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Tesla Dismisses Model 3 Production Shortfall and Investors Appear to Agree

Production accelerating so fast it may soon “exceed even that of Ford and the Model T.”

by on Apr.03, 2018

Tesla's Elon Musk told investors the company will be closing in on higher production numbers for the Model 3.

Tesla on Tuesday confirmed that it again fell short of its production target for the much-delayed Model 3 sedan, though it also promised that the “production rate will climb rapidly” from the 2,000 battery-cars assembled each week in late March to 5,000 by the end of the second quarter.

Delays with the ramp-up of the Model 3, Tesla’s first mainstream offering, have been a nightmare for the California-based carmaker, plunging its first-quarter earnings deeply into the red and raising the specter of having to raise new equity to fund its ongoing operations. But after a sharp plunge in its stock over the past month, investors appear to be taking solace in the latest production figures, Tesla shares surging by more than 3% in late morning trading.

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Tesla played up the positive in a statement Tuesday, despite missing its production target. It cited “the progress made thus far” as “laying the groundwork” for a strong third quarter. “As a result, Tesla does not require an equity or debt raise this year, apart from standard credit lines.” (more…)

Tesla Faces a Stock Market Freefall Over Growing Model 3, Crash and Cash Flow Concerns

“Reality is setting in,” as shares fall by a third from 52-week high.

by on Mar.29, 2018

Tesla CEO Musk has repeatedly been caught missing production targets on vehicles like the Model 3.

Tesla stock is getting pummeled by investors over growing concerns about the company’s cash coffers, a crash that is raising serious concerns about its vaunted Autopilot technology, and the ongoing “manufacturing hell” at the automaker’s assembly plant in Fremont, California.

TSLA shares briefly crashed through their 52-week low Thursday morning before staging a modest rebound. But the once high-flying stock has clearly been wounded and is now running about a third below its 52-week high.

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“Reality is setting in,” said Joe Phillippi, head of AutoTrends Consulting, and a long-time Wall Street automotive analyst. Investors, he said, “were banking on increased earnings…once they got their manufacturing system fixed. It was going to be a no-brainer.”

(more…)

Tesla Shareholders Vote Yes on Musk’s $2.6B Compensation Plan

Total payout could exceed $55B if Tesla his all targets.

by on Mar.22, 2018

Tesla's shareholders approved the $2.6 billion compensation package for CEO Elon Musk.

Tesla Inc. shareholders told founder and CEO Elon Musk that they liked him, but not that they really, really liked him. Investors approved Musk’s compensation package by almost a 3-to-1 margin, which is lower than typical approvals.

The grant gives Musk $2.6 billion in stock options in 12 tranches, each of which vests as the company hits performance markers during the next 10 years.

Industry News!

The electric vehicle manufacturer must meet certain value targets in order for Musk to receive additional shares of Tesla stock. There is no cash compensation in the deal, according to a Securities and Exchange Commission filing. (more…)

Long-Term Outlook for US Auto Sales — Stable

Only a major event would impact sales.

by on Mar.20, 2018

New vehicle sales are expected to stabilize in the 16.8 million to 17 million unit range.

Barring a sudden shock such as a financial crisis like the one in 2008 or another foreseen disruption of the economy in the U.S. or other parts of the world, the auto industry appears headed for a long period of stability, according to an updated forecast by IHS Markit.

Sales appear to have reached a very sustainable plateau quite similar to the that started in the early 1990s and survived the bursting of the “Dot.com” bubble and 9/11, Peter Nagle, an IHS analyst noted in a briefing for reporters in Detroit. The long period of steady, stable sales could stretch out to 2025.

News You Can Trust!

Sales in the U.S. market have been slowing since the middle of 2016, he added. “We’re entering a replacement cycle but at a very level even as the plateau tilts slightly downward.  IHS expects total sales in the U.S. to reach 17 million this year and tail off to 16.8 million in 2019. (more…)

Self-Driving Uber Test Vehicle Kills Pedestrian

Company halts all autonomous testing.

by on Mar.19, 2018

An Uber Volvo XC90 was involved in a minor crash, getting flipped onto its side, during a test program near Phoenix last year.

Company’s testing autonomous vehicles and self-driving technologies have one giant fear, a fatality. That fear became a reality last night for Uber as one of its self-driving vehicles killed a pedestrian in Tempe, Arizona.

The incident occurred when the vehicle was in autonomous mode; however, there was a safety engineer behind the wheel, which is standard Uber practice. There were no other passengers in the vehicle at the time.

Autonomous News!

According to a USA Today report, the woman, who has not yet been named, was crossing outside the designated crosswalk at about 10 p.m. when she was hit, police said. (more…)

Chinese Automaker Nio Aims for $2b U.S. IPO

Move underscores China’s aggressive aims for American auto market.

by on Mar.01, 2018

Nio is selling its ES8 battery-electric SUV in China. Will it be the company's entry vehicle for the U.S.?

It has yet to sell a single car in the United States, but that hasn’t stopped Chinese electric vehicle startup Nio from putting together a consortium of American banks charged with setting up a U.S. IPO that could raise as much as $2 billion in capital.

While that’s a fraction of the $25 billion stock offering floated in 2014 by China’s massive e-commerce service, Alibaba Group Holding Ltd., it underscores the ambitious goals of Chinese automakers aiming to crack into the world’s second-largest automotive market.

Global News!

So far, only a handful of Chinese-made vehicles have come into the U.S. and, like the Buick Envision, they’re offered by Western brands such as Buick and Volvo. But a number of domestic Chinese manufacturers are hoping to crack the code over the next few years, including GAC which showed off a variety of models at the North American International Auto Show in January. (more…)

Geely Chairman Shufu Shaking Up Auto Industry

Daimler may have gained a new strategic partner.

by on Feb.26, 2018

Geely Chairman Li Shufu, left, and Volvo CEO Stefan Jacoby after Shufu signed the papers to take the majority interest in Volvo Cars.

Daimler AG and its principal Chinese partner, BAIC, plan to invest almost $2 billion in a state-of-the-art factory in China, even as Li Shufu, the ambitious entrepreneur, who has made Geely into an automotive power begins to digest his purchase of a 9.7% stake in the company.

Adding to the intrigue, Daimler and BAIC, the company built around Beijing Jeep and a key Geely competitor, plan to use the money to revamp a factory they jointly own to build both Mercedes-Benz luxury and electric vehicles from Mercedes new line of electric vehicles.

An Electrifying News Source!

The investment was clearly planned prior to Li Shufu’s dramatic disclosure he had quietly acquired 9.7% of Daimler AG’s shares. The Chinese entrepreneur, who has built his company into the largest privately owned auto company in China, also hinted that he was prepared to acquire more shares even as he prepared to visit Germany for a round of talks with Daimler executive in Stuttgart and officials from the German government in Berlin. (more…)

Geely Buys 9.7% of Daimler AG for $9.2 Billion

Chinese company now Daimler's largest shareholder.

by on Feb.23, 2018

Geely Chairman Li Khufu purchased 9.7% of Daimler AG for $9.2 billion.

Li Shufu, Geely’s chairman and majority owner, continues to sample different flavors from the automotive industry buffet, spending $9.2 billion for a 9.7% stake in Daimler AG.

The purchase, which was revealed in a regulatory filing, makes Shufu Daimler’s largest single shareholder ahead of the Kuwait Investment Authority, which holds 6.8%. Nearly 71% of Daimler shares are held by institutional holders, like Shufu.

The Last Word!

“We are delighted, with Li Shufu, to have won over another long-term investor who is convinced of Daimler’s innovative prowess, strategy and future potential,” a Daimler spokesperson told Reuters. “Daimler knows and respects Li Shufu as a Chinese entrepreneur of particular competence and forward thinking.” (more…)

Dyson’s EV Efforts Following a Familiar Path

Entrepreneur plans to start with a low-volume, premium car then add two.

by on Feb.14, 2018

James Dyson confirmed plans to produce an electric vehicle by 2020.

Stop me if you’ve heard this one: a quirky entrepreneur decides to get into the automotive business by developing an electric vehicle, even though he has no real experience in that arena. The grand plan calls for three vehicles to anchor the company.

Sound familiar?

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Yes. But it’s not Elon Musk and Tesla, but rather James Dyson, the famous inventor of the Dyson vacuum and many other products. Dyson recently revealed plans to produce an EV using a solid state batteries rather than the lithium ion panels currently used by automakers. (more…)

Tesla Loses Big Money in 2017: $1.96B

Model 3 production issue escalate expenses, offsetting record revenues.

by on Feb.07, 2018

Production of the new Model 3 has run into some snags, according to Tesla.

Tesla reported its revenues rose in the final quarter of 2017 to $3.3 billion, which was better than last year’s Q4 result of 2.3 billion. However, the increased revenue also brought a bigger loss of $675 million, or 4.01 a share, compared with $619 million, or $3.70 a share.

For the full year, revenue rose 55.7% to $11.7 billion due in large measure to achieving record sales results for its Model S and X electric vehicles; however, the company still lost money for the year and is well behind early production goals for the Model 3.

An Electrifying News Source!

The company lost $1.96 billion, or $11.83 a share, this year compared with $694 million, or $4.68 a share, in 2016 as its operating expenses were nearly double from the year-ago figure. (more…)