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Musk repeats no capital raise needed for Model 3 under current plan

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8 years ago

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A SEC filing in August indicated that Tesla Motors would likely need to raise more capital before the end of the year, however, six weeks later, CEO Elon Musk took to Twitter to announce that a capital raise was no longer necessary. During yesterday’s Q3 earnings call, Musk confirmed that no additional capital raise is needed by end of year and “probably not” needed in Q1.

He said Tesla is working hard to reduce the cost of manufacturing the Model 3 as one of this top 3 immediate priorities. As a result, the company “does not require any capital raise for the Model 3 at all”, though he indicated that a capital raise could still take place at some time in the future to “account for uncertainty and de-risk the business.”

Demand for Tesla’s cars with the latest 100 kWh battery has been strong. That battery carries a $10,000 premium compared to the older 90 kWh battery. The company is also benefiting from the sale of zero emissions credits to other manufacturers.

In the third quarter alone, income from ZEV credits amounted to $139 million — nearly equal to what the company realized from selling those credits in all of 2014 says Cowen analyst Jeffrey Osborne. “Certainly what drove the upside on profit is the $139 million of those zero emission credits which is a near 100 percent profit business,” said Osborne.

When the proposed merger with SolarCity was first announced, many skeptics saw it as a bailout for a faltering business run by Musk’s cousins, Lyndon and Peter Rive. In fact, SolarCity has been the beneficiary of several new funding packages this year and is in a position to actually contribute some cash to Tesla if necessary. Yesterday, Musk confirmed that, saying the acquisition of SolarCity will be neutral or even a cash contributor to fourth quarter Tesla results in “a small way.” Tesla is planning to release more financial data relating to the merger on November 1.

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Tesla said it had $3.08 billion in cash and cash-equivalents as of Sept. 30, compared with $3.25 billion at the end of the second quarter. The company plans over $1 billion of capital expenditures in the fourth quarter, bringing its total capital spending this year to $1.8 billion. Even though that seems like an enormous amount of money, it is still 20% less than the $2.25 billion the company forecast at the start of the year.

The company announced its first quarterly profit since the first quarter of 2013 yesterday. Elon Musk promised investors that the fourth quarter will be profitable as well. Of 20 analysts who cover the company, seven have a “sell” rating on the stock, four rate it “buy” or higher, and nine have a “hold,” according to Thomson Reuters.

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Investor's Corner

Elon Musk praises Ray Dalio’s Bridgewater for accumulating TSLA stock

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3 weeks ago

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February 14, 2025

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Credit: Tesla Asia/X

A recent 13-F filing from legendary investor and billionaire Ray Dalio’s Bridgewater Associates has revealed that the hedge fund has added over $62 million worth of Tesla stock (NASDAQ:TSLA) to its portfolio.

Elon Musk has praised the billionaire’s investment in a post on X.

Bridgewater’s TSLA stake:

  • As per Bridgewater’s 13-F filing, it currently holds 153,589 shares of TSLA, which costs $62,025,382.
  • The firm added the TSLA shares in the fourth quarter.
  • Tesla shares gained momentum after its Q3 2024 earnings call, and it only gained more strength after the election of U.S. President Donald Trump.
  • At the end of 2024, Tesla shares were up 62%, as noted in a MarketWatch report.
  • Tesla stock is still up 88% over 12 months despite a steep drop over the past month.

A vote of confidence: 

  • Bridgewater Associates is one of the largest hedge funds in the world, so the firm’s stake in TSLA could be interpreted as a vote of confidence in the electric vehicle maker.
  • Elon Musk has praised the firm’s investment. In a post on X, Musk noted that Bridgewater’s investment was a “smart move.”
  • Elon Musk has been quite consistent on his idea that Tesla could eventually become the world’s most valuable company. He emphasized this point during the Q4 2024 earnings call.
  • “I see a path. I’m not saying it’s an easy path but I see a path of Tesla being the most valuable company in the world by far. Not even close. There is a path where Tesla is worth more than the next top five companies combined,” Musk said.

Don’t hesitate to contact us with news tips. Just send a message to simon@teslarati.com to give us a heads up.

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Investor's Corner

Tesla (TSLA) gets $475 price target and “Buy” rating from Benchmark

Published

3 weeks ago

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February 12, 2025

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Credit: Tesla

Tesla shares (NASDAQ:TSLA) have received a “Buy” rating and a $475 per share price target from Benchmark.

Benchmark’s price target is based on 68.2 times its 2028 earnings before interest, taxes, depreciation, and amortization (EBITDA), as noted in a Morningstar report.

Tesla rating:

  • In a note to clients, Benchmark analyst Mickey Legg noted that Tesla has outlined a path towards more growth through several of its initiatives.
  • These include Tesla’s work in autonomous driving systems, robotics, and energy generation.
  • The company could also make more headway into the electric vehicle segment.
  • “The company has outlined a path for growth with a more affordable vehicle scheduled for 1H25, unsupervised full self-driving as a paid service this June in Austin, TX, and Optimus robot production ramp through 2026 and beyond,” the analyst stated.

More potential:

  • While he sees potential in Tesla, the Benchmark analyst noted that his current model only incorporates vehicle growth. 
  • Thus, there could be “significant potential upside” if the company’s autonomous vehicle program and Optimus are scaled.
  • “Tesla’s market leadership, near-term catalysts, strong management, and diversified business justify the stock’s market premium,” Legg noted.

Don’t hesitate to contact us with news tips. Just send a message to simon@teslarati.com to give us a heads up.

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Tesla is ‘better-positioned’ as a company and as a stock as tariff situation escalates

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1 month ago

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February 3, 2025

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The Cybertruck-towed Model Y ad at Hayden Planetarium. Credit: Tesla North America | X

Tesla is “better-positioned” as a company and as a stock as the tariff situation between the United States, Mexico, and Canada continues to escalate as President Donald Trump announced sanctions against those countries.

Analysts at Piper Sandler are unconcerned regarding Tesla’s position as a high-level stock holding as the tariff drama continues to unfold. This is mostly due to its reputation as a vehicle manufacturer in the domestic market, especially as it holds a distinct advantage of having some of the most American-made vehicles in the country.

Analysts at the firm, led by Alexander Potter, said Tesla is “one of the most defensive stocks” in the automotive sector as the tariff situation continues.

The defensive play comes from the nature of the stock, which should not be too impacted from a U.S. standpoint because of its focus on building vehicles and sourcing parts from manufacturers and companies based in the United States. Tesla has held the distinct title of having several of the most American-made cars, based on annual studies from Cars.com.

Its most recent study, released in June 2024, showed that the Model Y, Model S, and Model X are three of the top ten vehicles with the most U.S.-based manufacturing.

Tesla captures three spots in Cars.com’s American-Made Index, only U.S. manufacturer in list

The year prior, Tesla swept the top four spots of the study.

Piper Sandler analysts highlighted this point in a new note on Monday morning amidst increasing tension between the U.S. and Canada, as Mexico has already started to work with the Trump Administration on a solution:

“Tesla assembles five vehicles in the U.S., and all five rank among the most American-made cars.”

However, with that being said, there is certainly the potential for things to get tougher. The analysts believe that Tesla, while potentially impacted, will be in a better position than most companies because of their domestic position:

“If nothing changes in the next few days, tariffs will almost certainly deal a crippling blow to automotive supply chains in North America. [There is a possibility that] Trump capitulates in some way (perhaps he’ll delay implementation, in an effort to save face).”

There is no evidence that Tesla will be completely bulletproof when it comes to these potential impacts. However, it is definitely better insulated than other companies.

Need accessories for your Tesla? Check out the Teslarati Marketplace:

Please email me with questions and comments at joey@teslarati.com. I’d love to chat! You can also reach me on Twitter @KlenderJoey, or if you have news tips, you can email us at tips@teslarati.com.

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