the the JP Nonsense thread, or banish them to Snippiness or something?
 
#117
Sorry for the long post.

I took a step back from the numbers and started to ask myself why is he (JP) doing this. I think that I have connected the dots and understand the motivation.

My thought process:

The market for EV's is huge and there is space enough for any number of different technologies. As stated by many, EV's currently make up a minor fraction of a percent of the total car manufactures output, so why try and destroy a competitor when there is enough for all. Its like tying to kill the one other person picking an apple from a tree from the same orchard when there are thousands of trees and millions of apples available. There is no need to compete and that will likely be the case for years to come. I therefore take competition off the list of motivations.

With the pushback and sometimes abuse that he receives, the motivation is likely not to save someone else from making an unwise investment. Its not like he is an evangelist, suffragette or on a crusade. I therefore take being an angel to other investors off the list of motivations.

Click trough income? Really? Does he earn the sort of money that would motivate someone like him to rely on click through income? He is an investor. He put over a $1m into AXION. Do you get that sort of cash from putting up articles in SA? To weak I think to put on the list of motivations.

So I ran out of reasons why he is doing this. Then something else came into focus.

The clue was in his comment on SA that BMW and one other company (I forget now who it is) is taking forever to validate his battery and justifies this as an action that any responsible company would do. That comes across as a valid frustration/argument.

I then thought that maybe he is trying to stop EV's because he wants ICE's to be around to use his battery, but its going to take years to replace all those ICE cars, both new and used. Someone has .0001% of the market and your worried about it. Cannot be - take off justification list. It also seemed illogical. I do not see blog after blog about people complaining that their legacy starter battery needs to be replaced after 5, 7 or more years. No reports of disgruntled clients dragging the poor dealer rep over the counter because 7 years ago they sold them a car that stopped working because the &^%*(& starter battery. What would be the motivation be for BMW to put in a battery that lasts for 20 or 30 years. A USP? - "The All New BMW 5 with a battery that last a lifetime" I can see the adverts now (not). They don't even give a sh1t if the tyres, windscreen wipers, oil or anything needs to be replaced. Its part of owning a car.

BMW would not be interested in replacing normal ICE starter batteries with this new technology unless it was cheaper for them. It is clear from their sourcing model that they drive the cost they pay to their suppliers to razor thin margins. Light cluster, windscreen wipers, seats, everything that can be, is outsourced to low cost manufactures based in former easter block countries (I know this from my former partner who travelled to those companies in her job as a relationship manger in the automotive section of an investment bank). A run of the mill starter battery will does last many years.

So what is the justification for JP?

OK - I look at what BMW has to do.

In Europe and other countries, Governments have or are introducing scaled taxation of cars based on CO2 output. Those taxes are getting higher and higher. A BMW M5 is US$188,000 in New Zealand, US134,000 in the Netherlands, UD$91,000 in the USA. That limits the ability to sell into those markets where the tax is high. On top of the sales tax, there are escalators on the annual road tax. Just look at the UK. Lowest CO emissions US$0, highest US$760 every year, and every year, the escalator is increased. This really limits the ability of a car company to sell cars. The extra on the price goes to the Governments.

So all the car companies are doing two things:

1. Make smaller/lighter/more aerodynamic cars, requiring smaller engines.
2. Increase the efficiency of the ICE

There are a number of technologies available for point 2. Direct injection, diesel, start stop, high compression, start stop, start stop..... penny drops.

Where the AXION technology will make a difference is with start stop technology. Existing batteries die after a year or so with the constant heavy load of having to restart a car at every traffic light, stop junction. That is why BMW is looking to use AXION - for start stop technology.

So what, the market is big enough for both.

Or is it.

Ever driven a start stop technology car? I had my first experience when my friends wife selfishly demanded that she have the Audi A6 Quattro to take the kids to school, swimming etc while us boys had to rent a car for our annual skiing weekend in Switzerland. Two of us were collected from the airport and had a long slow drive through Zurich in the rush hour in a rental with start stop technology. Every 10 meters, car shudders to a silent halt. Traffic moves, car shudders into life. Move 10 meters. Engine stops. I suppose that is something you could get used to. Is it major problem? BMW does not make an M5 car with start stop (as far as I know), but lets assume that the taxes get higher and higher. Are you going to produce a car that only one or two people in Zurich can afford? Lets assume that at some time they do. Imagine the 0-60 times. 5-4-3-2-1 chug chug chug zoom. Thats OK though, because not only has your 0-60 gone from 4 seconds to 5, the Porsche next door has also now got start stop and your both in the same boat.

Now while your wringing you hands of the steering wheel and nodding to the Porsche driver next to you that your up for the off the line race, a Tesla pulls up next to you. The lights turn green and the Tesla is far off in the distance before your car has even started.

Gen III and a M3 - same situation.

Back in München, the CEO looks at his management team and asks the question. How are we doing with reducing the CO2 output so we can reduce the tax impact and start selling cars again. They look at him and tell him that the cars have lost va va voom (or the German equivalent) but so has VW, Mercedes and all the others, but we got the CO2 down so the price to the customer is better and sales are UP. CEO - What about this Tesla thing I read about?. Oh don't worry about that. John Petersen tells us that they will all burst into flames flames, or the battery will die after 6 months, they cost soooo much to build that they only survive on credits from the Government, they can only go as far as the extension cord will reach and anyway, now we have our technology working, all the CO2 is gone and the credits can no longer be sold and they will be bankrupt around (looks at watch) 9pm tomorrow. Phew mein gott in himmel says the CEO and they all all tuck into a bratwurst wash down with a cold Bitburger.

Two flaws in this story.

1. BMW is having issues with start stop. Google "BMW start stop problems". They are even allowing the dealers to reprogram their existing cars to turn the system off. People do not like it and the starter battery dies after a short enough time that queues are forming outside the dealerships where the reps have taken to wearing traditional Lederhosen because of the spanking that they are getting from disgruntled customers.

But AXION to the rescue - A battery that will last longer than your last marriage.

2. Tesla cars are not bursting into flames. They somehow are managing to survive without the ZEV credits (they are selling the car in Europe at the same price + cost to transport, import taxes but don't get a kickback for it) and the market cap is increasing.

So why trash Tesla and not the Nissan Leaf? Maybe because its not really a car that competes with a BMW. Its kind of comparing a BIC pen with a Mont Blanc.

So what is JP looking for?

He has a bunch of AXION stock that currently can just about be used to purchase a couple of boxes of BIC pens. Imagine what the stock would do tomorrow if BMW announced that after years of testing that the great BMW endorsed the AXION battery. A 22 carat gold stamp of approval from one of the biggest iconic brands.

How does JP make that happen. He produces evidence. Cast iron evidence that building an EV is the most stupid thing that you could ever do. Just look at Tesla!!!! Look what happened to Fiska, A123 et al. Fires, bankruptcies, pollution, dead EV's with their passengers burned to a crisp filling our landfill and randomly catching fire again and again. Look at the environmental impact to those poor Chinese families as the lithium strip mines take over the country. Do you want all that bad press on you hands. The blood of those workers. The poor children that have to drink polluted water from all those leaking batteries in the landfill?

Just validate my battery and everything will be OK!!!!

It actually does not matter if JP is right or wrong. All he needs is that validation from BMW. Even if they only use the technology for 0 minutes. That seal of approval would be worth more to AXIONs share price than anything I can think of.

JP needs BMW to continue down the start stop research route. He needs BMW to hedge against choosing just one technology outcome. I do not even think that he is bothered if the CEO of BMW says "build me a Tesla" as long as he also say "but just in case JP is right - better sort out the stop start issue. Just in case EV is a lemon".

I have seen comments that JP should apologise when Tesla makes it. As long as AXION gets that BMW stamp of approval, his shares will be worth a stack and all you will see is his index finger as he backs onto the flight to Barbados with a big bag of $$$$ under his arm. AXION can use the "as endorsed by the great BMW" tagline and maybe even make a good living selling them to train companies or households to augment PV systems.

The annoying thing about all of this is that I actually think that AXION has a good product. Not for EV's and I do not think that start stop has a future. There are lots of possible uses.

He is a very clever man. Everyone is looking, arguing about Tesla when all he is trying to do is to get time and motivation to have BMW give their gold stamp of approval for his own financial gain.

In the final analysis, its kind of irrelevant to Tesla. They will or will not be a success. I think that the management team at Tesla are smart and will succeed. At the same time, I think that JP will generate enough FUD in the BMW boardroom that they will hedge their bets and validate the AXION technology. The wait for BMW must be killing him. I could feel it in his comment about how long its taking. Waiting every day for that call, having to go back to the forums to take another beating to keep the FUD in the BMW boardroom alive.

Feedback appreciated.
 
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