Summarizing Problems for Tesla, SpaceX, Twitter, Musk and World in 2022 and 2023

A few people in the comments have been strongly requesting some anti Musk and Tesla article. Here is a summary of the problems that Musk, Tesla, Space X and Twitter have had in 2022 and problems they can have in 2023. Full disclosure, I own shares in Tesla and SpaceX. So this will be a summary of problems from someone who is very pro-Musk and pro-Tesla. However, I am thorough. I am giving what some people have been asking.

Tesla share price dropped to 30% of the post-split high of $400 down to $123. This is despite increasing trailing 12 month net income in Q3 2021 from $3.5 billion to $11.2 billion in Q3 2022. The Nasdaq dropped 33% from its highest peak price in 2022. Amazon shares dropped to 50% from its 2022 peak. Tesla shares have been cratering sharply for 7 weeks. Many believe it is the Twitter noise and what they believe is Elon being erratic. A larger contribution is the concerns about major demand issues in China.

Over half of Tesla’s global cars are made in at Tesla Shanghai. The covid lockdown in Shanghai in about April-May 2022 reduced cars produced by about 100,000 and delayed an expansion. Delaying the to Q3 reduced total cars produced by another 100,000.

China has struggled with a real estate and lending crisis for 2021 and 2022. China just released a bailout package package for the property sector. Along with other policies announced earlier this year, they are injecting 1 trillion yuan ($142 billion) into real estate. The sector has not turned around yet but real estate stocks have strongly bounced.

China is currently experiencing a massive surge of Covid. Perhaps 25% or more of the population is currently infected. There are reports hospitals and cremation facilities are overwhelmed. China has a low ratio of emergency rooms and hospital beds for population. China also did not used the more effective COVID vaccines from Pfizer and Moderna. 3rd parties are forecasting there will be about 2 million deaths in this COVID surge in China.

Various parts of the world have experienced an economic slowdown in 2022 and some parts of the world are in recession. It is expected that there will be a recession or deepening recession in 2023.

The global recession and China economic problems is softening (reducing) demand for Tesla cars in China and Europe. There are concerns that Tesla will not cut prices and reduce margins in 2023 to sell cars. There are concerns that even with those actions they will need to reduce production of cars from their potential capacity in 2023.

Elon Musk bought Twitter and had to sell about $40 billion in Tesla stock to buy Twitter and to provide liquidity to cover operating losses and debt financing. The Tesla stock sales, Twitter problems and drama around Twitter have contributed to Tesla shares to lower in price.

It is highly another major holder or multiple large investment funds sold in the recent crash in Tesla shares.

Elon has said he will not be selling Tesla shares in 2023 and may not until 2025. Many people do not do believe his assurances.

Tesla has had delays and slower production ramps for the Berlin and Texas car factories. Both factories are each just now reaching 3000 cars per week. It was previously believed that both factories could easily reach 5000 cars per week by the end of 2022.

Tesla has had delays and slower production ramps with their own 4680 batteries. On Tesla battery day in September 2020, they announced a goal of 100 GWh of 4680 batteriesin 2022. The 4680 production just reached 1000 packs per week which is 0.08 GWh per week or 0.3 GWh per month. This is just over 1 GWh for 2022. If Tesla triples 4680 production every quarter then they would reach 2 GWh in Q1, 6 GWh Q2, 18 GWh Q3, 54 Gwh Q4 which would 70 GWh for 2023. Tesla would be more than a year behind the 2020 battery day ramp goal.

Tesla has been able to get abundant battery supplies from CATL and other suppliers.

After Twitter was purchased about two months ago, Elon has fired about 70% of the staff to reduce a $3.5 billion per year burnrate to less than $1 billion per year. Elon has announced he expects Twitter to breakeven in 2023.

There have also been delays introducing products like the Tesla Semi. The Tesla Semi is now released and about 100 will made in December of 2022. The Tesla Semi was about 3 years later than originally targeted. The Tesla Semi has vastly superior specs to other electric Semis from Freightliner, Volvo and others.

Electric cars are ramping up around the world. Tesla still has over 60% market share in the USA. Tesla has less market share in China as the China market has a lot of very cheap cars and cheap EVs. For the over US$40,000 EV market segments, Tesla has over 40% market share for those segments.

The war in Ukraine and COVID have disrupted supply chains and sent prices and inflation soaring. The war and COVID could continue to cause financial problems in 2023. Inflation could remain out of control or too high in 2023.

Tesla is targeting over 50% production growth in 2023. Tesla will likely miss the 50% delivery growth target in 2022. We will see what they report Jan 2, 2023 for Q4 volume production figures.

The Cybertruck should be released mid-2023. The Cybertruck release is about one year late. We will see how fast the Cybertruck production ramp is and if it is released on the new target date. The Semi technology should help the performance of versions of the Cybertruck. The Cybertruck should have the 1000 volt technology and engines for more powerful and efficient towing.

We will see if Tesla can deliver the Cybertruck and ramp the 4680 and new factories in 2023 and how they manage the economic slowdowns and manage demand weakness in different regions.

Tesla will have a boost from the US Inflation Reduction Act which provides tax incentives that reduce the effective price of most Tesla Model 3 and Tesla Model Y by $7500. There is also $45 per kWh of support for US battery production. There are also incentives for Energy products like Tesla Powerwalls and Megapacks.

2022 has been a challenging year and 2023 will also have big challenges.

40 thoughts on “Summarizing Problems for Tesla, SpaceX, Twitter, Musk and World in 2022 and 2023”

  1. Brett, when you say ‘they view any challenge to their ability to censor public discourse as an existential threat’. It really suggests you are making liberals a monolithic stereotype with unbounded power, so much so the whole USA is now gunning for Elon. The logical fallacy of monolithic stereotypes aside, conspiracy tales and lies can and will destroy the social fabric. The Big Lie, for example, has underminded our democratic institutions. I, for one, won’t buy a car from anyone who propagates lies.

    • I, for one, think it’s a very reasonable assertion to announce the very likely, even ‘slippery slope’-type movement to a nanny-type state, via twitter control, utterly contemptuous of risk, aspiration, ambition, and personal resilience.
      It truly is as simple as: You either want a Fair World or a Great World; choose.

      A Great World has leading and quickly-developing electric cars, spaceflight, wealth growth, untold financial opportunity, passionate discourse, a modern and resilient military, and hyper-resilient economic characteristics; amongst other advances in technology and industry.

      A Fair World, lacking a Great examplar to copy/ trade, does not. It has inclusiveness and pronoun choice and ‘protected fields of grass’ above productive lithium mine sites.
      The rich world is littered with Fair World examples, as personified by northern European countries; nice to visit, but to live, raise a solid family, create, and develop there? Miserable. Bleeding-Heart Liberalism, though not invalid, has shown severe consequences in growth, creativity, productivity, etc., but is a fine place to retire or relax.

      The Great World, consequently needs heroic levels of uncensored speech, minimized technical regulation, and an absolute resistance to non-meritocratic personal growth and opportunity. This is the way.

  2. Another day, another day when Musk can’t resist his political comments on twitter and another day when tesla shares are tanking.

    We’ll be below $100 probably even before 2023. This guy is ruining the brand, and with it, he possibly will ruin Tesla company. Not even long term, he is doing it in real time.

    New products don’t matter, more and more people simply are starting to hate this guy, and the number of people who want to support him/his companies will probably quickly decrease over time.

    I don’t see a path to fix it. Even if he will stop being Tesla CEO, people probably won’t forget and like I said before, won’t be interested in increasing this guy wealth.

    I hope SpaceX will succeed.

    • Interesting… you base your purchases based upon whether you want to make the owner of the company richer or not? You would buy or not by a BYD car based upon how you felt about Wang Chuanfu and Warren Buffet. Amazon shopping levels are tied to the popularity of Jeff Bezos. Volkswagen was started literally by Nazis. VW had the 2015 emissions cheating scandal. The Chevy Bolt and the Hyundai Kona had to recall every one of the cars made up to 2021 because of battery fires.

      • Not necessarily me Brian. But in this regard, Tesla is quite unique.
        Tesla brand = Musk. This is how tons of people are seeing it, I’m afraid.

        Therefore it will be hard if not impossible to solve this issue for Tesla.

        If we think about other car brands, we don’t think about their CEOs, owners, we don’t even know them.

        I do not want Tesla collapse, I personally don’t care that much about their cars, because tons of other players already have them and market will soon be flooded with even more various nice EVs, but I want Tesla robot to succeed. I want cheap, mass manufactured, advanced humanoid robot with decent intelligence asap.

      • In real time, you are witnessing the tanking of Tesla and Twitter because of Elon’s attacks on ‘woke’ liberals. Similarly, Trump ruined his brand. It’s Business 101, you don’t bite the hand that’s feeding you. It still remains to be seen if Elon will completely destroy his companies, but he has certainly giving it his best.

  3. Man, I love this website. A ton of libertarians/technology lovers who rooted for Elon when he leaned left and supported Democrats and who love him even more since he moved to the center supporting rational Democrats and rational Republicans…

  4. “China is currently experiencing a massive surge of Covid. Perhaps 25% or more of the population is currently infected. There are reports hospitals and cremation facilities are overwhelmed.”

    Do people still buy these myths?

    • I’m convinced that epidemics do two things:

      1. make people die from a physical virus that they catch
      2. make people preternaturally dense due to a mind virus they catch.

      yes covid is real, yes covid kills people. there is more empirical evidence for this than pretty much any other claim out there.

      • Oh that’s interesting. See I’m one of those people that didn’t get the vaccine and associates with a lot of other people that didn’t get the vaccine and we’re all fine. I do know of one obese asthmatic who succumbed.

        This definitely was a virus of the mind you are correct.

      • Nothing you are indicating is wrong, its about having a reality and risk-benefit check.
        You are over-valuing human life -and- under-valuing human happiness and economic security.
        Doing a body count or day-lives lost calc is to miss the point.
        With a widespread pandemic of this nature, fairly unprecedented in some parts of the rich world, it is reasonable to enforce a significant lock-down, government support program, and comprehenisve vaccine development and distribution program -over, say- 3-, 6-, 9+ months. That’s reasonable notice and protection for vulnerable people to reasonably put their affairs in order and then minimize their risk – move, disperse, align with medical systems, whatever.
        But the idea, that we need to stay in a lock-down and enforce minimum vaccine, mask requirements for such things as movement, using transit, services, or shop in essential businesses ‘until things get so good that the vulnerable feel good enough to mingle freely’ is a nonsense. I get it. There are people out there who think anything less than a risk-free world is highly desirable. That’s a miserable nanny-state existence few ‘useful’ people would embrace.

  5. Elon Musk has brought so much new thinking and practical technology to bear on challenges humanity is facing. The negative attack campaign launched by many on the left is disappointing and counterproductive. Best Wishes for a Strong and Prosperous New Year Mr. Musk…

  6. You say that you own shares in SpaceX . How could I own shares of SpaceX. I own shares of Tesla. Thanks for this daily mail.

    • Spacex shares via SPVs aka Special purpose vehicles. Sellers wrap up the shares in a holding company and make it available to qualified investors. space Angels and others have offerings.

  7. the above is all good and fine. where things get a bit disturbing with Musk are the conspiracy theories, closeness to the Trump family, and the free speech talk ending when it affects him, like blocking links to competing social platform.

    he may very well follow the path of mcaffee. brilliant but eventually going a bit nuts.

    • Actually nothing you said is correct and comes from the partisan cult of politics, even the cross platform ban.
      casual linking isn’t banned, but accounts dedicated to cross platform advertising are.
      Why? Because you need to pay for adverts and go through the proper channels!

      All social media does this, fyi.

      The media/people who told you this was outrageous are again, lying aholes, all social media has restrictions to outright bans on cross platform advertising.

    • It stops qualifying as a “conspiracy theory” once you can produce the evidence. Musk has been producing the evidence. And the people who LIKE having state run media have nothing left but mindlessly denying it was true.

  8. When is Starship slated to launch, they are years behind in that as well, but if they get to orbit and land it would be glorious.

    • Well, to be fair, the federal government set back the development schedule by about a year by slow-walking that environmental review. But it does seem they ran into some unanticipated problems with the booster. Evidently enough of a change in scale became a change in kind, too.

      That one explosion during spin-up testing I would label a self-own; The use of ‘sparklers’ to ignite unspent fuel in order to prevent that sort of explosion has been a routine practice for decades now, it shocked me to find that SpaceX wasn’t doing it.

    • January or February. On Sept.1st SpaceX targeted a 6 month window for a 90 minute orbital flight. They are working through a long checklist given by NASA in June.

      Starship is slated to ferry NASA’s Orion module from lunar orbit and land on the moon in 2025 and 2027. Artemis 2’s crewed flyby will be delivered by SLS in may 2024.

  9. As far as I can see, the biggest problem for all three businesses is their California exposure, particularly Twitter. The Tesla factory in Fremont, should be converted to a warehouse as soon as a empty factory can be acquired in a state not run by lunatics. We have plenty of room here in North Carolina.

    Moving starship development away from the port of Los Angeles was the best decision Musk ever made.

    • At this point the big issue isn’t California exposure, it’s USA exposure. California exposure is an acute risk, but USA exposure is a chronic risk.

      Once Musk proposed to end Twitter censorship, he became public enemy #1 so far as the left were concerned. They view any challenge to their ability to censor public discourse as an existential threat.

      Once he set down that road, it became him or them, and they have a LOT of means to attack anybody they don’t like, billionaire or not. Indeed, as a billionaire who makes his money making stuff, rather than just investing, he’s more subject to regulatory attack than most.

      It’s possible he hadn’t realize how far down the road to totalitarian rule the US had slid, until he came in the cross hairs.

      • Elon is censoring the press for doxxing even though it didn’t happen. He censors people because they hurt his feelings. Eliminating lies is not censorship. Apparently Elon doesn’t care about lies until he thinks they are about him. This commenter still seems to be living in the delusion of the past few years.

        • Hold on. Are you saying that the reporters did not provide a link to the Elon plane tracker, I.e. doxing?

          Provide proof please. Usually, the main stream media do not claim that the reporters thrown out of Twitter were not linking to the tracker. The just “forget” to mention it.

        • You were either lied to or are a liar, elons private plane’s FAA tracking numbers are private, not public information.

          tracking groups have to guess which unlisted FAA flight numbers flying from that airport are elons by using paparazzi given times of departure to guess which flight # is his.

          This is not easily obtained public info, it’s stalking, spying and doxxing. the tracking is also a guess and is often wrong which places others in danger (his son was attacked recently after leaving airport, it’s likely the attacker used the doxxers info to set up the ambush.)

          The only thing different now, is the media is now all treated as everyone else who doxxes and they’re all throwing a tantrum because they’ve been put in time out for the first time.

      • Seems to me that a bigger threat of totalitarian rule is a president who instigates an insurrection and sics his white malitias on congress and his vice president. The fact that liberals, who have been attacked by Elon as ‘Woke’, will no longer buy his cars is just the magic of the marketplace. Only a egomaniacal idiot attacks past and future customers. It is not totalitarian; it’s business 101.

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