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All Things EV podcast


Feb 2, 2019

All Things EV Podcast S1 E4

 

What’s going on everyone. Welcome back to the All Things EV Podcast. In S1 E4 I cover Tesla’s Q4 2018 quarterly earning call. If you’ve watched the video version of my Q4 recap, I’d skip past this podcast episode because it is verbatim. I will publish episode 5 next week as usual and cover two week’s worth of EV news - and there has been a lot going on.

 

With that said, let’s dive in.

 

Q4 2018 quarterly call

 

Profit and Growth

Improving Service Operations

New Products

Retail Investor Questions

Institutional Investor Questions

 

 

Profit and growth

 

Last year was the most challenging year in Tesla’s history but also the most successful.

 

Tesla achieved an 80% market share of sales in US in 2018

 

They delivered more cars last year than all prior years combined

 

Even if there’s a global recession, we’re expecting deliveries to be ~50% better than 2018

 

Increased cash on hand by more than $700m dollars

 

Tesla will have enough cash to pay convertible bond

 

Elon is “optimistic about being profitable in Q1 (2019) - but not by a lot…”

 

 

Improving Service operations

 

Elon’s priority number one is improving service

 

27 new stores and service locations

 

Increased service fleet to 411 vehicles. Can scale up very rapidly.

 

Increasing functionality of Service app

 

If car detects something wrong, before the Tesla comes to a stop there is a towing or loaner on the way

 

Improving parts distribution by stocking all common parts at service centers

 

 

New Products

 

Model Y completed engineering and parts

 

75% of parts for Model Y are same as Model 3, versos Model X commonality with Model S was 30%

 

Capex for Model Y will be extremely low

 

Model Y production will most likely at Gigafactory in Nevada

 

Model Y might be 50% higher than Model 3

 

Gigafactory Shanghai has begun and expect to be in production by end of year (body, paint, final assembly, general assembly, and module production

 

 

Say.com questions

199,452 shares and $62.3M connected

 

72,082 SHARES and 311 VOTES: Owners, many of them with large followings online, are becoming very vocal about Tesla's worsening customer service experience with delivery, service, and repair. This has a severe impact on sales and returning sales. What are you doing to change this growing negative reputation?

 

69,304 SHARES and 117 VOTES: How are you feeling about demand across the production line right now? 

 

46,013 SHARES and 130 VOTES: Can you please share an update on Full Self Driving?

 

44,595 SHARES and 138 VOTES: If and when will Tesla switch to 2170 cells? What percent range improvement do you expect?

 

37,859 SHARES and 188 VOTES: Where will the Tesla Semi & Model Y be produced? Can you share a timeline on the expected production ramp of these vehicles?

 

 

 

Institutional Investors

 

JP Morgan: What will CAPEX for Shanghai look like and how will you raise capital?

 

Loop Ventures: What does Waymo have that you don’t have? How important is autonomy in the Tesla story?

 

OppenheimerFunds: What is the geographic dispersion of Model 3? What is your expectation of reduction of production costs?

 

UBS: Any color on what price point your Model 3 demand will be? Do you have a new battery supplier to accommodate demand?

 

Deutsche Bank: When should we expect the Standard Range Model 3? Do you expect a 25% gross margin on Model 3 despite introducing Standard Range? 

 

New Street Research: How will Tesla react to a potential 2019 recession?

 

Goldman Sachs: How is Europe and China Model 3 orders shaping up? And preorders?

 

Wedbush Security: What is demand like in Europe for Model 3 in by region? What logistics and delivery opportunities and challenges do you expect? How do you envision the potential competitive advantage of Shanghai Giga in 18-24 months?

 

Bernstein Research: How much of price differential of Model 3 is structural (i.e. powertrain costs)? Are unites produced or gross margin most important to Model 3 sales?

 

Macquarie Group: Where are battery costs currently and where they will be at the end of 2019? Where you made aware of the Panasonic and Toyota deal?

 

Wolfe Research: Do you plan to offer a US lease product of Model 3? What has Model S and X lease been like in the past? Is there a restructuring charge that you expect in the first quarter and is it included in your expectations of a small profit? Will the change to servicing parts have a negative impact on working capital?

 

Baird Capital: What can you share about consensus? How do you feel about global recessions in relation to Tesla’s most recent layoffs? What can energy storage add to the bottom line in 2019? 

 

 

Wrap up

 

Thank you so much for listening

 

If you’d like to get your question answered on All Things EV Podcast tweet me at @SeanMMitchell and use the hashtag #AllThingsEV.

 

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Lastly, if you would like to the review the articles mentioned in this podcast you can go to AllThingsEV.info/podcast.

 

I’ll talk with you all on the next episode of All Things EV Podcast.