Elon Musk: Tesla service development is going mobile

The Tesla (TSLA) CEO Elon Musk said in the company conference call yesterday that Tesla´s service development is going mobile, more and more in the future.

-Our mobile service is part of the growing service development, while this is the best way to reach our customers, Musk said.

The company also said it has opened 25 new service locations globally and that they measure the new locations by traffic and driving time. The need for service development is essential while the Tesla fleet have doubled in a year and the growth expectations are also showing the same trend. Also service needs to be scaled.

According to Musk, the car service operations is one of the main drivers for the new car sales. For example during the Q2 period this year, the company generated orders at a high pace.

Tesla is also developing its automation within the cars and for example the automatic stopping at the stop signs and traffic lights is going to part of the new safety automations. The Model 3 has reached the highest ever safety standards in the US Safety Assist Category, the company said.

Business Finance Tech Travel

Tesla´s Q2 deliveries 95 356 – on track with China factory & Model Y

The US electric car manufacturer Tesla (TSLA) announced its second quarter results, which show that the company in on track with the Shanghai Gigafactory plant and with the new model, Model Y. It means the new factory would be ready by the end of this year and the new model by the fall 2020.

The company said its Q2 deliveries were 95 356 vehicles and they reach a record production of 87 048 vehicles. During the period Model 3 deliveries were 77 634 vehicles and the average selling price (ASP) was around 50.000 dollars. Tesla also said it expects its weekly production reach 10.000 by the end of the year. The total annual production expectation remained at 360.000- 400.000 vehicles.

The free cash flow was 614 million dollars. The car revenue was 5,3 billion dollars compared to 3,7 billion dollars in the previous quarter. The loss of car operations was 167 million dollars compared to 521 million dollars in the previous quarter and 621 million dollars a year earlier. The CEO Elon Musk said in the conference call that he expects the company to turn profitable during the rest of the year.

Business Finance

Virgin´s Galactic is becoming a listed company – WSJ

Virgin Galactic, which offers human spaceflights to public, is planning to be listed to fund the growth. According to Wall Street Journal, the Social Capital Hedesophia  Holdings is planning to invest about 800 million dollars in Virgin Galactic for a 49 % stake. This would also mean that the Virgin Galactic would become publicly listed later this year.

The space travelling is become more common while Amazon´s owner Jeff Bezoz´s Blue Origin and Elon Musk´s Space Exploration Technologies (Space X) are also in the same markets.

According to WSJ, the Virgin Galactic has already raised more than 1 billion dollars since it was founded in 2004.

Business Finance Tech Travel

Tesla to make record deliveries in Q2?

The US electric cars manufacturer Tesla (TSLA) is expecting to make a record deliveries of Tesla cars during the second quarter 2019. The news is based on the company internal email from CEO Elon Musk to employees in which Mr Musk says that the company has  a “good chance” to exceed the deliveries achieved during the last quarter of 2018.

According to the email, the company may be in the position to deliver over 90.700 cars that the company delivered during the final quarter of last year. This would also mean that the daily production would be 900 Model 3 cars during this week.

The Tesla shares one-year return is down over 30 %. Today the shares were trading up 0,69 % to 194,05 dollars.

 

 

 

 

 

Business Finance Lifestyle

Tesla: Q4 operating income stable – positive cash flow beyond Q1 2019

According to the Tesla (TSLA) CEO Elon Musk last year was the most pivotal year in Tesla’s history. Mr Musk commented the year in the shareholder letter conserning 2018 and Q4 figures.

– During our Model 3 production ramp, we went through significant challenges with the battery module line at Gigafactory 1 in Nevada, and later with our general
assembly line in Fremont. Thanks to the hard work and ingenuity of our
manufacturing teams, by mid-2018 we successfully overcame these
challenges and stabilized Model 3 production at high volumes, he said on Wednesday.

Tesla´s  Q4 figures:

– Q4 operating income stable compared to Q3 at $414M, operating margin of 5.7%
– Operating cash flow less capex improved from Q3 to $910M in Q4
– Cash and cash equivalents of $3.7B at Q4-end, increased by $718M in Q4
– Q4 GAAP net income of $139M impacted by $54M non-cash charge
– Model 3 GAAP and non-GAAP gross margin remained stable at >20% in Q4

Elon made his estimates of the Model 3 production this year and commented the production shift.

– Model 3’s production rate progressively improved through Q4, with December 2018 being our highest volume month ever. In our Fremont facility, we are now past the steep portion of the production S-curve, and we expect our production rate to continue to
gradually improve. Every part of the Model 3 production process has demonstrated over a 24-hour period the ability to produce at an extrapolated rate of 7,000 vehicles per week. By the end of this year, we expect to be able to produce Model 3 at this rate on a
sustained basis, he stated.

– In Q4, we delivered 27,607 Model S and Model X vehicles to customers. For the full year, we delivered 99,475 Model S and Model X vehicles, which was in line with our guidance. We recently stopped taking orders for the 75 kWh versions of Model S and Model X and
will focus on the longer-range versions of these flagship products instead, with the recent introduction of a 310 mile range base Model S and 270 mile range base Model X, he reminded.

– In total, we are expecting to deliver 360,000 to 400,000 vehicles in 2019, representing a growth of approximately 45% to 65% compared to 2018. In this range, we are expecting to have positive GAAP net income and to generate positive free cash flow
(operating cash flow less capex) in every quarter beyond Q1 2019. We believe these results will be substantially driven by our restructuring action and the ongoing financial discipline with which we are managing the business, Elon said.

– Our 2019 capex, the vast majority of which will be to grow our capacity and develop new vehicles, is expected to be about $2.5 billion. We believe this amount should be sufficient to continue to develop our main projects, such as Gigafactory Shanghai, Model Y and Tesla Semi, as well as for the further expansion of our Supercharger, service and retail networks. We expect to arrange financing through local banks in China to fund most of the capex for Gigafactory Shanghai, he said.

Tesla published its figures after the Wall Street trading, but the company shares closed higher to 302 dollars, up 3,80 %.

 

Business Tech

Tesla: Focus on standard-range Model 3

Tesla has today published a blog and according to it, the company will cut workforce by 7 % in order to meet the targets regarding the Model 3 production and focusing also more in mid-range models.

-Starting around May, we will need to deliver at least the mid-range Model 3 variant in all markets, as we need to reach more customers who can afford our vehicles. Moreover, we need to continue making progress towards lower priced variants of Model 3.
Right now, our most affordable offering is the mid-range (264 mile) Model 3 with premium sound and interior at $44k. The need for a lower priced variants of Model 3 becomes even greater on July 1, when the US tax credit again drops in half, making our car $1,875 more expensive, and again at the end of the year when it goes away entirely, the CEO Elon Musk writes.

-Sorry for all these numbers, but I want to make sure that you know all the facts and figures and understand that the road ahead is very difficult. This is not new for us – we have always faced significant challenges – but it is the reality we face, he continues.

– As a result of the above, we unfortunately have no choice but to reduce full-time employee headcount by approximately 7% (we grew by 30% last year, which is more than we can support) and retain only the most critical temps and contractors. Tesla will need to make these cuts while increasing the Model 3 production rate and making many manufacturing engineering improvements in the coming months. Higher volume and manufacturing design improvements are crucial for Tesla to achieve the economies of scale required to manufacture the standard range (220 mile), standard interior Model 3 at $35k and still be a viable company. There isn’t any other way, he says.

Tesla shares were trading down, -9,9 % to 312,79 dollars, after the blogging in Wall Street on Friday. Company also reminded that it made 4 % profit during the Q3. The last quarter figures of the year 2018 are not yet published.

– In Q4, preliminary, unaudited results indicate that we again made a GAAP profit, but less than Q3. This quarter, as with Q3, shipment of higher priced Model 3 variants (this time to Europe and Asia) will hopefully allow us, with great difficulty, effort and
some luck, to target a tiny profit, he estimated.

 

 

Lifestyle Travel

Highlights of the year 2018 – Brexit, trade talks and green finance

The year 2018 was a year of Brexit, electric cars and trade talks. It included special moments in the financial markets and in the company side. Green Bonds and Green Finance were getting more attention in the markets and trade talks and Brexit were the topics during the year 2018 along. Climate Change and low carbon landed also in the agenda of central banks.

Investors were also asking what is the role of the City as a global financial hub. Should it have its own rules in spite of the Brexit? In the financial hub competition, Frankfurt and Paris were the European cities to get more new financial offices as financial companies were moving some operations to the EU side.

The UK Parliament is expected to vote of the Brexit during Janury 2019 after very intensive debate about the deal during the year.

Climate Change has become part of the everyday life in the financial markets and for example one of the biggest insurance companies in the US, Berskhire Hathaway informed in February 2018, that it has got 3 billion dollars losses of the natural catastrophies, the hurricances in the US. Several central banks, including the European Central Bank and some Asian ones, have also agreed about the co-operation in the climate issues and how to monitor the impact on the markets.

In the tech-side augmented reality and ioT were the themes for the year. Apple, Amazon, Google, Tesla, Intel  and Samsung  were one of the tech-companies to deliver new services related to the new technology. On the other side of the topic, Facebook was dealing with the privacy issues globally. New tech- companies listed in the markets were for example Spotify and Xiaomi.

Year 2018 was a year of electric cars in many countries. The e-cars breakthrough with charging issues was one of the tech topics as well. Telsa founder Elon Musk was the leading industry sector figure as he estimated that Tesla would make one million cars by 2020 in February 2018.

Also the German automakers announced new investments and concept cars. For example the BMW Group launched an autonomous driving campus in Munich in March 2018.

Year 2018 was also a year for luxury goods and services. The Basel World 2018 -fair announced its good selling and for example the CEO of Hublot, Ricardo Guadalupe,  told ComteamPUB+ that the company expects double digit growth for the year and that the Chinese customers will be the leading segment.

In the debt markets the US Uber and Netflix issued their junk bonds to investors. Uber, the ride-sharing company, is said to plan an IPO for the year 2019 according to the secret filings to the SEC.

One of the biggest infrastructure projects ever, the China Silk Road, is getting more attention from the green investors side, while the organization made its first announcement of the green principles for the project co-operation and operators. The ancient Silk Road is expected to rise the GDP growth by 4 % or 240 billion dollars in the countries invlolved according to Credit Suisse analysis.

The aim of the Roman time Silk Road is to connect the western Europe with the eastern coast of China and to renew the infrasturcture in between. This means also that the 10 world largest container ports are located along the route.

Trade talks between different countries have continued lively during the year. US and China have been in the headlines, but also the EU with its agreement with Japan.  The political situation and rising volatility in the financial markets tell the direction for the next year. Geopolitical easing is needed.

Päivi Härkönen, co-founder, ComteamPUB+

 

 

Business Finance Lifestyle