Some people think their money is too much? Does anyone think your company’s share price is too high? Indeed, this man is the “unaquestres” Musk, a “madman” who is both adored and hated. Here’s the thing, Tesla’s shareprice jumped nearly 10 percent after the u.S. opened its 2020 Q1 quarter a few days ago.
Author . . . Sun Mingyuan, Produced by Tiger-Smelling Car Group, Caption Map Quatz
The next day, however, Tesla’s shares opened higher and lower, plunging nearly 9 percent, as Musk’s earnings conference call took place.
It wasn’t over, and on the third day Musk tweeted, “Tesla stock is high in my opinion,” and the tone didn’t drop, and Tesla’s share price plunged another 10 percent in just over an hour.
So what’s going on with this series of magic things?
Unexpected financial results
As the global epidemic hit, the auto industry was almost spared, with supplier closures, factory closures, poor sales, lower wages, layoffs, falling share prices… A series of chain reactions have made the car companies that had entered the cold winter, making it worse, and most of them have suffered a severe blow.
Coincidentally, Tesla, which has gone through bankruptcy, capacity hell, short-seller “bombing” and so on, has just finished “saltfish turning over”. The end of 2019 for two consecutive quarters of profitability, Shanghai plant began to mass production, cash reserves sufficient … A lot of good news contributed to Tesla’s share price surge, from $400 per share at the start of the year to more than $900 per share, although the stock later suffered from a u.S. stock meltdown, the share price fell to $361 per share, but only a month later recovered to $740 per share, the market value remains the second largest in the world. (First, Toyota)
While tesla is ostensibly in the “infinite” stage, it is still in its infancy, and capital and markets are still questioning its future performance. So Tesla’s Q1 quarter 2020 results are not only about how much capital recognizes it, but it also affects market confidence in it.
However, the “first quarter” is already an off-season for the auto industry, and with the new crown outbreak hitting both producers and sellers, Tesla will struggle to come to the fore. So most stock analysts are not optimistic about Tesla’s Q1 2020 results, and even relatively optimistic investors think Tesla is likely to lose money.
However, at 5 a.m. on April 30 (4 p.m. North American time on April 29), Tesla officially announced its 2020 Q1 results, with surprisingly good results.
The first was Tesla’s return to profit in the quarter (GAAP net profit of $16 million and Non-GAAP net profit of $227 million), which was significantly lower (expected) quarter-on-quarter, but compared with a large loss of $702 million for The 2019 Q1 and a net loss of $494 million for Non-GAAP, the results were very good.
(GAAP net profit; figure/Hyperchart)
Total revenue for the quarter was $598.5 million, down 19% from a year earlier, up 32% YoY, gross profit was $123.4 million, down 11% YoY, up 118% YoY, and operating profit was $28.3 million, down 21% YoY and up 154% YoY.
(Total revenue, gross profit, operating profit, Figure/Hyperchart)
The automotive business contributed $513.2 million in total revenue, the solar roof (and energy storage) business contributed $29.3 million, and services and other components contributed $56 million.
(Revenue component: automotive, energy, services, and others; Figure/Hyperchart)
Operating margin was 4.7%, down 0.2% YoY, up 16.2% YoY, while overall gross profit margin was 20.6%, up 1.8% YoY, up 8.1% YoY, and net profit was 0.26%, down 1.16% YoY, up 15.72% YoY.
(Gross profit margin, operating margin, net profit margin; figure/Hyperchart)
The profit margin for bicycles was 25.5 per cent, up 3 per cent month-on-month and up 5.3 per cent year-on-year, while revenue from the automotive business included “carbon emissions” ($35.4 million), although even excluding them was 20.0 per cent, up 4.7 per cent year-on-year.
Note: “Carbon emission quota” is the U.S. government to promote car companies to accelerate energy conservation and emission reduction policy, if a car company’s carbon emissions performance does not meet the requirements, you need to buy a car company like Tesla’s “environmental score” to average their own carbon emissions. The FCA, for example, announced last year that it would spend about $1.8 billion over the next three years to buy a “carbon credit” from Tesla.
Even as a result of the outbreak, the Tesla Fremont plant and the Shanghai plant delivered a total of 88,496 vehicles, a decrease of 21% month-on-month, but up 40% year-on-year.
(Tesla Quarterly Delivery Quantity, Figure/Hyperchart)
But at the same time, due to the impact of the outbreak, the quarterly production (102,672 vehicles, down 2% month-on-month, up 33% YoY) was greater than the number of deliveries, resulting in an increase in inventory, inventory time rose to 20 days, although down 33% YoY, but up 82% YoY. This resulted in a decrease of $895 million in free cash flow, together with investment and operating expenses such as plant construction in Europe.
(Operating Cash Flow, Capital Expenditures, Free Cash Flow Chart, / Hyperchart)
Cash matters to the company, but it was good that Tesla made an issue at the start of the year (2.65 million new shares were issued at $767 a share, raising $2.31 billion), and its cash reserves rose to $8.08 billion, up 29 percent from a year earlier and up 268 percent from a year earlier. That means Tesla is well-stocked and can last nearly nine quarters, even if it maintains its current Q1 operating conditions.
(Tesla Cash Reserve, Figure/Hyperchart)
Under the twin pressures of the off-season and the outbreak, the answer was far more than expected for Tesla, but Musk’s words on the conference call “lost the way.”
Speak ingly Musk
When Adam Jonas, a researcher at Morgan Stanley, asked about Tesla’s recent “liquidity” during a conference call, Musk raised the issue of “back-to-work” and immediately raised a sensitive “fishing question” — what you would say to American law makers.
(After Adam Jonas asked the “fishing” question, almost everyone in the live room was saying, “Stop! Stop! Musk don’t say “”It’s over, Musk must have been taken off the fishing problem, “What’s this analyst doing?” “”The media headlines are definitely going to use this content”)
Hooked straight, Neho Musk has always been a “big mouth king”, unaware of the problem buried in the bomb.
“We have some concerns about not being able to get back to normal operations in the Bay Area (the Fremont plant), which is the toughest issue we’ve had right now,” Musk said. Tesla has only two core plants, the Fremont plant and the Shanghai plant, and most of its vehicles are made at the Fremont plant, including all Model S/X, most Model 3 and all Model Y. So the ‘extended closure at home’ rule (or forced imprisonment at home) is unconstitutional, and I think it’s bad and wrong to interfere with the freedom of the people. “
Note: In March, Tesla’s Fremont plant was required to “keep operating to a minimum, and the final plant workforce was reduced from 10,000 to 2,500.”
Yeah we are a bit a bit about about not let bea to resume production in the bay area and that be be be ed as a serious risk, um only have to two right factories right now, one in in shanghai and one in the bay bay area. And Bay area produce the vasty of the source cars, all the S/X, and most of the 3 and all of the Y. So the extension of the shelf-in-place or frankly i will call it improved d i’r saly saly s an inits home all its singlines, my opinion. And raising people’s freedoms in ways that are have a meede and wrong (author’s note)
“It’s going to have a huge impact not only on Tesla, but a lot of other companies, even if Tesla can survive, but there are a lot of small companies that can’t cope, and that’s going to destroy a lot of people’s lives and work.” There are many suppliers, especially small suppliers on the verge of collapse, even with the same will make many people unable to live. “
It will great be not just the Tesla but all company and while tesla will weather weather the storm, there are all will will not and all people’s people people work for the whole whole life of the one-of-a-kind to get is ingest in real time. Many suppliers and ours a out of the super hard times sa small one and it is causing a lot of totoli a lot of people. (The author’s note)
“If people want to stay at home, that’s fine, they should be allowed to stay at home. But if they are forced to stay at home and can’t leave, and they are arrested once they go out, how does that differ from fascism? This is not democracy, not freedom, please return the freedom of the American people. “
Note: about this part does not explain too much, simply is the “epidemic prevention means” and “survival” between the balance, take which extreme is wrong, their own experience.
If somebody wants to the house that’s great, they have be let let let ed to day day in the house and they do not let beled to leave to say to leave house and they will be arrested if they do. This is is fascist, this is not democratic, this is freedom not. Give people backtheirdamn goddamn god.freedom .the author’s note
When Musk said “This is is fascist,” the author concluded that he was going to “sweep” the headlines again. Then, after all, the major media at home and abroad seized on this sentence “big article” and “out of context.”
(News headline: Musk says ‘staying at home’ is fascism during new crown outbreak
As soon as the news came out, people came out to accuse Musk of cold-bloodedness and greed, calling him a bloody capitalist, taking into account only the profits of his company, his own wealth, and the lives of the American people. It also cites the same “out-of-the-way” tweets as a complement to the “new coronavirus is stupid” evidence of Musk’s indifference to people’s lives, but not in the original.
(Translated as “the panic caused by the new corona virus is stupid”)
Some even think Musk wants to get back to work as soon as possible to keep Tesla’s share price up and get a huge option bonus.
Note: Musk signed an option bonus at Tesla with no pay and no dividend, and when Tesla’s market value averages $100 billion for six months, it will trigger the first of 12 options, allowing Musk to buy 1.69 million Tesla shares at $350.02 each, or about $590 million at a $700 share price.
Tesla’s shares plunged nearly 9 percent the day after the news conference call (April 30, North American time).
However, something unexpected happened.
In addition to continuing to explain his views on the “forced stay at home” rule, Musk tweeted on May 1st, saying, “I think Tesla’s share price is too high,” “I’m going to sell all my tangible assets, including my own mansion,” “Just one requirement for buying my mansion, Gene Wilder’s former home, not allowed to be destroyed or lost.”
At one point, Tesla’s share price was “listening”, plunging 10 percent in an hour and showing no sign of picking up in after-hours trading.
Tesla’s just getting started
Why did Musk say that?
The simple answer is that he’s always been a person who thinks about what to say, and Tesla’s short-term market value and option stakes don’t matter to him. First, he believes that Tesla’s future size and development is much better than it is now, and secondly, for him, his personal property is still for the “flying to Mars fleet”, and he doesn’t care.
(Mary asked Musk about “Tesla’s stock price is too high,” Musk replied, “I don’t need money, my goal is the sea of stars, the property will only drag on me”)
Another reason should be that we don’t want to be “played” by capital markets and don’t want to be disturbed by these “boring” questions. Two years ago, Musk tweeted that he “wanted to recycle Tesla for more than $400 and become a private company” (at a time of more than $300), and was later fined and forced to “give up” the CEO job after being suspected by the SEC of manipulating the stock price.
And, with Tesla’s potential, this is just the beginning.
We analyze in three dimensions: capacity, market demand, profitability.
The first is capacity.
The Tesla Fremont plant currently has an annual capacity of 400,000 vehicles/year and will increase to 500,000 units per year by 2020; the Shanghai plant is now capable of reaching 4,000 units/week, with an estimated 6,000 units/year by the end of the year; the Berlin plant is under construction and a new U.S. super plant will announce its location within a month.
In addition, the Model Y plant at the Shanghai plant is under construction, and the battery pack plant and production line are already in operation.
(Model Y plant on the right)
(Battery production plant)
In addition to these basic hardware facilities, the optimization of design and production technology also allows for rapid increases in mass production speeds. Examples include the Shanghai factory’s domestic Model 3 and Model Y’s early mass production.
The second is demand.
In china, Tesla has only been in the country for a few months, but the Model 3 is not only leading the way in new energy model sales, but also in its equivalent, including fuel-fueled vehicles. (In the first quarter, when Tesla hasn’t cut prices yet)
(New energy model sales, Figure/Multiplier)
(High-end car sales, Figure/Multiplier)
(All car sales, Figure/Multiplier)
Not to mention in the U.S. market, the new energy sector has no rivals, including fuel vehicles in the same market is dominant, all car model sales are not weak.
(First quarter mid-size luxury car sales rank)
(First quarter car sales rank)
In addition, model Y’s mass delivery has only just begun. Based on current car owner feedback and existing market-user bias, the Model Y is expected to be “the highest-selling model in Tesla’s history” as Musk expects.
According to several Tesla industry reports, Tesla’s gross profit is expected to reach more than 30 percent after the scale of mass production increases, even if the price is cut again. And Tesla is always improving production, even at its Fremont plant, and its gross profit will remain at a high level as production processes change and improve, though at a lower cost than the Shanghai plant.
In a conference call, Musk mentioned that the surprise of Model Y in addition to the early realization of mass production capacity, more importantly, Model Y has just achieved mass production, its gross profit has been positive, which means that from design to production, Tesla has mastered a more mature system, the new model from the beginning of the realization of positive gross profit, and then with the domestic Model Y downline, its profit will increase further.
(The second half of the body, which is formed as a whole with die-casting technology, ensures a significant reduction in costs under the condition of strength)
In addition, in the Q-a section, some ones were asked about the current income accounting situation of FSD. Musk replied: “At this stage, under GAAP, only half of FSD’s revenue is included in profits, about $600 million.” Skealso also mentioned the possibility of future FSD subscription services, which would allow you to be billed as “monthly” as a member if you want to use self-driving.
With an estimated 1 million Teslas, the FSD option for the 7,000-knife means that only 17 percent of users buy the FSD software, meaning that if the FSD achieves its ability to “get to and from work without intervention” by the end of the year, according to Musk, potential users have a potential purchase potential of up to $5.3 billion. And this does not include services such as speed upgrade packages, traffic charges, and possible future fee upgrades.
(Recent lyme sending in North America identification and auto-stop)
There are also businesses like Tesla Insurance and Solar Roof, whose market potential is incalculable.
Taken together, Tesla is likely to have an explosive year this year, and with a good chance of still making a profit in Q2, it will be able to enter the S . . . 500 once it makes a profit for four months in a row, when the share price will have a chance of a surge.
A while ago, Volkswagen CEO Herbert J. Herbert Diess, chief executive, said Tesla had a competitive edge in electric cars and that its advanced software systems were already a threat to VW. After Japanese engineers praised Tesla’s six-year-old technology, traditional car makers are finally coming to acknowledge what Tesla has done over the years, rather than being dismissive.
Tesla’s bumpy ness is a microcosm of Musk’s own experience, from unbelieved to being questioned to being devalued, and finally being recognized when he finally does everything it can to fulfill his “promise.”
But this promise is not to give to others, that recognition does not really need others to give, when Armstrong also laughed at him, he should understand that the real understanding of his people, not many.