Tesla: Model Y starting 39 000 dollars

Teslamotors (TSLA) has published more info related to its new mid-size , all-electric SUV, called Model Y.  According to the company information, it has been designed for maximun versatility and safety.  The Standard Range version will start at 39.000 dollars and it will have batteries to 230 miles of range while Model Y Long Range will be able to travel up to 300 miles on a single charge.

Tesla says the Model Y is the designed to be the safest mid-size SUV. It includes for example low center of gravity and rigid body structure. According to the company information, the car can achieve better driving range with less energy than other EVs on the market because of the high-efficiency in the energy usage.

Delieveries are expexted to begin in fall 2020 for Model Y Performance, Long Range Rear-Wheel Drive and Dual-Motor All-Wheel Drive variants. And spring 2021 for the  Model Y Standard Range.

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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 %.

 

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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.

 

 

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Stocks started up in Wall Street – Tesla and Apple in headlines

The financial markets ended slightly up on Wednesday trading in Wall Street. The year´s first trading day started with a small downside, but at the end of the day, the direction was positive with all the major Wall Street indices.

The electric car manufacturer Tesla (TSLA) announced its production figures from the fourth quarter and according to the information, the company produced 63.150 Model 3 Sedans during that period. Totally the company annual electric car production was about 245.200 in 2018. The official quarter figures are still to be published, the day is not yet confirmed. Tesla shares fell sharply first, but ended down 6,81 % to 305,50 dollars due to the published price cuts. The company informed that the car prices will be lowered by 2000 dollars in the US markets.

The second surprice for the markets was the mobile phone manufacturer Apple (AAPL), who said that the revenue forecast will be lower due to the economy situation in China. According to CEO Tim Cook, the China economy slowdown has been greater than earlier expected. Apple´s announcement sent the stock price to about 7 % decline.

Apple´s announcement was the first big information about the China economy and the trade talks situation. The President Donald Trump and his Chinese collaque President Xi Jinping are expected to continue the talks next week. During the holiday weekend president Trump indicated that the US and China trade talks have had positive signs.

In the US markets, the goverment shutdowns have continued and after the political leaders meeting the outcome was, that the shutdowns are expected to continue.

In the UK, The Brexit situation is the same as Prime Minister Theresa May said that the situation is not changed. According to Financial Times, PM May is going to have discussions with some of the European leaders during this week.  The UK Goverment has urged pharma companies and supermarkets to reserve enough drug and food stock in the case of no-Brexit. The UK Parliament is expected to vote on the deal in the middle of January.

Dow Jones -index ended up 0,08 % to 2344 points, S&P 500 -index ended up 0,12 % to 2509 points and Nasdaq-index ended up 0,46 % to 6665 points. In London the FTSE 100 -index was up 0,09 % to 6734 points and in Germany the DAX-index ended up 0,20 % to 10580 points.

In Asia the Wednesday trading was on negative side, while in Tokyo the stocks fell and Nikkei-index ended down 0,31 % to 20014 points and in Hong Kong  the Hang Seng index declined 2,77 % to 25 130 points.

Euro declined 1,04 % to 1,13 dollars as did the UK sterling, 1 % to 1,26 dollars.

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Tesla´s year deliveries 245.240 electric cars in 2018

The US electric car manufacturer Tesla (TSLA) announced that it has delivered totally 245.240 electric cars during last year. According to the company info, Tesla produced almost as many cars in 2018 as they did in all years together. The company published  its fourth quater production info on Wednesday.

– In Q4, we produced and delivered at the rate of nearly 1,000 vehicles per day, setting new company records for both production and deliveries.
Production in Q4 grew to 86,555 vehicles, 8% more than our prior all-time high in Q3. This included 61,394 Model 3 vehicles (in line with our guidance and 15% more than Q3) and 25,161 Model S and X vehicles, consistent with our long-term run rate of approximately 100,000 per year, the company said.

Tesla delivered the new Model 3 only in the North America, while the international deliveries in Europe and in China are expected to start in February this year.

-Our inventory levels remain the smallest in the automotive industry, and we were able to reduce vehicles in transit to customers by significantly improving our logistics system in North America, Tesla continued.

Tesla also announced that it will cut the car prises by 2000 dollars in the US markets.

– Moving beyond the success of Q4, we are taking steps to partially absorb the reduction of the federal EV tax credit (which, as of January 1st, dropped from $7,500 to $3,750). Starting today, we are reducing the price of Model S, Model X and Model 3 vehicles in
the U.S. by $2,000. Customers can apply to receive the $3,750 federal tax credit for new deliveries starting on January 1, 2019, and may also be eligible for several state and local electric vehicle and utility incentives, which range up to $4,000, the company wrote.

– Tesla’s achievements in 2018 likely represent the biggest single-year growth in the history of the automotive industry. We started the year with a delivery run rate of about 120,000 vehicles per year and ended it at more than 350,000 vehicles per year – an increase of almost 3X. As a result, we’re starting to make a tangible impact on accelerating the world to sustainable energy.

– Additionally, 2018 was the first time in decades that an American car – the Model 3 – was the best-selling premium vehicle in the U.S. for the full year, with
U.S. sales of Model 3 roughly double those of the runner up, the company said.

Tesla´s shares fell sharply during the first trading hours after the announcement, but gained slightly during the day and ended down 6,81 % to 308,88 dollars in Wall Street. The profit and sales figures for the last quarter of 2018 will be published later on, the day is not confirmed yet.

tesla 3

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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+

 

 

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