Jun 5, 2019

How the Tesla drama could end

Illustration: Sarah Grillo/Axios

Tesla's tumultuous year has analysts and industry pundits speculating about a possible end game for the 16-year-old electric car manufacturer, ranging from a distressed sale of the company to a soaring, China-led rebound.

Why it matters: Even once-bullish investors have turned decidedly sour on the company lately amid slowing demand for cars like the Model 3 and cash flow warnings from CEO Elon Musk. The next 6 to 12 months will be critical in determining the eventual outcome.

Driving the news: Tesla has always been a roller-coaster and generated divergent views among investors. What's new is a greater wariness about the company's long-term future.

Predicting what's next at Tesla is always difficult — and Tesla declined to comment — but here are some plausible scenarios:

China to the rescue: Electric vehicle sales in China are through the roof, thanks to government mandates, which makes it a perfect market for Tesla.

Yes, but: A brewing trade war between the U.S. and China could limit Tesla's upside in China, and should Tesla default on its loans, Chinese interests could wind up with a bigger stake. In the current climate, however, the U.S. government would likely stop that from happening.

Distressed fire sale: Some analysts have weighed the possibility of a buyout by another automaker or tech company, but most say Tesla is still too expensive, despite the share collapse.

  • Some analysts mention Toyota as a potential white knight, mostly because it's seen as a laggard in electric vehicles.
  • But Toyota has other plans that don't involve Tesla. Later this week, the company plans to roll out a long-term electric vehicle strategy that leans heavily on its own Chinese partners.
  • Any buyer would likely insist Musk leave the company, but that's unlikely, too.
"Tesla is Elon. And Elon is Tesla"
— Brian Johnson, Barclay's automotive analyst, to Axios

Licensing its technology: Tesla's lithium-ion battery pack and related power electronics in the Model 3 are the envy of the industry, but it has struggled to master vehicle manufacturing.

  • Instead of trying to build its own cars, it could license its premium EV technology and software capabilities to other manufacturers.

Or ... Tesla delivers: Musk has a way of defying skeptics, and the company may well manage to muddle through — again.

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Top Trump ally sounds 2020 election alarm over coronavirus response

Photo: Jim Watson/AFP via Getty Images

There is growing concern among top conservative leaders that the Trump administration isn't addressing the long-term economic impact of the coronavirus, several sources tell Axios. One top adviser said if the recovery is bungled it could cost President Trump the election.

What we're hearing: "The next 4-8 weeks is really going to decide whether Trump gets reelected," Stephen Moore, Trump's former nominee for the Federal Reserve board, told Axios. If the administration mishandles its economic recovery efforts, he said, Trump is "in big trouble."

Coronavirus dashboard

Illustration: Aïda Amer/Axios

  1. Global: Total confirmed cases as of 10 p.m. ET: 1,600,427 — Total deaths: 95,506 — Total recoveries: 354,006Map.
  2. U.S.: Total confirmed cases as of 10 p.m. ET: 465,329 — Total deaths: 16,513 — Total recoveries: 25,410Map.
  3. Public health latest: U.S. has expelled thousands of migrants under a CDC public health orderDr. Anthony Fauci said social distancing could reduce the U.S. death toll to 60,000.
  4. Business latest: The Fed will lend up to $2.3 trillion for businesses, state and city governments — After another 6.6 million jobless claims, here's how to understand the scale of American job decimation.
  5. 2020 latest: Top conservative leaders are concerned the Trump administration isn't addressing the virus' long-term economic impact.
  6. States latest: FEMA has asked governors to decide if they want testing sites to be under state or federal control.
  7. World latest: Lockdowns have led to a decline in murders in some of the world's most violent countries — Boris Johnson is moved out of the ICU but remains in hospital with coronavirus.
  8. In Congress: Senate in stalemate over additional funding for small business relief program.
  9. 1 SNL thing: "Saturday Night Live" will return this weekend in a remotely produced episode.
  10. What should I do? Hydroxychloroquine questions answeredPets, moving and personal healthAnswers about the virus from Axios expertsWhat to know about social distancingQ&A: Minimizing your coronavirus risk.
  11. Other resources: CDC on how to avoid the virus, what to do if you get it.

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Federal court temporarily blocks coronavirus order against some abortions

Gov. Greg Abbott. Photo: Tom Fox-Pool/Getty Images

A federal judge ruled Thursday that clinics in Texas can immediately offer medication abortions — a pregnancy termination method administered by pill — and can also provide the procedure to patients nearing the state's time limits for abortions.

Driving the news: The decision comes after federal appeals court ruled 2-1 on Tuesday in favor of an executive order by Republican Gov. Greg Abbott that prohibits abortions during the coronavirus outbreak.

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