Notice How Tesla Behaves So Much Better For China Than The US?
Where are CEO Elon Musk's expletive-laced rants and mean tweets about government tyranny after China shuts down Tesla's Shanghai factory again as it fights its worst Covid wave of the pandemic?
Who can forget how Tesla (TSLA) CEO Elon Musk erupted in a foul-mouthed rage on an earnings call in April 2020 after the Fremont, California factory was ordered by health officials to suspend operations under “shelter-in-place” precautions as the deadly Covid-19 pandemic began to envelop the nation (see my report Tesla CEO Diverts Q1 Call With WTF Rant, 4/30,20):
The extension of the shelter in place or frankly I would call it ‘forcibly imprisoning people in their homes against all their constitutional rights’ — that’s my opinion — and breaking people’s freedoms in ways that are horrible and wrong and not why people came to America or built this country. What the f***? Excuse me. Outrage. It’s an outrage.”...To say that they cannot leave their house, and they will be arrested if they do, this is fascist....This is not democratic. This is not freedom. Give people back their goddamn freedom.
Elon Musk, Tesla Q120 earnings call.
Urgent measures to curb prolific transmission had been implemented across the US as hospitals became overwhelmed by rapidly spiking cases which worsened acute shortages of doctors, nurses, and vital supplies. But Musk was lying again, as he often did, when he claimed people were forcibly imprisoned or prohibited from or ever arrested for leaving the house.
And yet in China, where this actually was happening, and where the government also had suspended operations at the Tesla Shanghai factory, Elon Musk respected that government’s decisively more stringent measures without objection or public comment.
It’s a troubling pattern I have commented on many times before: Elon Musk, and Tesla, as a result, is typically dismissive, arrogant, and downright rude to US
authorities:
Tesla's sycophantic Board has been virtually useless as Musk defied the SEC, US Occupational Safety and Health Administration (OSHA), the Environmental Protection Agency (EPA), the National Transportation Safety Board (NTSB), court orders and law enforcement, and so on—with impunity.
Nikola’s Troubles And Tesla’s History Shadow Battery Day, 9/21/20
How have US regulators responded for years to Elon Musk and his petulance and volatile temper? With a “combination of pressure, flattery and threats to persuade him to comply with federal safety measures”, according to a disturbing report by Washington Post. For example, “When National Highway Traffic Safety Administration officials called Tesla executives to say they were launching an investigation, Musk screamed, protested and threatened to sue.”
Musk’s own attitude was part of the problem with efforts to enforce safety, the officials said. Some experienced personal encounters with Musk that escalated into yelling matches or otherwise proved unproductive because of the CEO’s skepticism about their findings.
NHTSA’s experiences with Tesla were unique among major automakers, the officials said. It was not rare for companies under scrutiny to fiercely push back against their findings, sometimes resulting in mandatory rather than voluntary recalls, they said. But with Tesla, issues as simple as a malfunctioning heat pump or noncompliant sound effects to alert pedestrians to a vehicles’ presence could result in stubbornness.
How auto regulators played mind games with Elon Musk, Washington Post, 3/27/22.
In other words, Elon Musk has thrived for decades by being the biggest jackass in the room.
Except, that is, in China.
Tesla’s luck hasn’t gone as far in China, mostly because it has continued to bungle its advantage by delivering poor quality cars and arrogant service which angered customers and the Chinese government, as I have observed before:
Meanwhile, China has cracked down hard on Tesla this year after serious complaints about locally made cars’ poor quality, reliability, customer service, and safety. Tesla has been summoned more than once before China regulators and multiple government agencies as a result. Tesla has been forced to execute several major recalls and provide formal public apologies for the trouble it has caused (see Tesla Q2 "Complications" on 6/29/21).
Tesla’s China Syndrome Will Spread, 1/13/22
Nowhere is Elon Musk’s obsequious deference to China versus obvious disdain for US authorities more obvious than in his behavior with the Covid-19 pandemic.
When Lives Are Literally On The Line
My report US Hospitals: In Sickness and in Hell on 3/13/20 detailed what turned out to be tragically accurate projections for the pandemic’s deadly spread as well as likely consequences in the US from the dangerously inept response—including broad and glaring disinformation—already apparent by the Trump Administration which politicized it.
A major component of the irreparable damage done early in the pandemic were influential voices like Elon Musk spreading false and dangerously inaccurate information about the virus, which impaired the country’s ability to implement widespread safety protocols effectively as cases and deaths ballooned into millions.
As I noted again in Tesla: Who Is The Enemy Now? 5/17/21:
Elon Musk is not a doctor or infectious disease specialist. But he spread dangerous misinformation and false claims about COVID-19, including debunked data and treatments, made explicative-laden rants against community safety protections, defied health official orders, endangered his workers who were threatened with firing and loss of unemployment benefits if they didn’t come to work during the pandemic when, as they feared, the factory wasn’t safe.
In the US, Elon Musk got by with reopening the Fremont factory in defiance of local lockdown orders, even after he dared authorities to arrest him.
But China has suspended operations at the Tesla Shanghai factory now three times due to strict Covid-19 emergency protocols, including two times this month. Importantly, this is the critical final month in an already struggling quarter for Tesla, that Tesla Shanghai has been ordered to suspend operations (see Tesla China Deliveries: Weaker And More Important Than You Think, 3/14/22).
We never heard a peep of complaint about this from Elon Musk, even though this has disrupted sales and operations for the critical final month of the first quarter when Tesla needed to generate a record volume of sales just to meet fourth quarter levels. And, as I have warned, that won’t be enough for Tesla to meet ambitious market expectations in its most important market (see Tesla China Deliveries: Weaker And More Important Than You Think, 3/14/22).
On the contrary, China’s Global Times reported Tesla Shanghai saying “it is strictly implementing the epidemic prevention and control measures and will arrange working schedules according to the government's policies: "We believe that Shanghai's speed and strength and today's move against the epidemic lay a foundation for better and faster development."
Keep this in mind as we in the US now watch in dismay as the latest Covid-variant surge sweeps across the planet toward us again, including Tesla’s US factories.
Odds are the Elon Musk we know so well will have plenty to say about that.
Stay tuned.
Tesla repurchased its 5.3% senior notes in the third quarter of 2021 as I projected, though I doubt we’ve seen the last of Tesla as a bond issuer:
Now stay tuned for the second step I described: a quickly shopped, likely $2-4 billion inordinately low coupon bond deal, accompanied by a bump in credit quality ratings potentially to low investment grade (see Tesla's Car Business Finally Turned A Profit. Really. Time For A Big Bond Deal). It could even be appealing... if it’s priced at T+100 bps or better.
Until then, I have Tesla: Not Rated.
Contact Us:
Disclaimer
This publication is prepared by Bond Angle LLC and is distributed solely to authorized recipients and clients of Bond Angle for their general use. In addition:
I/We have no position(s) in any of the securities referenced in this publication.
Views expressed in this publication accurately reflects my/our personal opinion(s) about the referenced securities and issuers and/or other subject matter as appropriate.
This publication does not contain and is not based on any non-public, material information.
To the best of my/our knowledge, the views expressed in this publication comply with applicable law in the country from which it is posted.
I/We have not been commissioned to write this publication or hold any specific opinion on the securities referenced therein.
Bond Angle does not do business with companies covered in its
publications, and nothing in this publication should be construed as a solicitation to buy or sell any security or product.Bond Angle accepts no liability whatsoever for any direct, indirect, consequential or other loss arising from any use of this publication and/or further communication in relation to this document.