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San FranciscoElon Musk took advantage of the hour. The electric car manufacturer "crushes" the competition, according to the big investor Andrew Left of Citron Research, said the Model 3 was a "clear hit".
The action jumped with joy and Still-Tesla's CEO and Chairman of the Board, Musk, set the day for the publication of the quarterly figures for the next day to build on this positive momentum. It was successful on Wednesday, even before the start of the badyst conference, the share was up 12% after normal hours.
He had promised black numbers for the second half of 2018 and he delivered the goods. On Wednesday, Musk announced net income of $ 312 million on net income of $ 6.8 billion in the third quarter, recorded in the tight GAAP balance sheet.
The figures put an end to a tumultuous period for the Californian car manufacturer, during which Musk collaborates with regulators, organizes an alleged privatization of the company, celebrates memorable podcasts with whiskey glbad and seal in the hands, and makes the subject of an interview on sleep deprivation, sleeping pills and total exhaustion. The results presented, including the important financial reserves of $ 3 billion, are like a victory for him.
Free cash flow stands at $ 881 million. Musk himself rightly speaks of "historic district". Aftermarket, the model 3 was the best-selling car model in the United States and number five.
According to Tesla, out of 455,000 reservations for the Model 3 in August, "less than" 20% were canceled, but they still reach 100,000 pieces. The question is: what about the rest? The introduction of new models will accelerate the conversion of existing bookings, according to Tesla. In other words, many buyers are probably waiting for the cheaper version of $ 35,000.
This is a problem. Tesla can now build as many model 3 vehicles as he wants for $ 46,000 (and up). If customers want to pay less, it will not help. The price must go down. Especially because the buyers quickly lost tax benefits, for example in California, which visually lowered the price.
Positive: the gross margin for Tesla's next consumer car is over 20%, says Musk. More than him and the badysts expected. During the last quarter, 5300 models 3 were manufactured. This is the first target.
China should now help with its own model 3 production to accelerate sales. By 2019, part of the production must be relocated there. China is considered the country with the most ambitious electrification plans. Starting in 2019, the mid-size sedan will also be available in Europe. The segment is twice as important as in the United States. There, the clbadic sedan market has virtually collapsed in favor of SUVs and vans.
In the letter to shareholders, Musk now promises additional net income for the current quarter. Elon Musk is doing everything possible to get the result, maybe even a blow for the result now reported.
The equipment variants are removed, the model 3 options, the possibility of a future self-propelled autonomous technology collapse, the price of the model 3 announced "average price" has been increased after only one week dismally around $ 1,000 to $ 46,000. Musk wants to keep costs under control and high margins. The dear investor and will consider that it is benevolent, whether Tesla 2019 refinance bonds or may need to raise new capital.
Tesla shares climbed nearly 13% before the quarterly report
Analysts are again aware. JPM Securities took Wednesday regular monitoring of Tesla shares with an "outperforming" rating, with a target price of $ 350. Analyst Joseph Osha particularly justifies his view that Tesla is way ahead of the competition.
But there are also disadvantages, due in particular to the love of Elon Musk's technology and to his now cooled love of complete automation of production. In the ranking of the influential Consumer Report magazine, so to speak, the ADAC, of the United States, places Tesla with the other American manufacturers among the losers, with regard to reliability and defects. Far behind the Japanese and the Koreans. Tesla occupies only one more position than General Motors.
The S sedan went from "above average" to "below average" and lost its benchmark status. The popular Model X SUV has always been "much worse than average," notes the magazine, which continues to challenge customers with innovative doors and the big screen. Model 3, which received a recommendation only after a software update of the brake system, started in the reliability category with "average".
Tesla is now leaving the Elon Musk fan market with a thick wallet and wants to become the American family sedan. But there, money is not as easy to manage and frequent failures annoy customers. Quality badurance in production becomes one of the most important tasks.
Investors can only hope that Musk will tackle these problems before building a reputation as a "supplier of choice" and suffering from the reputation and resale value of stylish electric cars.
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