Advertisements

Elon Musk And The Mirage Of Tesla In India

Elon Musk smiles while speaking to members of the media outside federal court in New York, U.S., on April 4, 2019. (Natan Dvir/Bloomberg)

Elon Musk smiles while speaking to members of the media outside federal court in New York, U.S., on April 4, 2019. (Natan Dvir/Bloomberg)

© 2019 Bloomberg Finance LP

Will Tesla chief Elon Musk finally bring his much sought after electric cars to India within a year?

That’s what he said while speaking with a team of students from the Indian Institute of Technology, Madras, who were competing in the SpaceX Hyperloop Pod Competition 2019. Suyash Singh, who was taking part in the hyperloop competition with a team called Avishkar, confirmed the comments by Musk through email.

But Musk has said this before, as recently as March this year.

In response to a question on Twitter on when he would bring Tesla to India, he wrote, “Would love to be there this year. If not, definitely next! [heart] India.”

The dangling started in April 2016 when Musk tweeted that India was being added to list of countries where Tesla’s relatively affordable Model 3 would be available. Although its price tag of $35,000 made it out of the reach of most Indians, that didn’t tamp any of the excitement around the idea. At the time Musk also said the company would also bring a “India-wide Supercharger network.” Tesla owners in the U.S. can juice up the depleted batteries of their cars in 75 minutes on a supercharger.

But that soon hit a road bump of prohibitive Indian rules. “Maybe I’m misinformed,” Musk tweeted, “but I was told that 30% of parts must be locally sourced and the supply doesn’t yet exist in India to support that.”

Last year he wrote: “Would love to be in India. Some challenging government regulations, unfortunately. Deepak Ahuja, our CFO, is from India. Tesla will be there as soon as he believes we should.” But then the company announced in January that Ahuja would be resigning from his role.

While it’s anyone’s guess on when Tesla will actually be available for sale in India, if ever, the country’s electric vehicle market is slowly picking up steam. New Delhi has a target that 30% of vehicles sold across all segments will be electric by 2030.

For financial year ending March, India saw sales of 3,600 electric cars, 126,000 two-wheelers, 500 buses and 700 three-wheelers also known as autorickshaws, according to CRISIL, an S&P Global company.

The nascent industry got a boost last week when ride hailing giant Uber announced it intends to launch electric autorickshaws in several cities in the coming months for which it has partnered with battery maker SUN Mobility, a joint venture between solar power company SUN New Energy System and electric mobility company Virya Mobility 5.0.

New Delhi has laid out $1.4 billion in subsidies over three years for electric buses, three-wheelers, four-wheelers that are registered as commercial vehicles as well as private motorbikes and scooters. The majority of Indians still travel by those modes rather than personal cars. It also plans to order Uber and its homegrown competitor Ola to convert 40% of their respective fleets to electric by 2026.

CRISIL Research expects a gradual pick-up in EV adoption in India to be led by three-wheelers and two-wheelers over the next five years.

However, for a real pick up in the sector, the country needs to beef up its charging infrastructure, says Hetal Gandhi, Director, CRISIL Research. India had only 352 publicly accessible chargers in 2018 in comparison to the 275,000 chargers in China, according to International Energy Agency. “Greater availability of charging infrastructure would aid in electrification of buses and taxis,” said Gandhi.

That apart, local manufacturing and assembly of battery packs for the EVs would also go a long way in reducing the cost of these vehicles, she added.

Should those actually kick in, it might make the market attractive enough for Musk to actually make good on those tweets.

I write about business and development in the Subcontinent. In the past I’ve worked at AFP, The Wall Street Journal, Mint, Forbes Magazine and Reuters. You can find me on Twitter: @mbahree or contact me on email: Megha.Bahree@gmail.com.

Source: Elon Musk And The Mirage Of Tesla In India

Advertisements

Tesla Gets Ready To Report After Upside Surprise On Q2 Vehicle Deliveries

Getty Images
Getty Images

Key Takeaways:

  • Tesla earnings this afternoon follow strong Q2 deliveries
  • Stock on a roll since falling below $200 a share this spring
  • Lower product prices raise questions for some analysts

Considering all the big news Tesla (TSLA) delivered over the last two weeks, its Q2 earnings report this afternoon might seem a bit anticlimactic.

Arguably the biggest (and best) news of the quarter is already digested. The company reported better-than-expected car deliveries for the second quarter. Earlier this month, TSLA said it delivered 95,200 total vehicles in Q2, ahead of Wall Street’s estimate for 91,000. That’s the widest beat in at least three years, according to market forecaster FactSet.

It’s also a huge turn-around from the company’s disappointing 63,000 in Q1, and might reflect some buyers deciding to jump in ahead of the Federal tax credit on TSLA’s cars being halved on July 1, Forbes noted. In Q2, the Model 3 posted deliveries of 77,550, surpassing consensus estimates on Wall Street for 74,100. Combined deliveries for the Model S sedans and Model X SUVs were 17,650, beating estimates of 16,600, according to FactSet data.

The delivery data also might confirm that the March quarter wasn’t quite as bad as people had thought, because thousands of the company’s cars were in transit at the end of March, but those deliveries ended up occurring in Q2. In other words, deliveries over time might be a little smoother than the quarter-to-quarter numbers show.

Shares Took Another Wild Ride in Q2

Smoothness isn’t a word often associated with TSLA, either the company itself or its shares. The Q2 was no different, with TSLA bouncing back quickly from a May sell-off that carried shares of the company down below $200 for the first time since late 2016. Shares recently were back above $250.

Where they go from here depends partly on whether TSLA can meet its delivery goals for the remainder of 2019. As Barron’s noted, TSLA delivered 158,000 cars in the first half—a number it might update when it reports earnings. Its goal for the year is 360,000 to 400,000, meaning it has to do a lot better in the next six months than it did in the first six months of 2019.

It might be interesting to listen to the company’s earnings call to see if executives provide investors a road map of how they plan to get to that point, especially considering the falling government tax incentives for electric car buyers.

Vehicle production was another Q2 highlight, rising to a record 87,048, TSLA said. That included 72,531 of its Model 3 and 14,517 of its Model S/X. Customer vehicles in transit at the end of the quarter were more than 7,400.

Even as it tries to grow production, TSLA has been under pressure to cut costs. The company has made workforce cuts this year, and this month it announced a revamping of its vehicle lineup. The company cut back the total number of vehicles available, making its lower-end Model 3 more affordable while raising prices on its higher-end Models S and X.

It did this, it said in a statement, “To make purchasing our vehicles even easier.” The pricing adjustment, it added, is “in order to continue to improve affordability for customers.”

Tesla said it’s reducing the price of the Model 3 by $1,000 to $38,990. The company will no longer sell the standard range versions of the Model S and Model X, raising the minimum amount people have to pay for those cars. The base version of the Model S is rising to $79,990 from $75,000, while the price of the Model X is increasing to $84,990 from $81,000.

However, lower prices for the Model 3 could mean lower margins for TSLA, which might lead to pressure on profitability. Speaking of which, analysts don’t expect a profitable Q2 despite the big deliveries. This would be the second “red” quarter in a row for the company, a troubling sign after it posted consecutive profitable quarters in the second half of 2018. The decision to lower prices also has some analysts questioning whether demand is there for TSLA’s vehicles.

In a sign that TSLA continues to work on expense control, it said it made “significant progress” in Q2 “streamlining our global logistics and delivery operations at higher volumes, enabling cost efficiencies and improvements to our working capital position.”

Cash Check

The company’s cash position is usually something analysts monitor at earnings time, and this quarter is no different. Tesla’s wallet looked lighter at the end of Q1 due to a bond payment, expansion costs, and a high number of vehicles in transit, analysts said. One question is whether that improved in Q2, and whether management can meet its forecast for positive free cash flow in the quarter. That might help soothe chronic worries about how quickly TSLA goes through cash.

Among investors, TSLA shares continue to see a lot of love from the Millennial generation. The company’s stock has been a long-time favorite of younger investors, according to the Investor Movement Index, or the IMX, a proprietary, behavior-based index created by TD Ameritrade designed to indicate the sentiment of retail investors.

For TSLA, the “magic” price point in early June seemed to be $200 a share. When the stock fell below that, retail investors appeared to become buyers and come back into the stock in a heavier way.

It’s pretty impressive how TSLA continues to attract younger people to its stock. People are buying what they know, but, like anything, it’s also important to do the research before buying.  Caveat emptor applies to any stock, not just TSLA.

thinkorswim chart

200 CLUB: Shares of TSLA appeared to get a lot of buying interest earlier this year when they fell briefly below $200 a share. Data source: Nasdaq. Chart source: The thinkorswim® platform from TD Ameritrade. For illustrative purposes only. Past performance does not guarantee future results.

thinkorswim

Tesla Earnings and Options Activity

For Q2, TSLA is expected to report adjusted earnings of negative-$0.42 per share, up from negative-$3.06 the prior-year quarter, on revenue of $6.42 billion, according to third-party consensus analyst estimates. That revenue would represent a 60.4% rise from a year ago.

Options traders have priced in an 5.5% stock move in either direction around the coming earnings release, according to the Market Maker Move™ indicator on the thinkorswim® platform. Implied volatility was at the 21st percentile as of this morning.

Weekly options activity has been higher in the 240- and 245-strike puts and the 275- and 285- strike calls.

Note: Call options represent the right, but not the obligation, to buy the underlying security at a predetermined price over a set period of time. Put options represent the right, but not the obligation, to sell the underlying security at a predetermined price over a set period of time.

TD Ameritrade® commentary for educational purposes only. Member SIPC.

I am Chief Market Strategist for TD Ameritrade and began my career as a Chicago Board Options Exchange market maker, trading primarily in the S&P 100 and S&P 500 pits. I’ve also worked for ING Bank, Blue Capital and was Managing Director of Option Trading for Van Der Moolen, USA. In 2006, I joined the thinkorswim Group, which was eventually acquired by TD Ameritrade. I am a 30-year trading veteran and a regular CNBC guest, as well as a member of the Board of Directors at NYSE ARCA and a member of the Arbitration Committee at the CBOE. My licenses include the 3, 4, 7, 24 and 66.

Source: Tesla Gets Ready To Report After Upside Surprise On Q2 Vehicle Deliveries

Elon Musk: Bitcoin is ‘Brilliant, Far Better’ than Paper Money; Tesla Isn’t Jumping in Just Yet

Tesla and SpaceX CEO Elon Musk believes cryptocurrency is a far better medium of transferring value than paper money, specifically lauding bitcoin for its ‘brilliant’ structure. Nearly everywhere Elon Mask goes, people want to talk about Tesla. On Tuesday, however, the media magnet went along with a change in focus by discussing his views about cryptocurrencies. His opinions come within months of a Bitcoin-related tweet that landed him in hot water with the social media platform. He ended up getting his account suspended by Twitter.

Source: Elon Musk: Bitcoin is ‘Brilliant, Far Better’ than Paper Money; Tesla Isn’t Jumping in Just Yet

Billionaire Elon Musk’s $40 Million Tweet May Be A Blessing For Tesla After Settling Fraud Suit -Antoine Gara

1.jpg

A tried and true platitude for many entrepreneurs is they learn more from mistakes than success. The maxim may prove especially true when it comes to automotive and aerospace billionaire Elon Musk and his $45 billion electric car giant Tesla TSLA -13.96%. In August, Musk used his Twitter TWTR -3.26% account to float a buyout of the company for a price of $420 a share, stating he’d secured funding for the take-private and had shareholder support. The price, as it turns out, was a veiled drug joke to Musk’s then-girlfriend Grimes and was pulled mostly out of thin air……

Read more: https://www.forbes.com/sites/antoinegara/2018/09/30/billionaire-elon-musks-40-million-tweet-may-be-a-blessing-for-tesla-after-settling-fraud-suit/#55b46e987435

 

 

Your kindly Donations would be so effective in order to fulfill our future research and endeavors – Thank you

%d bloggers like this:
Skip to toolbar