Archive for Graham Rapier

Elon Musk teases a Tesla Cybertruck availability update as soon as April

Tesla Cybertruck
Elon Musk unveils Tesla's Cybertruck concept

Elon Musk on Saturday teased an update about the availability of Tesla's forthcoming Cybertruck as soon as April.

"Update probably in Q2. Cybertruck will be built at Giga Texas, so focus right now is on getting that beast built," the CEO said on Twitter in response to a question about the truck's first deliveries.

 

In January, Musk said the F-150 competitor's engineer was nearly finished and that Tesla would soon begin designing an assembly line to build it. 

"We're no longer iterating at the design center level or design level," he said. "We've got the designs fixed. We're getting to -- we'll soon order the equipment necessary to make the Cybertruck work."

Tesla's newest factory near Austin, Texas, is currently under construction, with a completion date set for later in 2021. 

The futuristic-looking truck comes at a crucial time for Tesla, which is already beginning to lose ground to competitors. Electric pickups are a crucial hurdle in mass market battery adoption - and key profit center for competitors like Ford.

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Coinbase’s CEO is set to get a $3 billion windfall as his company goes public amid a cryptocurrency boom

brian armstrong coinbase
Coinbase Founder and CEO Brian Armstrong attends Consensus 2019 at the Hilton Midtown on May 15, 2019 in New York City.
  • Coinbase founder Brian Armstrong is set for a hefty payday as his company speeds toward a direct stock listing. 
  • According to Bloomberg calculations, his stock options could total a $3 billion windfall. 
  • Considered a bellwether for the cryptocurrency industry, Coinbase's public listing could give legitimacy to the movement. 
  • Visit the Business section of Insider for more stories.

Coinbase's surge in popularity amid a boom in cryptocurrencies has helped mint founder and CEO Brian Armstrong as one of the newest Silicon Valley ultra-rich.

Amstrong is set to reap a potential $3 billion windfall from the digital currency exchange's direct listing as a trend of mega grants to tech founders continues full steam ahead, Bloomberg calculated from company filings and news reports. His stake in the company is worth $15 billion, the news site estimates.

In 2020, Armstrong took home $56 million of stock option awards on top of a $1 million salary and another $1.8 million in reimbursement for legal and security fees, according to registration documents

Like peers including Elon Musk, the most well-payed CEO in the world in recent years, Armstrong's pay day isn't a shoe-in. He'll need to shepherd the company through a choppy cryptocurrency market, and hit certain milestones along the way. What's more, his 9.3 million option grant doesn't even begin vesting until Coinbase's stock price hits $200 - up from a "fair value" award price of $23.49.

"We believe the performance conditions associated with the 2020 CEO Performance Award are extremely rigorous and appropriately align Mr. Armstrong's incentives with the interests of our stockholders," Coinbase said in its filing. His options fully vest at a roughly 1,600% price increase.

Coinbase is set to hit public exchanges within weeks, when outside investors for the first time will value shares of the company. Luckily for Armstrong, the required price increases could be near: Axios reported in February that Coinbase sold several tranches of stock totaling 1.8 million shares, going for as high as $303 each - a nearly 1200% increase from the option strike price.

As traders await first trades, bitcoin has continued to spike higher. The world's largest cryptocurrency surged as high as $57,000 last month before paring some of gains in recent weeks.  A survey by Goldman Sachs found the bank's clients to be largely optimistic about the currency's future price, with 22% expecting it to double in the next year.

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Elon Musk lost $27 billion in a rough week for the electric vehicle sector

GettyImages 1229892852
Elon Musk.
  • Elon Musk is no longer the world's richest person. 
  • The magnate's wealth dropped $27 billion in the first week of March amid a selloff in Tesla stock. 
  • EV stocks across the board had a rocky week after surging at the beginning of the year. 
  • Visit the Business section of Insider for more stories.

Electric vehicle stocks have been on a tear in 2020, fueled by a storm of reverse-mergers, technical breakthroughs, and potential political help.

But heavy selling amid broader market weakness last week caused headaches for some investors. For industry titan Elon Musk, it meant a $27 billion dent in his Tesla fortune, according to Bloomberg's Billionaires Index.

As Tesla shares tumbled more than 16% the week of March 1, so too did the wealth (on paper at least) of Musk, its chief executive and largest shareholder. A rout of about the same percentage since the beginning of year dented Musk's historic riches, sending him to second place on a ranking of the world's wealthiest.

At $157 billion, Musk now trails Amazon chief executive Jeff Bezos, the world's richest person, by about $20 billion. Luckily for Musk, the Tesla losses are padded partially by continued gains for SpaceX, a private entity in which he also holds a massive stake, which continues to garner new investment and higher valuations.

Tesla wasn't the only electric vehicle stock to stutter following months of searing gains. Chinese startup Nio has declined about 40% from a February high, with its competitors like XPeng and Li Auto falling similar amounts.

Recent names to go public via special purpose acquisition companies, or SPAC's -  including Canoo, Nikola, Lucid, Fisker, and others -  also saw heavy selling from February into March.

A shortage of critical microchips is also affecting new and entrenched automakers around the world, with the White House pledging to help stave off some of the impact.

Dan Ives, an analyst at Wedbush Securities, said the recent weakness represents "growing pains" but likely isn't a full implosion.

"The last month we have witnessed a sell-off in EV names across the board as the risk-off trade coupled by some sales choppiness seen in China during the month of January has sparked some investors to hit the exit signs in the near-term," he told clients Thursday.

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Tesla falls short of Wall Street’s expectations as it closes out its first profitable year

Elon Musk
Tesla CEO Elon Musk
  • Tesla reported its earnings for the final quarter of 2020 on Wednesday afternoon.
  • Elon Musk's automaker missed Wall Street's earnings expectations by about 20%.
  • Shares of Tesla fell sharply in late trading following the news. 
  • Visit Business Insider's homepage for more stories.

Tesla posted yet another quarterly profit to close out 2020, but fell short of Wall Street's expectations, as the electric automaker continues to grow its sales and turn a profit despite the coronavirus pandemic.

Here are the important numbers:

  • Revenue: $10.744 billion, compared to an expected $10.33 billion
  • Earnings: $0.80 (adjusted) per share, compared to an expected $1.01 per share.

Shares of Tesla fell about 4% in late trading Wednesday following the EPS miss. The stock has risen more than 650% in the past year, helping mint CEO Elon Musk as the world's richest person. 

"Despite unforeseen global challenges, we outpaced many trends seen elsewhere in the industry as we significantly increased volumes, profitability and cash generation," the company said in a press release. 

Tesla expects to begin delivering its electric semi-truck in 2021, it said, as well as a souped-up "plaid" version of its Model X. Production of the semi was originally supposed to begin in 2019, and some apparent versions have been previously spotted in the wild. 

Revenue from selling regulatory tax credits to other automakers, a significant catalyst for Tesla's five previous consecutive profits, grew to $2.24 billion - or about one-fifth of overall revenues.

The company did not provide 2021 guidance for its automotive production, but said it expects "50% average annual growth" on a multi-year outlook. In 2020, it fell very slightly short of its 500,000 deliveries goal.

"Importantly, all eyes will be focused on the company's delivery unit guidance for 2021, with the trajectory looking like ~750k to 800k with our view that the 1 million threshold could be hit by 2022 for Tesla," Dan Ives, an analyst at Wedbush, said in a note to clients. 

On a conference call with investors and analysts later Wednesday, Musk will likely be pressed for updates on Tesla's under-construction factories in Germany and Texas, ongoing production acceleration in China, and more granular detail on sales of higher-margin vehicles.

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Tesla is about to close the books on its most historic year yet – here’s what to expect

Elon Musk
  • Tesla will report its final 2020 earnings report on Wednesday afternoon. 
  • It will likely be the company's first fiscal year of profitability. 
  • Tesla and its leader Elon Musk had a wildly successful 2020 amid the pandemic. 
  • Visit Business Insider's homepage for more stories.

2020 was by all measures a blowout for Tesla.

The company delivered its highest number of cars yet, missing Elon Musk's goal of 500,000 by a tiny margin, while its stock price climbed to astronomical levels.

And on Wednesday afternoon Tesla will fully close the books on 2020, likely marking the automaker's first fiscal year of profitability. Here's what Wall Street is expecting from the fourth-quarter earnings report:

  • Revenue: $10.33 billion
  • Earnings: $1.01 (adjusted) per share

Even if Tesla is able to top analyst expectations for the year, investors may not be rewarded with the usual rise in share price. That's thanks in part to Tesla's eye-popping 691% surge in the past year - which has even left Wall Street's brightest scratching their heads - as well as a less-rewarding market and increased focus on deliveries. 

"While 4Q should be a relative blowout vs. Street expectations given the robust delivery numbers already reported coupled with more cost efficiency and tax credit tailwinds, all Street eyes are now on the delivery unit trajectory for Musk & Co. over the coming quarters," Dan Ives, an analyst at Wedbush who's garnered a reputation for his optimism about Tesla, said in a note to clients.

Ives expects Tesla to shoot for 750,000 deliveries in 2021 as new factories in Germany and Texas begin producing batteries and vehicles. However, other analysts - including those at UBS - say production at those new facilities may be limited depending on their full completion dates.

Investors will also have a close eye on regulatory tax credit sales, revenue from which have made up a hefty part of Tesla's five prior profitable quarters. Those credits are sold to other automakers that do not produce as many electric vehicles as Tesla, though the company provides little insight as to which.

Analysts are also excited about the prospect of newly refreshed models, and a higher mix of Model S and X vehicle sales, which could benefit Tesla's profit margins.

"The localized Model Y in China will be the key growth driver year-over-year," UBS analysts said. The country, which boasts the world's largest automotive market as well as a booming electric-vehicle industry, could be key to Tesla's continued success.

"The hearts and lungs of the Tesla bull thesis is centered around China as we have seen consumer demand ratchet up for 2021 with Model 3's, but also for impressive Chinese domestic players such as Nio, Xpeng, and Li Auto and in this key region," Ives said.

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Wall Street analysts loved test driving the new Mustang Mach-E – and say it could be bad news for Tesla investors

Mustang Mach E
Ford reveals its first mass-market electric car the Mustang Mach-E, which is an all-electric vehicle that bears the name of the company's iconic muscle car at a ceremony in Hawthorne, California on November 17, 2019. This is Ford's first serious attempt at making a long-range EV and will be the flagship of a new lineup that will include an electric F-150 pickup truck.
  • Ford's electric Mustang Mach-E is beginning to hit dealerships. 
  • So far, the crossover has impressed both media reviewers and Wall Street analysts. 
  • JPMorgan says the car likely won't eat into Tesla sales, but it could boost Ford's market value if previously hesitant investors are coaxed back to the name. 
  • Visit Business Insider's homepage for more stories.

Ford's Mustang Mach-E impressed media reviewers as it hit showrooms, and now Wall Street analysts are similarly enamored with the new electric vehicle.

A team at JPMorgan recently took the vehicle for a spin, less than a month after Insider's own Matt Debord said the car was one of the most exciting he's ever driven, "and walked away thoroughly impressed."

"Its design is unique and we believe will appeal to many buyers, particularly as relates to its Mustang-esque styling cues, including sinewy sheet metal, trademark tail lights with sequential signaling, and a rakish side profile more emblematic of a sports coupe than a utility vehicle," the team, lead by Ryan Brinkman, said in a note to clients.

"On the road," they continued, "it was fun and exciting to drive."

But the analysts stopped short of making a direct comparison to Tesla's Model Y, seemingly the most direct competitor on the market today.

"We do not aim to argue that one vehicle is necessarily superior to the other (many consumers will continue to prefer the Model Y's greater availability of semi-autonomous driving features and Tesla brand, while others will be attracted to the Mach-E's styling and availability of a $7,500 federal tax credit)," they said.

Read more: New hires at Tesla's German factory reveal what it's like to interview with Elon Musk's company - and why they're leaving competitors for less pay

Rather, the issue for Tesla investors may be simply that Ford's stock has more room to run. Not only has the name been range-bound for some time, falling about 4% last year, compared to Tesla's meteoric - and often puzzling - rise in 2020.

"We see three negative implications for Tesla valuation,"

"(1) a growing number of compelling offerings will increasingly compete with Tesla for battery electric sales and share (of course while also growing the overall pie);

"(2) the sales of these offerings will place downward pressure on the demand from other automakers for Tesla's valuable Zero Emission Vehicle credits; and - most importantly -

"(3) as single-digit P/E automakers increasingly roll out similarly attractive battery electric models, we believe it will call into question the perceived paradigm shifting nature of Tesla's vehicles and business model and, in turn, its industry unique valuation."

JPMorgan remains Wall Street's most skeptical shop when it comes to Tesla, pegging the company's value at $105 - or about an eighth of where it was trading Friday.

Another bear, RBC Capital Market's Joseph Spak, threw in the towel on his previous valuation this week, upgrading Tesla to a neutral rating.

"There is no graceful way to put this other than to say we got TSLA's stock completely wrong," RBC said.

And as far as the future of Ford goes, both JPMorgan and RBC think there's plenty of room for the stock - and the Mustang Mach-E - to run.

"While we do not expect Ford to rival Tesla for number of battery electric vehicles sold (although Volkswagen, with a $99 billion cap, may)," JPMorgan said, "we do expect investors to increasingly take seriously its competitiveness in this area."

Read the original article on Business Insider

Wall Street analysts loved test driving the new Mustang Mach-E – and say it could be bad news for Tesla investors

Mustang Mach E
Ford reveals its first mass-market electric car the Mustang Mach-E, which is an all-electric vehicle that bears the name of the company's iconic muscle car at a ceremony in Hawthorne, California on November 17, 2019. This is Ford's first serious attempt at making a long-range EV and will be the flagship of a new lineup that will include an electric F-150 pickup truck.
  • Ford's electric Mustang Mach-E is beginning to hit dealerships. 
  • So far, the crossover has impressed both media reviewers and Wall Street analysts. 
  • JPMorgan says the car likely won't eat into Tesla sales, but it could boost Ford's market value if previously hesitant investors are coaxed back to the name. 
  • Visit Business Insider's homepage for more stories.

Ford's Mustang Mach-E impressed media reviewers as it hit showrooms, and now Wall Street analysts are similarly enamored with the new electric vehicle.

A team at JPMorgan recently took the vehicle for a spin, less than a month after Insider's own Matt Debord said the car was one of the most exciting he's ever driven, "and walked away thoroughly impressed."

"Its design is unique and we believe will appeal to many buyers, particularly as relates to its Mustang-esque styling cues, including sinewy sheet metal, trademark tail lights with sequential signaling, and a rakish side profile more emblematic of a sports coupe than a utility vehicle," the team, lead by Ryan Brinkman, said in a note to clients.

"On the road," they continued, "it was fun and exciting to drive."

But the analysts stopped short of making a direct comparison to Tesla's Model Y, seemingly the most direct competitor on the market today.

"We do not aim to argue that one vehicle is necessarily superior to the other (many consumers will continue to prefer the Model Y's greater availability of semi-autonomous driving features and Tesla brand, while others will be attracted to the Mach-E's styling and availability of a $7,500 federal tax credit)," they said.

Read more: New hires at Tesla's German factory reveal what it's like to interview with Elon Musk's company - and why they're leaving competitors for less pay

Rather, the issue for Tesla investors may be simply that Ford's stock has more room to run. Not only has the name been range-bound for some time, falling about 4% last year, compared to Tesla's meteoric - and often puzzling - rise in 2020.

"We see three negative implications for Tesla valuation,"

"(1) a growing number of compelling offerings will increasingly compete with Tesla for battery electric sales and share (of course while also growing the overall pie);

"(2) the sales of these offerings will place downward pressure on the demand from other automakers for Tesla's valuable Zero Emission Vehicle credits; and - most importantly -

"(3) as single-digit P/E automakers increasingly roll out similarly attractive battery electric models, we believe it will call into question the perceived paradigm shifting nature of Tesla's vehicles and business model and, in turn, its industry unique valuation."

JPMorgan remains Wall Street's most skeptical shop when it comes to Tesla, pegging the company's value at $105 - or about an eighth of where it was trading Friday.

Another bear, RBC Capital Market's Joseph Spak, threw in the towel on his previous valuation this week, upgrading Tesla to a neutral rating.

"There is no graceful way to put this other than to say we got TSLA's stock completely wrong," RBC said.

And as far as the future of Ford goes, both JPMorgan and RBC think there's plenty of room for the stock - and the Mustang Mach-E - to run.

"While we do not expect Ford to rival Tesla for number of battery electric vehicles sold (although Volkswagen, with a $99 billion cap, may)," JPMorgan said, "we do expect investors to increasingly take seriously its competitiveness in this area."

Read the original article on Business Insider

Tesla’s 2020 delivery numbers were impressive, but the company’s success puts more pressure on its new factories in Texas and Germany

Tesla Berlin Gigafactory
Tesla Berlin Gigafactory.

Tesla can't open its under construction factories quickly enough to keep up with demand.

The automaker on Saturday revealed 2020 delivery figures that topped Wall Street estimates for the year, and fell short of internal targets by just 450 vehicles. While the numbers show a slow second half of the year in which the coronavirus pandemic hobbled many industries, they show a 36% increase in the company's total output over 2019.

"The good news is Tesla has the formula consumers want," Gene Munster, managing partner at Loup Ventures, and long time Tesla supporter, said in a blog post.  "The bad news is to keep up with this demand, the company needs to quickly build new factories in Austin, Texas, and Brandenburg, Germany. While they made it look easy in Shanghai, ramping production is difficult and will be one of the most important Tesla topics in 2021."

Read More: REVEALED: How much Tesla, Rivian, and Nikola pay their employees, from engineers to managers

"While they made it look easy in Shanghai, ramping production is difficult and will be one of the most important Tesla topics in 2021, along with the status of FSD," he continued.

Tesla did not provide any geographical detail in its numbers, but it did note that Model Y production has begun in Shanghai with "deliveries expected to begin shortly." Reports from China suggest demand in the world's largest auto market remains high, both for Tesla and electric vehicles at large. Tesla appears to have recently lowered the cost for Model Y's in China by a significant amount.

Even skeptics, like the long-bearish analysts at JPMorgan, noted the delivery numbers were a good sign.

"Tesla's ability to grow roughly in line with expectations in 2020 is impressive because it suggests greater underlying momentum given the headwinds faced in 2020," the bank said in a note to clients. Its price target is now $105, up from $90 in December, but still well below current trading prices.

Despite recent hiccups - including court orders and temporary water shut offs - Tesla's Berlin factory remains on track to open in July 2021,Elon Musk told Business Insider last month. And in Texas, where the company plans to build its eventual Cybertruck, construction continues. The factory near Austin is slated to open in the first half of 2021, Tesla has said.

Both factories will be key for Tesla to ensure it retains its title as the top EV producer in the world, especially as a multitude of competitors - both upstart and traditional - seek to siphon off some of its success.

"Heading into 2021, we are seeing a major inflection of EV demand globally with our expectations that EV vehicles ramp from ~3% of total auto sales today to 10% by 2025," Dan Ives, an analyst at Wedbush, said in a note to clients over the weekend.

"We believe this demand dynamic will disproportionately benefit the clear EV category leader Tesla over the next few years especially in the key China region which we believe could represent ~40% of its EV deliveries by 2022 given the current brisk pace of sales," he said.

Shares of Tesla were up more than 3% in trading Monday following the delivery numbers, continuing a surge that saw the stock gain more 650% last year. 

Read the original article on Business Insider

Tesla’s services could be worth more than its car business, according to one Wall Street analyst who says the company is better compared to Apple, Tinder, and more.

elon musk
Elon Musk, founder and chief engineer of SpaceX speaks at the 2020 Satellite Conference and Exhibition March 9, 2020 in Washington, DC.
  • Tesla's services business could be worth more than all of its car sales by the end of the next decade, Morgan Stanley said last month. 
  • The bank estimates autopilot, insurance, energy, and everything else to be worth about 53% of a new street-high target price of $540 by 2030. 
  • Investors should also consider comparing the company to other services companies, like Apple, Tinder, Roku, and video game makers, the analysts said. 
  • Visit Business Insider's homepage for more stories.

Wall Street analysts have long compared Tesla to Apple and other tech giants more easily than its Detroit competitors.

Now, Morgan Stanley's Adam Jonas has taken one of the strongest steps yet to do just that - and is including an array of companies including Tinder, Roku, and video game makers too.

For the first time in November, the bank included Tesla's ancillary services - like its autopilot software, home energy products, insurance, and the long-awaited Tesla network - in its valuation of the company, which now sits at a street high of $540.

"To only value Tesla on car sales alone ignores the multiple businesses embedded within the company, and ignores the long term value creation arising from monetizing Tesla's core strengths, driven by best-in-class software and ancillary services," Jonas said in a note to clients.

His 2030 "sum of the parts" valuation gives $254 per share to Tesla's core automotive sales category, which CEO Elon Musk has said will reach 500 million units this year. That's about 47% of his total target.

Tesla network services, comprising everything from the company's Supercharger network to driver-assistance software, premium infotainment, and performance upgrades - gets the next largest weight in Jonas' analysis, at $164 per share.

Ride-hailing, something Musk previously said would be in place with a million self-driving by the end of 2020, will be worth $38 per share by 2030, Jonas says.

Insurance, which Tesla launched in California last year, and a third-party supplier business, make up the final $73 per share of Jonas total target.

All together, the new weight on non-automotive revenues are another step in transformation from a product sales business to a services-heavy, recurring revenue business like Apple, to which Morgan Stanley has often compared Tesla. The iPhone maker, Jonas points out, has grown services revenue to 40% of overall profits.

But the comparisons don't stop there. Morgan Stanley says it consulted across teams for relevant comparisons to Tinder, Roku, and even video game makers.

"Yes, consumer behavior in a dating environment is relevant," Jonas said. "A real eye-opener for us."

Tesla's stock price is up 635% this year, fueled most recently in November and December by the company's addition to the S&P 500 index.

Read the original article on Business Insider

Elon Musk confirms he’s moved to Texas after a months-long fight with California

Elon Musk with Texas Governor Greg Abbott
  • Elon Musk confirmed on Tuesday that he's moved to Texas. 
  • Earlier this year, he threatened to move Tesla out of California during a spat about the state's coronavirus restrictions. 
  • The move could save him lots of money on taxes. 
  • Visit Business Insider's homepage for more stories.

After months of speculation, Elon Musk on Tuesday confirmed he has moved to Texas.

He made the announcement at a virtual conference hosted by The Wall Street Journal, while continuing to criticize his former home of California.

"Tesla and SpaceX obviously have mass operations in California," Musk told the paper's editor-in-chief, Matt Murray. "In fact, it's worth noting that Tesla is the last car company still manufacturing cars in California. Space X is the last aerospace company still doing significant manufacturing in California. There used to be over a dozen car plants in California, and California used to be the center of aerospace manufacturing. My companies are the last two left."

"For myself, yes, I have moved to Texas," Musk continued. "We've got the Starship development here in South Texas where I am right now. We're hopefully going to do a launch later today. And then we've got big factory developments just outside of Austin for Giga Texas."

His move has been months in the making

Musk's divorce with California began largely this spring, when local coronavirus restrictions forced Tesla to temporarily close its only US car factory in the San Francisco Bay Area.

"Tesla will now move its HQ and future programs to Texas/Nevada immediately," he tweeted during a May disagreement with local health officials whose COVID-19 rules differed from state and national guidelines. "If we even retain Fremont manufacturing activity at all, it will be dependen (sic) on how Tesla is treated in the future." 

And over the summer, after listing many of his Los Angeles-area homes for sale, Musk quietly moved his charitable foundation to Texas, public filings first spotted by Bloomberg this week show. 

For Musk, Texas' lack of a state income tax is a clear incentive compared with California, which has the highest in the country. Musk's 2020 income is set to be just as large as his 2019 pay - the most of any CEO at just under $600 million - thanks to a series of stock-option awards unlocked by various corporate performance metrics. In total, they could reach more than $55 billion.

Read the original article on Business Insider