Why the Liberal Media Gives Phony Elon Musk Wet Kisses Despite the Brewing Disaster at Tesla

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By Heat Street Staff | 2:05 pm, May 5, 2017
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Is Elon Musk a fraud?

For the vast majority of the media that covers Musk’s electric car company, Tesla, if a person or product fights global warming it must be good. No need to look under the hood. And therein lies the problem.

For a guy who claims to be saving the world, Elon Musk lives a very carbon intensive lifestyle. He reportedly flies around in a big Gulfstream jet and has a giant series of connected homes in the hugely expensive Bel Air section of Los Angeles. Musk may indeed be something of a phony, but does that make Tesla a scam?

The company’s stock is now worth $47 billion. More than Ford and nearly as much as General Motors. Aside from the sleek Tesla design and incredible marketing, the overwhelming argument for the run up in the stock is simple: Elon is god and he is a genius.

Tesla Motors CEO Elon Musk speaks about the Interplanetary Transport System which aims to reach Mars with the first human crew in history, in the conference he gave during the 67th International Astronautical Congress in Guadalajara, Mexico on September 27, 2016. / AFP / HECTOR GUERRERO (Photo credit should read HECTOR GUERRERO/AFP/Getty Images)

“That’s what they said in Guyana before the Congressman landed,” said hedge fund manager Mark Spiegel in an interview with the upstart financial news service Real Vision. Spiegel is one of the hedge fund managers betting against Tesla. He is referring to Congressman Leo Ryan, who was famously shot and killed in the late 1970s trying to investigate claims of the notorious Jonestown cult. A few hours later 900 people took their lives and the world inherited the phrase “drinking the kool aid.” Too dramatic a comparison, but you get the point.

Here is the basic argument against Tesla, made by Spiegel, and other short-sellers:

1) The company currently loses a ton of money with no direct competition and many new entrants coming very soon. Next year Jaguar, Audi, and Mercedes will roll out beautiful electric cars with a 300 mile range.

2) Tesla is about to introduce an entry-level model for less than half what the current models sell for. The new Model 3 base price is $35,000, perhaps closer to $43,000 with options.The short sellers believe the car will still cost a lot more to produce than its sales price. “If you can’t make money selling a $100,000 car to rich people, how are you going to make money selling a $45,000 car to normal people?” To make the short case against Tesla stock, “you don’t really have to go any farther than this. They’re going to lose money on every Model 3 they build and sell,” said another short seller.

2) Tesla has no patents. “Traditionally dominant companies in an industry have patent protection.”

3) Elon Musk is just another incredibly untrustworthy stock promoter. Spiegel calls him an outright liar making claims such as “we don’t discount our cars for anyone. Then you go to website and there is a $1000 discount referral program and brand news cars for thousands off.”

4) No focus and a messiah complex. “He’s all over the map, from tunneling under cities to flights to Mars to solar roof tiles.”

What’s also interesting about Tesla is that they don’t test their cars. A so-called “real car maker” run a fleet of 200 cars all over the world in extreme conditions. Musk says Tesla does most testing in a computer. For the short sellers that’s an ill-advised “software attitude manufacturing a real world industrial item.”

“This is a case of Greentard (reporters) overlooking anything because it’s good for the environment,” says Spiegel using a slightly offensive new term to make his point.

And here is a nice kicker. Tesla is perhaps the most valuable, self-proclaimed, socially conscious company in the world, and the absolute key to its product are the batteries in its cars. These batteries contain the chemical element cobalt. Cobalt is produced in countries such as Congo, where child labor is rampant. According to The Washington Post, “the mining companies tied to these child labor problems supply some of the largest manufacturers of lithium-ion batteries. And some of those battery makers directly supply Tesla and other big tech giants.”

Tesla emphatically denies that its batteries contain cobalt tainted by child labor. On the other hand, the company also refuses to reveal where the cobalt in its batteries is mined.