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Investor's Corner

Tesla Q1 2017 financial results and Q&A call will be on May 3

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Tesla’s First Quarter 2017 Financial Results Q&A Conference Call will take place on May 3rd at 2:30pm PT (9:30pm GMT).

CEO Elon Musk is expected to discuss details behind the company’s record first quarter delivery numbers as well as touch on production plans for Model 3, which is expected to begin low volume production in July. The questions and answers portion of the earnings call is always a treat, as Musk tends to reveal details about its upcoming product line. It wouldn’t be all that surprising to hear more details about Tesla’s compact utility Model Y.

The serial tech entrepreneur recently fired off tweets sharing that a Tesla Semi truck will be revealed to the public for the first time in September. Musk expressed his personal take on the vehicle, noting that it was “seriously next level.” Given Tesla’s dominance in autonomous driving technology to date, speculation is that the Tesla Semi will also be autonomous, which could revolutionize the trucking industry, while simultaneously rendering millions of truck drivers around the world unemployed.

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Finally, as Tesla looks towards next year, the Tesla pickup truck is expected to make its debut. Pickup trucks currently comprise 18% of all vehicles sold in the US. Having a new vehicle catered to this segment will allow Tesla to garner press from an entirely new market.

During Tesla’s last earnings call, Musk shared insight on work that was being done to streamline the manufacturing process for Model 3, noting that it is a car designed to be easy to make. The process will be further streamlined by more efficient “machines that build the machine”. The effort Tesla is putting into improving the efficiency of manufacturing of the vehicle from both sides is unprecedented.

Looking beyond the upcoming July Model 3 launch event, Tesla said during the Q4 2016 earnings call that it would be finalizing the locations of Gigafactories 3, 4 and possibly even 5 this year. Details for the next Gigafactory beyond Gigafactory 2 in Buffalo, New York could be revealed on the earnings call. Competition around the world has been heating up with countries like Lithuania, Spain, Sweden and France all vying for Tesla’s attention.

What are you expecting in the earnings call? Start discussing below. As always, if you have a tip on anything you’d like to share, feel free to email it to me directly.

Company Description

Tesla’s mission is to accelerate the world’s transition to sustainable energy. Since our founding in 2003, Tesla has broken new barriers in developing high-performance automobiles that are not only the world’s best and highest-selling pure electric vehicles—with long range and absolutely no tailpipe emissions—but also the safest, highest-rated cars on the road in the world. Beyond the flagship Model S sedan as well as the falcon-winged door Model X sports utility vehicle, we plan on launching our new Model 3 sedan later this year at a base price of $35,000 that we expect to truly propel electric vehicles into the mainstream.

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In addition, with the opening of the Gigafactory and the acquisition of SolarCity, Tesla now offers a full suite of energy products that incorporates solar, storage, and grid services. As the world’s only fully integrated sustainable energy company, Tesla is at the vanguard of the world’s inevitable shift towards a sustainable energy platform.

I'm passionate about clean technology, sustainability and life. I've worked in manufacturing, IT, project management and environmental...and enjoy unpacking complex topics in layman's terms. TSLA investor. Find more of my words on my website or follow me on Twitter for all the latest. Tesla Referral link: http://ts.la/kyle623

Investor's Corner

xAI targets $5 billion debt offering to fuel company goals

Elon Musk’s xAI is targeting a $5B debt raise, led by Morgan Stanley, to scale its artificial intelligence efforts.

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(Credit: xAI)

xAI’s $5 billion debt offering, marketed by Morgan Stanley, underscores Elon Musk’s ambitious plans to expand the artificial intelligence venture. The xAI package comprises bonds and two loans, highlighting the company’s strategic push to fuel its artificial intelligence development.

Last week, Morgan Stanley began pitching a floating-rate term loan B at 97 cents on the dollar with a variable interest rate of 700 basis points over the SOFR benchmark, one source said. A second option offers a fixed-rate loan and bonds at 12%, with terms contingent on investor appetite. This “best efforts” transaction, where the debt size hinges on demand, reflects cautious lending in an uncertain economic climate.

According to Reuters sources, Morgan Stanley will not guarantee the issue volume or commit its own capital in the xAI deal, marking a shift from past commitments. The change in approach stems from lessons learned during Musk’s 2022 X acquisition when Morgan Stanley and six other banks held $13 billion in debt for over two years.

Morgan Stanley and the six other banks backing Musk’s X acquisition could only dispose of that debt earlier this year. They capitalized on X’s improved operating performance over the previous two quarters as traffic on the platform increased engagement around the U.S. presidential elections. This time, Morgan Stanley’s prudent strategy mitigates similar risks.

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Beyond debt, xAI is in talks to raise $20 billion in equity, potentially valuing the company between $120 billion and $200 billion, sources said. In April, Musk hinted at a significant valuation adjustment for xAI, stating he was looking to put a “proper value” on xAI during an investor call.

As xAI pursues this $5 billion debt offering, its financial strategy positions it to lead the AI revolution, blending innovation with market opportunity.

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Tesla tops Cathie Wood’s stock picks, predicts $2,600 surge

Tesla’s future lies beyond cars—with robotaxis, humanoid bots & AI-driven factories. Cathie Wood predicts a 9x surge in 5 years.

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Cathie Wood shared that Tesla is her top stock pick. During Steven Bartlett’s podcast “The Diary Of A CEO,” the Ark Invest founder highlighted Tesla’s innovative edge, citing its convergence of robotics, energy storage, and AI.

“Because think about it. It is a convergence among three of our major platforms. So, robots, energy storage, AI,” Wood said of Tesla. She emphasized the company’s potential beyond its current offerings, particularly with its Optimus robots.

“And it’s not stopping with robotaxis; there’s a story beyond that with humanoid robots, and our $2,600 number has nothing for humanoid robots. We just thought it’d be an investment, period,” she added.

In June 2024, Ark Invest issued a $2,600 price target for Tesla, which Wood reaffirmed in a March Bloomberg interview, projecting the stock to reach this level within five years. She told Bartlett that Tesla’s Optimus robots would drive productivity gains and create new revenue streams.

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Elon Musk echoed Wood’s optimism in a CNBC interview last month.

“We expect to have thousands of Optimus robots working in Tesla factories by the end of this year, beginning this fall. And we expect to scale Optimus up faster than any product, I think, in history to get to millions of units per year as soon as possible,” Musk said.

Tesla’s stock has faced volatility lately, hitting a peak closing price of $479 in December after President Donald Trump’s election win. However, Musk’s involvement with the White House DOGE office triggered protests and boycotts, contributing to a stock decline of over 40% from mid-December highs by March.

The volatility in Tesla stock alarmed investors, who urged Musk to refocus on the company. In a May earnings call, Musk responded, stating he would be “scaling down his involvement with DOGE to focus on Tesla.” Through it all, Cathie Wood and Ark Invest maintained their faith in Tesla. Wood, in particular, predicted that the “brand damage” Tesla experienced earlier this year would not be long term.

Despite recent fluctuations, Wood’s confidence in Tesla underscores its potential to redefine industries through AI and robotics. As Musk shifts his focus back to Tesla, the company’s advancements in Optimus and other innovations could drive it toward Wood’s ambitious $2,600 target, positioning Tesla as a leader in the evolving tech landscape.

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Investor's Corner

Goldman Sachs reduces Tesla price target to $285

Despite Goldman Sach’s NASDAQ: TSLA price cut to $285, Tesla boasts $95.7B in revenue & nearly $1T market cap.

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(Credit: Tesla)

Goldman Sachs analysts cut Tesla’s price target to $285 from $295, maintaining a Neutral rating.

The adjustment reflects weaker sales performance across key markets, with Tesla shares trading at $284.70, down nearly 18% in the past week. The analysts pointed to declining sales data in the United States, Europe, and China as the primary driver for the revised outlook. In the U.S., Tesla’s quarter-to-date deliveries through May fell mid-teens year-over-year, according to Wards and Motor Intelligence.

In Europe, April registrations plummeted 50% year-over-year, with May showing a mid-20% decline, per industry data. Meanwhile, the China Passenger Car Association (CPCA) reported a 20% year-over-year drop in May, despite a 5.5% sequential increase from April. Consumer surveys from HundredX and Morning Consult also shaped Goldman Sachs’ lowered delivery and EPS forecasts.

Goldman Sachs now projects Tesla’s second-quarter deliveries to range between 335,000 and 395,000 vehicles, with a base case of 365,000, down from a prior estimate of 410,000 and below the Visible Alpha Consensus of 417,000. Despite these headwinds, Tesla’s financials remain strong, with $95.7 billion in trailing twelve-month revenue and a $917 billion market capitalization.

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Regionally, Tesla’s challenges are stark. In Germany, the German road traffic agency KBA reported Tesla’s May sales dropped 36.2% year-over-year, despite a 44.9% surge in overall electric vehicle registrations. Tesla’s sales fell 29% last month in Spain, according to the ANFAC industry group. These declines highlight shifting consumer preferences amid growing competition.

On a positive note, Tesla is making strategic moves. The Model 3 and Model Y are part of a Chinese government campaign to boost rural sales, potentially mitigating losses. Piper Sandler analysts reiterated an Overweight rating, emphasizing Tesla’s supply chain strategy.

Alexander Potter stated, “Thanks to vertical integration, Tesla is the only car company that is trying to source batteries, at scale, without relying on China.”

As Tesla navigates these delivery challenges, its focus on innovation and supply chain resilience could help it maintain its edge in the electric vehicle market despite short-term hurdles.

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