There is nothing wrong with the direction of new energy. What is wrong may be the status quo of cash that cannot support the vision.
Editor’s note: This article is from WeChat public account “Finance Doodle” (ID: caijingtuya) , author: Corporate intelligence experts, researchers: zero.
On March 13th, considering that Delaware did not recommend the gathering of people since the state of emergency on the 12th, the trial of Elon Musk originally scheduled for the 16th was postponed.
This is a complaint about improper valuation of a $ 2.6 billion acquisition in 2016, when Tesla acquired solar city Solarcity, a transaction accused by shareholders of sacrificing Tesla’s interests Let Musk personally benefit.
This accusation is mainly based on two points. One was that Solarcity was on the verge of bankruptcy, but received a premium acquisition proposal from Tesla, and the company was founded by Musk’s cousin. This transaction It can only benefit Musk and other directors who also hold Solarcity shares. Second, Solarcity has been madly burning funds belonging to Tesla since the transaction, but business income has been declining, and it has to rely on layoffs and closing some facilities to maintain Operation, which runs counter to Musk’s claim that it will soon bring a huge increase in value.
The accusation hopes that Musk will surrender the 2.2 million shares he acquired through the transaction, which are equivalent to approximately $ 1.2 billion.
Elon Musk’s uninhibited style is loved by his fans, and his sarcastic sarcasm on Wall Street analysts was brought to the court. A person familiar with the Delaware Court of Justice told me to host the event The trial’s Deputy Justice Joseph Slights was a rigorous, unscrupulous judge, and Musk’s performance could eventually lead to unsatisfactory results.
Elon Musk talks about solar energy at the Manhattan Energy Summit (Source: Internet)
I have previously analyzed the overall idea of Tesla’s solar energy: Foreseeing US Stocks | Tesla: Big Business Behind Home Energy , We still think that the direction of new energy is not wrong, and the wrong one may be unable to support the vision Cash status quo.
We review Tesla’s fourth quarter earnings report again, which guided the 2020 shipments to “easily exceed” 500,000 vehicles. This means that each quarter of the new fiscal year needs to reach 125,000 vehicles. From a digital point of view, such a speed is certainly feasible, but in the first quarter, the two super factories in the United States and China could produce close to 100,000 vehicles.
So far, Tesla has not changed its guidance figures. So what can Tesla’s output be affected by the epidemic? I and the departments responsible for the production lines of the two super factories near Tesla After research, we found that Tesla’s shipments in the first quarter were as follows:
Source: Graffiti Institute
This number will continue to be revised downward as the epidemic is becoming more serious in the region. I and several Wall Street analysts who tracked the data registered by Tesla to European cargo ships, US states and countries Communication, In the end, we believe that Tesla’s first-quarter delivery volume fluctuated between 60,000-70,000.
This “anchor bias” is mainly due to epidemic prevention and control in Europe and the United States. The factories in Norway, the Netherlands and Spain have been completely closed. The latest news on Monday Tesla closed most of the factories in the United States. Only the Nevada super factory remains in operation.
In Europe, the main reason why Q1 is expected to decline is not only affected by coronavirus. Combined with another previous study: Graffiti thinking | Self-made batteries: Tesla’s key competitiveness in the next stage The European layout of Volkswagen’s new energy vehicles is mentioned. Tesla’s competition in Europe is gradually being replaced by German cars. Squeeze out.
Even Tesla’s original European base, Norway, after extracting Norwegian data, we found that Tesla’s share is gradually decreasing.
Isolate Norwegian data from European new energy vehicle shipments (Source: Accenture Consulting, Norwegian National Statistics, Tuya Research Institute)
China’s electric vehicles have not yet squeezed out Tesla. The United States cannot basically interfere with Tesla’s market position. The competition mainly comes from Europe. However, with the imminent federal income tax credit policy in the United States, a large amount of demand in the fourth quarter was released ahead of time, again suppressing the first quarter.
The lower shipments directly affect cash flow in the first quarter.
From the Tesla 8-k file on Thursday, several important conclusions are: the cash balance at the end of the fourth quarter of 19 was $ 6.3 billion, and a recent financing of $ 2.3 billion was completed. There is still a $ 3 billion credit line available, enough to support the uncertainty of this period.
The amount of $ 11.6 billion on this “paper” appears to be huge. I chose to take a closer look at Tesla’s cash position by analyzing the various parts.
First, there is a balance of $ 6.3 billion in 8-k. Comparing with the detailed table in 10-k, about 1.3 billion of which is held by Tesla’s foreign subsidiaries. The process of cash repatriation is usually Difficult, plus $ 106 million in year-end cash in VIEs banks, Tesla’s cash balance can be corrected to $ 4.9 billion.
Second, more than half of the US $ 3 billion credit line is provided by Chinese institutions. These financings are clearly limited to construction and working capital in China and cannot be remitted to the United States.
There is also a 1 billion storage line lease guarantee. This part is controversial and we have temporarily included it in the liquidity analysis.
Then Tesla’s liquidity capital we can get is about $ 8.2 billion.
Next, considering that no company can make cash balance zero, according to Tesla’s volume, it isNeed less than 2 billion US dollars to support, then the actual liquidity needs to be compressed again to 6.2 billion US dollars.
$ 6.2 billion is not much, although it is almost half the number in the guide. So whether the liquidity of this fund is sufficient depends on the speed of Tesla’s burning money.
First of all, lower delivery volume means that cash costs may exceed transaction revenue. At the same time, we know that Tesla’s accounts payable at the end of the fourth quarter is $ 3.77 billion, and a decrease in delivery volume also means that Tesla Latin America needs to repay more trade credit, and the A / P balance may shrink to $ 2.5 billion.
This is only the first quarter. As far as the current situation in the United States is concerned, the epidemic situation is still in the rising stage of the curve, so it is impossible to rule out the possibility that the closure of these factories will continue to the second quarter. Perhaps this is 8-K Does the meaning of “spend a long period of time” in Chinese?
Although burning money for two consecutive quarters seems to affect the life and death crisis, for Tesla, such “life or death” moments have been staged many times. However, the next time Tesla needs funding, its issue price may no longer be as high as $ 767, and the number is likely to be cut.
I don’t know how fast SpaceX burns money, but from the reports of some American media, it is not difficult to guess that it is a “bottom hole.”
Returning to the trial we mentioned at the beginning, we currently do n’t know when the trial will start again. This date may have to wait until the Delaware epidemic is effectively controlled, but if the outcome of the trial really goes unfavorable, This is undoubtedly a blow to Tesla, both on stock prices and Musk personally.
Building a brand, cutting-edge innovation, and pursuing greatness are all parts of Elon Musk’s admiration, but a company cannot rely solely on these to operate, and the realization of its ideals depends on reality. .