Research archive for TSLA

Tesla reported numbers after hours last night. Tesla is a business that is in build up phase, it is a hugely capital intensive business, led by a fellow that wants to change the world tomorrow. Elon Musk may not necessarily be the inventor of the electric vehicle, he certainly is at the beginning of a momentum shift where consumers are deciding that fossil fuels are not necessarily the future of powering automobiles. The combustion engine design has been tweaked over the decades, it certainly has not really changed that much in that time. Musk wants you back off the grid, he wants you to consume battery technology and be reliant on the sun for your power. I was chatting to a senior fellow who recently attended the mining indaba in Cape Town, he said that loads of people were interested in the raw materials for battery technologies. The more that the mining companies produce as a result of demand, the better for the consumer. You get the sense that the momentum shift is already afoot.

Tesla Motors reported numbers last evening, this was for their third quarter of the current financial year. The company is one that splits the street down the middle, those that think the man is a visionary and that it is going to take more than a quarter (or a year, or a decade) to be materially profitable and those who think that the business is eventually going to come apart at the seams, Musk dreams too much and under delivers. If you are an Elon Musk fan and can put up with your fair share of expletives, then make sure you read the Ashley Vance book on him. It is really good and gives some very valuable insight into how the guy works. He is beyond quirky and has incredibly high standards, as well as incredibly high goals. Musk can be credited for bringing forward the fleet of electric vehicles and equally promoting driverless fleets. Someone always needs to be the doer and the others will follow.

Why do we not like change as human beings? Not all of us, the vast majority prefer the status quo, prefer not to upset the apple cart. I would assume that upsetting the apple cart 300 years ago would result in many apples becoming dirty and "running away" from you. We are resistant to ideas of change, perhaps as it requires mental strength to think that something should be different, it would be easier that way. Tesla is a business that can change your product overnight, whilst you are catching some z's. The software update on the Tesla autopilot will take place over the next couple of weeks. It may not work for "seeing" deer when the system switches to radar (fluffy animals apparently to Elon Musk) in snow, fog and dust.

Tesla reported numbers for their Second Quarter 2016 last week, as we were voting and worried with the weighty matters of democracy. Tesla are equally worried with the weighty matters of sustainable energy and climate change. One of the best and most sensible things Elon Musk said was that the best and most reliable energy sources known to mankind was the sun, yet we hardly enhance the full potential.

That person who doesn't have consensus. Elon Musk. And perhaps that is a very good thing. If your number 1 priority is to change the world, and to really, really change the world, then best you deliver on your promises/forecasts/plans. Best you do that. Last evening the fellow reminded us of the original Masterplan from ten years ago - The Secret Tesla Motors Master Plan (just between you and me). As you could imagine, he does admit to flying by the seat of his pants, as all great inventors do.

I have been thinking about the "fallible" Tesla technology for a few days now. First the fact that it is 2016 and we have driverless cars is pretty cool. The fact that a big fan of the technology met his untimely end in a car he loved, that is not too cool. Being in his favourite car, that perhaps was the only good thing about the incident. I thought one thing of the whole accident, and laid it out last week, what if the truck with the trailer had the self driving technology? Would it have turned at that moment, sensing the oncoming traffic? Possibly not. And as discussed last week, we wouldn't be having this conversation. I was struck in my reading that the very "inventor" of modern flight, one of the Wright brothers was involved in the very first flying fatality known to man. We didn't stop evolving now, did we? Otherwise I wouldn't have actually been able to write this very paragraph whilst sitting on a commercial airline in the sky.

Tesla has been in the news for the wrong reasons over the last few days. Firstly the mangle of the driverless vehicle not distinguishing the background of a trailer against the sky, and causing a vehicle to smash through it, killing the driver, is bad news in itself. It means that the self driving mode is not 100 percent yet. And regardless of how many minor or major accidents humans may have in their life, the fact that the self driving mode is not 100 percent safe is cause for concern. This is regardless of the fact that the driver may not have been paying attention, and may have been watching Harry Potter on his device.

There will be big movements on the 'renewable energy' stock front today, thanks to Elon Musk. Waking up this morning we were greeted with the news that Tesla Makes Offer to Acquire SolarCity Given the huge cash burn rate of both companies, this will be a pure script deal. The current proposal is:

Tesla announced last evening that they were raising more money, not at the discount you may expect. The first line says it all: This is a public offering of shares of common stock of Tesla Motors, Inc. The company is offering 6.8 million shares to shareholders. The Tesla document (if you read it) is a little hard to read, the WSJ do a better job than I ever would - Tesla Plans to Sell $2 Billion of Stock. Raising money to ramp up production and then Elon Musk is exercising rights (and selling to pay for tax obligations) in order to settle obligations. The quantum of which is mind blowing. He is not (repeat not) taking any money out, rather exercising rights granted in 2009 (5.77 million shares) for a mere 36.5 million Dollars.

Nikola Tesla was a strange man. At least from all of the reading that I have done. He moved to New York a couple of years before the founding of our city, Jozi. There he worked for another inventor, Thomas Edison. There was a dispute between the two over a pay issue, Tesla resigned and started with his own string of inventions, including developing a patent for a biplane (it was 1915) that could take off vertically. A list on Wikipedia is a testament to his extraordinary and perhaps unrecognised brilliance -> List of Nikola Tesla patents. He was a dashing, weird, obsessive workaholic, who repeated the ordinary and suggested to all that he never slept.

Tesla bears were kicked in the chops, after what looked like a miss in sales numbers the session prior, less than 15 thousand vehicles for the quarter, the company suggested that they would deliver somewhere in the region of 80 to 90 thousand vehicles for the year. Here are the sales numbers -> On Track for Full-Year Delivery Guidance. To put this into context, I read that last year there were 116 thousand electric vehicles sold globally, of the plug in kind. That sounded a bit low to me. Bearing in mind that the global car market is somewhere in the region of 83 million vehicles, China at 21.1 million and North America at 20.6 million. Europe sales were (including Russia) at 18.8 million units. Basically those three regions account for all of the consumer related vehicles, Toyota sold over 10.15 million units as the number one seller globally.

I know Byron is not a car guy, when you sit with someone all day long you get to know an awful lot about them. You had better enjoy your business partners as much as your family, you quite possibly spend more waking hours with them! Tesla however is a different kettle of fish, Byron was genuinely excited yesterday, comparing the launch of the Tesla Model 3 to the first iPhone. I guess with Tesla, this is dumbing their vehicles down in order to make them more affordable for environmental savvy folks across the world, and for those people who want to drive what is a beautiful vehicle. Watch -> Tesla unveils its $35,000 Model 3. And then also -> Meet Tesla's Model 3, Its Long-Awaited Car for the Masses.

I keep looking at the results of Tesla day after day and promising Michael that I will hammer them out tomorrow. And then of course something else happens. The company reported this time last week, at least I have the whole day over California, so it is not quite a week late: Tesla Fourth Quarter & Full Year 2015 Update. There are some pretty powerful things in there, that letter from Elon Musk to his fellow shareholders. The fact that the business is unique as a motor vehicle manufacturer, in that they still know everything about their car once it has left the assembly line. How many manufacturers of any sort can claim to know everything about their products (provided the user wants that) once they have sold it? I can't think of too many. Tesla continues to collect data from their users, with the Autopilot learning at a rate of 1 million real-world miles a day. That is pretty astonishing.

On the third of November we received third quarter earnings from electric car maker Tesla. I am sure the company needs no introduction. If you have not heard of Tesla or Elon Musk you are probably living in North Korea. Over there the fat man is just about to invent cars with a sixth gear. Here in the real world, Tesla is changing the face of automobile manufacture. Lets delve into the numbers first.

Despite opening lower both the Dow and the S&P 500 finished in the green, with the most interesting news coming from Morgan Stanley and their price target for Tesla. The 12 month price target was upgraded from $280 to $465. What! The current share price of just over $240 isn't even at their first price target of $280. (Morgan Stanley really, really loves Tesla) The reason for the huge upgrade is based on the hypothesis that Tesla will be a leader in the self driving car market, with the forecast being that the self driving market could triple the currently forecast 2029 revenues (forecasts 2 years out are sketchy, 14 years out will definitely be wrong). The market liked the upgrade, the shares popped 4.9%.