Despite a down quarter, Tesla is planning new products — including car insurance

Despite a down quarter, Tesla is planning new products — including car insurance

7:39pm, 24th April, 2019
Tesla CEO Elon Musk introduces the Tesla Semi truck and an updated version of the Tesla Roadster at a 2017 unveiling. (Tesla via YouTube) Tesla today reported wider-than-expected financial losses in the first quarter — due to what the company said were delivery challenges, a seasonal dip in demand and the unanticipated effects of pricing decisions. Despite the downturn from what had been a profitable couple of quarters, Tesla CEO Elon Musk was bullish on several fronts, including rollouts for the company’s and , plus the opening of Tesla’s Gigafactory in Shanghai, China. Musk is even planning to offer car insurance policies starting next month, with pricing determined by the data that’s received from the company’s cars. “We have direct knowledge of the risk profile of customers and the car,” he explained during today’s teleconference with financial analysts. “If they want to buy Tesla insurance, they have to agree to not drive the car in a crazy way. Or they can, but then the insurance rate is higher.” If it’s done right, in-house insurance could add another revenue stream to Tesla’s bottom line. That could help ease the pain for Tesla’s accountants as well as for investors, who have seen share prices slump due to concerns about long-term profitability. (The price slipped nearly 2 percent during today’s trading, to $258.66 at the close.) Net losses amounted to $702 million, and adjusted net losses per share were $2.90. That’s 13 percent worse than the year-ago figure and . Revenue was $4.5 billion, which was better than the year-ago figure but not as high as analysts thought it would be. In its , Tesla said there was a production jam-up that forced a large number of deliveries to be deferred into the second quarter. “This is the most difficult logistics problem I’ve ever seen, and I’ve seen some tough ones,” Musk said. In all, 63,000 electric cars were delivered during the first quarter, which fell far short of expectations. In addition to the logistical challenges, Tesla said pricing changes for its Model S and Model X cars caused a higher-than-anticipated return rate. One disincentive to sales was the gradual phase-out of federal tax credits for electric vehicles. Previously: The good news is that powertrain improvements have boosted the performance and range of those two models: The maximum range was extended to 370 miles on a full charge for the Model S, and 325 miles for the Model X SUV. For the past two years, Tesla has been focused on ramping up production of the Model 3, which finally . Tesla reported producing 63,000 Model 3 cars during the quarter and is aiming to raise that figure higher. “If our Gigafactory Shanghai is able to reach volume production early in Q4 this year, we may be able to produce as many as 500,000 vehicles globally in 2019,” the company said in its shareholders’ letter. “This is an aggressive schedule, but it is what we are targeting.” Musk said that the Shanghai construction project was “going incredibly well,” and that he was receiving “midnight Gigafactory email” on an almost nightly basis. On other financial fronts: Tesla’s cash on hand fell by $1.5 billion over the course of the quarter, to $2.2 billion. A $920 million convertible bond repayment accounted for most of that reduction, and the delivery snag was an additional factor. Another, linked to Tesla’s SolarCity subsidiary, is said to be due this month. One analyst asked Musk whether he wished that he had persevered with efforts to take Tesla private last year — efforts that ended up getting him in hot water with the Securities and Exchange Commission. “I would prefer that we were private,” Musk replied, “but unfortunately that ship has sailed.” Musk told analysts that “at this point I do think there is some merit to raising capital,” but he didn’t provide further details.
Tesla stock goes through twists and turns as analysts focus on Model 3 car outlook

Tesla stock goes through twists and turns as analysts focus on Model 3 car outlook

6:15am, 8th May, 2018
Tesla CEO Elon Musk presides over the handover of the first Model 3 cars in August 2017. (Tesla via YouTube) Tesla’s share price took a weird turn today after the company reported its first-quarter financial results and billionaire CEO Elon Musk dissed analysts’ concerns about the Tesla Model 3 mass-market electric car. The raw numbers reflected Tesla’s efforts to ramp up production over the quarter: Net loss widened to a record $784.6 million for the quarter, but revenue rose to $3.41 billion, outdoing analysts’ estimates. The key questions have to do with the Model 3, which Musk is counting on to bring the company to profitability by the latter half of this year. “It’s high time we became profitable,” he said during today’s teleconference for analysts. “The reality is, you’re not a real company until you are.” Model 3 production surpassed 2,000 cars per week only in the past month or so, which is far behind Musk’s initial timeline. Tesla said it was targeting a 5,000-a-week rate by the end of June, and anticipated turning the gross margin on the Model 3 from slightly negative to break-even by then. Net reservations for the Model 3, including configured orders that had not yet been delivered, exceeded 450,000 at the end of the quarter, Tesla said. Musk said Tesla’s operations would undergo some restructuring this month, in part to reduce the number of third-party contractors. “We’re going to scrub the barnacles on that front,” he said. “It’s pretty crazy.” But when analysts wanted to delve into the details about gross margin, Musk brushed off the questions as “not cool” and “boring.” “These questions are so dry, they’re killing me,” he said. Instead, he went to a YouTube channel operator and retail investor named Gali Russell, who asked a series of questions about Tesla’s plan to phase in fully autonomous driving. In the course of the conversation, Musk repeated his complaints about reports focusing on fatalities involving Tesla cars. “It’s really incredibly irresponsible of any journalist with integrity to write an article that would lead people to believe that Tesla autonomy is less safe, because people might actually turn it off, and then die,” he said. Around that same time, Tesla’s share prices slumped in after-hours trading by as much as 5.7 percent. Musk eventually returned to analysts’ questions, touching on such subjects as ride-hailing services (which he said could begin “as soon as the end of next year”), plans for factory expansion (including the fact that every Gigafactory added from now on would build cars as well as batteries) and the Tesla Semi (a project that Musk said was currently getting a lower priority due to the focus on the Model 3). He also provided some stock advice for traders who speculate on the company that Musk himself has admitted is something of a “Do not buy if volatility is scary,” Musk said.