Tesla forced to raise more than $ 2 billion in a fight for profitability

Tesla is looking to raise $ 2 billion, Ford is reducing its V8 production, electric vehicles need to fight against solar power providers and Jaguar has a plan in these difficult times. Everything is in The Morning Shift of Friday, May 3, 2019.

1st gear: A new fundraiser at Tesla, one year after Musk said it would not have been possible.

Just over a year ago, Tesla CEO Elon Musk proudly proclaimed his company's focus on profitability and avoided any continuation of its massive capital increases that kept it afloat.

But now, with Tesla's stock market value down 30 percent this year and the initial cash flow forecast from Tesla's Model 3, the company plans to raise more than $ 2 billion through debt and equity offerings. shares, reports Bloomberg:

The CEO of Tesla said several times last year that Tesla would no longer need to raise capital as soon as its first production car was ramped up. Musk changed its tone after the first quarter, when a record drop in vehicle deliveries and the company's largest debt payment depleted its cash balance to $ 2.2 billion, its lowest level ever. three years.

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It is unclear how much stock the banks plan to buy. Tesla said the total product offerings could rise to around $ 2.3 billion if subscribers fully exercise their option to purchase additional securities. The offer should be quoted after the close of the market.

The first quarter results of Tesla have been very difficult this year. They announced a loss per share twice what had been projected, forcing Musk to increase its capital, as he had promised a year ago.

According to estimates, $ 2.3 billion will go a long way in keeping Tesla afloat and investors satisfied for the year, but Bloomberg says the company is also expected to spend about $ 2.5 billion to further develop the model crossover Y recently announced and the previous announcements of Tesla Roadster and Semi. .

Musk has promised that the company's profitability will be restored by the third quarter of this year, and it seems more than ever to have to find a way to make sure this promise is sustainable.

2nd gear: Audi All-Star resignation rather abruptly

Mark Del Rosso, the recently appointed president of Audi of America, has suddenly left his post for unknown reasons, despite an excellent track record within the company, reports Automotive News:

After less than six months at the helm of Audi of America, President Mark Del Rosso resigned immediately.

He will be temporarily replaced by the Chief Operating Officer, Cian O'Brien. In a press release announcing the changes in leadership, Audi did not explain the departure of Del Rosso.

Audi said that for almost nine years, during which Del Rosso had directed sales operations in the United States, the company had recorded seven years of record sales, strengthened the financial health of the dealer network and managed profitable growth for ensure greater value of the franchise.

It is unclear whether the resignation was a decision of Del Rosso, or Audis, and no further details appeared. It's a bit mysterious that a man who does so well in a business as big as Audi can come out of the door suddenly.

It's relatively independent, but the last time an executive at this level stepped down so abruptly, Ford's North American president, Raj Nair, left the automaker last year for "Inappropriate behavior" not specified.

Again, in the age of start-up companies that take the talent of traditional builders, it is possible that the departure of Del Rosso is not as suspicious as it seems at first glance. We will just have to wait for more details to see exactly what happened.

3rd gear: the production of Ford Scaling Back V8 is a sign of the times

The demand for Ford's 5.0-liter V8 engine in the F-series of pickup trucks is down, which is a bit disappointing. But now it also means that the engine's production lines are being shaken, according to Automotive News:

Ford Motor Co. will drop one of three production crews at its Essex engine plant in Windsor, Ontario, in October, as demand for 5.0-liter V8 engines in trucks F series of the manufacturer.

The decision was made "to better align with consumer demand," a spokesman for Ford Canada told Automotive News Canada in an email.

John D'Agnolo, president of Unifor Local 200, who represents the workers at the plant, said the third shift was the result of Ford offering a growing number of engines of different sizes.

F-Series truck buyers can choose between 2.7, 3.3, 3.5 and 5.0-liter engines – as well as a diesel variant – and many opt for smaller engines, D said. Agnolo. A flawless stay

Ford also announced that workers affected by the shift change would be offered a move to the Windsor Engine Plant Annex, which produces its 7.3-liter V8 pusher production, and that there would be no job cuts as a result of the reshuffle. it's good.

4th gear: the electric vehicle and solar energy industries are competing for supplies

Alternative energy industries are growing rapidly, but the ever-increasing demand for supply lines that have to keep pace with the crisis is one of the challenges. This is becoming more and more competition from two growing industries: solar energy and electric cars.

This is not only a competition for electrical components, but it seems that cars have an unfair advantage of Bloomberg:

Components, electrical transistors, are essential for electric vehicles and solar panels to convert current between DC and AC for use in light bulbs, appliances and, of course, cars. As electric vehicle production is booming, solar component manufacturers are expected to wait nearly a year for parts.

"It surprised a lot of people," said Brad Meikle, a solar energy analyst at Williams Trading LLC. He estimated that wait times had increased from eight weeks to more than 50 weeks.

According to companies waiting for supplies, suppliers have apparently ignored the growing demand and have been slow to increase their capacity. Now that orders have wait times of two years in some cases, and with longer-term supplier offers on the table, suppliers are finally starting to accelerate them.

Analysts seem convinced that the problem will quickly disappear, but we must now fear that the solar industry is seeking revenge in … uh, I do not know, maybe blocking the sun? It looks cool, to be honest.

5th gear: Jag keeps up with diesel and gas engines for the moment

Jaguar has been a bit pinch lately, with its big push in China, the global market fleeing the diesel powertrain, and with the threat of a Brexit without agreement that still hangs over everyone.

But if it's one thing companies always have, it's their project and, interestingly enough, Jaguar seems more attached to diesel and big engines.

Here are some details from an interview with Ralf Speth, CEO of Jaguar Land Rover:

In February, the share price of Tata fell by 30% after the automaker announced a quarterly loss. Tata had to reduce the value of its British subsidiary by nearly $ 4 billion. It appears that Tata is exploring strategic options, including the sale of British brands, and PSA General Manager Carlos Tavares has expressed interest.

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What problems do you face?

First and foremost, we are investing heavily in autonomous driving, networking and shared mobility. Second, we renew and expand our product portfolio. Thirdly, we are optimizing all our internal combustion engines so that we can continue to offer our customers exceptional products. Given the current challenges, it is not easy. We would have liked to be in a different place at this point.

As the demand for V-8 diesel and gasoline engines decreases, are you questioning your powertrain strategy?

Absolutely not. I think we will continue to need this mix. According to industry forecasters, a global share of 20 to 30 percent of electrified vehicles is expected by 2025. By contrast, this means that 70 to 80 percent of all vehicles in the world will be equipped with conventional engines. Let me add that today's diesels are absolutely clean and CO2 efficient.

Why is electric mobility still not important for consumers?

On the one hand, the products are still too expensive. On the other hand, the infrastructure is still too impractical and unreliable, so that electric cars tend to be aimed at people with large pockets.

We are used to having automotive leaders talk about the future, as if it were to be all-electric, but in the short term there is still no rational business case. It's really refreshing to hear Speth tell the truth in this regard.

Unfortunately, Jaguar Land Rover must find a solution, as it struggles to fire 2,500 temporary workers and provide 2,500 full-time workers with voluntary leave earlier this year. The struggles of society probably can not be solved forever with a new advocate and dedication to diesel, so here is hoping they do it.

Reverse: Mothers Against Drunk Driving

Neutral: Will Model Y have Model 3 problems?

The Tesla Model 3 was supposed to be the key to the profitability of the company and apparently only worked for about a month. Do you think that the Model Y crossover could solve the problem for good, while the demand for the 3 is causing serious concern? Or does Tesla still have more rounds of financing in the future?