Author: CNBC Online news

Saudi Arabia — which Elon Musk claimed would back a buyout — cut its Tesla exposure: FT

Bobby Yip | Reuters
Tesla Chief Executive Elon Musk stands on the podium as he attends a forum on startups in Hong Kong, China.

Saudi Arabia has reportedly taken out an insurance policy on its investment in Tesla, which dramatically cuts its net exposure to the stock, just months after CEO Elon Musk claimed the kingdom was prepared to back a deal to take the electric car maker private.

Musk settled fraud charges with the Securities and Exchange Commission in September over the claim, agreeing to step down as Tesla's chairman, pay a $20 million fine and appoint new board members.

In recent weeks, Saudi Arabia's Public Investment Fund has hedged nearly its entire 4.9 percent stake in Tesla, the Financial Times reports. That means the PIF still holds the shares, but it has taken out other positions that protect it from a drop in Tesla's stock price.

Tesla tanks after Elon Musk lays out a 'difficult' road ahead
5:37 PM ET Fri, 18 Jan 2019 | 05:31

The Financial Times first revealed the PIF's stake in August. Almost immediately after that, Musk tweeted that he had secured funding to take Tesla private at $420 per share, later explaining that the Saudis would back the buyout. The SEC later charged the remarks were “false and misleading.”

According to the FT, the PIF put the hedges in place after the market closed Jan. 17 with the help of J.P. Morgan bankers. The following day, Tesla announced layoffs and warned of “very difficult” times ahead. Tesla's stock price has fallen about 15 percent since then.

Musk told the FT that there hasn't been communication with the PIF in months and Tesla is not aware whether the kingdom still holds the shares. The PIF and J.P. Morgan declined the FT's offer to comment.

Tesla's stock initially dipped by more than 2 percent on the FT report, but the shares ended the day down modestly.

While Saudi Arabia is the world's largest oil exporter, its investment in electric car pioneer Tesla is part of Crown Prince Mohammed bin Salman's drive to diversify the nation's economy. The PIF has become a major investor in tech companies under Crown Prince Mohammed.

Read the full story here.

China’s Didi just announced a new joint venture to work on electric and hybrid vehicle projects

Zhang Peng | LightRocket | Getty Images
A user holding a smartphone with a Didi Chuxing app.

China's largest ride-hailing operator, Didi Chuxing, said Monday it had entered into a joint venture with a unit of BAIC, China's state-owned autos giant.

The joint venture between Beijing Electric Vehicle and Didi, called BAIC-Xiaoju New Energy Auto Technology, will work to develop “next-generation connected-car systems” through projects related to electric and hybrid vehicles and artificial intelligence.

In recent years, Beijing has aggressively pushed for so-called new energy vehicles as a way to curb air pollution. Those include passenger cars and other types of vehicles that run either purely on battery or is a plug-in hybrid electric vehicle.

BAIC has said it plans to stop manufacturing and selling gas-driven car models by 2025.

For its part, Didi said it has close to 400,000 new energy vehicles registered on its platform, many of which are through its partnerships with electric vehicle makers such as BYD.

The China Association of Automobile Manufacturers predicted that new energy vehicle sales in the country will hit 1.6 million in 2019, according to Reuters. That followed after car sales in China contracted last year for the first time since the 1990s, the news agency reported.

Last year Chinese authorities announced a broad crackdown in the domestic ride-hailing market, targeting Didi with fines following the death of two passengers in separate incidents. The company has about 550 million users on its platform and is backed by Japan's SoftBank. It's valued at $56 billion according to CB Insights.

VW revives the dune buggy with an electric concept vehicle that brings the past into the future

Volkswagen Design
Volkswagen's electric dune buggy concept vehicle

Cue the Beach Boys. Along with their California-tinged sound, one of the staples of the '60s surf scene was the dune buggy, typically a modified version of the equally iconic Volkswagen Beetle, and now the automaker is ready to show off an all-new, retro-futuristic dune crawler.

But this time, the VW dune buggy concept vehicle set to debut at the Geneva Motor Show in March will be environmentally friendly, riding on the same electrified platform that will be shared with dozens of battery-electric vehicles, or BEVs, the German company plans to bring to market by 2025.

“A buggy is more than a car. It is vibrancy and energy on four wheels,” VW's global design chief Klaus Bischoff said in a statement accompanying a pair of shots teasing the dune buggy concept's debut. “These attributes are embodied by the new e-buggy, which demonstrates how a modern, non-retro interpretation of a classic can look and, more than anything else, the emotional bond that electric mobility can create.”

Beach buggies

Also known as beach buggies and sand rails, they became wildly popular with the launch of the Meyers Manx, produced by California surfer and entrepreneur Bruce Meyers. Debuting in 1964, Meyers came up with the idea of lifting the body off the original Volkswagen Beetle and replacing it with a fiberglass, open-topped shell, making a few other modifications that would let it operate on sand dunes, as well as public roads.

Volkswagen estimates that as many as 250,000 of the original Beetles were modified into dune buggies and other unique models by the 1980s. Meyers himself relaunched his company in 2000, still relying on the first-generation Beetles that continue to ply U.S. highways.

Volkswagen isn't offering many details about the new e-buggy, but the teaser pics reveal that it picks up on the classic design first pioneered by the Manx, with a long nose, a stubby tail, a shortened windshield, roll bar and high side sills rather than doors. Knobby, oversized tires suggest that, like the original sand rails, the VW e-buggy concept is designed to operate both on and off-road.

Handout
Volkswagen's electric dune buggy concept vehicle

But there's at least one big difference between a classic sand-crawler and the e-buggy: the drivetrain. The Manx, and pretty much every VW-based buggy that followed relied on the automaker's simple – and famously reliable – air-cooled four-cylinder engine. The e-buggy concept, however, is all-electric.

MEB

The body is mounted onto a platform dubbed the MEB, a modular “architecture” that will be used for the majority of future all-electric products that the Volkswagen Group will sell through brands as diverse as Europe-based entry marques Seat and Skoda, as well as upscale Audi.

Two MEB-based battery-electric vehicles also will be produced for the Volkswagen brand in Tennessee, the automaker last month announcing an $800 million expansion of its Chattanooga assembly line.

Appropriately enough for this California-inspired concept, the MEB somewhat resembles a skateboard. Instead of mounting its engine up front — or in back, as with the original Beetle — the battery pack and motors are tucked underneath the floorboard. That approach lowers the center of gravity, making the platform more stable. It also means that space normally devoted to the engine compartment can be transformed into additional passenger or cargo space.

Greg Gjerdingen | Flickr CC
1968 Volkswagen Dune Buggy

While the e-buggy is being described as purely a concept vehicle, it wouldn't be the first retro-tinged show car the automaker has introduced with an eye towards production. VW revealed an all-electric take on its classic, hippy-era Microbus during the January 2016 Consumer Electronics Show in Las Vegas. It has since announced that what will be known as the I.D. Buzz will roll into showrooms in 2022.

Whether VW would want to get into the dune buggy business is far from certain. But the concept coming to the Geneva Motor Show might offer a hint that another once-believed model is ready for a revival.

The third-generation Beetle is currently winding down and will go out of production by the end of the 2019 model-year, Volkswagen confirmed last August with the debut of the “Final Edition.”

“There are no immediate plans to replace it,” said Hinrich Woebcken, then the head of the Volkswagen Group of America. But he left the door open slightly when he quickly added that “I would also say, 'Never say never.'”

Beetle fans will be watching the debut in Geneva next month to see if the automaker just might be ready to bring back the Beetle in all-new form.

Anonymous Tesla shorts who snap pics of Tesla parking lots have a new website

Tslaq.org
Aerial photo of a Tesla distribution and manufacturing facility taken by a contributor to tslaq.org.

A group of Tesla short sellers launched a site Friday called Tslaq.org to showcase their crowdsourced research tracking the car maker's activities.

Tslaq.org includes aerial photography from the Shorty Air Force, a group of pseudonymous researchers who fly over the company's parking lots and delivery centers to count Tesla's inventory cars.

Other photos on the site come from a group calling themselves the Shorty Ground Force, which takes photos from publicly accessible points near Tesla factories or facilities using smartphone cameras or hobbyist drones.

Elon Musk: Demand for Model 3 is 'insanely high,' but cost is too high
12:22 PM ET Thu, 31 Jan 2019 | 01:40

Some contributors tally up the cars that they can count in the images. Others provide theories about what's observable in the photos when considered along with Tesla's own claims and disclosures.

Tslaq.org makes all the photos and videos featured on the site available under a creative commons license, meaning other independent bloggers or mainstream media outlets don't have to seek permission before re-publishing them.

Tesla declined comment, but the site is likely to annoy Tesla CEO Elon Musk, who has recently sparred with short sellers and the media.

Last year, Musk shut up one of his most vocal critics, a short seller who used the handle “Montana Skeptic” on Twitter and wrote bearish analysis of the company on SeekingAlpha. The Tesla CEO reportedly phoned Montana Skeptic's employer and told the blogger he would potentially take legal action in response to his posts.

The Tesla CEO also sounded off on Twitter at mainstream media organizations throughout 2018, and said he plans to start an organization that rates reporters.

WATCH: Why this analyst rates Tesla a sell

Why this auto analyst rates Tesla a sell
8:18 AM ET Thu, 31 Jan 2019 | 04:49

GM’s involuntary layoffs start Monday, at least 4,000 workers expected to lose jobs

America is falling back in love with trucks and SUVs, and that's causing big changes at big car companies
1 Hour Ago | 04:45

General Motors is planning to layoff at least 4,000 salaried workers in North America starting Monday ahead of the company's fourth-quarter earnings report, according to two people briefed on the matter.

The reductions come as the largest U.S. automaker undergoes a massive restructuring announced by CEO Mary Barra in November. GM is halting production at five plants in North America and cutting 14,000 jobs as it realigns its workforce and plants to produce more electric vehicles.

Company executives want to complete as many of the layoffs as possible before the company reports its earnings Wednesday, the people said, asking not to be named because the information isn't public yet.

“We are not confirming timing. Our employees are our priorities and we will communicate with them first,” GM spokesman Pat Morrissey told CNBC Friday.

The involuntary cuts aren't as steep as previously thought.

GM offered buyouts to 17,700 employees in North America with at least 12 years of service in November, according to a document obtained by CNBC at the time. The company was aiming for 8,000 voluntary buyouts, the company previously confirmed. About 2,250 workers accepted severance agreements by Nov. 19, the company previously confirmed. Roughly 1,500 contract jobs have since been eliminated, according to one of the people briefed on the layoffs.

That leaves roughly 4,250 salaried workers and 6,000 hourly employees targeted for layoffs. The company said in November that half of the hourly workers were in Canada with the other half in the U.S.

Many of the cuts are planned at factories in the United States and Canada that make sedans and compact cars — vehicles that have not been selling well in North America, as customers turn toward trucks, sport utility vehicles and crossovers. These vehicles tend to be more profitable for automakers.

As it has been trimming back its sedan lineup and exiting its least lucrative businesses, GM has been pumping cash into new mobility technologies, especially autonomous driving.

GM's reorganization is expected to save the company about $6 billion by 2020, with half of those savings realized by the end of 2019, the company has said.

Executives told investors in mid-January that the company's full-year results for 2018 exceeded the company's expectations, and gave a positive outlook for 2019 as well.

“Mary is bold man. She doesn't mind making a tough decision, which is probably nice to see compared to what GM has been historically. Shes not afraid of a tough decision,” said Sam Huszczo, owner of SGH Wealth Management outside of Detroit. He said he manages money for several clients who work at GM.

This story is developing. Check back for updates.

CNBC contributor Paul Eisenstein assisted with this article.

Car loan rates are rising quickly, even as the Fed holds rates steady

Getty Images
Customers look at a Jeep vehicle for sale on the sales lot of a Chrysler Jeep Dodge dealership in Miami.

Planning to buy a car? You could be driving for a long time before you're out of debt.

As interest rates rise and vehicles become more expensive, that new-car smell increasingly comes with larger loans and lengthier terms.

Americans now owe nearly $1.3 trillion in auto debt. In January 2019, the average interest rare on a new car was 6.19 percent, compared with 4.9 percent a year ago, according to Edmunds, which provides research on the car industry. The average monthly payment has swelled to $551, from $524.

Meanwhile, the typical term for an auto loan is now 69 months, up from 61 in 2010.

“Vehicle prices and interest rates are so high right now that consumers are facing the very real possibility of spending thousands of dollars more on a new vehicle than they did last time they purchased a new car,” said Jessica Caldwell, the executive director of industry analysis at Edmunds.

However, you may be able to reduce your car debt. Here are some strategies.

Consider a used car

Source: Philip Reed
Philip Reed's 21-year-old BMW

Used cars are typically less expensive than new ones and so the loans for them are often smaller, said Philip Reed, an automotive writer at personal finance website NerdWallet.

“If you turn on the football game, you will be brainwashed into thinking you need a new car,” Reed said. “People don't understand how reliable a good used car can be.”

While the average vehicle on the road is around 12 years old, Reed said, a car's price tag can halve after just three years.

The average monthly loan payment for a used vehicle in January 2019 was $407, according to Edmunds.

Thoroughly vet the history of any used car you consider buying, Reed said. Using the vehicle identification number, located on the driver's side dashboard, you can check the car's history with the National Insurance Crime Bureau, CarFax or the National Motor Vehicle Title Information Center. You may also want to have the car inspected before you buy it, to make sure nothing was missed on the car's record.

Go to the dealership prepared

You should go to your bank or credit union and get pre-approved for an auto loan before you enter a dealership, said Rebecca Borne, senior policy counsel at the Center for Responsible Lending. “It puts the consumer in a better bargaining position,” she said. “It forces the dealership down on the rate.”

Borne also recommends “cross-shopping” at other dealerships to try to lock in the best price on a given car. Autotrader is one database of used and new cars.

Don't be sucked in by low monthly payments, Borne said. If you're able to make higher payments on a shorter loan term you'll save overall.

And resist the often unnecessary add-ons that many dealerships push, she added, such as extended warranties and additional insurance. “They give a windfall to the dealer without giving much benefit to the consumer,” she said.

Look for deals

Getty Images

Be on the lookout for car-buying incentives that could save you money, including loans with zero-percent interest or cash-back deals, Reed said. You can learn about these offers on websites such as Edmunds and Kelley Blue Book, or directly with the car manufacturer.

Excellent credit is often needed to secure the zero-percent interest rate offers, Reed said, and they're becoming rarer. Still, it can't hurt to apply.

“Even if you fall short,” he said, “there's a good chance you'll still beat current rates.”

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Indonesian ride-hailing firm Go-Jek hits big number with latest fundraising effort

afif c. kusuma | iStock Editorial | Getty Images
Bike passengers wearing Helmet with Gojek logo.

Indonesian ride-hailing company Go-Jek said Friday it had finalized the first closing of its ongoing Series F fundraising efforts.

Go-Jek's release did not disclose the amount of fresh funds raised.

An industry source familiar with the matter told CNBC that Go-Jek raised just more than $1 billion with the first close of the Series F funding round.

Investors included tech giants Google and Tencent as well as Chinese e-commerce player JD.com and Japan's Mitsubishi Corporation.

The company said the proceeds would be used to expand and deepen Go-Jek's presence in its home market, Indonesia, as well as Singapore, Vietnam and Thailand.

“We started out with ride-hailing but in a short space of time have become Indonesia's industry leader across all key verticals including transport, food delivery, mobile payments, logistics, and merchant services,” Nadiem Makarim, CEO of Go-Jek Group, said in a statement.

“As we expand internationally, we are excited to extend our vision to more countries and at the same time put Indonesia on the map as a regional hub for tech innovation,” he said.

Go-Jek has a presence in 204 cities and regencies across five countries in Southeast Asia. It has more than 2 million drivers and about 400,000 merchants on its platform.

Last month, the company made its beta service available to all users in Singapore.

Go-Jek's regional expansion puts it in direct competition with Grab, which announced a partnership with video streaming service Hooq earlier this week.

Grab has also raised funds north of $3 billion since last year as investors jump on board the potentially lucrative digital market in Southeast Asia.

The region's internet economy is set to exceed $240 billion by 2025, according to a report from Google and Singapore's Temasek Holdings.

Go-Jek said that after the close of the Series F fundraising, its founders would still maintain control over the decision-making process and direction of the company.

Tesla is betting big on China, and here’s what Elon Musk had to say about it

Aly Song | Reuters
Tesla CEO Elon Musk and Shanghai's Mayor Ying Yong attend the Tesla Shanghai Gigafactory groundbreaking ceremony in Shanghai, China January 7, 2019.

To tap into a growing market for electric vehicles in China, Tesla is betting big on the region — and executives talked up the company's efforts there on an earnings call this week.

Specifically CEO Elon Musk and Tesla's retiring CFO Deepak Ahuja emphasized their aims to get the Tesla Shanghai Gigafactory up-and-running this year, and to deliver U.S-made Model 3 sedans to customers in China immediately. Musk expressed concern that trade tensions between China and the U.S. could escalate, resulting in higher import taxes or tariffs, and other problems for Tesla.

Electric vehicle sales have grown more rapidly in China than other parts of the world, and already comprise about 4 percent of the substantial market there. The growth is thanks, in part, to a shifting array of federal and local incentives for electric vehicle makers, and subsidies for people who buy these cars in China. Tesla wants to establish a stronger foothold in this massive market, before the subsidies and incentives go away.

The industry ministry of China expects annual “new energy vehicle” output to rise to 2 million in 2020, and sales of 7 million new energy vehicles in China by 2025, representing about 20 percent of the overall autos market there.

Tesla faces serious competition from domestic Chinese companies like: the Warren Buffet-backed BYD; SAIC, which makes Roewe electric cars; and Geely, the parent company of Volvo. It also faces competition from foreign automakers that produce electric cars or hybrid, and already know their way around manufacturing in China, like Ford, Hyundai and Toyota.

Here are some of Tesla's biggest plans for China that execs outlined Wednesday's fourth-quarter earnings call, as transcribed by FactSet:

Funding the Shanghai Gigafactory:

“The purchase of the land is a 50-year lease with the government of China. So, it's not capex, but it's operating lease, and that shows up as the cash flow from operations. However, the capex that we will invest is our equipment, and we fully own it. So that will show up as capex. The plan, as we have indicated in the letter, is still to get funding for majority of that capital spending from local China banks. And we expect very attractive rates based on the dialogue we've had and there's a lot of interest.” — Deepak Ahuja

“Yeah. I mean, as a ballpark figure, probably something in the order of $500 million in capex to get to the 3,000-vehicle rate in Shanghai, ballpark figure. And as Deepak was saying, hooking up a very competitive debt financing in China really extremely compelling interest rates and so we do not expect that to be a capital drain on the company.” — Elon Musk

Tesla's advantages in China:

“If you're in the automotive industry you understand how significant this is, but maybe it's not as obvious to everyone. Tesla has the first wholly owned manufacturing facility in China of any automotive company. So, this is profound. And we're very appreciative of the Chinese government allowing us to do this. I think it is symbolic of them wanting to open the market and apply and it farewells to everyone. I'd just say like an order of appreciation for the Chinese government in allowing us to do that. It's a very significant thing.” – Elon Musk

On making batteries in Shanghai:

“We'll be making the module and the pack. So, it's really just production of cell supply. And you can essentially use any high-energy density, 2170 chemistry. We expect it to be a combination of cells produced at our Gigafactory in Nevada, cells produced in Japan and cells produced locally in China. And we feel confident of sufficient supply to hit 3,000 units a week.” — Elon Musk

Delivering a lower-priced Model 3:

“We need to bring the Shanghai factory online. I think that's the biggest variable for getting to 500,000-plus a year. Our car is just very expensive going into China. We've got import duties, we've got transport costs, we've got higher costs of labor here. And we've never been eligible for any of the EV tax credits. A lot of people criticize Tesla for being so dependent on incentives. In fact, for a company making EVs, we have the least access to incentives. It's pretty crazy. Because there's so many countries that have put price caps on the EV incentive which differentially affect Tesla. And in China, which is the biggest market for EV's, we've never had any subsidies or tax incentives for vehicles.

“So, it's difficult. Once a car is made there, it is eligible for that. That sounds like that's going to be reducing in China in the coming years. But really, bottom line is, we need the Shanghai factory to achieve that 10,000 rate and have the cars be affordable. It's important to appreciate, the demand for Model 3 is insanely high. The inhibitor is affordability. It's just that people literally don't have the money to buy the car. It's got nothing to do with desire. They just don't have enough money in the bank account. If the car can – if we made it more affordable, the demand is extraordinary.” — Elon Musk

On how demand in China stacks up versus Europe:

“Our relationship actually with Europe and China is how do we get the cars made and on order such that it reaches customers before end of quarter and we don't have a massive number of cars on the order. That's our biggest challenge. It's not demand. It's how do we get the cars there fast enough…I mean, we're not even really trying, I should point out. Our factory is like right now only making cars for China and Europe. That's all it's doing with respect to Model 3. And our whole focus is okay, how do we get those cars made, get them on a ship as fast as possible.” — Elon Musk

On U.S.-China trade relations:

“We don't know what's going to happen with the trade negotiations. So it's very important to get those cars especially to China as soon as possible. We hope the trade negotiations go well, but it's not clear. But we need to get them there while there's sort of de facto sort of a truce on the tariff war. And demand gen is really not one of the things we're thinking about.” — Elon Musk

WATCH: Elon Musk says demand for Model 3 is “insanely high,” but cost is too high

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Surprise exit of Tesla CFO unnerves analysts: ‘Significant loss of institutional knowledge’

Watch three Tesla experts debate the electric car maker's mixed earnings report
4 Mins Ago | 01:58

Tesla's announcement that Chief Financial Officer Deepak Ahuja is retiring has unnerved Wall Street's top analysts and overshadowed the company's sales beat in the fourth quarter.

Many viewed the loss of the longtime executive as the most significant in a string of high-profile departures as the electric car manufacturer struggles to retain talent. The company said in September that chief accounting officer Dave Morton was leaving the company after less than a month on the job, while head of human resources Gabrielle Toledano decided last year not to rejoin the company after a leave of absence.

Others chose to highlight Ahuja's unseasoned replacement, Zack Kirkhorn, who will take the financial reins of the $53 billion public company just six years out of business school.

“We see the departure as a significant loss of institutional knowledge, and note that Kirkhorn is a first-time public company CFO,” wrote AB Bernstein analyst Toni Sacconaghi.

To be sure, Tesla reported better sales in the fourth quarter than Wall Street analysts had expected with revenues of $7.23 billion, more than double its $3.29 billion in revenue during the same quarter in 2017. And while profit fell short of projections, the company's stock crept higher immediately following its earnings announcement based on the solid sales numbers and a decent 2019 outlook.

However, the equity quickly declined after CEO Elon Musk announced during the earnings conference call that Ahuja is leaving after almost 11 years at the company. The stock fell 3.7 percent Thursday morning.

Here's what Wall Street analysts thoughts about Deepak Ahuja's departure.

AB Bernstein (Market Perform)

“Surprisingly, Tesla's CFO Deepak Ahuja announced that he was retiring, and would be succeeded by Zack Kirkhorn, Tesla's current VP Finance. We see the departure as a significant loss of institutional knowledge, and note that Kirkhorn is a first-time public company CFO, just six years removed from business school.”

Goldman Sachs (Sell)

“Management announced that CFO Deepak Ahuja would be retiring from his position at the firm in 2019 and would be replaced by Zach Kirkhorn, who joined Tesla nine years ago. Mr. Ahuja had previously left his position as CFO of Tesla in 2015, but returned in early 2017. We believe the changeover may cause some uncertainty for investors as Tesla just saw two consecutive quarters of profitability and positive cash flow, and we see potential for a less stable path forward due to a sequential step-down in deliveries, working capital headwinds and convertible debt payment.”

J.P. Morgan Chase (Underweight)

“We expect investors to react negatively to the replacement of Deepak Ahuja, 56, as CFO with Zack Kirkhorn, 34, Tesla's current Vice President of Finance, given Mr. Ahuja's long automotive industry experience and 11-year tenure as the firm's CFO (across two separate stints), during which he provided relative stability to the firm's finance staff that has otherwise seen a great deal of churn.”

Barclays (Underweight)

“While the call had some positives around cash (largely due to under spending on capex and opex), those were overshadowed by the announcement of departure of the CFO and the absence of an experienced Silicon Valley (much less automotive experienced like ex-CFO Ahuja) vet to replace him. We remain underweight with a $210 price target.”

Morgan Stanley (Equal-weight)

“At the very end of the analyst conference call, Elon Musk announced that CFO Deepak Ahuja was retiring and will be replaced by Zack Kirkhorn who is VP of Finance and has been at the company for 9 years. CFO changes are significant events and we look forward to meeting Mr. Kirkhorn.”

— With reporting by
Michael Bloom
.

Tesla shares fall after company posts 4Q profit that misses expectations, replaces CFO

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Tesla reported its second consecutive quarterly profit Wednesday and better-than-expected sales, but its fourth-quarter earnings fell short of analysts' expectations and sent its shares south after the markets closed.

CEO Elon Musk also announced a major change to the electric carmaker's executive ranks with the retirement of long-time Chief Financial Officer Deepak Ahuja.

Tesla's shares, which rose 3.8 percent during the regular session, fell by about 5 percent in after-hours trading. Ahuja is being replaced by Zach Kirkhorn, previously the company's vice president of finance, Musk told analysts at the end of a conference call announcing the results.

Not as bad

The electric car maker's results and outlook for 2019 were not as bad as some had feared, but the automotive segment, which still comprises the majority of Tesla's business was less profitable than some had expected. This is Tesla's fourth profitable quarter overall since it went public in 2010, and the first time Tesla has reported back-to-back profitable results. Musk said last year that he expected Tesla to be sustainably profitable beginning in the third quarter of 2018.

Earnings were hit on a number of fronts, the company said, citing a decline in revenue from the sale of regulatory credits, higher import duties on parts from China as well as lower prices on the Model S and Model X in China and a lower-priced midrange version of the Model 3.

“Last year was definitely the most challenging year in Tesla history, but also the most successful,” Musk told analysts on a conference call.

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Mixed bag

Executives said the company's main priorities in 2019 include reducing costs, shipping as many cars as possible until more tariffs hit, getting Tesla's Shanghai factory running and improving service in North America.

“This release was a mixed bag,” CFRA analyst Garrett Nelson told CNBC. “The company generated strong free cash flow, which should ease balance sheet-related concerns, which is the biggest positive from this release in our view. Vehicle sales guidance for 2019 was a bit short of expectations, but not nearly the doomsday scenario some had expected resulting from the federal EV credit step-down.”

Here's how the company did compared with what Wall Street expected:

Adjusted EPS: $1.93 versus $2.20, according to average estimates compiled by RefinitivRevenue: $7.23 billion versus $7.08 billion, according to average estimates compiled by Refinitiv

Revenue beat

On an unadjusted basis, Tesla made $139.5 million, or 78 cents a share, compared with a loss of $675.4 million, or $4.01 a share, during the last quarter of 2017. It generated $7.23 billion in total revenue, more than double its $3.29 billion in revenue during the same quarter in 2017. It also beat analysts' average sales estimates of $7.08 billion.

Tesla said its cash position substantially improved by $1.45 billion, despite spending $230 million to repay convertible bonds during the quarter.

The company should see higher revenues in 2019 as it substantially ramps up production and deliveries this year, aiming for 360,000 to 400,000 vehicle deliveries, about 45 to 65 percent more than its deliveries in 2018. Musk predicted its deliveries will grow 50 percent in 2019, “even if there's a recession.”

Tax credits

Investors have been paying close attention to how profitable Tesla's cars are, particularly the Model 3 sedan. The federal tax credit on every Tesla vehicle sold was cut in half to $3,750 at the beginning of the year, after Tesla sold its allotted 200,000 units that qualified for the full credit.

“That 360,000 to 400,000 vehicles is within the band of what the street was expecting, and I think there were fears that would be significantly worse given what we saw in North America with the EV tax credit,” Wedbush analyst Dan Ives told CNBC.

Jessica Caldwell, Edmunds' executive director of industry analysis, sees a tough year ahead for Tesla.

“Things really aren't going to get any better for Tesla in the U.S. than they did at the end of 2018,” she told CNBC on Wednesday. “Turning a profit, creatively addressing production challenges and getting the Model 3 to the masses were huge milestones, but keeping up this momentum is going to be virtually impossible.”

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She said its product line is starting to get stale and it faces new competition from Audi, Porsche and Jaguar.

Purgatory

“Tesla's in an awkward purgatory between being a start-up and a mainstream automaker, and the biggest open question heading into 2019 is where the company really goes from here,” Caldwell said. “Tesla is used to owning the spotlight, but for the next year we might see a lower-key Tesla as the company takes baby steps to keep things moving along while it plans for the future.”

Eyes are watching whether Tesla needs to raise any more capital in the short term, especially given the fact that it needs to pay off $920 million in debt due March 1. Bondholders can convert the debt into equity if the shares trade at or above the strike price of $359.87. But below that price, Tesla would likely have to pay off the notes with cash.

The company assured investors that it has “sufficient cash on hand to comfortably settle in cash our convertible bond that will mature in March 2019.”

Read Tesla's results here.

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Elon Musk