Tesla Price Prediction: A Blow-off Top Followed by Epic Collapse

  • Hertz Announced an initial order of 100,000 Tesla’s to be filled by year-end 2022.
  • Tesla skyrocketed from a $913-billion market cap (October 22, 2021) to $1.21 trillion.
  • The bullish response added $300 billion, implying a $3-million price tag per vehicle ordered (not sold).

Tesla Daily Chart

Tesla shares skyrocketed above $1000 on the Hertz announcement. Tesla is now worth more than all the auto manufacturers combined. More on that later.

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Tesla Market Cap

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https://ycharts.com/companies/TSLA/market_cap

Gross Profit

Let’s say Tesla makes a generous $20,000 profit per vehicle ($20,000 X 100,000). That indicates a gross profit of $2 billion, far shy of the $300-billion increase. What is going on here?

Ford Motor Company

By comparison, Ford Motor Company currently sports a $72-billion market cap, so Tesla adding $300 billion in market cap is like adding four (4) Ford Motor Companies.

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https://ycharts.com/companies/F/market_cap

Major Auto Companies by Market Cap

Below is a quick rundown of all major auto manufacturers by current market cap. Tesla is worth more than all and sells less than 1% of the vehicles.

With a market cap of $1.21 trillion, TSLA is trading at a 25% premium above all auto manufacturers on the planet!

Tesla looks, acts, and smells like a bubble. The question is…when will it pop?

AG Thorson is a registered CMT and expert in technical analysis. He believes we are in the final stages of a global debt super-cycle. For regular updates, please visit here, or follow AG on Twitter at https://twitter.com/ag_thorson

International Opposition Mounts Over Proposed U.S. EV Tax Credit

A group of 25 ambassadors to Washington wrote U.S. lawmakers and the Biden administration late Friday saying “limiting eligibility for the credit to vehicles based on their U.S. domestic assembly and local content is inconsistent with U.S. commitments made under WTO multilateral agreements.”

The U.S. Congress is considering a new $12,500 tax credit that would include $4,500 for union-made U.S. electric vehicles and $500 for U.S.-made batteries. Only U.S. built vehicles would be eligible for the $12,500 credit after 2027, under a House proposal released this week.

Canada and Mexico have issued separate statements in the last week opposing the plan. The U.S. State Department declined to comment Saturday and the White House did not immediately respond to a request for comment.

The proposal is backed by President Joe Biden, the United Auto Workers (UAW) union and many congressional Democrats, but opposed by major international automakers, including Toyota Motor Corp, Volkswagen AG, Daimler AG, Honda Motor Co, Hyundai Motor Co and BMW AG.

A dozen foreign automakers wrote California’s two senators on Friday urging them to abandon the plan that they said would discriminate against the state.

UAW President Ray Curry said the provision will “create and preserve tens of thousands of UAW members’ jobs” and “would be a win for auto manufacturing workers.”

The EV tax credits would cost $15.6 billion over 10 years and disproportionately benefit Detroit’s Big Three automakers – General Motors, Ford Motor and Chrysler-parent Stellantis NV – which assemble their U.S.-made vehicles in union-represented plants.

The ambassadors that also include Poland, Sweden, Spain, Austria, Netherlands, Belgium, Cyprus, Ireland, Malta, Finland, Romania and Greece said the legislation would harm international automakers.

They said it “would violate international trade rules, disadvantage hard-working Americans employed by these automakers, and undermine the efforts of these automakers to expand the U.S. EV consumer market to achieve the (Biden) administration’s climate goals.”

The letter added it “puts U.S. trading partners at a disadvantage.”

Autoworkers at the foreign automakers in the countries that wrote are nearly all unionized but not in the United States.

“Our governments support workers’ right to organize. It is a fundamental right and should not be used in the framework of tax incentives, setting aside the opportunities for nearly half of America autoworkers,” they wrote.

(Reporting by David Shepardson; editing by Diane Craft)

Hyundai Motor to Invest $100 Million in Battery Startup Solidenergy Systems – Yonhap

“As we have been investing in various companies related to electrification, our investment in SolidEnergy is part of that,” an official at Hyundai Motor told Yonhap.

Founded in 2012, SolidEnergy Systems (SES), which was spun off from the Massachusetts Institute of Technology, develops anode-free lithium metal batteries.

SES shareholders include General Motors Co, SK Inc, Tianqi Lithium Corp among others, according to the company’s website.

In April, Hyundai said during its earnings call that the company had been developing solid-state batteries and planned to mass produce electric vehicles (EV) using solid-state batteries in 2030.

Hyundai currently sources its batteries for its EVs from SK Innovation Co Ltd and LG Chem Ltd’s wholly-owned LG Energy Solution.

In March, General Motors announced a partnership with SES to boost its battery development, allowing for increased electric vehicle driving range in a smaller package.

Hyundai did not immediately respond to a Reuters request for comment.

(Reporting by Heekyong Yang; Editing by Shounak Dasgupta)

Exclusive: Hyundai to Slash Combustion Engine Line-up, Invest in Evs – Sources

By Gilles Guillaume and Heekyong Yang

The move will result in a 50% reduction in models powered by fossil fuels, one of the people said, adding the strategy was approved by top management in March.

“It is an important business move, which first and foremost allows the release of R&D resources to focus on the rest: electric motors, batteries, fuel cells,” the person said, without giving a timeframe for the plan.

While Hyundai did not specifically address a Reuters query on its plans for combustion engine models, it said in an email on Thursday that it was accelerating adoption of eco-friendly vehicles such as hydrogen fuel cell vehicles and battery EVs.

The automaker added that it aims to gradually expand battery EV offerings in key markets such as the United States, Europe and China with a goal for full electrification by 2040.

Hyundai Motor Group, which houses Hyundai Motor Co and Kia Corp and Genesis, aims to sell about one million EVs per year by 2025 to achieve a 10% share of the global EV market.

Facing tightening CO2 emission targets in Europe and China, all major automakers are accelerating their shift to EVs.

The huge cost of developing electric motors and increasing the driving range of car batteries has already led some to say their days of investing in conventional engines are over.

“Hyundai has stopped developing new powertrains for internal combustion engine cars,” one of the people said.

PSA Group said in November, shortly before merging with Fiat Chrysler to form Stellantis, that it was no longer investing in combustion engines.

Daimler has recently revamped its combustion engines and executives say the new generation will see it through the electrification process.

Some car makers have already announced plans to go fully electric, with Sweden’s Volvo, which is owned by China’s Geely, saying it would do that by 2030.

Ford Motor Co says its line-up in Europe will be fully electric by the same date.

For Hyundai, which together with Kia is one of the world’s top ten auto groups, the move is particularly important because it has one of the broadest ranges of engine and transmission technologies in the industry.

The group will finalise its strategy to switch to all electric models within the next six months, one source said.

In April, Hyundai said it would cut the number of its gasoline models in China to 14 from 21 by 2025, while launching new electric models every year starting in 2022.

In February, the group said it was no longer in talks with Apple to develop an autonomous vehicle.

Sources familiar with the matter said the idea of the group becoming a contract manufacturer for Apple encountered strong internal opposition.

(Reporting by Gilles Guillaume in Paris and Heekyong Yang in Seoul, Writing by Nick Carey; Editing by Mark Potter and Himani Sarkar)

 

Hyundai Raises Hydrogen Game As New Trucks Roll Into Europe

By Vera Eckert and John Revill

A new class of the Xcient Hyundai truck, equipped with more efficient fuel cells with longer life-span, is due to arrive in Europe in the fourth quarter, said Mark Freymueller, CEO of Hyundai Hydrogen Mobility (HHM).

Hydrogen lags electric batteries in the green transport stakes because it is more expensive, but proponents say for long-haul transport hydrogen-powered trucks have the advantage because they have a greater range.

HHM, a joint venture between Hyundai and Swiss hydrogen company H2 Energy, has been renting out “green” hydrogen trucks to commercial clients in Switzerland since last October in the world’s most advanced pilot in the field.

HHM plans to go into other European countries next year. “Germany and the Netherlands are the most likely,” Freymueller told Reuters, adding there was also interest for pilots from Austria, Norway, France, Italy, Spain and Denmark.

Hyundai’s latest push will put more pressure on local players, which are developing their own hydrogen plans.

These include Germany’s Daimler with Sweden’s Volvo and Italy’s Iveco, a unit of Italian-American vehicle maker CNH Industrial, which is cooperating with low-emission truckmaker Nikola .

Hydrogen has come into the spotlight in Europe, where EU environment ministers want truck CO2 emissions cut by a third by 2030 from 2019 levels, threatening potential diesel bans and higher taxes but promising up to 75% of lower road tolls for greener vehicles.

Although more expensive than battery electric vehicles, fuel cell electric vehicles, driven by on-board hydrogen, will potentially benefit from Europe’s desire to build a world-leading industry around the hydrogen technology.

A study by consultancy Berylls Strategy Advisors reckons that by 2030, 25% of new truck sales in Europe will be battery powered and 10% fuel cell. But the ratio could change if green hydrogen is scaled up, it said.

POSITIVE FEEDBACK

Hyundai chose Switzerland for its pilot on the basis of benign regulation, environmentally conscious customers and reliable hydropower, which accounts for 58% of the country’s power mix. Local road tax is waived for no-carbon vehicles while fossil fuel ones pay around 800 euros ($977) for each tonne of CO2 they emit.

“Anyone wanting to see how fuel cell technology works on the road should go to Switzerland,” said Steffen Stumpp, head of the business unit commercial vehicles at Berylls.

Initial customer feedback on Hyundai’s pay-per-use pilot seems positive. Drivers at grocery chain Coop like the similar payload to diesel trucks and with only a few minutes of refuelling, a spokeswoman said.

“There was no need to change my driving style,” Nadine Sigrist, a driver for retailer Migros in the Zurich region, said “What was new for me was the huge acceleration and the quiet engine.”

As more Hyundai trucks arrive, Swiss power utility Alpiq is planning to ramp up its electrolysis capacity at Niedergoesgen where it produces green hydrogen that is then transported on trucks as gas to filling stations.

“We will go from 2 megawatts in the direction of double-digit, or 5-10 megawatts,” said Amedee Murisier, head of hydropower generation at Alpiq and board member of Hydrospider, a Swiss green hydrogen joint venture between Alpiq, gases group Linde and H2 Energy.

Hydrospider could reach breakeven as soon as 2022, Murisier said.

BATTERY VS FUEL CELLS

McKinsey expects hydrogen for fuel cell electric vehicles to achieve break-even with diesel only in 2028 at the earliest, but carmakers are pushing ahead with plans, albeit at different speeds.

Nikola and Iveco say they will produce a fuel cell electric vehicle by 2023, putting them two years ahead of Volvo and Daimler Truck, which are muscling in but will not have test trucks for three and a half years.

Separately, Daimler group subsidiary Mercedes Benz will prepare customer trials for its GenH2 Truck in 2023.

“Nikola’s timeline is significantly ahead of Daimler/Volvo,” said Stumpp. “Hyundai will be neck on neck with Nikola/Iveco if they offer the Xcient in other European markets.”

Daimler Truck chief executive Martin Daum said that a hydrogen fuelling network needed to be in place first before fuel cell trucks would find buyers, which would take years to develop, so they were timing their moves in line with the infrastructure.

Truckmaker Paccar’s DAF is also in the game, but its priority is battery electric vehicles, where Nikola is also active and plans market entry in fourth quarter 2021.

Other companies have also chosen to put fuel cell technology second.

Traton, the truck division of Volkswagen, recently said that only the battery route had been chosen by its MAN and Scania units.

“Hydrogen trucks have a decisive disadvantage. Only a quarter of the original energy goes into propulsion, three quarters are lost through conversion,” Traton CEO Matthias Gruendler and alternative drivetrains specialist Andreas Kammel wrote in a column in newspaper Handelsblatt.

“With e-trucks, the ratio is the other way around,” they said.

Traton has left the door ajar by raising its investment in truck maker Navistar that is developing fuel cells in the Americas.

SUPPLIERS

On the automotive supply front, companies are hedging their bets.

Bosch, a fuel cell proponent, has entered into a joint venture with China’s Qingling Motors to supply fuel cell systems for 2022/2023.

Elringklinger and Mahle, too, are also working on fuel cell technology.

U.S. engine maker Cummins, due to start building a fuel cell system factory in Herten, Germany, later this year, sees no conflict.

“Fuel cells will complement the BEV (battery electric vehicle) system in places where energy storage, range, weight and power requirements are unable to be met by batteries alone,” said Amy Davis, president of New Power at Cummins.

“That’s why we are investing in the electric vehicle drivetrain components, because we think those will be maturing too, and they will be key to both fuel cells and batteries.”

($1 = 0.8188 euros)

(Reporting by Vera Eckert in Frankfurt and John Revill in Zurich; Additional reporting by Nick Carey in London. Editing by Jane Merriman)

Hyundai Motor to Invest $7.4 Billion in The U.S. by 2025

The company said it will offer a suite of U.S.-made electric vehicles to consumers in the country starting next year as part of its plan that also includes tapping into hydrogen energy as a mobility technology. (https://prn.to/33E6qMm)

Hyundai is also investing in robotics, urban air mobility and autonomous driving technology, the company said.

(Reporting by Ankit Ajmera in Bengaluru; Editing by Amy Caren Daniel)