Who’s Afraid Of Direct Sales?

This is how you don't change a business... (courtesy: Opensecrets.org)

This is how you don’t change a business… (courtesy: Opensecrets.org)

In my most recent post at Bloomberg View, I draw a connection between Michigan’s new law blocking Tesla’s direct-sales model and the interests of the automakers based there. General Motors has taken the lead among Michigan’s automakers in opposing Tesla’s state-by-state battle for direct sales, publicly pushing Governors to protect the franchise system in Ohio and now in Michigan. In both cases, GM positioned itself as defender of “an even playing field” in the car business rather than arguing against direct sales or defending the franchise model. As I point out in the column, this is nothing short of absurd: GM’s extraordinary bailout make it the auto industry’s least-qualified advocate for fair play. But it’s also strangely telling: GM may not want Tesla to sell directly to consumers in states where it has a franchise dealer network, but it is hardly settled on the issue of direct sales themselves.

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Manager Magazin: Tesla to be disrupted by Mercedes, Porsche, and Audi

Batteries included - Picture courtesy motortrend.com

The Tesla stock has been – until September – a Wall Street darling, never mind that S&P had taken a decidedly contrarian view by slapping Tesla’s debt with a junk rating. When S&P did that, the rating agency figured “that the company is less likely to successfully adapt to competitive and technological displacement risks over the medium to long term.”

Translation: Should EVs ever become the huge business Tesla stockholders hope it will be one day, it will take established carmakers all but five minutes to put upstart Tesla in its place, and out of business. The jury is still out on the huge business, but established automakers are already working on the putting out of business part. [Continue Reading]

Daimler isn’t the only high-profile investor that has lightened-up on TSLA stock

Good God, stop the selling

Good God, stop the selling

Yesterday’s news that Daimler sold its 4 percent stake in Tesla weighed on the already beaten down stock of the electric carmaker. Daimler on the other hand is all smiles, having turned a $50 million initial investment into a cash flow of $780 million – not counting what it had received after selling a 40 percent chunk of its initial holdings to the Dubai government in 2009. Wall Street sources surmise that the sell was not a strategic decision, but the result of hedging. With the Tesla stock having retreated some 50 points from its September peak, options may have been exercised. According to a Daimler statement, the Stuttgart carmaker hasn’t simply cashed-in on its shares, but rather “has terminated the share-price hedge it initiated in 2013 and has sold its stake in Tesla of approximately 4%.”

Daimler isn’t the only high-profile investor that has lightened-up on TSLA stock.

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Wednesday morning car news roundup, October 22, 2014

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Tuesday morning car news roundup, October 21, 2014

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Takata stock, amid growing airbag recall, takes record 23% plunge - Automotive News: Takata plunged by a record in Tokyo trading after Toyota advised U.S. owners of its cars to seat passengers in the back amid reports of metal shrapnel being … [Continue reading]

Monday morning car news roundup, October 20, 2014

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UK: JLR eyes US southern states 'transplant' - paper - Just-auto: Tata Motors' Jaguar Land Rover (JLR) reportedly is talking to local governments in several southern states about setting up a factory in the US which would be a first for a British … [Continue reading]

No, GM did not slide to third place. Yes, VW may be number one – next year

Silverado fights Tourareg. Picture courtesy GMauthority.com

End of last week, Ebola and ISIS played second fiddle (for a few seconds, at least) to the shocking news that Volkswagen has dethroned GM as the world’s second largest automaker. Trouble is, there was no dethroning. Volkswagen has been in the number … [Continue reading]

Friday morning car news roundup, October 17, 2014

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  US: Honda eyes air bag in 2013 parking lot death - Just-auto: Honda is trying to establish if a man who crashed his Acura sedan in a California parking lot in 2013 died due to a faulty air bag. SWEDEN: Extra Volvo shift already … [Continue reading]