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From July 1, 2010 to September 20, 2019, Tesla stock returned roughly 909% versus the S&P 500 return of roughly 190%. That’s what happens with you catch an industry asleep at the wheel.
— Source: Stockcharts.com

COMPANY PROFILE

Tesla, Inc. designs, develops, manufactures, and sells electric vehicles, and energy generation and storage systems in the United States, China, Netherlands, Norway, and internationally. The company operates in two segments, Automotive, and Energy Generation and Storage. The Automotive segment offers sedans and sport utility vehicles. It also provides electric vehicle powertrain components and systems to other manufacturers; and services for electric vehicles through its company-owned service centers, Service Plus locations, and Tesla mobile technicians. This segment sells its products through a network of company-owned stores and galleries. The Energy Generation and Storage segment offers energy storage products, such as rechargeable lithium-ion battery systems for use in homes, commercial facilities, and utility grids; designs, manufactures, installs, maintains, leases, and sells solar energy systems to residential and commercial customers; and sell renewable energy to residential and commercial customers. The company was formerly known as Tesla Motors, Inc. and changed its name to Tesla, Inc. in February 2017. Tesla, Inc. was founded in 2003 and is headquartered in Palo Alto, California.

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Recent Earnings

We are making progress towards stopping at stop signs and traffic lights. This feature is currently operating in “shadow mode” in the fleet, which compares our software algorithm to real-world driver behavior across tens of millions of instances around the world.
— Management on quarterly earnings call
  • I love it when shorts over-stay their welcome. This story is beginning to take shape as China production ramps in a country where manufacturing costs will be significantly lower than they are in the U.S. Here’s the details but this stock is a buy on any dips as the EV technology leader.

  • Cash and cash equivalents of $5.0B, highest level in Tesla’s history

  • Operating cash flow less capex of $614M

  • Auto gross margin at ~19% in spite of reductions in vehicle ASP and lower regulatory credit revenue

  • On track to launch Gigafactory Shanghai by end of 2019 and Model Y by fall of 2020.

  • Record deliveries of 95,356 vehicles and record production of 87,048 vehicles

  • Model 3 received the highest ever ratings in the Safety Assist category of Euro NCAP’s new and more stringent testing protocols

  • In Q2, Model 3 deliveries reached an all-time record of 77,634

  • More than 60% of Model 3 trade-ins are non-premium brands, indicating a larger total addressable market for this product than initially expected.

  • Model 3 average selling price (ASP) was stable at approximately $50,000.

  • Model 3 base price of RMB 328,000 ($46k in USD) is consistent with its gas- powered competitors, even before gas savings and incentives. 

  • Given Chinese customers bought well over a half million mid-sized premium sedans last year, this market poses a strong long-term opportunity for Tesla.

  • We continue to target production of over 500,000 vehicles globally in the 12-month period ending June 30, 2020.

  • We are also accelerating our European Gigafactory efforts and are hoping to finalize a location choice in the coming quarters.

  • We expect positive quarterly free cash flow, with possible temporary exceptions, particularly around the launch and ramp of new products. We believe our business has grown to the point of being self-funding.

  • Our 2019 capex is expected to be about $1.5 to $2.0 billion, a reduction from prior guidance. We continue to find opportunities to improve capital efficiency and shift cash outflows to future periods.

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It’s happening in China folks, the ramp has begun!

It’s happening in China folks, the ramp has begun!

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Opinion

I have a strong feeling todays quarter will go down as THE pivot-point for Tesla’s next phase. The catalysts for a future ramp in production and profitability are right ahead of us and today they showed they can scale production, generate cash and deliver on goals. With 25% short interest, I am NOT surprised to see the stock +17% after-hours. The bears are dug-in and they are clearly covering some shorts on this terrific quarter with strong guidance. The short thesis will continue to get harder and harder to anchor to with Gigafactories in Europe & China coming online. I probably don’t own enough of this stock so it’s on my buy dips list in a big way. The EV growth around the world is undeniable and unstoppable nd Tesla has a massive technology and brand lead on all other car makers. These are just the facts. The brand from a consumer perspective is enormously strong and brand relevancy is the most important driver of continued purchase intent. Tesla is in a great spot as the Shanghai factory begins production in volume and offers much more attractive economics than the Fremont factory offers.

I absolutely love the Tesla Model S. It’s one of the sexiest cars on the road and the technology inside Tesla cars is truly breathtaking. This post is a fun one for me. The founder of Tesla, Elon Musk is one of the most polarizing people I can think of. He’s opened himself up for extreme criticism and has forced investors of Tesla stock to consider whether his is the right operator to run this business. Make no mistake, Elon Musk is a super smart, super forward-thinking guy who has created an entirely new car category in electric vehicles (EV). They are by far the leader in this category and have a significant lead on competitors. There are plenty of examples of an innovative company that gets ignored by the “status quo” only until they become so important to consumers that they start stealing market share from the incumbents. Every major car company around the world is scrambling to catch up and build EV cars for global consumers. It’s their lead on autonomous driving data that’s most important though. Cars are dumb pieces of steel until you deploy them with the technology that Tesla has created. Everyday someone uses co-pilot or autonomous, more data and analysis is happening and more data equals more intelligence and more intelligence equals more safety over time. Yes, there will be accident but consider the alternative of massive auto deaths every year by human error.

Now that Elon has been neutered from his idiotic Tweeting, he seems to have gotten back to what’s really important - executing on the plan and building exceptional vehicles while reducing our carbon footprint. Make no mistake, the entire industry is headed to EV and it will never go backward so this is a trend with long legs and I’m happy to build this small starter position up on dips. The global opportunities are huge.