23 July 2020 | Tesla’s Profitable Year And Future Plans – My Take

Show #848

 

Good morning, good afternoon and good evening wherever you are in the world, welcome to EV News Daily for Thursday 23rd July 2020. It’s Martyn Lee here and I go through every EV story so you don't have to.

 

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TESLA'S FOURTH QUARTER OF PROFIT

Headlnes from CNBC: "Tesla reported its first full year of GAAP profits, along with second-quarter results Wednesday. Tesla said its revenue reached $6.04 billion during the quarter, with $428 million of that from regulatory credits. Net income: $104 million (GAAP). Tesla also reported its first full year of profitability on a GAAP basis, which means it can now be considered for inclusion on the S&P 500 index." CNBC says: "On the earnings call Wednesday, Musk announced that Tesla will build its next factory near Austin, Texas. The company plans to dedicate its Fremont, California, car plant to the production of Model S and Model X vehicles for all markets, and for Model 3 and Model Y production for the Western half of North America. The Texas factory, Musk said, will be used for production of the company’s Cybertruck, Semi, and Model 3 and Model Y vehicles for the Eastern half of North America."

 

https://www.cnbc.com/2020/07/22/tesla-tsla-earnings-q2-2020.html

 

"Tesla has said that its long-term plans don't include regulatory credits as a meaningful driver, but they have been recently. In fact, without regulatory credits, the automaker would not have become eligible to join the S&P 500. [RBC Capital Markets] noted that credits over the last four quarters have amounted to about $1.05 billion." according to Yahoo! Finance: "The company said its regulatory credits could double this year, which suggests they will reach $1.2 billion. It also reiterated hits guidance of 500,000 vehicle deliveries this year, although it added that reached that number could be more difficult due to supply constraints."

 

https://finance.yahoo.com/news/tesla-q2-2020-earnings-stock-155526993.html

 

"Musk on a conference call on Wednesday said Tesla would prioritize growth over profit going forward and focus on making its vehicles more affordable." according to Autoblog: "Tesla on Wednesday affirmed its goal to deliver at least half a million vehicles by the end of 2020 despite production interruptions, including the shutting of its California factory for nearly six weeks of the quarter on orders of local authorities. The company delivered more than 90,000 vehicles in the second quarter, surpassing analyst expectations. Musk said on Wednesday's call that the real limitation to Tesla's growth is battery cell production at an affordable price, and said the company would expand its business with Panasonic Corp  and China's Contemporary Amperex Technology (CATL). Tesla will introduce new low-cost, long-life batteries in its Model 3 sedan in China later this year or early next, Reuters reported previously."

 

https://www.autoblog.com/2020/07/22/tesla-reports-profit-fourth-straight-quarter/

 

From Tesla: "“Our operating profit improved in Q2 despite challenging circumstances. Positive impacts included lower operating costs due to a temporary reduction in employee compensation expense, a sequential increase in regulatory credit revenue and deferred revenue recognition of $48M related to a Full Self Driving (FSD) feature release. These positive contributions were offset by significant costs related to factory shutdowns, as well as a sequential increase in non-cash SBC expense primarily attributable to $101M related to 2018 CEO award milestones. Although the Model Y production line was operating for about four months in the first half of 2020 due to shutdowns, we exited Q2 with Model Y production running at installed capacity.  This ramp was significantly faster than our initial Model 3 ramp, which took over nine months to reach the same weekly rate. We are installing additional machinery at the Fremont Factory, which is expected to increase total Model 3 / Model Y capacity from 400,000 to 500,000 units per year."

 

CYBERTRUCK HEADING FOR AUSTIN

"Tesla has selected Texas as the location for its next US factory. The factory will be the company’s second in North America and located about 15 minutes from downtown Austin and near the Colorado River. Billed as Tesla’s “Cybertruck Gigafactory”, the facility will be the main production plant for its upcoming all-electric Cybertruck and Model 3/Model Y vehicles for customers in the eastern half of the US." says Teslarati: "Musk confirmed that development on the new Giga Texas facility began on the weekend of July 17."

 

https://www.teslarati.com/tesla-gigafactory-texas/

 

TESLA’S GIGA TEXAS IN AUSTIN, TEXAS, WILL BUILD CYBERTRUCK, SEMI, MODEL 3 & Y

" Elon Musk confirmed the location of what is now known as Giga Texas, just outside Austin. The new factory will, as we expected, produce the Cybertruck, but also the Tesla Semi, Model Y, and Model 3 for customers in the Eastern United States." says CleanTEchnica: "Building vehicles in a location in the central United States will help endear a completely new set of potential customers to Tesla, to electric vehicles, and perhaps most importantly, to the Cybertruck itself. Tesla has risen rapidly for those in the technology, clean technology, and environmental segments, but is still largely a mystery to many customers around the world, including millions of truck drivers using their vehicles as a tool for work."

 

https://cleantechnica.com/2020/07/22/confirmed-teslas-giga-texas-in-austin-texas-will-build-cybertruck-semi-model-3-y/

 

 

TESLA SOLAR ROOF TRIPLES INSTALLATIONS

"Tesla's Solar Roof was slow to ramp up for Tesla because it had to find ways of testing for longevity in an accelerated environment and lower the cost, price, and completion time of installations. The first hint that installations were becoming faster came when Tesla confirmed it had "roughly tripled" solar roof installation in Q2 versus Q1, Electrek reports." Interesting Engineering says: "In its Q2 2020 financial results, Tesla wrote: "Solar Roof installations roughly tripled in Q2 compared to Q1. We continue to expand our installation team to increase the deployment rate." As the rate of global climate change approaches a point of no return, homeowners may jump now more so than ever at the chance to take Tesla's solar panel offer of $1.49 per Watt up — signifying the possibility of the biggest-yet change in U.S. energy infrastructure."

 

https://interestingengineering.com/tesla-solar-offering-149-per-watt-installation-on-existing-roofs

 

TESLA INVITES ACTUARIES TO HELP IT CREATE A ‘REVOLUTIONARY’ INSURANCE COMPANY

"Tesla, which has been testing an insurance product for its drivers in California, is preparing to build an insurer, one CEO Elon Musk says will be “revolutionary.” And he’s inviting actuaries to join his cause." according to Insurance Journal: "According to Zachary Kirkhorn, Tesla’s chief financial officer, the company wants to harness the data from its telematics on its cars and drivers to build the new insurance operation beyond California.He said Tesla is nearly finished with testing its California telematics product and hopes to be filing that in several more states by the end of the year with the goal of going nationwide"

 

Elon said: "“I would love to have some high energy actuaries, especially. I have great respect for the actuarial profession. You guys are great at math. Please join Tesla, especially if you want to change things and you’re annoyed by how slow the industry is. This is the place to be. We want revolutionary actuaries”

 

Musk said that accuracy of information is “at the heart of being competitive” with insurance. The choice is between assessing drivers “looking in the rear-view mirror” or assessing them individually, “looking ahead with smart projections” and being able to inform them what actions they can take to reduce their insurance.

 

https://www.insurancejournal.com/news/national/2020/07/24/576871.htm

 

AFFORDABLE MODELS ARE COMING

Elon: "“The thing that bugs me the most is that our cars are not affordable enough. We need to fix that. We want to be slightly positive and maximize growth, and make the cars as affordable as possible"

 

 

 

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