TSLA - Tesla Motors Inc (NASDAQ)

[sptrawler]

A nice confirmation from vehicle manufacturers -

Makes sense in the U.S, they still use UNC and UNF threads and weird gallons, but Ford and GM need to get onto Tesla charging for sales.

 

[JohnDe]

Fair point.

Australia’s future is in tech: Tesla chair

Elon Musk’s right-hand woman Robyn Denholm told a business forum Australia needs to embrace a new vision for the economy away from a reliance on mining and agriculture.

Elon Musk’s right-hand woman Robyn Denholm must have a few interesting tales to tell.

But at the QUT Business Leaders’ Forum in Brisbane on Wednesday the Sydney-based Tesla chair was not getting into a discussion about what it was like “wrangling” in the boardroom with the Tesla founder and the world’s richest person.

“I don’t see myself as an entrepreneur. I have always been a person who has enabled and helped founders create businesses. The Tesla founder is still walking the hall,” she said.

“I like problem solving and usually have complementary skills to the founder. Boards are there to work for all shareholders and help companies achieve their full potential.”

Originally from Sydney’s western suburbs Ms Denholm grew up working in her migrant parents’ petrol station and after university embarked on an accountancy degree which saw her start at accountants Arthur Anderson.

She has had executive roles at Toyota and in the mid-1990s pivoted into technology, joining computer gear manufacturer Sun Microsystems. A single mum of two she found herself in the US and moved to Juniper Networks in 2007, a major network equipment maker, where she became chief financial and operating officer.

She was recruited by Tesla in 2014 as a non-executive director and in early 2017 returned to Sydney to take up the chief operations officer role at Telstra. In October 2018 she became the telco’s giant’s effective second in charge as its chief financial officer.

Five weeks later she resigned after agreeing to take over from the controversial entrepreneur as the chair of Tesla.

Ms Denholm admitted there was a level of risk in her move but wanted to help Tesla continue its journey which began four years previously.

And what a journey, especially in the last 18 months.

By the end of 2022 the company had lost roughly 70 per cent of its value since the stock hit a record high in November 2021, weighed down by global economic uncertainty, increased competition and concerns that Musk was spending too much time on his acquisition of Twitter.

Since then the share price has recovered but it is well under its 2021 high.

“It’s worked out but by the same token you have to believe in what you’re doing. I don’t know how to do it any other way,” Ms Denholm said. “There was a long period of time when everyone was saying electric vehicles were hopeless. But we are now past the tipping point in terms of EV globally. When I joined the board in 2014 the company produced 30,000 electric vehicles and last year it produced 1.365 million.”

Last year Tesla produced 1.365 million electric vehicles. Picture: Getty Images

Ms Denholm said it was important that Australia embraced a new vision for the economy away from a reliance on mining and agriculture.

The Tech Council of Australia has set the goal that by 2030 tech activity across all industries will contribute $250bn every year to the national GDP. It also is aiming for the tech sector to employ more than 1.2 million Australians.

“Tech is here to stay and is set to grow and expand at a blistering pace. No matter what cyclical downturns tech may face, it will keep growing – it must, because our future prosperity depends upon it,” Ms Denholm said.

“It’s true that tech has been in the news recently as a result of prominent lay-offs across the world. Obviously when big tech firms sneeze, some commentators claim the industry is headed for the ICU.

“But times are different. Tech is different. While external pressures come and go, the trend has stayed the same – more of our jobs and more of what we make in Australia is reliant on tech. It would be a mistake to make decisions about Australia’s long-term future based on a cyclical downturn.”

CHRIS HERDE​

BUSINESS REPORTER

 

[JohnDe]

Tesla Starts Selling Model Y in South Korea for About $45,000

Tesla (TSLA) has begun selling its Model Y rear-wheel drive vehicle in South Korea at about 57 million won ($45,010), multiple media reported on Friday, citing the company's website.
The sports utility vehicle price makes it eligible for the maximum rate of government subsidies, Reuters reported.

With the subsidies, the price of Chinese-made Model Y drops to about $37,000 in Seoul and to $30,000 in some cities offering additional incentives for electric vehicles, Bloomberg reported.

The car has a driving range of 350 kilometers and is available for delivery between August and September, Reuters reported.

The only Model Y cars previously available in the country were the dual-motor performance and long-range versions, Bloomberg reported.

View attachment 159590

 

[JohnDe]

Tesla faces citizen grilling on impact of German plant expansion​

GRUENHEIDE, Germany (Reuters) -Tesla on Tuesday sought to assuage Brandenburg state residents' concerns by holding a question-and-answer session on the EV maker's planned expansion that would make its local plant the biggest car factory in the country.

Tesla, which currently produces around 5,000 cars a week, hopes to double the plant's production capacity to 1 million vehicles a year and add 50 gigawatt hours of battery production capacity, though it has not provided a timeline.

Ramping up output at its first European production hub is crucial to Tesla's goal of vanquishing market leader Volkswagen, whose largest plant in Wolfsburg has capacity for 800,000 vehicles but last year produced only around 400,000.

While Volkswagen still holds the highest EV market share in the region, Tesla is making its mark. Its Model Y was the best-selling car in Europe in the first quarter of the year.

Tesla workers answered queries from locals on issues from water use and biodiversity protection to the environmental impact assessment for the expansion, in an attempt to address concerns that could hold up its application to local authorities.

The first phase of the plant's construction was delayed due to the high number of objections from local citizens, mostly related to environmental concerns.

Tesla has long argued that the plant's impact is relatively low and referred to the benefits of EVs in combating climate change.

The carmaker is due to publish the full application for the expansion on Wednesday, and citizens have until mid-September to file objections.

Tesla on Tuesday said the planned expansion covers a new 700-by-700-metre production space, around double the size of its current production hall, and could entail increasing its staff to 22,500, from around 10,000 now.

The attendees' main concern at Tuesday's event was how the carmaker will manage to expand the plant without using additional water, which Tesla has said it will achieve by recycling the 1.4 million cubic metres of water it is licensed to use.

"I keep my animals here for hunting and not even they get enough water. We just don't have enough," Emily, a 23-year-old attendee, told Reuters during the meeting.

Still, others were more optimistic.

"Water isn't a Tesla problem - it's a general problem," said 68-year-old local resident Matthias Handschick. "If the recycling works, that's good - we need these solutions."

(Reporting by Victoria Waldersee, Nette Noestlinger and Leon Malherbe in Gruenheide, GermanyWriting by Christoph SteitzEditing by Louise Heavens and Matthew Lewis)

 

[JohnDe]

Profitability 9.6% operating margin
$2.4B GAAP operating income
$2.7B GAAP net income
$3.1B non-GAAP net income

Cash Operating cash flow of $3.1B
Free cash flow2 of $1.0B
$0.7B increase in our cash and investments3 QoQ to $23.1B

Operations Cybertruck factory tooling on track; producing RC4 builds
Model Y became the best-selling vehicle globally in Q1

Q2-2023 was a record quarter on many levels with our best-ever production and deliveries and revenue approaching $25B in a single
quarter. We are excited that we were able to achieve such results given the macroeconomic environment we are currently in. Our operating margin remained healthy at approximately 10%, even with price reductions in Q1 and early Q2. This reflects our ongoing cost reduction efforts, the continued production ramp success in Berlin and Texas and the strong performance of our Energy and Services & Other businesses.

Our commitment to being at the forefront of AI development entered a new chapter with the start of production of Dojo training computers. We are hopeful that our immense neural net training needs will be satisfied using our in-house designed Dojo hardware. The better the neural net training capacity, the greater the opportunity for our Autopilot team to iterate on new solutions.

In conclusion, we are focusing on cost reduction, new product development that will enable future growth, investments in R&D, better vehicle financing options, continuous product improvement and generation of free cash flow. The challenges of these uncertain times are not over, but we believe we have the right ingredients for the long-term success of the business through a variety of high potential projects.

Revenue
Total revenue grew 47% YoY in Q2 to $24.9B. YoY, revenue was impacted by the following items:

+ growth in vehicle deliveries​

+ growth in other parts of the business​

- reduced ASP YoY (excluding FX impact)​

- negative FX impact of $0.6B1​

Profitability
Our operating income decreased slightly YoY to $2.4B in Q2, resulting in a 9.6% operating margin. YoY, operating
income was primarily impacted by the following items:

- reduced ASP due to mix and pricing​

- cost of production ramp of 4680 cells and other related charges​

- increase in Operating expenses driven by Cybertruck, AI and other large projects​

- negative FX impact​

+ growth in vehicle deliveries (despite margin headwind from underutilization of new factories)​

+ lower cost per vehicle, which includes lower raw material costs and IRA credit​

+ gross profit growth in Energy business as well as Services & Other​

Cash
Quarter-end cash, cash equivalents and investments increased sequentially by $0.7B to $23.1B in Q2, driven mainly by free
cash flow of $1.0B, partially offset by other financing activities, including debt repayments.

https://digitalassets.tesla.com/tesla-contents/image/upload/TSLA-Q2-2023-Update.pdf

Tesla, Inc. Q2 2023 Financial Results and Q&A Webcast Audio only

 

[JohnDe]

 

[mullokintyre]

Is this what they call deflation?
Mick

 

[mullokintyre]

Not sure how this article about Tesla being a bit "optimistic" about their range will be received, but I put it out there anyway.
From Reuters

IN March, Alexandre Ponsin set out on a family road trip from Colorado to California in his newly purchased Tesla, a used 2021 Model 3. He expected to get something close to the electric sport sedan’s advertised driving range: 353 miles on a fully charged battery.

He soon realized he was sometimes getting less than half that much range, particularly in cold weather – such severe underperformance that he was convinced the car had a serious defect.

“We’re looking at the range, and you literally see the number decrease in front of your eyes,” he said of his dashboard range meter.

Ponsin contacted Tesla and booked a service appointment in California. He later received two text messages, telling him that “remote diagnostics” had determined his battery was fine, and then: “We would like to cancel your visit.”

What Ponsin didn’t know was that Tesla employees had been instructed to thwart any customers complaining about poor driving range from bringing their vehicles in for service. Last summer, the company quietly created a “Diversion Team” in Las Vegas to cancel as many range-related appointments as possible.

The Austin, Texas-based electric carmaker deployed the team because its service centers were inundated with appointments from owners who had expected better performance based on the company’s advertised estimates and the projections displayed by the in-dash range meters of the cars themselves, according to several people familiar with the matter.
Tesla years ago began exaggerating its vehicles’ potential driving distance – by rigging their range-estimating software. The company decided about a decade ago, for marketing purposes, to write algorithms for its range meter that would show drivers “rosy” projections for the distance it could travel on a full battery, according to a person familiar with an early design of the software for its in-dash readouts.

Then, when the battery fell below 50% of its maximum charge, the algorithm would show drivers more realistic projections for their remaining driving range, this person said. To prevent drivers from getting stranded as their predicted range started declining more quickly, Teslas were designed with a “safety buffer,” allowing about 15 miles (24 km) of additional range even after the dash readout showed an empty battery, the source said.

The directive to present the optimistic range estimates came from Tesla Chief Executive Elon Musk, this person said.

“Elon wanted to show good range numbers when fully charged,” the person said, adding: “When you buy a car off the lot seeing 350-mile, 400-mile range, it makes you feel good.”

Tesla’s intentional inflation of in-dash range-meter projections and the creation of its range-complaints diversion team have not been previously reported.

Driving range is among the most important factors in consumer decisions on which electric car to buy, or whether to buy one at all. So-called range anxiety – the fear of running out of power before reaching a charger – has been a primary obstacle to boosting electric-vehicle sales.


South Korean regulators cited Tesla for false advertising this year. The agency said the company failed to disclose that cold weather could greatly reduce its vehicles’ driving range. Regulators also required Tesla to change certain wording on its local website.
At the time Tesla programmed in the rosy range projections, it was selling only two models: the two-door Roadster, its first vehicle, which was later discontinued; and the Model S, a luxury sport sedan launched in 2012. It now sells four models: two cars, the 3 and S; and two crossover SUVs, the X and Y. Tesla plans the return of the Roadster, along with a “Cybertruck” pickup.

Reuters could not determine whether Tesla still uses algorithms that boost in-dash range estimates. But automotive testers and regulators continue to flag the company for exaggerating the distance its vehicles can travel before their batteries run out.

Tesla was fined earlier this year by South Korean regulators who found the cars delivered as little as half their advertised range in cold weather. Another recent study found that three Tesla models averaged 26% below their advertised ranges.

The U.S. Environmental Protection Agency (EPA) has required Tesla since the 2020 model year to reduce the range estimates the automaker wanted to advertise for six of its vehicles by an average of 3%. The EPA told Reuters, however, that it expects some variation between the results of separate tests conducted by automakers and the agency.

Data collected in 2022 and 2023 from more than 8,000 Teslas by Recurrent, a Seattle-based EV analytics company, showed that the cars’ dashboard range meters didn’t change their estimates to reflect hot or cold outside temperatures, which can greatly reduce range.

Recurrent found that Tesla’s four models almost always calculated that they could travel more than 90% of their advertised EPA range estimates regardless of external temperatures. Scott Case, Recurrent’s chief executive, told Reuters that Tesla’s range meters also ignore many other conditions affecting driving distance.

Electric cars can lose driving range for a lot of the same reasons as gasoline cars — but to a greater degree. The cold is a particular drag on EVs, slowing the chemical and physical reactions inside their batteries and requiring a heating system to protect them. Other drains on the battery include hilly terrain, headwinds, a driver’s lead foot and running the heating or air-conditioning inside the cabin.

Tesla discusses the general effect of such conditions in a “Range Tips” section of its website. The automaker also recently updated its vehicle software to provide a breakdown of battery consumption during recent trips with suggestions on how range might have been improved.

Mick

 

[orr]

For those wishing to put into Youtube;
'Tesla Breakthough: James Douma explains....'

There's a break down of one line of thinking behind the 'Dojo' elements of Morgan Stanleys recent TESLa stock forecast.

 

[basilio]

Developments in Giga Press. Casting an entire car in one go.

 

[orr]

How many (short years) until my Tesla Bot smothers me in my sleep.
Better that than a heart attack out pushing a lawn mower.
Mine will be called 'Heimi'.
A bump in the stock overnight; a coinsidence? probably as a lot tech jumped... but.

 

[JohnDe]

An interesting read -

Tesla, Inc. (NASDAQ:TSLA) demonstrated notable financial and operational progress in Q3 2023, marked by an increase in revenue primarily attributed to a rise in vehicle deliveries and expansion across various business segments. However, this growth was moderated by a decrease in the average selling price. The company's operating income experienced a decline, influenced by lower selling prices, increased operating expenses due to investments in Cybertruck and AI developments, and costs related to factory upgrades and production adjustments. Despite these challenges, Tesla's financial health remained vigorous, improving its liquidity position, and highlighting a robust balance sheet and cash reserves.

This article extends my previous discussionby examining Tesla's financial health in Q3 2023 and conducting a technical analysis to identify investment opportunities. The analysis indicates that Tesla has developed a pronounced bullish price trend, suggesting a potential upward trajectory in its stock value.

Revenue Growth Amidst Market Challenges​

Tesla reported a solid revenue growth, with a 9% year-over-year increase, amounting to $23.35 billion. This growth was primarily fueled by increased vehicle deliveries and expansion in other segments of the company's business. However, the revenue figures were somewhat impacted by a year-over-year reduction in the average selling price. Regarding profitability, Tesla saw a year-over-year decrease in operating income, dropping to $1.764 billion in Q3 and leading to an operating margin of 7.6%. The reduction in profitability was influenced by several factors including a decrease in average selling price, and an uptick in operating expenses driven by significant investments in Cybertruck, AI developments, and R&D initiatives. The costs associated with production ramp and idle time related to factory upgrades also contributed to this decline in profitability.

The chart below illustrates Tesla's quarterly revenue and net income, revealing an incremental trend despite a noted decline in profitability in Q3.

Data by YCharts


Tesla has reduced the prices of its vehicles, aiming to expand its market share, in an effort to maintain its edge in the electric vehicle market. This strategy caters to consumers more concerned with monthly payments than the upfront cost, especially in the face of rising interest rates. Although this approach has fueled Tesla's growth, with a 27% increase in deliveries in Q3, it has also reduced the gross profit margin to 17.89%.

Data by YCharts


Despite the reduction in the profit margin, Tesla's liquidity improved in Q3, with quarter-end cash, cash equivalents, and investments increasing by $3.0 billion sequentially, totaling $26.1 billion. This was driven by financing activities that generated $2.3 billion and a healthy free cash flow of $0.8 billion, indicating a solid company balance sheet and cash position.

Additionally, Tesla substantially enhanced its manufacturing lines at several plants, leading to a momentary dip in production levels. Total production for Q3 2023 was $430.39 million compared to $479.7 million in Q2 2023. Nevertheless, the company efficiently improved its delivery pace over the quarter, noting that deliveries in September accounted for about 40% of the quarter's total, marking a reduction from the previous year's 65% for the same period.

In the U.S., the pilot production of the Cybertruck commenced at Tesla's Gigafactory in Texas, with the company preparing for a steady elevation in the production rate of the Model Y. Efforts to optimize the supply chain for cost-effectiveness are in progress. The production of the dense 4680 battery cells is ongoing, with further scaling up of cathode production and lithium refining capabilities in the country.

Tesla's energy storage sector experienced a remarkable 90% year-over-year jump in deployments, reaching an all-time high of 4.0 GWh in Q3. This surge is credited to the progressive scale-up of the Lathrop Megafactory in California, aiming for a grand capacity of 40 GWh upon completing the second expansion phase. On the other hand, the solar division faced setbacks, with deployment falling sequentially and year-over-year to 49 MW, influenced by increasing interest rates and the net metering in California.

Tesla is on track to increase production, aiming to surpass the long-term annual growth target of 50% CAGR with expectations to produce approximately 1.8 million vehicles in 2023. The company possesses substantial liquidity to support product development, capacity expansion, and other financial commitments, ensuring a resilient balance sheet.

Tesla's resilience in the face of market challenges is evident from substantial revenue growth and strategic pricing adjustments to capture a larger share of the electric vehicle market. The company's commitment to innovation and efficiency, particularly in manufacturing and AI, has enabled it to sustain growth and improve liquidity, despite the pressures on profitability and the average selling price. With a strong balance sheet, a focus on scaling production, and the deliveries of Cybertruck, Tesla is well-positioned to navigate the evolving automotive landscape and continue its growth trajectory.

Decoding the Bullish Price Structure​

Recap​

The previous article showcased the market's significant volatility using yearly and quarterly charts. Tesla's stock experienced a remarkable surge, escalating by 3412.17% from a 2019 low of $11.80 to a record high of $414.50 in 2021. This rapid price increase over three years indicated significant volatility, leading to a notable price correction, with the stock hitting a low of $101.81 in 2023. This price correction marked support and resulted in a robust price recovery, as seen by the bullish hammer pattern on the quarterly chart. The strong rebound from $101.81 formed a distinctive falling wedge pattern, signaling potential bullish momentum in the market. The critical support level at $215 was also the strategic entry point for long-term investors.

Tesla's Future Trajectory​

Despite ongoing market fluctuations, Tesla stock has maintained a robustly bullish trend. The monthly chart below showcases significant price moves, with the red trendline marking a critical juncture for potential future price increases. Notably, the monthly chart's January 2023 bullish hammer candlestick signals a foundational low point and predicts a continued upward trajectory. The RSI maintaining above the 50 midpoint further reinforces this positive outlook.

TSLA Monthly Chart (StockCharts.com)



The weekly chart highlights a falling wedge pattern, reinforcing the bullish sentiment previously discussed. The stock's consistent fluctuations within this pattern support a bullish forecast. The previously discussed key support level of $215 has shown strength, with the stock briefly dipping to $191.25 before rebounding, forming a bullish hammer on the weekly chart. This sharp decline and subsequent recovery have given rise to a bull flag pattern, another bullish signal. The existence of the bull flag within the falling wedge pattern suggests a preparation of the stock price to breach the $300 mark, triggering another substantial rally.

TSLA Weekly Chart (StockCharts.com)



This bull flag pattern is also discernible in the short-term daily chart below. It is developed following the formation of an inverted head and shoulders pattern, with the head at $101.81 and the shoulders at $166.18 and $152.37. The neckline of this pattern, situated at $215, has been decisively broken, and a recent retest of $215 consolidates the anticipation of a continued rally. Furthermore, the appearance of a bullish hammer candlestick on the daily chart amplifies the likelihood of a breakout from the bull flag pattern.

TSLA Daily Chart (StockCharts.com)



Based on the above discussion, investors can consider increasing long positions in anticipation of a significant surge following a breakthrough above the $300 mark.

Market Risk​

The strategic move to reduce prices, targeting a larger share in the competitive electric vehicle market, has decreased operating income to $1.764 billion and a lower operating margin of 7.6%. This scenario, coupled with increased operating expenses from investments in Cybertruck, AI, and R&D and costs associated with factory upgrades, presents a substantial risk to Tesla's profitability. The onset of Cybertruck production and the scaling up of 4680 battery cell production are positive steps but carry substantial financial and operational risks, including potential delays and increased costs. Additionally, challenges in the solar division, including a decrease in deployment to 49 MW, reflect broader issues in renewable energy markets.

The company's aggressive growth target of producing approximately 1.8 million vehicles in 2023, alongside large-scale investments in product development and capacity expansion, requires careful financial management. While Tesla's commitment to innovation and market dominance is clear, the inherent risks in these ambitious plans, coupled with external economic factors like interest rates and market competition, could impact its financial stability and stock performance in the future.

From a technical standpoint, the stock demonstrates significant volatility, evidenced by substantial price fluctuations in both directions. Should the stock close below $150 monthly, it would undermine the short-term positive trend, suggesting a potential further decline in the market.

Final Thoughts​

In conclusion, Tesla showed impressive resilience and adaptability in the face of market challenges during Q3 2023. The company grew revenue, primarily driven by increased vehicle deliveries and expansion across various segments. However, this was tempered by a decrease in the average selling price and a decline in operating income, affected by investments in the Cybertruck, AI developments, and increased operational expenses.

Despite these challenges, Tesla has maintained a solid financial position with improved liquidity and robust cash reserves. The company's strategic pricing adjustments and focus on innovation and efficiency have sustained growth and positioned it to capture a larger share of the electric vehicle market.

From a technical analysis perspective, Tesla's stock demonstrates a pronounced bullish trend, indicating a potential upward trajectory in stock value. Tesla's stock has consistently exhibited a strongly bullish trend despite market volatility. The falling wedge and bull flag patterns signify a solid momentum in price. If the stock surpasses the $300 mark, it will likely confirm the existing bullish price structure, potentially leading to a significant increase in price. Investors may consider taking long positions in Tesla, Inc. stock at the current levels in anticipation of a price surge.

 

[pozindustrial]

An in depth valuation of most of Tesla businesses is presented here by a disruptive investor finishing with stock price predictions up to 2033. His spreadsheet begins at 56 mins.

 

[Knobby22]

There are a lot of competitors appearing. I can't see a decent moat.
In 5 years time it will be very tough for Tesla imo.

 

[Value Collector]

There are a lot of competitors appearing. I can't see a decent moat.
In 5 years time it will be very tough for Tesla imo.

I think at the moment and for the foreseeable future, their moat in the charging network, their self driving software and their vertical integration.

As an owner of a Tesla, that has attempted to use non Tesla charging locations, they are atrocious and when it comes to their software they are years ahead.

I think we are in the Nokia and IPhone situation, Tesla is the IPhone, it’s not clear which car maker will be the Samsung galaxy yet, but I think some will disappear during the transition.

————————
I hold a little block of Tesla, but it’s less than 1% of my portfolio now, so I am not “talking my book”

 

[JohnDe]

There are a lot of competitors appearing. I can't see a decent moat.
In 5 years time it will be very tough for Tesla imo.

If they were just a car company, yes. But they’re not just a car company.

 

[pozindustrial]

I think their speed of innovation is their moat. Also, they own and built their software while Ford admitted to having 150 different software from suppliers that do not talk to each other. In a Tesla everything talks to everything. It’s a computer on wheels so the Apple/Nokia comparison is spot on.

 

[mullokintyre]

Hope they plan to bring them to OZ, would be an absolute winner.

Mick

 

[Dona Ferentes]

going to be unstoppable? give us a brake!

 

[eskys]

Apply the handbrake?