San FranciscoCalifornian car pioneer Tesla closed the first quarter of 2019 with a surprisingly high net loss of $ 702 million. If CEO Elon Musk predicted a small profit at the end of 2018, he later corrected this for a possible loss. In the end, delays in the current model 3 hope, price reductions and lower deliveries of the top models Model S and X led to a sharp drop in sales and one of the highest quarterly losses in the company's history. Tesla is back where it started twelve months ago: a year ago, the loss reached $ 709 million.
At the end of the March quarter, 63,000 vehicles were delivered, well below expectations of 76,000. "That was the most difficult logistical problem I've ever encountered," Musk said about supply issues to Europe and China.
Analysts are watching Tesla's financial situation closely
Difficult production, difficult deliveries: The S and X models together came to over 12,000 units, well below the quarterly average of 25,000. Turnover at $ 4.54 billion was well below the $ 5.19 billion forecast. Pure car sales were $ 3.72 billion, up 36 percent from a year ago, but 41 percent below the fourth quarter of 2018.
The financial situation of the car maker is closely monitored by analysts. By the end of 2018, cash and cash equivalents stood at $ 3.7 billion, down from $ 2.2 billion at the end of March. Of this, nearly one billion dollars flowed into the cash repayment of a convertible bond. The share price was so low that it was not worthwhile for the bondholders to demand shares instead of cash. Another $ 180 million debt will be due in April.
A lot of money goes into a new gigafactory for batteries and vehicle assembly in Chinese Shanghai. It is expected to go into operation in the fourth quarter of 2019 and increase annual production capacity to 500,000 vehicles – but only by 2020. The Chinese plant is largely funded locally, Elon Musk said, meaning Chinese banks support the company. Therefore no capital increase is needed.
Nonetheless, analysts continue to believe that Musk must go to the capital market to finance the expansion. The Tesla CEO in turn assures that the financial situation is not strained. However, Musk acknowledged in the analysts' discussion that it is currently "making sense" to go to the capital market.
Since the model 3 from the Chinese plant is to be produced much cheaper than in California, parts of the production of the model Y, the planned compact SUV, could be shifted also to China or to Reno in Nevada.
In the short term, there is no breathing space for Tesla investors. The current second quarter should also end in a loss, it is said, before it should go up again in the second half of the year. The previous annual targets of 400,000 vehicles delivered remain unchanged.
The question asked by an analyst whether Tesla plans an insurance offer for its customers, affirmed Musk. You are already working on that. The installments would be very "competitive". Tesla has virtually all the data of a vehicle, the driving behavior and the driver in real time and will take these into account when calculating the rates, it said. Tesla already provides some data to insurance companies today. "We have full access to the drivers' risk profile," says Musk.
Tesla is generally looking back on a dramatic quarter. Price reductions were announced and partially revised days later. For a short time it was said that the majority of the shops would be closed, a few days later that was also withdrawn. Elon Musk himself started a dispute with the Securities and Exchange Commission about his Twitter habits.
A dispute between its major suppliers was also publicly held, as battery supplier Panasonic and Tesla blamed each other for failing to achieve a planned mammoth investment in the Gigafactory in Nevada. Musk finally gave Panasonic the blame for a delayed production of the Model 3 in the first quarter. From Japan came media reports that one sees demand weaknesses for Tesla vehicles.
On Monday followed the announcement of self-propelled Teslas, later this year. There will also be a fleet of Robotaxis from 2020, as well as a dedicated ridesharing app for Tesla drivers and a dedicated computer chip for autonomous driving, which Musk presented as the "best in the world".
Tesla therefore plans to make companies such as Nvidia (chips) and Google (Waymo) in self-driving cars, as well as the driving services Uber and Lyft competition. Musk announced in the analyst call also directly: Who like Google so-called "lidar" devices, special devices for the three-dimensional scanning of the environment on the roofs of self-driving cars, use, was "doomed," said the Tesla CEO.
Experts remain skeptical
On Wall Street, such news is viewed with skepticism. Industry observers hardly expect that the legal framework for autonomous cars on public roads will be created in the USA by 2020. Some experts therefore consider the timeframe set by Musk to be a deliberate maneuver to distract from the bad numbers.
Mark Tepper, founder of Strategic Health Partners, sees skepticism as well. "It's a cult cult company that believes Elon Musk will change the world. That's the only reason the stock is trading at $ 260. The true price should rather be around $ 100, "he told TV broadcaster CNBC on Wednesday.
The economic service Bloomberg noted that according to own observations for the first time more analysts give with the "sell" recommendation than with a "buy" recommendation. After the stock exchange, there were only small losses on Wednesday after quarterly announcement. So far Musk remain loyal to the shareholders.
. (tagsToTranslate) Tesla (t) Loss (t) Elon Musk (t) Car Industry (t) Electric Car (t) Panasonic (t) Google (t) SEC (t) CNBC (t) Waymo (t) Lyft (t) Nvidia (t) Uber (t) Elon Musk