Tesla ‘stands out’ as top pick in sector; Rivian closest to being the ‘next Tesla’: Barclays

RV_ · February 15, 2023

I bought more Tesla between $100 and $150 with the proceeds of my loser MJ and Rivian stocks. It got down to ~ $100 in the last month or so, and is now at $215.18 as of 3PM MT Wed., 15 Feb 2023. . I could take my profits but aside from my feeling of security with Tesla stock as an investment, I agree with this new Barclay's news. I also agreed with them about Rivian being the most likely next Tesla a year ago. I just sold their stock and expect them to go BK at some point. Too many mistakes I ordered the car an bought a lot of stock and lost 75% of it but not enough to hurt. “We are hard pressed to see any company in the auto landscape as the ‘next Tesla,’ as Tesla has been quite unique in its accomplishments.” More below.

Excerpt:

"Tesla (TSLA) is adding to the big gains it notched earlier this week, following a big call from Barclays.

On the heels of the White House announcing a deal with Tesla to open up thousands of its superchargers for non-Tesla owners, and likely open up new revenue streams, Barclays analyst Dan Levy is out with a short note launching coverage of the autos sector, with the aforementioned Tesla in the driver’s seat."

“We are hard pressed to see any company in the auto landscape as the ‘next Tesla,’ as Tesla has been quite unique in its accomplishments,” Levy said. “That said, if we were to identify any of the start-up EV automakers as the closest to Tesla (vis-à-vis defining characteristics), we believe it would be Rivian. Rivian thus far has established key moats in product and technology.”

Much more here:

https://finance.yahoo.com/news/tesla-stands-out-as-top-pick-in-sector-rivian-closest-to-being-the-next-tesla-barclays-180232207.html

Randyretired · February 16, 2023

I am not a stock picker and prefer a lot of diversity. I have read some articles about BYD that make that seem interesting. Have you considered that?

RV_ · February 16, 2023

Hi Randy,

I only own one individual stock and the rest is diversified, usually a mix of real property, Index funds and my wife's now Schwab managed 401k that is all over the place. We are watching for a recession and if index funds drop enough to use up some more cash we may add more like we did Tesla on the recent dip. I am the least experienced stock picker for others and I have said that for years here. Sharing the info is good IMO like your mention of BYD. They have buses in the US but not cars yet. They began as a battery company for cell phones so they may make some breakthroughs all can use but not so far in EVs. They are known for copying car and tech designs, stealing IP. They have been found guilty and have done theft and copying designs before and after their EVs. Id Buffet's BH cuts them like they just did their TSMC holdings (https://finance.yahoo.com/news/warren-buffetts-berkshire-slashes-tsmc-holding-continues-to-build-apple-stake-162244763.html ) BYD could be in as much trouble as Rivian when they lost major Amazon support among others.

I tried to find the thread here in this forum "Are you still in?" which started in 2011 one year after Tesla went public and was here as of as couple of months ago but apparently has been hidden. There was nothing in it against any rules since it was here for 12 years of our comments. It showed the PTSD SKP investors had from the great recession on through the recovery to current as of a few months ago. And all from our perspective here. It is against the rules to say why I think it was hidden so I'll remain silent for now. I have asked Kirk to look into it but he hasn't gotten back yet. I sure would like to see it back as it has all of us participants here since 2011 in it. And we all got along in it. I'll forward to the Staff admins its disappearance as it may just be an error.

I am posting here as we transition from Fossil fuels worldwide. When I see a new tech advance or a Tesla move forward in capabilities I do post. With that information PHEV and EV related investment

But I am the last person to advise others what to buy. However I do post info I see as significant affecting the battery tech/engine tech/cost/market share of EVs.

For example Ford just stopped production of the Lightning trucks due to battery issues as yet unnamed by Ford, and no get well date yet either as of yesterday. That is important for this market segment and Ford investors in particular to watch. That is not advising to sell or buy, just info for folks already there.

No on BYD and I have two reasons. One: I do not like wholly Chinese owned companies of any kind, regardless of factories here, because of the totalitarian government over there that can take over anything they want as pressure politically. Like Putin stopped the supply of RD-180 rocket engines to the US which Boeing/Lockheed depended on and still does for their Atlas 4 ISS runs. Space X designed and built/build their own engines, and pioneered reusable rocket stages first. Putin stopped allowing them to be exported to the US when Obama sanctioned them over the Ukraine. Tesla has a car and Supercharger factory in China as the world's largest auto market, in addition to Berlin, Austin TX, and Fremont California, counting battery fabs and solar fabs in the US even more. If China took over the Shanghai Tesla complex we still have non-communist factories all over the world and more planned.

Two: BYD (Build Your Dreams) needs to lead as they did in batteries but not so much in cars or reporting:

Excerpt:

"Lawsuits and controversies

In December 2018, the Albuquerque council sued BYD over the alleged poor welding, poor battery range, malfunctioning doors and brakes of its buses.^[67] BYD denied the allegations, and the lawsuit was settled without money changing hands.^[68]

In 2020, the Australian Strategic Policy Institute accused at least 82 major brands, including BYD, of being connected to forced Uyghur labor in Xinjiang.^[69]

On April 27, 2020, BYD hired attorney Charles Harder and filed a federal civil complaint in U.S. District Court, Southern District of New York,^[70] against Vice Media alleging defamation for a story about BYD using forced Uyghur labor in its supply chain which was published on April 11, 2020.^[53] BYD's case was dismissed with prejudice (legal term) in March 2021.^[71]

In September 2021, BYD appointed Lu Kewen, an online influencer known for spreading antisemitic tropes, as a spokesperson for the company.^[72]

On November 5, 2021, a 36-year-old employee was found dead in a rented home. According to his relatives, his sudden death was due to high-intensity overtime work.^[73]

In 2022, the United States Department of Commerce found that BYD had circumvented tariffs on solar panels by routing its operations through Southeast Asian countries.^[74]

Imitation of competing models

BYD Auto had been accused of taking designs from other manufacturers. Articles claimed BYD F1 "is a clear copy of the Toyota Aygo,"^[75] that the BYD S6 "closely apes the Lexus RX",^[76] the BYD F3 "is a copycat of the Toyota Corolla^[77] the BYD S8 has a similar appearance to a Mercedes-Benz SL-Class,^[78] and the BYD F8 "features an almost identical Mercedes-Benz CLK front-end and Renault Megane CC rear".^[79] Although the U.S. government had been advised by its consul-general in Guangzhou, China that BYD uses an approach of "copying and then modifying car designs." Chinese courts ruled BYD has not infringed on patents.^[80]

Nanjing electric vehicle fraud

In 2016, a peculiar suicide note started an investigation into government subsidy fraud.^[81] The auto dealer had been facing bankruptcy and blamed BYD for his situation. According to the note, BYD had received government subsidies for 600 electric buses it had never produced. A single electric bus went for about 2 million yuan (US$305,000). Of 600 buses, the city had received only a few dozen. That year, the Finance Ministry fined five manufacturers (not including BYD) which had fraudulently obtained more than 1 billion yuan (US$153 million) worth of subsidies.^[82] The companies were required to return the subsidies in full and also pay penalties worth an additional 50% of subsidies received.

According to the relatives of the man, BYD forced dealerships to increase EV inventories even though sales were bad.^[81] In an attempt to clear inventories, dealerships tried selling to people from outside of Nanjing, while simultaneously trying to help them get temporary Nanjing residence documents.^{[citation needed]} But Nanjing would not grant subsidies to outsiders and the dealerships wound up paying the subsidies on 80% of vehicles sold.^{[citation needed]}

Foxconn disputes

In addition to patent litigation^[66]Foxconn sued BYD in Hong Kong and Illinois in 2007, alleging BYD poached 50 Foxconn employees and was complicit in the stealing of trade secrets to set up a competing cell phone manufacturing operation.^[83] Court proceedings were brought before BYD Electronic was spun off by BYD later in 2007, delaying the public listing^[84] on the Hong Kong stock exchange by half a year.^[85]

Foxconn^[when?] also opened proceedings in the district where BYD is headquartered, at the Shenzhen Intermediate People’s Court,^{[citation needed]} which referred the case to the Supreme People’s Court, which in turn commissioned an appraisal by the Beijing JZSC Intellectual Property Forensic Center into files in BYD's possession which were alleged to belong to Foxconn.^{[citation needed]} Eventually^[when?] the Shenzhen court made the final judgment: BYD's files contained non-public information originating from Foxconn, which could bring economic benefits to the holders, thereby, BYD was found guilty of infringing Foxconn’s trade secrets.^[84]^{[additional citation(s) needed]}

Afterwards, Foxconn withdrew the civil proceedings against BYD in mainland China, and sought criminal prosecution instead.^{[citation needed]} On March 20, 2008, the former executive director and Vice President of BYD was arrested.^{[citation needed]} Then on March 24 and 31 2008 two former employees of Foxconn were arrested and sentenced to 1 year and 4 months, and 4 years in prison respectively.^[84]^{[additional citation(s) needed]}

BYD issued a counterclaim to Foxconn in Hong Kong court, alleging defamation and bribery of Chinese officials as well as intimidation on Foxconn's part.^"

Source:

https://en.wikipedia.org/wiki/BYD_Company

As well Buffet's Charlie Munger's subdsidiary of Berkshire Hathaway bought a lot of shares of BYD back in 2008! "In September 2008, MidAmerican Energy Holdings, a subsidiary of Warren Buffett's Berkshire Hathaway Inc, invested about US$230 million for a 10% (or 9.89%^[65]) share of BYD at HK$8/share." What happens if they sell their BYD stock?.

Randyretired · February 16, 2023

https://www.cnbc.com/2023/02/15/charlie-munger-says-byd-is-far-ahead-of-tesla-in-china.html

The attached article includes Charlie Munger's take on BYD and claims it is light years ahead of and out selling Tesla in China. Just a thought about Tesla competition. As I said I don't pick stocks and being Chinese I wouldn't touch BYD stock but I certainly respect Charlie Munger's stock selections.

RV_ · February 17, 2023

4 hours ago, Randyretired said:

https://www.cnbc.com/2023/02/15/charlie-munger-says-byd-is-far-ahead-of-tesla-in-china.html

The attached article includes Charlie Munger's take on BYD and claims it is light years ahead of and out selling Tesla in China. Just a thought about Tesla competition. As I said I don't pick stocks and being Chinese I wouldn't touch BYD stock but I certainly respect Charlie Munger's stock selections.

Red and bold added by me/RV for clarity

BYD is certainly to be watched. I read your link carefully. Munger only referred to sales in China not Tech - just sales in China. BYD started as a cellphone and other rechargeable battery manufacturer if I read it correctly.

https://www.business2community.com/stock-news/charlie-munger-calls-byd-his-best-investment-takes-a-swipe-at-tesla-02632988#:~:text=Berkshire Hathaway vice chairman Charlie Munger has said,became the biggest NEV (new energy vehicle) seller.

Where did he say it was light years ahead of Tesla in anything but sales in China?

They are right in saying they are ahead of all manufacturers in total sales of Hybrid, PHEV, and BEV (or EV ) like Tesla makes, when you combine their sales. That is like GM claiming they build electric vehicles and outsell Tesla 10-1 in the US (When they include fossil fueled ICE vehicles they sold.)

More accurate would be to extract BYD's EV sales then track if they are the EV leader.

But I agree that Munger is one I will listen to except about Tesla and BYD. BYD will be fun to watch.

Thanks for the interesting discussion.