From Collapsing Bridges to Tesla's Troubles: Uncovering the Future of Mobility
In this episode, I explore two pivotal stories: the collapse of the Francis Scott Key Bridge and the ongoing challenges facing Tesla and the electric vehicle industry. These incidents raise serious questions about the resilience of our infrastructure and the uncertain path ahead for electric vehicles. Join me as I discuss how these events could impact transportation, investment, and public safety, and what they reveal about larger trends in the industry and societal changes.
Navigating Charted Waters
Footage of the Francis Scott Key Bridge collapsing went viral last week. The bridge spanned the Patapsco River and outer Baltimore Harbor. Six maintenance crewmen working on the bridge at the time lost their lives and at least one vehicle fell from the bridge into the river. Although it is too early to confirm whether further lives have been lost, and while loss of life is unquestionably tragic, the incident has generated disproportionate impacts compared to reactions to genocide in Gaza, where 33,000 people have been killed and more die every day.
Infrastructure Risks and Broader Consequences
Cognitive biases, such as availability heuristic or representativeness, inherent in the way that many of us relate events to our own experiences, may enable anyone who regularly drives over river crossings, whether in Baltimore or Bangkok, to better understand the terror of driving across a collapsing bridge than the terror of having family exterminated and neighbourhoods flattened by the IDF. There is also perhaps deeper resonance to the collapse of Key Bridge. Architecture, especially on a grand scale, embeds deeper significance and meaning to the fate of the physical structures, whether towering places of worship impregnable halls of finance or triumphal monuments of war (think of the jubilant scenes when erstwhile protectors toppled both the regime and the statues of American-appointee Saddam Hussein).
Historical Context and Future Implications
Key bridge, spanning over 1.6 miles and rising almost 200 feet above the water was an imposing sight on the Baltimore skyline. Resonance was intentionally added by naming the bridge after Francis Scott Key, who wrote the poem The Defence of Fort M’Henry after a night spent on a British warship during the 1814 bombardment of the fort (just down the river from where the bridge would later be built). In 1931 the poem, set to music and by then known as ‘The Star-Spangled Banner’ was adopted as America’s national anthem.[1] More tangibly, Key Bridge, opened in 1977, symbolises the state of US infrastructure. While reported to have been in an acceptable condition and state of maintenance, it was designed and built when global shipping was very different. What, asks Rick Hutzell of The Baltimore Banner, if a similar container ship hits the twin spans of the much larger (4 miles long) Chesapeake Bay Bridge? Regarded as one of America’s scariest bridges, “Eiffel Tower-size ships” pass the bridge at 20 knots (as opposed to the 8 knots at which the Dali was travelling when it collided so catastrophically with the Key Bridge).
Hutzell is aware of broader ramifications, explaining ‘The butterfly effect’ to his readers –“a popular expression of chaos mathematics distilled by meteorologist Edward Lorenz. He came up with the elegant illustration of a butterfly flapping its wings in Brazil, setting off a chain of consequences that results in a tornado in Texas.
“Right now, that’s what we’re all searching for. Journalists, analysts and commissioners from Queen Anne’s County are looking for hidden connections in a complex system — butterflies fluttering away from the wreckage of the Key Bridge. For every explanation and every worry, though, there is an important caveat — maybe, maybe not……There’s a kaleidoscope of butterflies hovering over the global supply chain right now.
Although Baltimore had just 4% of total East Coast imports, it was the leading U.S. point of entry for cars and work trucks, plywood, aluminum [sic] and a whole range of other products…One of its biggest exports was coal. Not just any coal, but high-energy coking coal from North and Central Appalachian coal fields headed for blast furnaces overseas — and India’s massive brick industry was a major destination. Last year, 19 million tons were shipped out of the coal piers at both the CSX Curtis Bay and Consol Marine terminals, most of it from mines in Western Pennsylvania…Indian kilns can switch to other fuels but at a cost. Guess who buys those bricks? Us. The United States is the fourth-largest importer of Indian bricks, according to the Observatory of Economic Complexity.
Builders will be able to get bricks elsewhere, again at a cost. But coalfields in Pennsylvania and West Virginia will have to navigate pricing and rail schedules when considering new ports such as Hampton Roads in Virginia.
Coal is dying because of its effect on climate change, and if this is a death blow for some producers, you and I might say good news. But people who work there sure won’t, nor the communities buoyed by the money coal pumps into them.
Ever Forward — at 1,095 feet, slightly longer than the Dali — grounded in the Chesapeake in 2022…about a year after its sister ship, Ever Given, did the same in the Suez Canal. Cell phone use was blamed for the Ever Forward accident. It’s not clear if anyone considered this a warning — that maybe ships twice the size they were when the Key and Bay bridges were built present a threat Maryland was unprepared to address.
It’s impossible to know where the Key Bridge butterflies will land. But they don’t all have to be bad.” – Rick Hutzell, The Baltimore Banner
[1] The original banner remains on display at The Smithsonian in Washington, DC.
Together in electric nightmares….
Gerry Brady of Boom Finance and Economics, a good friend of MBMG, has written extensively about EVs (electric vehicles) and alternative energy of late. Not only would we commend much of what Gerry has to say, but we’re also impressed by the acerbic economy of his prose. In March, Tesla and its founder came under Gerry’s gaze. The full article can be found at
“On 11th February, BOOM wrote -- “Tesla shares (TSLA) finished the week up by 3 % which sounds promising. However, they did so on progressively falling daily volumes. This is an unconvincing bounce. BOOM is waiting and watching closely for further weakness here as this is the “moment of truth” for Tesla.” Since then, Tesla shares have slowly traded to slightly higher prices. However, progress has continued to be unconvincing for tentative buyers. Last week, it all came to an end with Tesla shares falling out of bed during Monday’s trading session. On that day, the share price fell by more than 7 %. By the end of the week, they had fallen by almost 13.5% and were desperately trying to hold above $ 170. The TSLA Weekly chart from Stockcharts.com shows what has happened over the last 12 months.
So – what is happening to Tesla? There are many problems --
1. China Sales Volumes and Revenues are falling
2. US Sales Growth and Revenue Growth are slowing
3. A major Tesla investor seems to have lost enthusiasm for the stock
4. The Tesla factory in Germany was shut down due to apparent sabotage to its power supply
5. Major regulatory and legal problems are affecting Elon Musk and Twitter (“X”).
Firstly, Tesla is facing stiff competition in the largest market for electric cars in the world in China. Sales numbers are falling there and so are revenues. BYD is the major competitor but there are many other Chinese companies to contend with such as XPeng. BYD is about to slash the price of its updated Yuan Plus SUV by 11.8%. That is a huge discount which Tesla will have difficulty matching.”
While we encourage everyone to read the full Tesla article in Boom – the following page contains highlights that particularly resonate with our views about Tesla.
“Data from the China Passenger Car Association last week showed deliveries from Tesla’s Shanghai “Gigafactory” are at their lowest point in more than a year. Tesla delivered 60,365 vehicles from its China factory in February…the lowest level since December 2022, 19% lower year-on-year. Tesla’s China factory produces over half the company’s global production. Tesla is trying to maintain sales through price reductions but this causes revenues to fall and inspires the competition to drop their prices as well. Tesla is planning new, cheaper electric cars which will (hopefully) appeal to a whole new market segment. But new products take a lot of capital and time to develop. Maybe Musk will just start buying other electric car companies and re-badging their already developed products? Last week, Rivian shares rose by 13% while Tesla’s shares fell by 13%. The 12-month chart for BYD shares, is almost identical to Tesla in overall appearance. Both companies began to downtrend in August. Investors have been selling since then. BYD’s sales in February were 37% below the numbers achieved in the same month last year. XPeng shares are following the same trajectory. Share charts for other electric car companies, NIO and Rivian, look exactly the same. This suggests that car buyers are slowly becoming reluctant to buy any electric car. Perhaps August 2023 will go down in history as the end of the electric car frenzy? Sales growth in electric cars is now slowing in the US.
Another company in the electric car sector does not make any cars. Founded in 2001, Tritium designs and manufactures proprietary hardware and software to create advanced and reliable DC fast chargers for electric vehicles. It sells its products in 47 nations and has sold 14,500 DC fast chargers worldwide. However, its shares are in a state of utter collapse. [Listed] on the Nasdaq two years ago at $10 per share, last week, they closed at 10 cents….another indicator the electric car boom may be over.
Last week, a major enthusiast Tesla investor, Ross Gerber suggested Musk has too many projects and problems on his plate. Unfinished artificial intelligence and self-driving technology projects (reasons stated by many long-term investors for Tesla’s valuation premium) are distractions which means the company is now being valued as just another car supplier while lawyers who blocked Musk's $ 56 Billion Tesla compensation package as being excessive are now seeking a record US $6 Billion legal fee. If the company pays the fee via issuance of Tesla shares, it would not cost them any cash. Apparently the lawyers are happy to accept shares. The fee is roughly equivalent to 30 Million shares in value (at $ 200 per share). However, the number of shares required to cover a fee of $ 6 Billion is rising as Tesla shares fall in price.
Last week, the Tesla factory in Germany, near Berlin, was the target of a sabotage attack by environmental activists. The factory had to shut down production for a few days. Yes – some environmentalists in Germany are opposed to electric cars. BOOM expects this trend to grow in many nations very soon indeed.”
Discussion of Tesla inevitably leads to discussion of Elon Musk’s many other interests and financial hobbies. Fortunately Gerry notes that “These all have an impact on Tesla indirectly” before also summarising these-
“There are lawsuits and regulatory issues to consider plus the financial aspects in regard to Musk’s newest project of scale, Twitter. Musk acquired Twitter for US$44 billion back in October 2022. He sold shares worth up to $ 27 Billion in Tesla to help him fund the deal. According to a report by Al Jazeera, the total sum of the deal also included $ 5.2 Billion from investment groups and about $13 Billion worth of bank loans from Morgan Stanley, Bank of America, Japanese banks Mitsubishi UFJ Financial Group and Mizuho, Barclays, Société Générale and BNP Paribas. If Twitter falters in revenues and gross profit, then the loans could theoretically become a default risk. In such a situation, Musk could sell personal assets to fund Twitter with personal loans [which] could then be used to pay the outstanding interest on the bank loans. Musk may have other options –
(1) to sell some of his personal Tesla shares and buy out the banks or
(2) have Twitter borrow more money from the original banking consortium to cover the loan repayments (unlikely) – in effect, capitalising the interest or
(3) borrow from yet another banking consortium hastily assembled to pay out the original consortium if they become disgruntled lenders.
Selling Tesla shares to fund Twitter’s interest payments buys precious time and causes minimum disruption. All the other options are more public and alert Tesla investors that the whole pack of cards may collapse. The possibility of Musk becoming a significant seller of Tesla shares would have a major dampening effect on price. He reportedly owns 715 Million shares which at $175 (Fridays closing price) are valued at US$125 Billion.
Twitter could be forced to follow a set of strict guidelines in the European Union after the European Commission (EC) announced that it may be classified as a ‘gatekeeper’ under the Digital Markets Act (DMA) and digital antitrust rules. The European Commission (EC) has explained that companies may be subject to additional regulations if they operate what is described as a “core platform service”.
This includes search engines, app stores, and messenger services that have over 45 million monthly active end users, more than 10,000 yearly business users, or over €75 billion ($81 billion) in market capitalisation. Twitter/X, Booking.com and TikTok have submitted notifications that their services potentially meet the DMA thresholds. The commission now has 45 days to decide whether to designate the three companies as gatekeepers. If Twitter becomes designated as a Gatekeeper, then its advertising revenues could suffer.”
Conclusion:
This episode's stories highlight the underlying connections between infrastructure and the electric vehicle industry. The collapse of the Francis Scott Key Bridge, along with Tesla's ongoing trials, reveals more than just isolated incidents—they signal broader shifts in transportation, safety, and the evolving dynamics of electric vehicles. The ripple effects from these events are far-reaching, impacting how we view infrastructure and the future of mobility. Join me in the next episode, where I'll unpack these critical developments further, providing analysis and insights to guide you through the changing landscape. Stay tuned; you won't want to miss what's coming next.