By on August 21, 2018

tesla model 3

Save for some uplifting production news, Tesla Motors is still fighting an uphill battle. CEO Elon Musk’s earlier claim that the company would go private has gotten him into trouble with the Securities Exchange Commission — since it looks as if the automaker hasn’t procured the necessary funding to make that happen.

However it doesn’t appear as if Norway’s sovereign wealth fund will be the outlet to pick up that tab. Trond Grande, deputy CEO of the Norwegian fund, declined to say whether Tesla had approached the fund about going private. “We don’t have a view on that,” he said before adding “We want to be invested in companies that make money.”

That savage burn, reported by Bloomberg, sounds pretty definitive. If Tesla hasn’t approached Norway already, it certainly isn’t going to now.

Norway is Tesla’s third-biggest market and the country’s wealth fund is the world’s largest. It currently holds a 0.48 percent stake in the automaker worth about $253 million. Assuming Tesla goes private, the fund is likely to sell off its shares as standard protocol. But it’s legally allowed to stay invested if it wants.

“The priority is to try to preserve the value for the fund. That is the priority,” Grande said. “If that means that the fund will be invested in a company that has been delisted for a period of time, that could happen … But as a main rule, we will exit the investments as and when, or soon after, it has been taken off an exchange.”

In March the fund voted against Musk’s potential $2.6 billion payout. It also backed an initiative to have Musk removed as chairman in June, and supported one would have allowed investors to nominate their own directors.

That’s likely of little consequence to Elon at the moment, though. The SEC appears to have opened an inquiry related to Musk’s tweets about privatization and that’s likely weighing heavier on his mind right now. The company’s stock has also taken a serious hit.

[Image: Tesla]

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21 Comments on “Norway’s Wealth Fund Issues Savage Burn On Tesla...”


  • avatar
    EBFlex

    The reality is that Tesla is a joke. It doesn’t have to be, but because Elon is such an arrogant, know-it-all prick, the company is suffering.

    Every other automobile manufacturer knows how to build cars better than Tesla. But because Elon won’t ask for help, Tesla is going to die.

    • 0 avatar
      stuki

      If Tesla is a joke, it’s because mainstreaming BEVs is currently a joke. If others could do it meaningfully better than Tesla, they would. But more sanguine types know they can’t, leaving the field to almost pathological optimists like the leading members of The Merry Musk Band.

      Whether Tesla is viable or not, has precious little to do with Musk himself. On a good day, he may be able to start a car, but that’s about as far as his expertise on such matters go. The guys doing development work there, are a completely different breed. But, specifically BECAUSE what they are doing really is akin to a Mars shot, in both difficulty and funding needed; the only way they can get the funding to even have a hope of getting somewhere, is to have some almost crazy Polyanna drum up enough hype, to have otherwise saner people willingly throwing money on the burner.

      • 0 avatar
        tnk479

        Respectfully, I disagree. Investors would have been interested in a steady growth BEV startup that made modest, measured progress without all the absurd “orders of magnitude” and “stepped exponential” Silicon Valley hype.

        • 0 avatar
          stuki

          Modest, measured growth towards Mars takes way too long to be on anyone’s investment horizon. We’ll be an outpost of the Calipghate before we get either there, or to a viable, large business case future for BEVs.

          The reason only crazies (and dupes) are starting and funding BEV companies (Tesla has nothing on Faraday and the like…..), is because, as an ongoing business sans hype and hocus-pocus, BEVs are crazy. With risk/benefit that can make Mars tourism startups look positively down to earth.

  • avatar
    stingray65

    When EV king Norway doesn’t like Tesla financials you know things are very bad, because they buy far more of Teslas than any other country on a per capita basis. Teslas are so popular that I’ve seen former Honda and Ford dealerships taken over by Tesla (and Honda and Ford move to smaller locations), but there are going to be a lot of unhappy Norwegians when Tesla goes belly up.

    • 0 avatar
      sportyaccordy

      Norway alone probably won’t let Tesla go out of business. Despite the dumping it gets online there is value in the company. A more conventional outfit could buy it and get things in order. I just pray it’s not FCA.

      • 0 avatar
        stingray65

        Sure there is value in the company – just not $70B in value that it would take to buy it – much cheaper to wait for bankruptcy and buy the scraps that are valuable at a reasonable price.

    • 0 avatar
      JimZ

      of course they’re popular when the Norwegian government waives all road and registration taxes on them, and taxes the everloving s**t out of non-electric cars.

      • 0 avatar
        stingray65

        The best estimates I have seen put the value of the Norwegian Tesla subsidy at about $100,000 for a model S or X. For some reason it seems that if you give people a $100,000 discount they are much more likely to buy the car, which is particularly true in Norway where S and X sized cars are otherwise not popular because they are too big and don’t fit in any parking places or many garages.

        • 0 avatar
          stuki

          I guess the wealth fund figures there’s got to be some limit to the amount of oil money a small country can be expected to pitch in for Musk’s Ambien habit. No matter how much enviroguilt, from living large off of fossil fuel pumping, they are trying to alleviate…

    • 0 avatar
      krhodes1

      The Norwegians buy tons of Teslas because the incentives there make a Model S comparable in total costs to a basic VW Golf. If I could get a Model S for what my GTI costs me annually, I would have one in my garage too.

  • avatar
    ernest

    Tesla tax breaks in Norway amount to about $8850 PER YEAR. No wonder it’s one of the largest selling car in Norway.

    https://www.reuters.com/article/us-indonesia-biodiesel/indonesia-revises-palm-crop-fund-rules-to-back-biodiesel-drive-idUSKCN1L60V1

  • avatar
    SCE to AUX

    “It currently holds a 0.48 percent stake in the automaker”

    And the fact that such a small shareholder isn’t going to float Tesla $70 billion is actually surprising and newsworthy?

    Is it also surprising and newsworthy that the fund likes to invest in profitable businesses? Newsflash – that’s how investment works, unless you like to take a bit more risk. It’s also the reason mfrs don’t want to build “Tesla-killer” cars, because it’s really hard to make money with them. If Tesla proves to be profitable someday, it’ll be at the cost of billions spent to get there – something no other mfrs want to do.

    Which other small stakeholders are also not writing that check?

    • 0 avatar
      krhodes1

      I think the point is that while they are a small stakeholder, they actually do have the wherewithal to write that check if they thought it was a good idea. Not many Tesla shareholders, or entities in general have that ability.

      • 0 avatar
        Zykotec

        Norway could actually, if there was any good reason for it or if they were for sale, buy the all the 10 largest automakers in the world at their current market value, and still have some money left.

  • avatar
    FWD Donuts

    I would like Tesla to make it. The only thing I don’t care about the company is the ridiculous amount of hype, including the hype surrounding Musk, and cult-like fanboys who parse information to build silly “it’s the best thing since sliced bread” arguments in support of it.

    That said, the company has major issues. Of the 5000 vehicles Tesla produced to make its production goal — 4300 had to be reworked. That’s an 86% failure rate. Good auto plants pencil out at 20% with others around 35%.

    Even then, customers are receiving cars with dirt blown into the paint and other flaws that are unheard out with any other automotive brand.

    Not sure why Tesla’s board can get out in front of this situation — but it needs to. Now.

    • 0 avatar
      krhodes1

      They had a wonderful idea, but the execution is hilariously terrible.

      • 0 avatar
        FWD Donuts

        You don’t know the half of it. I’m in Northern California and Silicon Valley all the time.

        I’ve bumped into several Tesla plant workers — and they’re all really concerned about its operations. They’re ex-NUMMI vets — and talk about managers saying everyone needs to work harder and faster otherwise the company will go bankrupt — while management talks about new sports cars and trucks — as ongoing production is anything but smooth.

        I’ve seen Model 3’s in the flesh — with tail lights filled with water coming out of a car wash and panel gaps that are downright scary in their inconsistency. And every Tesla I’ve been in with 50,000 miles or so on the odometer have Soviet-era squeaks and rattles.

        Finally, and this is really weird, is one day you’ll see a vacant office space lot, then the next day it’s full of partially wrapped Ss, Xs, and 3s — then a couple of months later they’re all gone. On top of that, there are car carriers loaded with their product driving around all the time. You expect to see some as the plant is cranking out all kinds of product to be sure — but these aren’t all fresh out of the factory, carefully wrapped cars. Most of them are covered in dust as if they’ve been sitting outside in a dirty field for weeks somewhere.

        The bottom line something just seems off about that entire operation right now. The quality issues. The constant hauling of cars around. Even the hiring of multiple security guards to keep an eye on their inventory. From an efficiency standpoint it just looks terrible.

        Again, I admit the hype around Tesla and Musk rustles my jimmies big time — as do some of their arrogant customers and delusional fanboys. However, I want this American company to become a global success story — but somebody needs to get in there and right the ship fast. Get Foxconn involved. Something before it’s too late.

  • avatar
    thelaine

    Deathwatch.

  • avatar
    kosmo

    Gotta love Norway with its huge subsidies for Tesla ownership.

    Funded by Norway’s Wealth Fund.

    Which is funded by North Sea oil revenues………

  • avatar
    Felix Hoenikker

    Yes, Elon is a nut case, but the product is real.
    I had lunch with an ex coworker two weeks ago. As we were leaving he showed me his new car – a white Tesla Model 3. Naturally we went for a spin up and down US 1 near Woodbridge, NJ. The performance of the 3 blew my socks off. I am a big fan of quiet power, and this thing is almost silent, and really fast especially from a stop. I never expected this kind of acceleration from a BEV passenger car.
    Now long term durability is another issue. Too early to tell, but out of the box the 3 is quite impressive to drive. At $50K it’s a little pricey for my tastes for a commuter car, but I could see $35K when production catches up with demand or battery prices keep dropping.

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