Factors that once constrained Teslas production capacity and cash shortage have become a thing of the past. Every new car is taken away almost immediately after it leaves the factory. In the future, the process of cost reduction, production expansion, and automatic driving research and development are advancing at a visible speed. After completing the record third quarter of 2020, Tesla has left the outside world with infinite expectations.
Cash shortage has become a thing of the past, Tesla still has room for price reduction
Teslas third quarter financial report, Musks ability to spend money and Teslas ability to save reflect incisively and vividly.
Teslas net cash generated from operating activities in the quarter was $2.4 billion, up 149% month on month and 217% year-on-year. Capital expenditure was US $1.005 billion, up 84% on a month on month basis and 161% on a year-on-year basis. As a result, the free cash flow generated was $1.395 billion, up 234% on a month-on-year basis and 276% on a year-on-year basis.
Screenshot: Teslas third quarter results
From the data, Teslas third quarter can be said to have made a lot of money. Not only did its net profit significantly exceed analysts previous forecast of 593 million dollars to 874 million dollars, but its free cash flow also more than tripled to $1.395 billion. Combined with the cash generated from operations and the funds raised by recent stock sales, Tesla, a cash strapped company, at the end of this quarter, made a profit There was a record $14.5 billion in cash, up nearly 70% in the past three months alone.
High cash and cash equivalent reserves mean Tesla has a very strong liquidity and production capacity.
Tesla also said in the statement that with this sufficient liquidity, the company is expected to fund its product roadmap, long-term capacity expansion plans and other project expenditures. The company had previously upgraded its assembly line to produce model y in Fremont.
From a start-up company to a company with a market value of about $400 billion, Tesla has been in trouble for several times due to lack of money, and even nearly to the brink of bankruptcy. In an interview with HBO / Axios, musk told the host that Tesla had only a few weeks to go out of business.
Now, the constraints of cash shortage on Tesla have become a thing of the past.
According to Wall Street reports, Teslas financial report showed that the total revenue in the third quarter was 8.771 billion US dollars, with a year-on-year increase of 39% and a month on month increase of 45%, which was higher than the analysts expected $8.26 billion; the net profit was $331 million, with a year-on-year increase of 131% and a month on month growth of 218%; the total gross profit margin was US $2.063 billion, with the overall gross profit rate of 23.5%, and the gross profit rate of vehicles was as high as 27.7%. These data all exceeded market expectations.
In particular, Teslas overall gross profit margin is 23.5%, and the gross profit margin of vehicles is as high as 27.7%, which means that there is still enough profit space for price reduction.
On the other hand, in the case of such sufficient gross margin space, musk still announced in the battery day that it would cut the battery cost by 50%. It can be predicted that in the future, Tesla models will have significant competitiveness in price.
500 thousand vehicles a year
1 million vehicles to be delivered next year
In an interview with HBO / Axios, musk admitted: Tesla does face a serious death threat because of the difficulty in increasing production of model 3. Basically, this company is losing money like crazy, and if we dont solve these problems in a very short time, we will die. It is extremely difficult to solve these problems.
Musk drunk next to model 3 (bankrupted on cardboard) image source: musk twitter
Production capacity is an extension of the problem of capital, because the capacity can not keep up with it, it is unable to achieve profits, and it is unable to repay debts, and it is almost bankrupt.
Since the establishment of the factory in China, with the blessing of Chinas speed, Tesla has taken off in the wind, and the production capacity no longer limits the pace of Teslas development.
Tesla said the year-on-year growth in operating revenue was mainly achieved by the substantial growth in vehicle delivery and other business growth. According to the financial report, Tesla delivered 139600 vehicles in the third quarter, a year-on-year increase of 44% and a month on month increase of 54%. It also confirmed that the annual delivery target of 500000 vehicles remained unchanged, which means that the delivery volume in the fourth quarter should exceed 181000.
According to the previous announcement issued by Tesla, the total output of Tesla vehicles in the third quarter was 145000, up 51% year on year, nearly 67% higher than 87000 vehicles in the second quarter.
Among them, the output of models and X was 16900, with a year-on-year increase of 4.1%, and the delivery volume was 15200 vehicles;
Model 3 and Y produced 128000 vehicles and delivered 124000 vehicles.
From the delivery and production data, Tesla is almost built a car was taken away!
It can be seen that what limits Tesla is not consumer demand, but its own capacity. According to Teslas third quarter output update, Fremont and Shanghais two super factories currently have an annual capacity of 840000 vehicles. With the completion of the Shanghai plants modely production line, Teslas global production capacity is expected to reach 1 million vehicles.
Modelys spray shop in Shanghai Super factory photo source: Tesla financial report
In 2018, car owners who buy Tesla will have to wait 4-12 months to pick up their cars. However, if they buy Tesla in China, they say that it can be completed in 7 days from the time of placing an order to collecting the car!
At a shareholders meeting in September, musk said that Shanghais super factory was trying to bring annual production to 1 million vehicles, which means production would increase seven times.
At the same time, Tesla also released the Berlin super factory and the Texas factory in the United States. With the successful completion of these two new super factories, Teslas annual production capacity will exceed 2 million. By that time, Tesla may be limited from capacity to demand.
Berlin super factory -- modely factory construction
Texas super factory
Teslas fully autonomous driving is coming
Tesla CEO musk said on twitter this month that a new fully self driving (FSD) software will soon be released, which will enable Tesla vehicles to achieve zero intervention automatic driving. As soon as the news came out, the scientific and technological circles and the automobile industry were boiling.
The day before the announcement, Tesla said it had sent the first FSD software update, urban roads, to a limited number of early experience program customers. Previously, Teslas aad team has focused on infrastructure rewriting of neural networks and control algorithms. This rewriting can release the remaining driving functions. In the future, as Tesla continues to collect data, the system will become more powerful.
After the US stock market closed on Wednesday, musk disclosed the update schedule of the new FSD software: Based on the small-scale test this week, it will continue to push the new FSD test version to more car owners this weekend and next week, and will further release it in the rest of 2020.
Industry insiders: high speed development will be maintained in the next stage
Industry insiders believe that Teslas financial data in the third quarter means that Teslas rapid growth is far from over, and with the further expansion of Teslas global capacity, its next stage will still maintain high-speed development.
Analysts at wedbush on Monday raised Teslas target share price to $500 from $475, up 13.7% from its October 16 closing price.