Tesla says its bitcoin investment is now worth $2.48-billion !! Tesla stock headed to $10.000 per share this year towards Q3 !!
Tesla Earnings Beat On Bitcoin, Regulatory Credit Sales; Musk Blasts 'Extremely Deceptive' Media Reports
esla (TSLA) topped first-quarter earnings estimates late Monday after more than doubling deliveries for the period, while sales of Bitcoin and regulatory credits totaled nearly $800 million. Tesla stock fell Tuesday.
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CEO Elon Musk, speaking on an earnings call with analysts, said media reports of a recent fatal accident were "extremely deceptive." Another executive claimed that someone was in the driver seat, in contrast to reporters quoting law enforcement.
Tesla Earnings
Estimates: Analysts polled by Zacks Investment Research expected Tesla earnings per share of 79 cents, a 216% year-over-year surge. Sales were seen jumping 66% to $9.92 billion.
Results: Tesla earnings swelled 304% to 93 cents as revenue leapt 74% to $10.39 billion. The EV giant faced easy comparisons from Q1 2020, when the coronavirus crisis first hit. The Shanghai plant was just ramping up Model 3 production. In Q1 2021, Shanghai began delivering the made-in-China Model Y for the first time.
Revenue from regulatory credits jumped 46% to $518 million. Tesla recorded proceeds from sales of digital assets of $272 million and net digital assets of $1.33 billion on the balance sheet. Tesla bought $1.5 billion in Bitcoin in February.
CFO Zach Kirkhorn explained the Bitcoin investment on the Tesla earnings call with analysts. "Elon and I thought it was a good place to place some of our cash that's not being used currently and get a good return."
Average sales price fell 13% on lower Model S and Model X deliveries due to product updates and as lower-priced China-made vehicles became a larger percentage of the mix. Tesla delivered 184,800 vehicles in Q1, up 109% and beating estimates for 168,000.
At the Fremont, California, plant, Model Y production continued to ramp and is approaching full capacity. In Texas, the Austin factory remains on track to start production and deliveries late this year. In China, the Shanghai factory continues to increase production and recently reached a domestic supply sourcing ratio of over 90%. Tesla said the Gigafactory in Berlin is still on track for production and deliveries in late 2021.
But the German state that's hosting the plant said Tuesday it can't predict how long approvals would take, according to Reuters.
Meanwhile, energy revenue nearly doubled in the first quarter to $595 million, but was down from Q4's $787 million.
Tesla Outlook
Tesla reaffirmed its delivery forecast from January, when it predicted 50% average annual growth in vehicle deliveries, with 2021 expected to be faster than that pace. In 2020, deliveries grew 36% to 499,647.
On the Tesla earnings conference call, CEO Elon Musk said deliveries of the updated Model S "Plaid" would probably start next month, but high-volume production wouldn't start until Q3. Model X production also would ramp up in Q3. He predicted production will top 2,000 Model S/X per week, perhaps above 2,400 depending on global supply chain issues.
On the Q4 2020 earnings call in January, Musk said that Model S deliveries would likely start in February. However, Tesla made no Model S or X vehicles in Q1 as it updates those upscale EVs.
Musk said Monday night that Tesla faced unexpected challenges with the Plaid versions, saying it took a lot of work to make the battery pack safe.
Tesla added that Semi deliveries will begin in 2021 but didn't mention Cybertruck.
Musk said Tesla would likely "achieve volume production" of its planned 4680 battery cells in 12 to 18 months. Those batteries, in pilot production at Fremont, are crucial to Tesla's Cybertruck and Semi production plans.
Musk said he expects "limited" production from the Berlin and Austin plants this year.
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Tesla Disputes Crash Claims
Musk strongly criticized media reports of a Model S crash on April 17, saying they have been "extremely deceptive." Two people died in the crash near Houston when the vehicle slammed into a tree and burst into flames. News reports, citing law enforcement, said neither person appeared to be in the driver seat.
Lars Moravy, VP of Vehicle Engineering, said someone was in the driver seat during the crash, given the damage to the steering area. He also said seatbelts were unbuckled. "FSD could not have been engaged," he stated.
Tesla said it's cooperating with local authorities and the National Highway Traffic Safety Administration (NHTSA). Police have issued a warrant to Tesla to retrieve data from the Model S car. Federal investigators are also probing the accident. It's unclear if Tesla has provided that data.
Musk also reiterated recent Tesla statements that the company is moving toward a camera-only driver-assist system, looking to phase out radar faster than anticipated. Most autonomous vehicle developers use cameras, radar and lidar.
Chip Shortage 'Huge Problem'
The results come as the auto industry has been hobbled by production slowdowns due to a global chip shortage, forcing companies like General Motors (GM), Ford (F), Volkswagen (VWAGY) and Nio (NIO) to slow production. Ford also reports on Wednesday, with Nio due on Thursday.
Tesla said Monday it was "able to navigate through global chip supply shortage issues in part by pivoting extremely quickly to new microcontrollers, while simultaneously developing firmware for new chips made by new suppliers."
Still, CEO Musk said on the earnings call with analysts that the semiconductor shortage is a "huge problem."
Tesla Stock
Stock: Shares fell 4.5% to 704.74 on the stock market today. Tesla stock has a cup-with-handle base with a 780.89 buy point, according to MarketSmith chart analysis.
Tesla stock has been volatile, falling as much as 40% to a low of 539.49 intraday on March 5 from an all time high of 900.40 intraday on Jan. 25. It has since reversed and regained more than 25% of its loss.
While Tesla stock is above its 50-day line, the 50-day is still declining. Also, the midpoint of the handle is only slightly above the midpoint of the relatively deep base.
Tesla's relative strength line is trending higher again after falling earlier this year, but it's not far from consolidation lows. Its RS Rating is 95, while its EPS Rating is 73.
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Tesla Faces New Risks
Tesla, which according to a recent German media report may have to delay opening its plant there until October, is facing headwinds elsewhere too.
A video of a Tesla protester in China, during an auto show blaming faulty brakes for an accident, went viral. Tesla initially responded by saying the crash was due to speeding. Chinese state media called the response arrogant. Government officials have been ratcheting up pressure on Tesla to be more responsive to complaints.
On Monday night's earnings call, Elon Musk made no mention of the Chinese market, despite it being the major growth driver for Tesla over the past year.
Morgan Stanley analyst Adam Jonas said in a note to clients Friday that the company faces "anti-Tesla sentiment in China." He says China realistically accounts for the majority of Tesla profits today.
"However, we have allowed over the next decade for Tesla's position in the domestic Chinese market will be substantially diluted over time through competition and policies to encourage local players," Jonas wrote.
Jonas forecasts that by 2030, Tesla will sell 743,000 units a year in China, accounting for less than 7% of its BEV market. For 2021, the analyst projects Tesla's share of the China BEV market to be about 15%.
However, given recent delivery numbers, Jonas raised his price target for Tesla stock to 900 from 880. He also raised his forecast for fiscal 2021 deliveries by 3% to 809,000 units. But he adds that his forecast is slightly below consensus because he's "allowing for potential supply constraints."
