Tag Archives: Tesla

Tesla plans to sell 400 000 Model 3 for under $35,000 each

Tesla is a great vehicle, but the stock is not among my top ten favorite stocks. It`s expensive to build vehicles in a very competitive industry which means they are burning a lot of money with a high cost.

Tesla will report results on Wednesday, May 4, 2016, after the bell.

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Tesla plans to sell Model 3 to the mass-market in 2017, and the price is set to $35,000 and have already 400,000 preorders. That sounds good, but investors are concerned about their ability to deliver.

The company guided for about 80,000 – 90,000 deliveries of their Model X and Model S last year, but we all know that this was too optimistic. In 2016, they delivered a record 50,000 vehicles but failed to meet volume expectations the company set earlier in the year.

Tesla is still aiming to scale production up to 500,000 vehicles per year by 2020, and is now on the hook to deliver 400k of one model, with production starting next year. Model 3 will come with lower margins.

Model 3 comes on top of Model X and Model S, and a third model will keep Tesla`s profits in the red for the foreseeable future. Operating expenses currently accounts for almost 50% of their revenue.

Large amounts of money is already spent in launching their first SUV and building out a sustainable battery. As production ramps up for each of these models, energy credits from green technology are expected to shrink proportionally to sales growth.

Estimize call for EPS of $-0,51, which is 1 cent higher than Wall Street, while revenue estimates of $1,60B are just slightly above the sell-sides $1,59B. The crowd has been bearish on Teslas profitability, moving EPS estimates down -326% since the Q4 report, now expecting earnings to decline 10% on a YoY basis.

Revenue estimates have also been ratcheted down by 8% but are expected to grow 47% from the year-ago period.

Investors are waiting for a forward-looking guidance on Wednesday. Not only Q1 results.

 

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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.

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Tesla is driving down the road along with its equities

2016 is so far terrible for Elon Musk. Tesla is down nearly 40%, trading at $148,25. Not only that. His SolarCity is down about 30% from start today. GM look even better at the moment, which is down only 16% YTD.

Barclays maintained an Underweight rating on Tesla and its new price target is $165. Analyst at Barclays Brian Johnson said; «Although we expect an inline 16 guide, so we think the slow ramp may challenge deliveries, cash burn, and margins, while also reminding us of risks in the years ahead to Tesla`s aggressive growth ambitions.»

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Estimize calls for EPS of $0,04, which is 4 cents higher than Wall Street while revenue estimates of $1,8B (up 69% from last year) are right in line with the Street. Estimize is bearish on Tesla`s profitability, moving EPS estimates down 58% this quarter, but still expecting impressive YoY growth of 130%!

Tesla delivered a record 50,580 vehicles but failed to meet volume expectations Tesla set earlier in the year. Investors sent the stock down over concerns that Tesla won`t be able to execute on its ambitions growth plans.

Given operation expenses account for almost 50% of the company`s revenue, missing volume forecasts put a severe damper on margins. Tesla have spent a lot of money in launching its first SUV and building out a sustainable battery.

If the Model X SUV sales are missing like the sales of the Model S sedan, it could have a huge effect on the stock price this year. It is a bearish sentiment on Tesla`s ability to turn a profit in Q4, and analysts have recently downgraded Tesla from a hold to sell rating.

10 out of 15 brokerage firms now say Tesla is a «hold» or worse, but Barclays’ Johnson also said the shares could see a short-term rebound after the March unveiling of the Model 3, especially with an unwinding of current bearish sentiment.

Tesla will report after the bell on Wednesday.

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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.

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The Auto Industry is strong

The U.S auto industry is up 75% since 2009, and is on the way to a new record year of annual sales, according to GM. U.S auto sales was only 10,4 million vehicles in 2009 but has skyrocketed to as much as 18,2 million so far in 2015, and this is the highest level since 2001.

Did someone say the U.S economy is bad? October was a huge month for the auto industry, despite concerns about a slowdown in consumer spending and stagnant wages. According to World Bank, the GDP per capita in the U.S was last recorded at 46405,26 dollars in 2014. That`s an all time high.

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Fiat Chrysler automotive reported its 67th straight month of YoY gains. Up 14,7% from 2014. Ford Motor Co is up 13%. Toyota Motor Corp; up 13%. Nissan Motor Co; up 12,5% in October, while GM said its sales is up 16% to 262,993 vehicles last month. The best October since 2004.

We cannot say the same about Tesla. They lowered the number of vehicles it plans to sell in 2015. From 50,000 – 55,000 to about 50,000 – 52,000. Tesla`s earnings growth in 2015 is -159,03% vs industry earnings growth at 24,50%, while P/E is down -85,86%.

Despite that, the most hyped stock in the market is up over 11% on Wednesday. Tesla announced Q3 results on Wednesday and they missed while burning a record amount of cash. Q3 non-GAAP gross margin dropped from 29,4% in 2014 to 25,1%.

Tesla released the new SUV a month ago and they have spent a lot of money into the production of this new model, so investors will want to see that sales of their new Model X are offsetting those costs. Tesla`s ongoing cash burn is the company`s worst cash burning quarter in their history.

Tesla`s Model 3 will be their most cost-effective model starting at $35k, and Tesla said they will start taking orders in March next year. The stock is up on Wednesday because of Musk`s forecast and that was as usual bullish.

Tesla has been working hard on building its gigafactory outside of Reno in Nevada. Their goal is to produce cheaper batteries and China is in focus for Tesla, because weaker sales can move the manufacturing facility to the region, as China is a key market for luxury cars.

What about Volkswagen?

Volkswagen`s recall is one of the biggest in Europe with 11 million vehicles worldwide. That`s more then they sell in one year. Rebates may help them to slow the decline, but the German carmaker`s market share in Europe is at its lowest in six months. Do I need to say more?

All this is happening while the rests of the world is waiting for the driverless cars which may become sooner than expected. GM now tries to beat Google to the driverless future. Steve Jobs talked about building Apple Car as early as 2008, so we expect to see Apple as well in the market and sooner than we know.

I`m not in doubt; the electric car is the future of the auto industry.

There is one problem. If we`re gonna help the rich, we need to help the poor. People need money and jobs. That`s how you create consumers.What we see in Tesla`s stock today is the stock market in miniature. Bad news is turned into good and the stock is rising high in the sky.

The auto industry looks strong, but Q3 reports seems to give us a sign of slower sales and earnings, and I haven`t seen that since 2009. But stimulus in China and Europe helps the stocks to rally.

Fed Chair Janet Yellen said the economy is solid on Wednesday in testimony before the House Financial Services committee in Washington. She said that would spur December rate hike. She said; «Domestic spending has been growing at a solid pace».

The rate has been near zero since 2008 and the Fed have waited for labor markets to move closer to their goal of full employment. The unemployment rate stood at 5,1% in September. The auto industry need consumers.

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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. UA-63539824-1.

 

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Volkswagen`s dead is Tesla`s bread

Volkswagen`s dead can be Tesla`s bread. As you may know, Volkswagen`s stock has plummeted, while Tesla is so far up for the year.

Volkswagen are spewing nitrogen oxide that is 40 times more than acceptable level, according to regulators. That`s not good for the environment because it contributes to pollution. In worst case it can lead to lung disorders, asthma and bronchitis.

At least 12 million cars is so far affected by the diesel scandal, and that is good news for EV producers like Tesla. We can see a trend in the market; people are looking for clean energy. They are looking for green energy.

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(Picture: Tesla Model X)

 

So, what is the option as the battery get cheaper? People will sooner or later dump diesel and go for battery anyway. For me it is clear; Volkswagen should have started to produce and sell EV`s long time ago, and not cheat with their «clean diesel» engines.

Volkswagen didn`t listen to the market, and cheated. For all I know, maybe they would start to have huge problems with the demand anyway?

Tesla published a letter to shareholders in the beginning of August 2015, telling them that Tesla Model X will be launched in September. I haven`t seen any news about the release yet, but I think it will be just around the corner.

This is great news for Model X buyers who have been waiting a long time for the new crossover SUV. Elon Musk said that the Model X is going to be «something quite special.» Who doesn`t want something special?

It`s a long waiting list for Tesla`s electric SUV, and that means if you want that car and put in an order for your Model X today, the order will fulfilled next year. Tesla already has about 24,000 Model X reservations.

Model X had about 12,000 reservations but I think Tesla is well more known now than three years ago, and their supercharger network is much more extensive than a few months ago. In addition, SUV is for many customers is more appealing and practical than a sedan.

The price for Model X will be similar to the Model S at a range between $132,000 and $144,000. Model X will have a battery range of roughly 215 miles to 217 miles, which is also similar to Model S. The difference, however, is the «falcon wing» doors on the brand new Model X.

Tesla will continue bo build out its Gigafactory in Nevada on top of the new release of a new Model X. All in all, this is bullish signals, despite the drop of the stock yesterday. Tesla is trading at $248,43, down -3,30%.

Elon Musk expect to reach the delivery goal of 50,000 to 55,000 EV`s for the full-year 2015.

 

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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. UA-63539824-1.

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Tesla Energy is growing

Tesla`s CEO Elon Musk said last year that their new SUV should be ready in May this year, but I still can`t see in on the market. Why? It`s probably because of their new business? The battery business, which is a $1 billion worth business.

CEO Elon Musk revealed some interesting new details about the new battery business last month. Tesla is on the way to build a Giga battery factory and the company will sell its batteries to industrial companies, utilities, commercial and home-owners.

 

Tesla Powerwall future

(Picture: Tesla Powerwall)

 

We all know the huge battery in their cars but their new market will be the battery to store energy from solar panels or energy from the power grid to be used for various purposes. Tesla`s Gigafactory is producing two new battery products, which is the larger Powerpack and the smaller Powerwall.

The demand for Tesla`s Powerpack is much bigger than the Powerwall. Straubel said earlier this year that the demand for their Powerpack is 70% of the business and 30% for their the Powerwall. Tesla`s new grid battery business is called «Tesla Energy».

The production is starting in the Gigafactory in the first quarter next year, but the first equipment to make the grid batteries in the Gigafactory will be installed at the end of this year.

So far, Tesla have about 100,000 reservations and the demand for their batteries is «crazy». The reservations are non-binding orders which is worth $1 billion. This is only the beginning and it is estimated to give around $40 million in grid battery sales at the end of this year.

But Elon Mush said that sales for the battery business could be «ten times that number next year», which means $400 million in a quarter. If this growth continue, for all I know, the sales can surpass Tesla`s Model S sales one day?

Well, Tesla is not alone on the market. There are tons of competitors that are already building batteries for the grid and buildings, and the projects using low-cost lithium-ion batteries are booming.

Batteries that let utilities, businesses and solar panel owners store energy is a growing market and 2015 will be a break out year for the battery makers.

A large coal or natural gas plant can generate a thousand megawatts, while a large solar farm can generate hundreds of megawatts of energy. According to GTM Research, there will be 220 megawatts of energy storage projects built in the U.S. You see the growth potential here?

The amount of energy storage projects installed was nine times higher than in the same time last year. The growth for energy storage will grow from 220MW in 2015 to about 858MW in 2019. The demand of low-cost lithium-ion batteries has led to mass production in Asia.

Solar companies are starting to pair batteries with solar panels, and the solar and storage pairing can also make solar energy more competitive with fossil fuels, and Utilities are starting to buy big battery banks which is the vast majority in this market right now.

87% of the 40,7 megawatts of energy storage installed in the U.S came from utility projects in the second quarter, but the battery market for commercial and industrial building owners grew significantly, too, according to GTM Research.

Tesla`s battery market made up 1% of the batteries installed in the second quarter and that was 61% higher than what it was in the first quarter. How big can Tesla`s Gigafactory be? And can it go beyond its present size?

 

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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. UA-63539824-1.

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