Tesla Is Heading Straight for a Speed Trap

For three years and counting, investor enthusiasm for Tesla Motors Inc. has repeatedly overshadowed, well, everything. Profits? Mostly irrelevant. Dwindling cash levels? No problem. Production issues? They won’t happen again, of course.

Tesla’s stock has surged more than 500% since 2013 behind a visionary, albeit unconventional, leader in Elon Musk and a cultlike investor following. But on this supposed long-term road to success, Tesla bulls face a harsh short-term reality.

Tesla has reported years of losses and has burned through billions of dollars. The hope is that the new, shiny and more affordable Model 3, unveiled earlier this year but not expected to ship until late 2017, will reverse those trends.

Until then, quarterly results, including Wednesday’s release, won’t be pretty.

Analysts polled by FactSet estimate Tesla’s first-quarter adjusted loss widened to 60 cents a share from a loss of 36 cents a year earlier. Revenue is expected to have increased by 45% to $1.6 billion. First-quarter deliveries were 1,180 lower than expected because of problems launching the Model X and disappointing Model S sales.

Investors, though, are focused on the Model 3. Mr. Musk said it received 325,000 preorders in the first week alone, which Tesla claimed was “the biggest one-week launch of any product ever.” That has since risen to nearly 400,000.

Yet what gets significantly less attention is Tesla’s underlying financial condition. It burned through $2.9 billion over the past six quarters, ending last year with $1.2 billion in cash and equivalents. That is less than the $1.5 billion in capital expenditures it expects in 2016. Tesla says it won’t need to raise money. Perhaps the $400 million float from Model 3 deposits can help bridge the gap.

Analysts don’t expect operating cash flow minus capital expenditures to be positive until 2018 at the soonest. That is despite Tesla touting last quarter a new and more optimistic “core operational cash flow” metric.

Tesla Plans to Sell $2 Billion of Stock

Proceeds to be used for Model 3 production, Elon Musk’s tax obligations

Tesla Motors Inc. said it would sell $2 billion in its stock to help finance production of its Model 3 electric vehicle and to cover tax obligations for an options exercise by Chief Executive Elon Musk.

The Palo Alto, Calif., car manufacturer will offer $1.4 billion in common stock to accelerate production of the coming Model 3. Proceeds also could be used for working capital and other corporate purposes, the company said.

The remaining shares will be sold by Mr. Musk to cover tax obligations associated with his exercise of more than 5.5 million in stock options, the company said. Mr. Musk will receive no cash through this sale, the company said.

According to a securities filing, Mr. Musk used a loan from Morgan Stanley, which is secured against his holdings in Tesla, to finance the purchase of the options. His total loan amount to Morgan Stanley stood at $299 million after the share purchase.

Mr. Musk plans to donate 1.2 million shares to charity, the company said. That would be worth $253 million based on Wednesday’s closing price.

The options exercise, despite the share sales by Mr. Musk to cover the taxes, will result in Mr. Musk increasing his overall holdings of Tesla stock.

The company ended the first quarter with $1.4 billion in cash after tapping a credit line. It ditched its forecast for producing positive free cash flow in 2016 and said its capital spending would increase by 50% more than it had earlier predicted.

An infusion of $2 billion should give the company a big enough cushion to finance growth over the next year.

Tesla has had only one profitable quarter since becoming a public company and its losses have grown as it has invested in growth.

Tesla Offers to Acquire SolarCity

Elon Musk is chairman, largest shareholder of both companies

June 21, 2016

Elon Musk proposed combining the electric-car and solar-energy companies that he backs, the latest in a series of financial shuffles among disparate firms of his empire.

Tesla Motors Inc., Mr. Musk’s Palo Alto, Calif., electric-car company, on Tuesday offered to acquire SolarCity Corp. in an all-stock deal valuing it at up to $2.8 billion. Mr. Musk is the chairman and largest shareholder of both companies.

Tesla shares tumbled 12% in after-hours trading following Mr. Musk’s announcement, while SolarCity shares surged 15%.

Tesla, in a letter to SolarCity Chief Executive Lyndon Rive — also Mr. Musk’s cousin—said its offer represented a value of between $26.50 and $28.50 a share, or a premium of roughly 21% to 30% over SolarCity’s Tuesday closing price of $21.19. The mothers of Messrs. Musk and Rive are twin sisters.

Mr. Musk, who has borrowed money and shuffled funds among his companies, recused himself from voting on the deal at the Tesla board meeting at which it was approved and will do so for any vote on the SolarCity board as well, the offer letter said. Antonio Gracias, a director on the boards of both companies, also recused himself, the letter said.

Tesla said the deal is subject to approval of “a majority of disinterested stockholders” of both companies.

The acquisition aims to create a company employing nearly 30,000 people with all products renamed “Tesla” that will package electric cars, batteries and solar panels for customers, Mr. Musk said.

But it would also add to the growing complexity and vertical integration of Tesla and add an unprofitable operation to its already-strained finances. Tesla, in a huge growth effort that includes building a $5 billion battery factory in Nevada, isn’t expected to be profitable until 2020 at the earliest and recently launched a share sale to raise $1.7 billion for capital expenses.

Tesla, with a market capitalization of $32.7 billion is a much larger company than SolarCity, whose market value is $2.1 billion.

The proposal is also likely to draw further scrutiny of Mr. Musk’s dealings with multiple companies he owns and helms, and their financial viability. In addition to Tesla and SolarCity, Mr. Musk is the largest shareholder and chief executive of rocket maker Space Exploration Technologies Inc.

SpaceX in 2014 was the largest buyer of $214 million in bonds SolarCity offered.

Mr. Musk has purchased shares of both Tesla and SolarCity when they have needed capital, and secured $475 million in personal credit lines with his own shares in the companies. Mr. Musk has disclosed the risks of margin calls related to the loans that can risk destabilizing the companies’ stocks.

Tesla’s proposed takeover comes amid significant struggles for SolarCity, which has suffered stock-price declines exceeding 60% over the past 12 months and lost $283 million during the first three months of this year.

Mr. Musk said the proposed takeover wasn’t motivated by SolarCity’s declining stock price.

Tesla Buying SolarCity: This Deal Defies Common Sense

Transaction has no industrial logic and shows weak governance

June 21, 2016

Just a day after Tesla boss Elon Musk made the odd boast that one of its cars “floats well enough to turn into a boat,” he did something even odder. Tesla’s bid for solar panel installation firm SolarCity on Tuesday afternoon is the sort of move that, even for the most Panglossian Silicon Valley investor, stretches the bounds of industrial logic. It also stretches some ethical limits given the fact that Mr. Musk is the largest, albeit a minority, shareholder in each firm. He also has borrowed personally to buy SolarCity shares, which are down by 58% in the year to date.

Although the offer is for shares, not cash, meaning that Tesla won’t have to go back to the capital markets well quite yet, the deal is far from the “obvious thing to do” that Mr. Musk says it is.

Both businesses, for different reasons, are cash hungry. In the past four quarters alone, Tesla burned up nearly 50 cents of cash for every dollar of sales it made. But it was practically the U.S. Mint compared with SolarCity which burned nearly $6 for each dollar of sales.

Banding together with another cash-hungry business simply because it is also green and may one day make use of Tesla’s batteries may excite some investors and burn short sellers in SolarCity’s stock. But, as Mr. Musk warned about his amphibious wonder car, such harebrained schemes can only float “for short periods of time.”

Musk Says SolarCity Deal About Synergy But It May Be About Debt

Elon Musk’s $2.86 billion bid for SolarCity Corp. may be as much about rescuing the company from swelling debt as creating a one-stop clean-energy powerhouse with Tesla Motors Inc.

SolarCity’s debt has ballooned 13-fold in the past three years to reach $3.25 billion, and it’s central to SolarCity’s strategy: borrow funds for rooftop systems that are mostly leased to customers. Those decades-long contracts provide slow, steady payback, while the company’s liabilities keep rising.

That has put SolarCity on a path that analysts warn may be unsustainable, as financing costs increase. The company faces $1.23 billion in debt due by the end of 2017, according to data compiled by Bloomberg. A takeover by Tesla may be Musk’s solution, said Angelo Zino, an analyst at S&P Global Market Intelligence.

“This deal has everything to do with debt. Call it a bailout, call it what you will,” Zino said in an interview Wednesday. “SolarCity is one bad economic downturn away from going belly up.”
Musk disagreed with the notion that the deal is a rescue package on a conference call with analysts Wednesday.

“I don’t know where this bailout comes from,” he said. “SolarCity is headed to, I think, a very healthy place from a cash flow standpoint,” and is on pace to be cash-flow positive this year.

Rising debt is endemic among solar companies. The industry has borrowed a total of $200 billion since 2010, according to a research note Tuesday from Goldman Sachs Group Inc. Industry-wide operating cash flows, meanwhile, declined $3 billion during that period. The pattern of rising debt and dwindling cash flow came into sharp relief in April, when the the world’s biggest clean-energy company, SunEdison Inc., filed for bankruptcy protection, listing $16.1 billion in liabilities.

‘Sick’ Solar

“The industry looks quite sick,’’ Edward I. Altman, a finance professor at New York University who specializes in corporate borrowing and debt, said in an interview.

While SolarCity’s sales have tripled in three years, it has posted losses in all but three quarters since its 2012 initial public offering while investing heavily in future growth. Its negative cash flows have grown worse, while its interest payment obligations keep rising.

“We’re talking about two cash-negative companies merging,” said Duncan Meaney, a financial adviser and portfolio manager at the Social Equity Group. “It does raise the suspicion that this is a way to bail out Solar City, which is a fairly significant money-losing operation.”

Tesla Motors' Delivery Miss Fuels Doubt Over Ambitious Targets

7/03/2016

Tesla Motors delivered 14,370 vehicles in the second quarter, the electric car maker reported Sunday, far below its own forecast, blaming its "extreme production ramp."

Tesla made 18,345 vehicles in Q2, with about 5,150 finished vehicles still en route to customers. Tesla had forecast that it would deliver 17,000 vehicles and produce about 20,000.

Tesla delivered 9,745 Model S cars. Tesla shipped 4,625 Model X crossovers, which first debuted late last year.

Q2's overall deliveries rose 25% vs. a year earlier. But they were below Q1's mark of 14,820. Q1 deliveries also missed Tesla's estimates, which the company blamed on "hubris" for making the Model X too technically advanced, leading to parts shortages.

Tesla also said it expects to deliver 50,000 vehicles in the second half of the year, implying a 2016 total of 79,180 vehicles. That's below its prior guidance for 80,000-90,000.

The Q2 deliveries and production report will fuel skepticism that it can produce 500,000 vehicles, at a high level of build quality by 2018. Tesla plans to launch its entry-level luxury sedan, the Model 3 in the latter half of 2017.

The Case of the Missing Teslas

July 3, 2016

Add yet another problem to the list at Tesla Motors : lackluster growth.

Tesla announced on Sunday that it delivered 14,370 vehicles in the second quarter. That is well below its own forecast of about 17,000, which it gave in May. Although sales of its Model X grew significantly from the first quarter, its signature Model S sedan actually saw sales fall sequentially by more than 22%. That is surprising since Tesla said in May that Model S orders were strong. The company has now missed its own deliveries guidance for two consecutive quarters.

The electric auto maker has delivered fewer than 30,000 cars in the first half of the year, putting its full year forecast of 80,000 to 100,000 in serious jeopardy. Tesla says it expects to deliver “about 50,000” cars in the next six months. That isn’t impossible, but Sunday’s news is disconcerting. Since Tesla can’t successfully forecast deliveries more than two months out, it stretches CEO Elon Musk’s bold forecast of 500,000 deliveries by 2018 from improbable to farcical.

For shareholders, this is merely the latest in a series of worries. For starters, the company continues to burn cash at an alarming rate, to the tune of $2.1 billion in the last four quarters through March 31. This means Tesla requires ongoing access to capital markets to function. Tesla has issued shares or convertible debt in every year since 2010.

That isn’t the end of it. A proposed merger with SolarCity, the other public company in which Mr. Musk is the largest shareholder, would exacerbate that cash burn, cause further stock dilution and raises questions about the firm’s corporate governance. Tesla’s reported earnings are heavily inflated by adjustments that don’t conform with generally accepted accounting principles. New competition looms on the horizon

Despite the litany of worries piling up, the stock remains priced for explosive growth in the near future. It fetches over 130 times consensus forward earnings, according to FactSet. Tesla’s shares, clinging to such a lofty valuation even as doubts have piled up, have been more dazzling than its vehicles.

Tesla Motors Inc. is scheduled to report second-quarter results after the bell Wednesday. Here’s what to expect:

Earnings:Revenue:Analysts will also key in on short-term production goals -- Tesla has said it plans to produce 50,000 vehicles in the second half of the year, against the fewer than 30,000 it has delivered in the first six months.

Despite still ramping production, Model X is also gaining market share, already growing to 6% of the U.S. large luxury SUV market in Q3, or #8 in the large luxury SUV category, edging out the Porsche Macan and Cayenne, the Land Rover R-R Sport and the Infiniti QX80. The large luxury SUV category is three times the size of the large luxury sedan category in the U.S., and represents a huge opportunity to further increase Model X sales.

Tesla shares hit 52-week high, less than 4 percent from all-time record

Feb. 13, 2017

Tesla shares hit a 52-week high on Monday, and edged closer to an all-time high, as the company prepares to announce earnings and takes further steps to develop its eagerly awaited Model 3 sedan.

Shares rose almost 4 percent Monday morning, at one point trading as high as $280.67, its loftiest level over the past year. At that price, the stock was less than 4 percent away from its all-time high of $291.42, set in Sept. 14.

Tesla has recently shown progress in its ambitious, even aggressive, plan to bring the Model 3 to market, by saying it was planning to pause its factory in Fremont, California, to retool for Model 3 production.

Oppenheimer analyst Colin Rusch said in a research note Monday that shares "are trading in line with anticipation of a successful Model 3 launch," and they would not be surprised to see Tesla "opportunistically raise capital to support medium- and long-term growth. We would view a capital raise as a catalyst to the upside given that it would remove part of the near-term bear argument."

Some Tesla bears suspect the company oes not have enough capital to complete its Model 3 production ramp on time, or fund the growth of its other projects — such as turning its SolarCity division into a profitable line of products.

The company also invited investors and analysts out to Nevada in early January for a tour of its Gigafactory, where it is making Model 3 components along with batteries for both its cars.

A Feb. 9 note from Baird analyst Ben Kallo urged investors to buy the stock ahead of its fourth-quarter earnings release, which is planned for Feb. 22. Kallo cited the Gigafactory tour as a factor in his confidence in the company, and said he thinks Tesla can deliver about 25,000 Model 3 sedans before the end of the year.

The stock's current price reflects a nearly 100-point jump from early December, when the stock was trading around $181 per share.

Tesla earnings: Expect Model 3 updates amid record stock highs

Feb 22, 2017

Tesla Inc. is scheduled to report fourth-quarter results after the bell Wednesday.

Wall Street will be eager to hear details on the Model 3, the all-electric mass-market car that Chief Executive Elon Musk hopes to start producing in July and selling later this year.

“That’s where all eyes are now,” said Ben Kallo, an analyst with Baird.

The Silicon Valley electric-car maker has promised to ramp up production to a rate of half a million vehicles in 2018, an ambitious goal that largely hinges on success of the Model 3.

Analysts expect Tesla to report a quarterly loss after disappointing vehicle deliveries, but the company sprung a surprise in the most recent report with a third-quarter profit and a sales beat.

Here’s what to expect:

Earnings:

Analysts polled by FactSet expect Tesla to report an adjusted fourth-quarter loss of 53 cents a share, narrower than the loss of 87 cents a share it reported in the fourth quarter of 2015.

Estimize has a more optimistic consensus estimate for Tesla, seeing a loss of 6 cents a share, based on 458 estimates.

Revenue:

The FactSet sales consensus is $2.16 billion, which would compare with sales of $1.75 billion a year ago. Estimize contributors on average project sales of $2.24 billion for Tesla.

Tesla reports wider quarterly loss but beats sales expectations

Feb 22, 2017

Tesla Inc. shares rose 1% late Wednesday after the electric-car maker reported a wider-than-expected quarterly loss but beat sales expectations.

Tesla said it lost $121.3 million, or 78 cents a share, in the fourth quarter, compared with a loss of $320.4 million, or $2.44 cents a share, in the fourth quarter of 2015. Adjusted for one-time items, Tesla lost $106.5 million, or 69 cents a share, in the quarter, compared with $2.02 a share a year ago.

Sales rose to $2.28 billion, compared with $1.21 billion a year ago. Analysts polled by FactSet had expected the Silicon Valley car maker and energy company to report an adjusted loss of 53 cents a share on sales of $2.16 billion.

Tesla Fourth Quarter & Full Year 2016 Update

• Q4 Model S and X orders reach record highs
• Model 3 on track for initial production in July, volume production by September
• Battery cell production started at Gigafactory 1
• All Tesla vehicles in production have the hardware necessary for full self-driving
• SolarCity and Grohmann integrations underway
• Q3 to Q4 cash increased by over $300 million to $3.4 billion
• 2016 revenue of $7 billion, up 73% from 2015

We start 2017 well positioned to scale our business significantly. Model S and X net order growth remains strong, as we are continually evolving our products by elevating performance, convenience, and safety. Our Model 3 program is on track to start limited vehicle production in July and to steadily ramp production to exceed 5,000 vehicles per week at some point in the fourth quarter and 10,000 vehicles per week at some point in 2018.

In Q4, we received 49% more global net orders for Model S and X combined, compared to the same period in 2015, as both vehicles continue to win over new customers.

Model 3 vehicle development, supply chain and manufacturing are on track to support volume deliveries in the second half of 2017. In early February, we began building Model 3 prototypes as part of our ongoing testing of the vehicle design and manufacturing processes. Initial crash test results have been positive, and all Model 3-related sourcing is on plan to support the start of production in July. Installation of Model 3 manufacturing equipment is underway in Fremont and at Gigafactory 1, where in January, we began production of battery cells for energy storage products, which have the same form-factor as the cells that will be used in Model 3. Later this year, we expect to finalize locations for Gigafactories 3, 4 and possibly 5 (Gigafactory 2 is the Tesla solar plant in New York).

Average transaction prices increased 1% from Q3 2016, primarily driven by continued mix shift to Model X.


Outlook

We expect to deliver 47,000 to 50,000 Model S and Model X vehicles combined in the first half of 2017, representing vehicle delivery growth of 61% to 71% compared with the same period last year. In addition, both GAAP and non-GAAP automotive gross margin should recover in Q1 to Q3 2016 levels and then continue to expand in Q2 2017.

As for our energy generation and storage business, we plan to prioritize profitability and cash preservation over total MW deployed ahead of the solar roof launch. We are on track to generate $500M in cash (including growth of non-recourse project financing) by 2019 and achieve the cost synergies we committed to upon acquiring SolarCity. Specifically, we plan to reduce customer acquisition costs by cutting advertising spending, selling solar products in Tesla stores, and shifting away from leasing solar systems.

We expect to invest between $2 billion and $2.5 billion in capital expenditures ahead of the start of Model 3 production. We continue to focus on capital efficiency while also investing in battery cell, pack and energy storage production at Gigafactory 1.

Tesla Global Vehicle Sales Rose 69% in First Quarter to 25,000

Auto maker aims to deliver 50,000 vehicles in first half

April 2, 2017

Tesla Inc. on Sunday said its global sales rose 69% in the first quarter, its best quarter of sales yet, putting the auto maker on a path to meet its goal of 50,000 deliveries in the first half of the year.

The Silicon Valley electric-car maker said it delivered roughly 25,000 vehicles—about 13,450 Model S sedans and about 11,550 Model X sport-utility vehicles—in the quarter, compared with a total of 14,820 a year earlier.

It was Tesla’s best quarter of sales on record, topping the third quarter of 2016, when it delivered 24,500 vehicles, which helped the company post its second-ever profitable quarter.

The results should help fuel further investor confidence in Chief Executive Elon Musk as he works to bring out later this year a $35,000 sedan called the Model 3. Tesla shares have risen about 30% this year, pushing the company’s market value to almost as much as 113-year-old Ford Motor Co. , the second-largest U.S. auto maker by market capitalization.

Tesla is aiming to sell about as many vehicles in the first half of 2017 as it delivered during the final six months of last year.

Much of the first-quarter gain came from the continued rollout of the Model X, which had 2,400 sales a year earlier. The Model S increased about 8% from a year ago. Tesla, unlike other major auto makers, doesn’t break out sales by region. In 2016, revenue from U.S. activities made up 60% of the company’s business.

During the first three months of this year, Tesla built 25,148 vehicles, the company said.

Tesla, on a Hot Streak, Passes Ford in Investor Value

Change reflects a growing belief that electric motors and autonomous driving are the wave of the future for cars

April 3, 2017

Elon Musk has steered past Henry Ford in the minds of investors, the latest sign that the auto industry is undergoing a seismic shift.

Tesla Inc., the upstart Silicon Valley electric-car maker run by Mr. Musk, has overtaken Ford Motor Co., the automotive pioneer that is exactly 100 years older, as the second-largest U.S. auto maker by stock-market value.

Shares in Tesla were up 7.3% at $298.52 Monday, pushing the California auto maker’s market capitalization to $48.7 billion, above the Michigan company’s roughly $45.5 billion, according to FactSet. The next milestone for Tesla would be General Motors Co. , valued at roughly $51.2 billion.

This milestone was achieved as the broader auto industry delivered disappointing March sales results, reinforcing widespread investor concern that the profitable U.S. market has plateaued after seven years of growth.

Wall Street has soured on blue-chip auto stocks as discounts to sell cars soar and inventories balloon, fearful that established players are headed into the prolonged downturns that have long plagued the boom-and-bust car business.

Tesla is among the few companies showing the potential to defy that cycle. Its sales of electric cars, while relatively modest, have skyrocketed in a period when low gasoline prices have sunk demand for other electric vehicles. On Sunday, the company said its global sales rose 69% in the first quarter, putting the car maker on the path to meet its goal of 50,000 deliveries in the first half.

GM launched its Chevrolet Bolt in January with none of the fanfare Tesla’s forthcoming Model 3 received; and the 3,000 Bolts sold through March indicate that the battery-powered Chevrolet will struggle to be more than a niche car.

The changing of the guard reflects a growing belief that internal-combustion engines will eventually be replaced by electric motors as the primary power source for automobiles. It is the latest threat to Detroit’s once-dominant stranglehold on personal transportation, a role that was diminished by Japanese car companies in the 1980s and is now being challenged by Silicon Valley’s technological might. While Mr. Ford’s Model T ushered in a wave of affordable mobility for the middle class, Mr. Musk is promising the same with the coming Model 3. It is a sleek, computerized $35,000 sedan that can drive nearly the distance from New York City to Washington on a single charge.

Tesla is a bet that Mr. Musk—who is 45 years old, the same age as Mr. Ford was in 1908 when he released the Model T—can reshape transportation not only with electric vehicles, but with cars that drive themselves.

Tesla remains a shaky bet. The 13-year-old company is unprofitable, deeply indebted and delivered just 76,000 cars last year. Its Autopilot mode is untested as a fully autonomous feature and has raised safety concerns.

Ford has over 20 times the annual revenue, billions of dollars in profit and sells millions of cars each year. It isn’t standing still under Chief Executive Mark Fields, promising to deliver self-driving cars by 2021. It is buying and investing in tech startups: It invested $1 billion in Argo AI, a company consisting of engineers from the autonomous vehicle programs of Uber Technologies Inc. and Alphabet Inc. Ford is coming off one of its most profitable periods in history, after a restructuring effort led by former Chief Executive Alan Mulally that eliminated brands, closed plants and streamlined the company’s global operations.

Ford is forecasting leaner results for 2017, further confirming Wall Street’s view that traditional car makers are still too exposed to the auto industry’s boom-bust cycles. On Monday, Ford reported March sales plunged 7.2% amid a decline in fleet and passenger-car sales. GM posted a softer-than-expected 1.6% sales increase for the month.

Ford’s market value is roughly the same as it was in late 2010, when a newly public Tesla was valued at less than $2 billion. Ford’s stock has fluctuated since then, while Tesla’s has steadily risen and has surged more than 50% since the company acquired SolarCity Corp. in November.

Mr. Musk is betting that a less-expensive Model 3 will help Tesla evolve from a luxury-car maker into one with mass-market appeal. He is aiming to make 500,000 vehicles next year, a projection doubted by some of his biggest supporters.

Tesla surges to fresh record after Piper Jaffray upgrades to buy, raises price target by 65%

Apr 10, 2017 9:39 a.m. ET

Tesla Inc. shares rocketed another 3% to a fresh record in early trade Monday, after Piper Jaffray upgraded the stock to the equivalent of buy from neutral and raised its price target by 65% to $368 from $223.

"We have driven a Tesla for seven months in preparation for this report, and after conducting investor meetings with the company last week, we're finally ready to take a stand," analyst led by Alexander Potter wrote in a note. "Admittedly, before investors can follow our advice and buy TSLA shares, they will need to employ a "creative" valuation methodology and prepare for a bumpy ride."

Potter said he is convinced that Tesla will begin Model 3 deliveries this year and not mid-2018 as previously assumed. Tesla shares rose to a high of $312.57 and was last quoted at $311.08.

Tesla Tops GM by Market Value as Investors See Musk as Future

April 10, 2017

Elon Musk’s Tesla Inc. surpassed General Motors Co. to become America’s most valuable carmaker, eclipsing a company whose well-being was once viewed as interdependent with the nation’s.

Tesla climbed as much as 3.4 percent in early Monday trading, boosting its market capitalization to about $51 billion. The company was valued at about $1.7 billion more than GM as of 9:35 a.m. in New York.

The turnabout shows the extent to which investors have bought into Musk’s vision that electric vehicles will eventually rule the road. While GM has beat Tesla to market with a plug-in Chevrolet Bolt with a price and range similar to what Musk has promised for his Model 3 sedan coming later this year, the more than century-old company has failed to match the enthusiasm drummed up by its much smaller and rarely profitable U.S. peer.

“Tesla engenders optimism, freedom, defiance, and a host of other emotions that, in our view, other companies cannot replicate,” said Alexander Potter, an analyst at Piper Jaffray Cos., who upgraded the stock Monday after owning a Tesla for seven months and meeting with management. “As they scramble to catch up, we think Tesla’s competitors only make themselves appear more desperate.”

Tesla usurped GM a week after conquering Ford Motor Co. and spurring debate over the relative value of Musk’s company compared with some of the world’s top-selling automakers. GM expects to earn more than $9 billion this year and analysts predict Ford will generate adjusted profit of about $6.3 billion. On that basis, Tesla is expected to lose more than $950 million.

Tesla results: Loss of $1.33 per share, vs expected loss per share of 81 cents

• EPS: A loss of 81 cents per share is expected, according to Thomson Reuters
• Revenue: $2.62 billion, analysts said

Tesla Earnings: What to Watch

Aug. 2, 2017

Tesla Inc.’s second-quarter financial results are expected to be released after the market closes on Wednesday. Here is what you need to know:

EARNINGS:

Tesla is expected to post an adjusted loss of $1.82 cents a share, according to the average estimate of 19 analysts surveyed by Thomson Reuters. That compares with an adjusted loss of $1.06 a share a year earlier.

REVENUE:

Second-quarter revenue is forecast to more than double to $2.51 billion from $1.27 billion during the same period a year ago. Tesla recently reported that deliveries of the Model S sedan and Model X sport-utility vehicle rose to about 22,000 during the quarter, a 53% gain from the same quarter in 2016 but shy of 23,655, the average estimate of analysts surveyed by The Wall Street Journal.


WHAT TO WATCH:

COLD CASH: Chief Executive Elon Musk revealed greater pricing details of the coming Model 3 last week while warning that ramping up production would be “hell.” Investors will likely want to know what a trip through hell looks like, focusing attention on cash burn as the company accelerates production. The company ended the first quarter with $4 billion in cash and said it would need to spend more than $2 billion by the time it started Model 3 production. Analysts, such as Colin Langan of UBS, say Tesla will ultimately need to raise more money.

ITEMIZING INVENTORY: After Tesla reported second-quarter vehicle sales, analysts questioned whether demand for the older Model S sedan and Model X sport-utility vehicle was softening. Toni Sacconaghi, an analyst for Bernstein, estimates that Tesla’s car inventory has risen to 14,585, about doubling in the past two quarters. “A key question for us remains: ’Where are all the Teslas going?’" Mr. Sacconaghi wrote to investors. “We think Tesla’s inventory build reflects a pause in demand for Model S and X, in part due to Model 3.” In May, Mr. Musk suggested the $35,000 Model 3 was affecting sales of the more expensive Model S. Analysts will also likely be looking for greater clarity about Mr. Musk’s recent comments that the company has more than 500,000 deposits for the Model 3, up from the previous 375,000.

Adjusted loss per share of $1.33 vs. $1.82 expected, according to Thomson Reuters
Revenue: $2.79 billion vs. $2.51 billion expected, according to Thomson Reuters