Tag Archive | "Tesla Motors"

Tesla Having Its Best Day in Five Months, Here’s Why…

Tesla Motors Inc. shares have shifted into high gear Monday, reported The WSJ.

The stock is having its best day in five months, up as much as 8.8%, after the electric-car company reported Friday that first-quarter vehicle deliveries came in stronger than expected. Stock markets were closed Friday in observance of Good Friday, so shares are getting their first chance to react in Monday trade.

In a filing made Friday with the Securities and Exchange Commission, Tesla said 10,030 units were delivered in the first three months of the year, exceeding CEO Elon Musk’s initial forecast by 500 units and representing a 55% increase in deliveries from the same period a year ago.

The move by Tesla to begin announcing quarterly deliveries several days after the fiscal period ends is the first of its kind for the car company. Before the latest quarter, it had waited until well after a quarter ended to disclose figures, which put it out of step with the auto industry trend of reporting sales on a monthly basis. Tesla’s faster disclosure of sales figures ushers in a new era of transparency for the business, says Pacific Crest analyst Brad Erickson.

“Disclosing end-of-quarter deliveries from now on shows management’s confidence in the sustainability of demand, in our view,” he added.

Tesla’s first quarter deliveries surpassed Mr. Erickson’s 9,500 estimate, and they eclipsed expectations of 9,500 at Global Equities Research too. Both firms have outperform, or overweight, ratings on the stock with price targets of $293 and $385, respectively. Wall Street, in general, is bullish on Tesla shares with an average price target of roughly $250 among 22 analysts.

After earlier rising as high as $207.75 on Monday morning, Tesla shares were recently up 7.8% to $205.91.

Trip Chowdhry, managing director of equity research at Global Equities Research, is particularly upbeat on Tesla’s outlook, forecasting a steady improvement in second-quarter deliveries with an acceleration in the third quarter and onward. “If Tesla is able to execute well, and continues to push the innovation envelope; we will not be surprised if Tesla emerges to be the most valuable company of the Century,” he wrote.

After a visit to Tesla’s factory Saturday, Mr. Chowdhry says production activity seems to have ramped up in March and is anticipated to continue into April, probably reflecting an end to the West Coast port strikes and easing of parts supply issues. That gives him confidence the car company can deliver at least 12,000 vehicles in the second quarter to reach Tesla’s first half target of 22,000 deliveries.

The company will unveil a brand new product line at the end of April, which is speculated to be a stationary battery storage system for residences. As Mr. Musk looks to grow the company, batteries could add a larger revenue stream to the business that currently gets roughly 95% of its sales from cars.

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Ga. Legislators Table Tesla Bill

ATLANTA — A subcommittee of the House Motor Vehicles Committee voted March 4 to table House Bill 393, which would have allowed Tesla to continue selling its electric vehicles directly to Georgia’s residents. The state’s dealers were behind the move to freeze the bill, The Atlanta Journal-Constitution reports.

Georgia law typically prohibits manufacturers from selling directly to consumers, except for up to 150 customer-made vehicles annually. Tesla sold nearly 500 cars in the state last year, mostly via online orders, which it says should not be included in the 150-vehicle cap. Dealers claim Tesla is violating state law by selling outside of the dealer system.

To read the full story, click here.

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Tesla’s Q3 loss grows to $74.6 million

DETROIT – Tesla Motors reported a loss of $74.6 million in the third quarter, compared with a loss of $38.5 million in the same period of 2013, reported MLive.

The Palo Alto, Calif.-based electric car maker blamed the larger loss on higher R&D costs and challenges related to a production overhaul for its Model S sedan. It also pushed back shipments of its Model X crossover to the third quarter of 2015 from the second quarter.

Tesla said it is investing in increased production to produce more than 2,000 Model S units per week by the end of 2015. Still, a delay in transitioning the production has caused it to adjust its projected deliveries of the Model S in 2014 to 33,000 units from 35,000.

The company stressed to investors Wednesday afternoon that growing losses in the third quarter are not from a lack of demand for its all-electric cars.

“Being unable to increase production fast enough, not lack of demand, is a fair criticism of Tesla,” the company said in its earnings release. “That said, we expect our annual production will increase by over 50% in 2014, again in 2015 and probably for several years to follow. This is unusual in the car industry.”

Tesla’s revenues jumped to $851.8 million, compared with $430.2 million in the third quarter of 2013.

The company was recently in the spotlight in Michigan because if legislation that Tesla and some law observers say is aimed keeping its unique, direct-to-consumer sales model illegal in the state.

Gov. Rick Snyder last signed a bill his office described as bipartisan legislation that simply strengthens existing law as it pertains to automobile dealership sales in Michigan.

But Tesla says the legislation is a direct effort at shutting it out of Michigan.

HB 5606 was approved 38-0 in the Senate and 106-1 in the House of Representatives after being presented to state legislators as aimed at prohibiting car dealerships in the state from dictating fees they charge customers. With the legislation, dealerships can decide whether or not to charge certain transaction fees.

“This bill does not, as some have claimed, prevent auto manufacturers from selling automobiles directly to consumers at retail in Michigan – because this is already prohibited under Michigan law,” Snyder said in a letter to lawmakers that accompanies the signed bill.

Todd Maron, general counsel for Tesla, said that not only does it further ensure that company cannot sell directly to consumers in the state, it goes so far as to prohibit Tesla from displaying its cars to and communicating with potential customers in Michigan.

“These changes were put in at the last minute with nobody vetting them,” Maron said, adding, “It looks like what they were trying to do is completely shut us out of Michigan.”

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Mich. Governor Signs ‘Anti-Tesla’ Bill

LANSING, Mich. — Michigan Governor Rick Snyder signed into law on Tuesday legislation that adds tighter restrictions on direct-to-consumer vehicle sales. The move effectively bans Tesla Motors from selling vehicles in the state.

Introduced in May, House Bill 5606 originally focused on prohibiting auto manufacturers from dictating what fees a franchised dealer can charge customers. But thanks to a procedural loophole, state lawmakers were able to toss in a last-minute amendment without public comment or debate. And that amendment reinforces a ban on selling vehicles directly to consumers.

The “Tesla Motors Team” reacted the day after the state legislature approved the legislation on Oct. 15. The electric-car maker called the bill a “raw deal,” writing that the last-minute change created an “effective prohibition against Tesla operating in Michigan. The company added that the move was a continuation of the “anti-competitive behavior” the company faced in New Jersey and Missouri.

“By striking a single, but critical word from … the law governing franchise relations in Michigan, the dealers seek to force Tesla into a body of law solely intended to govern the relationship between a manufacturer and its associated dealers,” Tesla stated in its blog post.

Gov. Snyder, however, said Tesla misunderstood what the new law does.

“The bill does not, as some have claimed, prevent auto manufacturers from selling automobiles directly to consumers at retail in Michigan,” Snyder said in a press release. “This is already prohibited under Michigan law.”

The last-minute amendment deleted the word “its” from a sentence in the existing law. A press release from the Governor’s office said that the change was made to allow manufacturers who don’t have their own franchised dealers to sell through another manufacturer’s dealer network.

Snyder added that lawmakers should discuss the current business model to determine if it was good for the state’s consumers.

“We should always be willing to re-examine our business and regulatory practices with an eye toward improving the customer experience for our citizens and doing things in a more efficient and less costly fashion,” said Snyder.

General Motors issued a statement yesterday in support of the legislation, saying the new law would “provide stability and support for our dealers.”

“Further, it will ensure we compete under the same rules in the marketplace as other automobile manufacturers,” GM stated.

Tesla officials could not be reached for comment.

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Tesla Aims to Leapfrog Rivals

Tesla Motors Inc. plans to offer hands-free highway driving in its Model S electric sedans in 2015, putting it as much as a year ahead of other luxury brands in offering autopilot functions in automobiles, according to people familiar with the company’s plans, reported The Wall Street Journal.

Other auto makers, including General Motors Co. and Volkswagen AG’s Audi, have said they’re aiming to launch hands-free highway driving systems by roughly 2016. Daimler AG’s Mercedes-Benz now sells a system that can pilot a car on a freeway, but it is designed so that drivers must keep a hand on the wheel.

Tesla’s plan for rolling out a semiautonomous driving system, which it calls Autopilot, and several other safety and driver assistance capabilities, presents as much of a challenge to its rivals as any of the individual features, said analysts. Chief Executive Elon Musk sketched out some of the company’s plans in suburban Los Angeles Thursday night, but said little about timing.

Tesla is installing in new Model S sedans radar, cameras and other equipment to enable hands-free highway driving, an automated parking system and other driver assistance and safety features. To eventually activate certain convenience features, including hands-free highway driving, will require purchasing an optional $4,250 technology package, the company said on its website.

The company plans to upgrade the software in these cars through “over the air” updates to enable the features and functions over the coming months. Established car makers have been much slower to adopt the frequent, over-the-air software upgrade approach common in the world of cellphones and other digital devices.

“Tesla is able to bring forth enhancements in product through over-the-air updates that would take other auto companies years to commercialize,” Morgan Stanley analyst Adam Jonas wrote in a note on Friday.

On Tesla’s website, the company said “progressive software updates over time” will “ultimately” give the Model S Autopilot the ability to operate in automatic mode from highway on-ramp to off-ramp.

New Model S sedans shipping now will include some features already common in rivals’ luxury vehicles, including lane departure warning, which signals when the car is drifting out of its lane. Other driver assistance features such as a cruise-control system that can respond to traffic conditions are expected to be released this year.

More advanced autopilot features, including hands-free highway driving, an automatic lane-change function and the automated parking system should be delivered to cars by the first half of next year, the people said.

Tesla’s moves come as auto makers are racing to deliver features that allow the car to shoulder more of the tedium and stress of stop-and-go traffic and long highway drives.

Mercedes-Benz S Class and E Class models were the first to offer features that automatically keep a car centered in a lane, navigate freeway curves and maintain a set speed up to 124 miles an hour. The system uses stereo cameras, which mimic human eyes, radar and ultrasonic sensors to feed information about the car’s surroundings into onboard computers, but requires the driver to keep a hand on the wheel.

GM’s Cadillac division promises in 2016 a system it calls “super cruise” that allows hands-free operation of a car at highway speeds. Volkswagen’s Audi, BMW AG and other luxury brands also have signaled plans to offer hands-free “advanced driver assistance systems,” or automated driving features, around 2016.

As for parking, BMW and Lexus, among others, now offer parking assist systems that enable their newer vehicles to maneuver themselves into a parallel parking spot, but drivers have to remain on board. Mr. Musk is promising he wants his system to allow drivers to leave the car and let the vehicle park itself.

Mr. Musk’s promise of autopilot systems could spur rivals to speed up their plans to launch similar features, analysts said.

“The media attention…will likely accelerate the ADAS/semi-autonomous rollout efforts of other” auto makers, Barclays analyst Brian Johnson said in a research note.

On other features Mr. Musk highlighted, Tesla is a follower.

German luxury car makers already offer all-wheel-drive systems on most of their models, and about 36% of the vehicles they sold in the U.S. in 2013 are equipped with the systems, according to WardsAuto data cited by Barclays.

BMW’s i8 plug-in hybrid, which competes with the upper end of the Tesla Model S range, has a small gasoline engine that drives the rear wheels, and electric motor that drives the front wheels.

Tesla says its approach to all-wheel-drive is superior, because its system delivers faster acceleration than a standard Model S and has 10 miles additional driving range over a single-motor model. Most gasoline powered cars with all-wheel drive are less efficient than two-wheel drive models.

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Tesla Motors’ Loss Widens on Higher Spending

Tesla Motors Inc said its second-quarter loss increased to $62 million, or 50 cents a share, from a $31 million loss a year ago as the company ramped up spending to develop its second electric vehicle, added workers and expanded into China, reported The Wall Street Journal.

Tesla said it delivered 7,579 Model S vehicles in the quarter, a bit above the 7,500 it had forecast. But Tesla lowered its forecast for revenue and deliveries for the third quarter to 7,800 vehicles from 9,500 because it had to shut down its factory in Fremont, Calif., to install equipment in July. Tesla said it should be able to ramp up production in the final three months of 2014 to reach its sales goal of 35,000.

Earlier Thursday, Tesla and Panasonic Corp. said they had reached an agreement for the battery maker to participate in the construction and operation of the world’s largest battery factory in the U.S. The so-called Gigafactory would be an investment of as much as $5 billion and employ 6,500 people, giving Tesla battery capacity for up to 500,000 vehicles a year.

Panasonic, earlier Thursday, reported that operating profit rose 28% to ¥82 billion ($798 million) in the April-June quarter. Sales increased 1.5%, helped by strong performance in its housing and automotive businesses. Net profit dropped 65% owing to a one-time gain in the year-ago period from a change in its pension scheme.

Tesla said it expects its annualized pace of deliveries will hit 100,000 vehicles by the end of next year, as it ramps up production of its Model X sport utility vehicle. In addition to that forecast, Chief Executive Officer Elon Musk boldly predicted that within 10 years, Tesla’s electric cars are “heading to a place of no contest when it comes to gasoline,” meaning electric cars will be lower cost.

Tesla said in its shareholder letter that it began site work near Reno, Nev., in June but continues to evaluate other locations in Arizona, California, Texas and New Mexico. Mr. Elon Musk, in a call with analysts, said the company would begin site work at one or more other sites and that the company was trying to work with local governments, which he expected would pay for up to 10% of the total project costs.

Revenue for Tesla rose 89% from a year earlier to $769 million. The average automotive revenue per electric car was about $101,000 during the quarter. The company said in a statement that demand for the Model S continues to rise in North America and Europe.

“We believe these markets remain underpenetrated,” the auto maker said, addressing concerns expressed by some analysts that sales growth in the U.S. and Europe was cooling off.

Tesla addressed another concern, saying that increased battery cell production by Panasonic in Japan should allow for higher production.

Tesla’s earnings were reduced by a noncash interest expense related to raising $2.3 billion in convertible notes earlier this year and stock-based compensation for executives. Tesla’s loss from operations rose to $28.7 million as research-and-development costs and overhead jumped 20% combined from the first quarter.

Earnings excluding stock-based executive compensation and the noncash interest expense were $16 million, or 11 cents a share, better than the 4-cent a share consensus forecast of analysts polled by Thomson Reuters.

Tesla adjusted revenue, which takes into account deferred leasing revenue, was $858 million for the quarter. The leases help overall deliveries, but put a lid on top-line GAAP revenue.

Similar to the second quarter, Tesla said its costs would jump in the third quarter to fuel research and development and new employment, with R&D spending rising 20% and overhead increasing 15%. The company said it would be “marginally profitable” on a basis that adjusts for the lease accounting, stock-based compensation and noncash interest expense.

Tesla also said its spending on capital expenses for 2014 could be as high as $950 million, up from an earlier forecast of $850 million.

“We are not currently showing all our cards,” he said. “Our cap-ex and R&D numbers are better than they appear because there are things you don’t know about.”

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