Tag Archives: Cars

The Chinese economy shrank 6,8 percent YoY in the first quarter of 2020 which is the first GDP contraction since records began in 1992

We are all in it toghether and the times we are living in right now is historic. Just take a look at China and the Chinese economy that shrank 6,8 percent YoY in the first quarter of 2020. What a drop! This is the first GDP contraction since records began in 1992. Wow.

The reason for the drop is well known; COVID-19. No doubt. Xi and the CCP took action after the virus outbreak and enforced a two-month-long shutdown of all non-essential business activity. Nor did they celebrate a new year, and a shutdown like this is of course very expensive.

Car production in China recorded the sharpest decline which dropped -44 percent. That is a big shock. Last year, approximately 21,36 million passenger cars and 4,36 million commercial vehicles had been produced in China.

The growth for passenger cars has jumped from 7 million in 2008 (financial crisis) to 25 million in 2017. In 2018, every fourth passenger vehicle in the world had been produced in China, and China is ranked first among countries with the largest production of passenger cars in 2018.

As you can see, the growth of the production and sale of vehicles in China have increased rapidly. Its interesting to see that almost all of the leading bestselling cars in China are the product of joint ventres with foreign manufacturers.

Shanghai Automotive Industry Corporation (SAIC) has an ongoing cooperation with General Motors (GM). SAIC-GM manufactures and sells Chevrolet, Buick and Cadillac brand automobiles in Mainland China. When the sales drop in China, so it does in the U.S.

Export from China also dropped 6,6 percent YoY to $185 billion in March 2020, compared with marked estimates of a 14 percent fall and after a 17 percent plunge in January-February combined amid the COVID-19 pandemic.

Among the the biggest trade partners, exports fell to the U.S by -20,8 percent. Considering the first quarter of 2020, exports declined 13,3 percent from a year earlier.

However, China`s long term growth potential will not be affected by the short term fallout of the coronavirus pandemic, as the country`s economic fundamentals remain unchanged, the authorities said.

To contact the author of this story: Ket Garden at post@shinybull.com

Leave a comment

Filed under Politics, Stock market

Car war


Tesla (TSLA) produced 7,535 Model S units in Q1 (6,587 in Q4). Guidance was 7,400. The company delivered 6,457 units, slightly above guidance of 6,400. Tesla expects to produce 8,5K – 9K Model S units in Q2, and they expect to deliver 7,500 units.


(Picture: BMW i8)

The company expects to be «marginally profitable» in Q2. The EPS consensus is at $0,27. Full-year free cash flow is expected to be slightly negative. Operating cash flow was $61M, and capex totaled $141M. The full-year capes forecast is $650M – $850M.


Gross margin was 25,4%. The stock will open down about – 8,5% today. It declined -2,86% yesterday. The stock price is $201,35, and the question is: Are Tesla stocks overvalued? They are doing it well but are Tesla`s market cap reasonable given the results and outlook?


Despite the success many companies have, its stock can be massively overvalued, and some investors can have unrealistic expectations going into earnings. They did probably not sell enough cars to satisfy the investors, and they need to sell plenty for the rest of the year to justify current price.


So far, they are still in a growth phase, putting cash back into the company to grow. The cost of batteries when they need to be replaced somewhere between 200,000 and 400,000 miles will be significantly cheaper in the future.


I think that Tesla is a good brand, but they are not alone on the market, and many other companies will follow. Take a look at BMW i8, which is a plug-in hybrid. The 2015 model has a 7,1 kWh lithium-ion battery pack that delivers an all-electric range of 37 km (23 mi).


BMW Vision Efficient Dynamics concept car is a plug-in hybrid with a three cylinder turbo diesel engine. The initial turbo diesel concept car was unveiled at the 2009 Frankfurt Motor Show, and deliveries in Europe are scheduled to begin in next month, and about a month later in the U.S.


The problem with Tesla is the limited time on the battery. With BMW i8 you have both, battery and gas, but the battery is in my opinion too small and limited. Anyway; this is just the beginning of a new era in the car industry.


Mercedes B-klass Electric Drive will be launched in the U.S soon. The engine is from Tesla, and they will fight against VW e-Golf, Nissan Leaf and BMW i3. The price for the Electric Drive will be $41,450.


Daimler are stock owner in Tesla and they are the factory that have developed the engine in the new car. The engine is fast and seems to be a great unit. It is a Tesla engine. Very good for Tesla and CEO Elon Musk, but are the Tesla stock price right?


CEO Elon Musk admitted several months ago that the stock price is more than they have any right to deserve. Tesla is overvalued using any reasonable valuation metric. Market cap is $27,000,000,000. This valuation will probably be repriced much lower, and that`s probably why it will plunge today.


Tesla have to increase its intrinsic value the next years. If not I think the stock price will decline to a lower level to reflect the company`s right valuation. A bearish commentary from Elon Musk is something long investors should take notice of.



Reports today:


08:30 a.m EST ECB Press Conference

08:30 a.m EST Unemployment Claims

09:30 a.m EST Fed Chair Yellen Testifies


Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.


Leave a comment

Filed under Stocks