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Tag: Financial Results
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Timestamped Summary Of Tesla Shareholder Meeting
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Published on June 11th, 2019 |
by Paul Fosse
Timestamped Summary Of Tesla Shareholder Meeting
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June 11th, 2019 by Paul Fosse
Tesla just completed its annual shareholder meeting. Like in meetings past, it was fairly long and covered almost every Tesla topic under the sun. To make it easier for people who couldn’t watch, wouldn’t watch, or simply want to go back to some of the topics in the meeting, below is a timestamped summary from Paul, who kindly stayed up late in Florida (just not as late as me here in Poland ) to put this together for the world. The summary notes are timestamped based on Eastern Time (pm), since they were made while the video was live. —Zach
5:35 — Picture of audience by General Counsel, Jonathan Chang
5:36 — Robyn Denholm (Tesla Chairman) gave a short intro and thanked shareholders for their internal fortitude.
5:41 — General Counsel Jonathan Chang starts official meeting and voting on all proposals. Board recommended for all their proposals and against the other proposals.
5:47 — All proposals passed that the company recommended except numbers 4 and 5. In the end, 99% voted for those proposals, but they didn’t get the required 66% of total shares represented, so they failed. Those proposals were:
4. A Tesla proposal to approve and adopt amendments to our certificate of incorporation and bylaws to eliminate applicable supermajority voting requirements (“Proposal Four”).
5. A Tesla proposal to approve an amendment to our certificate of incorporation to reduce director terms from three years to two years (“Proposal Five”).
5:50 — Elon Musk starts speaking. (Note: From here on, I’ll only include things I perceive to be news or highlights. Much is repeated from previous meetings, conference calls, or tweets.)
5:51 — The Tesla Model 3 was highest grossing car in the USA — the car which pulled in the most revenue — in the past 12 months. (We’ve reported on this for three quarters and were first to report on the Q3 milestone — see our Q3 2018, Q4 2018, and Q1 2019 reports.)
The Model 3 outsold its BMW, Mercedes, and Audi competitors — combined.
5:52 — Tesla is more efficient than competitors, much more efficient, and no competitors have exceeded the range of the 2012 Tesla Model S.
5:55 — There is “not a demand problem — absolutely not,” Elon emphasized. He also said that Tesla has “a decent shot at a record quarter on every level.”
Importantly, “90% of orders are coming from non-reservation holders — new customers. … 63% of trade-ins are non-premium cars.”
5:56 — Operating costs of an EV are much less than a gas car. A Tesla Model 3 can cost as little as a Camry or Accord, but is much better.
Fart app is “perhaps my finest work.”
5:57 — Full Self Driving will be feature complete by year end — will be able to drive from garage to work with no intervention (but still monitoring). It will then get better and better and eventually get legal approval.
5:59 — Tesla expects to have 1 million robotaxi-capable cars on the road in 2020, which will massively increase their value.
6:00 — Elon presumes you have to be mad to buy a gas or diesel car, because their value will drop quickly. Non-autonomous capable cars will also go down in value.
6:02 — The Tesla Model Y market segment is 2½ times as big as the market for Model 3. Tesla might be able to lower drag coefficient below that of the 3, which is surprising since crossovers usually have poor aerodynamics.
6:04 — JB Straubel (Tesla Chief Technical Officer) came onstage to help explain that Tesla decided it needed a Gigafactory because it knew it would need more batteries than worldwide production at that time. At 80% or so of capacity, it now accounts for half of global EV battery production.
6:08 — Gigafactory 3 (GF3) in China is quickly being constructed to serve the largest car market in the world. The company will be able to avoid import duties and reduce production costs with GF3.
6:09 — Regarding Gigafactory Europe, Tesla hasn’t yet selected a location. It will make a decision on the location sometime around the end of this year, 2019. Cars for sales in Europe will be more affordable if they are built in a factory in Europe.
6:10 — Tesla Energy is expected to see 2× growth in 2019 compared to 2018.
6:11 — The Tesla Solar Roof is being installed in 8 states. A tough problem is making it durable, low cost, and easy to install. Tesla has a shot at it costing as much as a comp shingle roof plus utility costs. Tesla is currently on version 3 of Solar Roof.
6:13 – Drew Baglino (VP of Technology, has been at Tesla for 14 years) was introduced and talked about the company’s solar goals, among other things.
6:15 — V3 Supercharger was mentioned.
6:16 — New maps for Supercharger deployment, including trans-Canada and Alaska, were also shown.
6:17 — Tesla is excited about its new mobile service vans. If your car breaks down, it will automatically send a notice to mobile Tesla service to immediately be dispatched to go fix your car. Tesla first trialled this in the Bay Area and has now extended it to the LA area and some other areas for tire repairs.
6:19 — Tesla is now adding bumper and minor collision repairs as features of these mobile service vans. Tesla just did its first bumper repair from a mobile service van. Elon noted this kind of repair can typically take weeks or months but it took less than an hour in this initial case.
6:20 — The Tesla Pickup unveiling is planned for this summer. It will be a totally Sci-Fi pickup truck. Elon thinks it is the coolest vehicle he’s ever seen, but he’s not sure yet how much others will like it — whether it will be a hit or not.
6:21 — Semi production is expected toward the end of 2020. “No reason to build more products if we don’t have batteries to supply them.”
6:22 — “We might get into the mining business — I don’t know. A little bit at least.”
SAY crowdsourced questions:
6:23 — Elon & JB didn’t want to let the cat out of the bag, but they knew something.
6:24 — Elon will wait for the Battery and Powertrain Investor Day later this year to get into the Maxwell details, but he seemed ver enthusiastic about the potential from this acquisition.
6:27 — Insurance details coming soon. Waiting on a small acquisition and need to write some software.
6:28 — Elon wants the pickup to be great, more functional than the Ford F-150 and a better sports car than a basic Porsche 911.
6:29 — The antenna is a little big. Tesla will probably continue to use cell phone networks. The advantage of Starlink is for low-density areas. It is not ideal for high-density cities.
6:30 — Tesla is likely to just a coating to repel rain and snow. (Elon joked about tiny wipers.)
6:31 — Elon feels good about demand. Profitability is tough as a fast growing company, but expects to be steadily cash flow positive despite a continued high growth rate.
6:32 — Elon said it’s a good idea and Tesla will probably launch a supervised robotaxi/rideshare system until it is approved to run driverless robotaxis.
Audience Questions:
6:34 — Q1 — Energy transmission is a problem, could Tesla get involved in that?
Answer: Roofs solve that problem. You don’t need to transmit it anywhere. Just generate where you live. Storage also helps make existing transmission work better — was what a big Tesla Powerpack project in southern California was used for, at a substation to avoid the need for more transmission lines.
6:38 — Q2 — The China factory production target of 500,000 cars a year seems low. With no import fees, the demand should be very good. Is Tesla being aggressive enough in China? Why not 2 factories?
Answer: We can’t spend money too fast. But, yes, the factory may do a million cars a year eventually. Or not. Tesla may want to have two China factories in the long term so that vehicles are produced close to the customers (China is a big country).
6:42 — Q3 — A potentially new way to let people invest in Superchargers, so they can roll out faster, is via finance companies.
Maybe. Maybe not.
6:44 — Q4 — News on Tesla is so negative that people are afraid to buy a Tesla. Can you solve through some new communications strategies?
Answer: Yes, 200,000 gas cars catch fire a year in the US, while Teslas rarely catch fire. Elon is at a loss to solve the media problem. It is driven by a crazy disinformation campaign, something like Elon has never seen before (ditto for us). Elon and crew asked that people continue to share their own positive messages about the cars and company — that’s the best solution Tesla has. They also highlighted that safety is paramount at Tesla and that is evident in its record-safe vehicles.
6:50 — Q5 — Suggestion: Perhaps a joint discussion with Micheal Bloomberg or Arianna Huffington on your mission, in order to help stimulate better media coverage.
Answer: Elon said that the company does need to take action, and seemed to genuinely consider this idea.
6:53 — Q6 — Where are we on the Mission?
Answer: We have helped the auto industry make the decision to move to EVs much faster. The media situation has always been negative, but Tesla is having a strongly positive impact.
Tesla is also helping to take islands to 100% renewable with solar and storage.
6:58 — Q7 — Congrats on Steven Hawkins medal. What will the towing capacity of the pickup truck be?
Answer: Will meet or exceed a Ford F-150’s towing capacity.
6:59 — Q8 — Full Self Driving … more details?
Answer: Features will be coming from now till the end of year. With Elon’s version, it can drive from home to office, but still has interventions. Tesla must have a general solution. Progress is faster than it appears because Tesla can only release something when it works generally, not only when it works for one specific location. Previously, the system just looked for drivable free sp..
Elon Musk says Tesla still plans to offer insurance, but is waiting for an acquisition to close
Elon MuskJim Watson | AFP | Getty ImagesOn Tuesday, during Tesla's annual shareholder meeting, CEO Elon Musk said an insurance offering that he expected his car company to launch in May this year is actually still in the works.
Musk said, “We're pretty close to being able to release that. We have a small acquisition that we need to complete and a bit of software to write.”
Back in April, Musk said on an earnings conference call that Tesla would be launching its own insurance product in about a month. He said that Tesla has an advantage in insurance, because it has “direct knowledge” of a person's risk profile “based on the car,” which gives Tesla an “information arbitrage opportunity.”
In 2017, Automotive News reported that Tesla clashed with auto-insurance providers AAA The Autoclub Group when they raised premiums for Tesla drivers, based on research by the Highway Loss Data Institute and others. They had said the Model S and Model X had high claim frequencies and high costs of insurance claims.
The idea behind Tesla offering its own insurance would be to lower rates for drivers, leveraging internal data from Tesla's AutoPilot systems to justify that.
Berkshire Hathaway's Warren Buffet predicted that Tesla will struggle if it goes into the insurance business. “I'd bet against any company in the auto business” getting into insurance, he said. “I worry much more about Progressive.” About one third of Berkshire Hathaway's business is in the insurance space and that includes Geico.
— CNBC's Fred Imbert contributed to this story.
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Bernstein says Tesla won’t be bought: ‘We struggle to see it being sold as a going concern’
Tesla CEO Elon Musk attends the Tesla Shanghai Gigafactory groundbreaking ceremony in Shanghai, China, January 7, 2019.Aly Song | ReutersIt's looking less and less likely that Tesla will find a buyer to save it from its financial struggles and offer it a source of new funding, Bernstein told clients on Monday.
European autos analyst Max Warburton wrote in a note that while Volkswagen's CEO may take a look, there really wouldn't be much support for a bid to acquire any of Tesla's assets.
“What assets are attractive? Tesla no longer has genuinely differentiated tech. The production plant is sub-par. The Gigafactory is probably not essential (and may be claimed by Panasonic),” Warburton wrote. “The brand still has value, albeit one that is declining fast. The Supercharger network also has some value. Perhaps these get picked up. But at what price?”
VIDEO7:0807:08Technician: Tesla so bad, it's worth buying nowFast Money “We struggle to see it being sold as a going concern,” he added.
Tesla used about $950 million of cash in the first quarter (for a combined $5 billion of cash burn since 2017), prompting renewed concerns over its long-term financial health. A few weeks ago, Tesla managed to raise $2.35 billion in new capital, with $750 million of common stock and $1.6 billion from convertible bonds. Others have suggested that another technology company, like Apple, could swoop in and buy Tesla when its assets cheapen.
Roth Capital Partners analyst Craig Irwin told CNBC last month that the electric car company could have sold to Apple six years ago at $240 per share. The stock is down 48% over the last six months at $185.16 a share.
Even though Warburton isn't Bernstein's Tesla analyst, he does cover a number of European auto companies that could be in for a pop if Tesla fails. The Palo Alto, California-based automaker has put “huge pressure” on the valuations of traditional equipment manufacturers in Europe as Tesla's initial success suggested that the barriers to entry in the electric vehicle market weren't as onerous as once thought.
“Its technology seemed ahead of all other OEMs — damaging the Germans' relative brand position. Tesla took market share from the German OEMs in the US, UK and some other regions,” Warburton wrote.
But “financial failure of Tesla would force a change in investors' views of traditional OEMs. It would show how difficult it is for a new entrant to succeed,” he added. “Most important: it would change views on the size and growth rates of the EV market.”
Bernstein's main Tesla analyst, Toni Sacconaghi, has a market weight rating on shares of Tesla.
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