Tesla could be particularly burned by the trade war between the United States and China

The news has affected some companies more than others, and perhaps Tesla more than most companies. The electric car manufacturer sees China and its growing electric vehicle market as one of its key medium-term strategic drivers for driving sales. Much of this strategy consists of a new Gigafactory factory in Shanghai, but the timeline of this building that produces cars is at best blurred. China is essential for all automakers, but Tesla particularly needs this momentum.

Investors are worried about any company closely related to China at this stage. They expressed their concerns about Tesla on the market yesterday. Here is Bloomberg:

Tesla plunged 6.3% to $ 224.50, its lowest level since January 2017, after China defied US President Donald Trump in announcing plans to raise tariffs on US imports worth $ 60 billion starting June 1st.

This is not so much that the current tariffs affect Tesla more than anyone – at present, motor vehicles do not appear on the list of goods that must be taxed with higher rates – but given rigidity on both sides, no one expects the commercial war de-escalation, and many fear that cars are next.

Tesla is far from being the only builder to deal with the tariff issue. Bloomberg notes that BMW and Daimler are the largest importers of US-built vehicles in China and their inventories fell by 1.2% and 3.3%, respectively. But investors are probably less worried about the impact of tariffs on their much larger companies that do not have falling quarterly delivery rates.

In any case, a generation genius like Elon Musk can overcome a mere trade war in his quest for a global domina – I mean, make a quality electric car at an affordable price.

2nd gear: electric cars do not only grow on trees

It is true that a large part of the automotive industry employs, to varying degrees, to increase the production of electric vehicles. It is also true that very few countries are currently able to mass-produce EVs. The United States does not belong to it. But a new Reuters report explains in detail how Congress is trying to change that.

One of the problems is that no one really knows the extent of the country's metal reserves that we have to exploit:

But we can only guess at the amount of cobalt and other minerals used in the manufacture of EVs in the United States, but the country did not do much through a national survey.

Current estimates from the US Geological Survey are based on annual company reports, historical data from the US Bureau of Mines and other sources, according to USGS spokesman Alex Demas.

To know the mineral composition of a particular region, it is necessary to send field personnel to take rock samples, a quick and expensive task. Murkowski's legislation would require a national reserve analysis for all minerals used to make EVs.

That's why Lisa Murkowski, Republican Senator from Alaska, is working on legislation to address this problem:

US Senator Lisa Murkowski, Chair of the Senate Committee on Energy and Natural Resources, presented this month the US Mineral Safety Act, which aims to streamline regulations and allow the development of lithium mines, graphite and other EV minerals.

The bipartisan bill, which is intended, in part, to codify a decree by President Donald Trump on the development of mineral resources in the United States by the end of 2017, is being convened for the first time before Mr. Murkowski's committee. .

"We have here the opportunity to get out of this vulnerable position in terms of dependence on others for our minerals, our EV supply chain," said Murkowski, a Republican of l & # 39; Alaska.

Of course, this whole issue is closely related to all of China's trade remedies, as they currently dominate the market for electric vehicle production. Again from Reuters:

"China has a huge headwind," said Gavin Montgomery, battery and mining analyst at Wood Mackenzie Consulting. "They've just been to that much longer than the rest of the world."

If you are tired of this constant return to China, it is a pity, because there will be many more where it comes from.

3rd gear: Uber Stock continues to fall, fall, fall (No, it's not like Amazon)

Investors continue to be so impressed by Uber that its stock has fallen further on its second trading day. Almost every professional publication dealt with this issue in one way or another, but here is the Wall Street Journal report:

Uber shares slipped $ 4.47, or 11%, to $ 37.10 on its second day as a public company, placing it 18% below the GIC's initial public offering price American, which was $ 45. This is after Uber's valuation expectations have been reoriented in recent weeks and the company has conservatively evaluated its IPO, in his opinion.

The opening was already painful enough for Dara Khosrowshahi, CEO of Uber, to send an e-mail to employees to announce the difficult beginnings, including:

Remember that post-IPO transactions on Facebook and Amazon have been incredibly difficult for these companies. And look how they've delivered since.

It's a little ironic that Uber, the company that has generated a whole life cycle of "Uber but for" jokes, now resorts to the comparison himself to other tech darlings.

Of course, the comparison of Khosrowshahi is as inappropriate as that of all Uber But Fors. There is a light difference between Uber – a company that has never made money and no one really understands what it could have done without a magical savior like autonomous vehicles – with Facebook, which was earning hundreds of millions of dollars a quarter when of its IPO in 2012.

And comparing Uber to Amazon, a common trope that Khosrowshahi has not hesitated to deploy for obvious and flattering reasons, is also misleading with regard to the performance of IPOs. Amazon IPO'd in 1997 while he only sold books. Even though Amazon was not profitable at the time, it was because the sales were so strong that they wanted to make the decision to grow accordingly, which does not resemble Uber's decision to penetrate new markets while they are not profitable because it must encourage the driver and the driver to get them into the car.

As TechCrunch noted when returning to Amazon's IPO:

The Amazon was not so unprofitable at a young age and this particular growth rate is impressive. Although the company was evolving in a secular way in digital commerce, the company, at the time of its IPO, was in great shape.

No one, not a single analyst, said Uber's business was strong, as unlike Amazon, Uber did not increase sales by 2,982% in the year prior to its IPO. .

In addition, here is a good excerpt from a Wall Street Journal report:

4th gear: GM says the battle horse is similar to Tesla, so Lordstown will be fine guys

You remember last week, when Trump announced that GM was selling its plant in Lordstown to a little-known company, an EV truck business called Workhorse, which had very little money and was just to "preliminary" discussions about the purchase of the plant?

And this workhorse, as my colleague Jason Torchinsky summarized it, "is a company that started manufacturing van chassis, which was bought by a company that converted ICE vehicles into electric vehicles and is currently developing a pickup truck for electric vehicle not too impressive and, oddly, an electric octocopter?

In a follow-up report issued by the Detroit News on skepticism surrounding the deal for several of the above reasons, GM defended the potential deal with a very specious logic, comparing Workhorse to another maker of electric vehicles whose you may have heard: Tesla.

"There was also a small start-up called Tesla, which was building a hundred electric vehicles in a huge plant in Fremont, California," said GM spokesman Jim Cain, referring to Tesla Inc. Elon Musk operating in a factory formerly operated jointly. by GM and Toyota Motor Corp. "Workhorse has defined a similar niche in commercial (electric) vehicles; he is one of the finalists for the construction of new trucks for the US Postal Service – there is stuff there. "

Aside from the really weird comparison here, launching the potential US mail service contract is misleading. Tom Colton, representing Workhorse in the potential deal, told me last week that they were do not is looking to build this USPS vehicle in Lordstown, if they win the contract. He said the two are completely separate companies.

This makes sense since the Lordstown plant should be acquired by a new entity because Workhorse does not have the money, but the contract with USPS would be Workhorse.

So, yes, put the brakes a bit on the New Tesla bit.

5th gear: Nissan prepares for the worst year of its decade

On this point, Nissan CEO Hiroto Saikawa gets straight to the point:

"We are at the lowest," Saikawa said at a press conference Tuesday at the company's headquarters in Yokohama. "We would like to return to our initial level of performance in two to three years," he added.

The company expects a 28% decline in its annual operating profit. The main culprit is here in the United States, where sales fell 9.3% after the removal of costly incentives introduced by former megabalist Carlos Ghosn to juice sales, particularly at the Rogue.

Speaking of our friend Ghosn, the Wall Street Journal announced that Tokyo prosecutors had amended the charges against him to include $ 20 million in cash from a "Saudi friend," Khaled Al Juffali. Hey, that's why friends are, right?

Reverse: Chrysler Negotiates With Private Equity Company