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2023-01-26

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Musk’s Big Tesla Growth Target Is a Problem

The company’s forecast for vehicle production falls short of estimates and its focus on compound ann

Musk’s Big Tesla Growth Target Is a Problem

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{"i18n":{"language":"en_US"},"data":{"magic":2,"id":9952673248,"tweetId":"9952673248","gmtCreate":1674710610985,"gmtModify":1676538954622,"author":{"id":3586340560570750,"idStr":"3586340560570750","authorId":3586340560570750,"authorIdStr":"3586340560570750","name":"YYMA","avatar":"https://static.tigerbbs.com/79c48b1c7642ca33606764484b6904b6","vip":1,"userType":1,"introduction":"","boolIsFan":false,"boolIsHead":false,"crmLevel":1,"crmLevelSwitch":0,"individualDisplayBadges":[],"fanSize":39,"starInvestorFlag":false},"themes":[],"images":[],"coverImages":[],"html":"<html><head></head><body><p>yes</p></body></html>","htmlText":"<html><head></head><body><p>yes</p></body></html>","text":"yes","highlighted":1,"essential":1,"paper":1,"likeSize":4,"commentSize":0,"repostSize":0,"favoriteSize":0,"link":"https://ttm.financial/post/9952673248","repostId":2306374584,"repostType":2,"repost":{"id":"2306374584","pubTimestamp":1674704147,"share":"https://www.laohu8.com/m/news/2306374584?lang=&edition=full","pubTime":"2023-01-26 11:35","market":"us","language":"en","title":"Musk’s Big Tesla Growth Target Is a Problem","url":"https://stock-news.laohu8.com/highlight/detail?id=2306374584","media":"Bloomberg","summary":"The company’s forecast for vehicle production falls short of estimates and its focus on compound ann","content":"<html><head></head><body><p>The company’s forecast for vehicle production falls short of estimates and its focus on compound annual growth obscures 2023’s sharp slowdown.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/dd372c6dfdeb7ea5e5e34553c906e643\" tg-width=\"1000\" tg-height=\"728\" width=\"100%\" height=\"auto\"/><span>Tesla CEO Elon Musk has been testifying in a lawsuit over 2018 tweets saying he was taking Tesla private with funding secured. Photographer: Justin Sullivan/Getty Images North America</span></p><p>It pays to parse the language of any company’s earnings report, but perhaps more so for Tesla Inc. You could say it’s in the corporate genes. After all, Chief Executive Elon Musk has spent much of the past several days trying to convince a jury that he really did have “funding secured” in 2018. That’s despite his mooted multi-billion dollar take-private deal seeming to have had less in the way of documented pre-approvals than your average household mortgage application.</p><p>The line that caught my eye on Wednesday evening concerned guidance, with Tesla aiming to produce 1.8 million vehicles this year and, thereby, “remain ahead of the long-term 50% CAGR,” or compound annual growth rate. For a couple of years, Tesla has said it aims to grow annual production by half, on average, over a “multi-year horizon.” Compare that 2023 target with 2020’s output of just over half-a-million and you do indeed get a compounded growth rate of more than 50%. But actual growth<i>this</i>year looks set to be 31%.</p><p>Let’s acknowledge that is still phenomenal for any reasonably sized autos manufacturer. Just five years ago, Tesla produced only about 250,000 vehicles.</p><p>But the tell here is the language, with Tesla going out of its way to emphasize that, technically, it will remain true to the “multi-year” target despite growth slowing sharply. Certainly, it has slowed more sharply than expected: The consensus forecast for 2023 is 1.95 million. Which gets at why Tesla likely felt the need for a growth-secured moment.</p><p>The disappointing fourth-quarter deliveries and price cuts that have unnerved investors over the past month or so fed through to Wednesday’s results. Inventory jumped and implied average selling prices, excluding leased vehicles and regulatory credits, dipped under $52,000, their lowest in a year. Even that figure was boosted by roughly $800 via the recognition of $324 million of deferred revenue linked to Tesla’s generously named Full Self Driving package. Gross profit per vehicle sold, at about $12,300, was the lowest in almost two years. Free cash flow dropped by a third, year-over-year, well shy of forecasts.</p><p>This is not surprising, but it is troubling. It isn’t surprising because companies chasing growth quite often run into the problem of boosting capacity faster than sales. Tesla produced 1.37 million vehicles last year but lists capacity of more than 1.9 million, with new and expanded factories expected in markets from Mexico to Indonesia.</p><p>It is troubling because, despite the collapse in Tesla’s stock over the past year or so, it still trades at a 77% premium to the S&amp;P 500 based on multiples of forward earnings estimates — estimates that look vulnerable after these results. Tesla remains priced for growth, but the growth story comes with the caveats of using average multi-year percentages and evident reliance on price cuts. The latter are especially inimical to Tesla’s aura because price cuts to move product are what you get from regular old car companies that trade on single-digit earnings multiples (Tesla’s is 32 times).</p><p>Even worse, regular old car companies haven’t been cutting prices of late, despite lower deliveries. This owes partly to the pandemic-related disruption of supply chains, leaving dealer lots sparse and giving the industry a relatively rare dose of pricing power. The likes of Ford Motor Co. took this on board in terms of aligning production more closely with sales. That is, in effect, the opposite of what’s happened with Tesla as it chases growth.</p><p>During Wednesday evening’s Q&amp;A, Musk touted Tesla’s AI capabilities. Framing Tesla as being more than an autos company has long been an effective way of boosting its valuation — albeit less effective of late. This year’s challenge for Tesla won’t be delivering robotaxis or a walking robot. It will be dealing with soft demand amid a potential recession that Musk seems to regard as all but certain. For investors who have just undergone a year of deflating expectations, it will be bracing for another dose.</p></body></html>","source":"lsy1584095487587","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Musk’s Big Tesla Growth Target Is a Problem</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; 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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nMusk’s Big Tesla Growth Target Is a Problem\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-01-26 11:35 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.bloomberg.com/opinion/articles/2023-01-26/musk-s-big-tesla-growth-target-is-a-problem><strong>Bloomberg</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>The company’s forecast for vehicle production falls short of estimates and its focus on compound annual growth obscures 2023’s sharp slowdown.Tesla CEO Elon Musk has been testifying in a lawsuit over ...</p>\n\n<a href=\"https://www.bloomberg.com/opinion/articles/2023-01-26/musk-s-big-tesla-growth-target-is-a-problem\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"BK4550":"红杉资本持仓","IE00BSNM7G36.USD":"NEUBERGER BERMAN SYSTEMATIC GLOBAL SUSTAINABLE VALUE \"A\" (USD) ACC","LU2249611893.SGD":"BNP PARIBAS ENERGY TRANSITION \"CRH\" (SGD) ACC","LU0820561909.HKD":"ALLIANZ INCOME AND GROWTH \"AM\" (HKD) INC","LU0234572021.USD":"高盛美国核心股票组合Acc","BK4574":"无人驾驶","BK4551":"寇图资本持仓","LU2063271972.USD":"富兰克林创新领域基金","IE00B1XK9C88.USD":"PINEBRIDGE US LARGE CAP RESEARCH ENHANCED \"A\" (USD) ACC","BK4581":"高盛持仓","LU0097036916.USD":"贝莱德美国增长A2 USD","IE00BWXC8680.SGD":"PINEBRIDGE US LARGE CAP RESEARCH ENHANCED \"A5\" (SGD) ACC","BK4504":"桥水持仓","LU0689472784.USD":"安联收益及增长基金Cl AM AT Acc","BK4099":"汽车制造商","LU2087621335.USD":"ALLSPRING GLOBAL FACTOR ENHANCED EQUITY \"A\" (USD) ACC","BK4511":"特斯拉概念","LU1852331112.SGD":"Blackrock World Technology Fund A2 SGD-H","BK4548":"巴美列捷福持仓","LU0198837287.USD":"UBS (LUX) EQUITY SICAV - USA GROWTH \"P\" (USD) ACC","LU1244550221.USD":"FRANKLIN GLOBAL MULTI-ASSET  INCOME \"A\" (USDHEDGED) INC (M)","LU1861215975.USD":"贝莱德新一代科技基金 A2","LU0316494557.USD":"FRANKLIN GLOBAL FUNDAMENTAL STRATEGIES \"A\" ACC","LU1861558580.USD":"日兴方舟颠覆性创新基金B","LU1244550577.SGD":"FTIF - Franklin Global Multi-Asset Income A (Mdis) SGD-H1","LU1548497426.USD":"安联环球人工智能AT Acc","LU0820561818.USD":"安联收益及增长平衡基金Cl AM DIS","LU1861220033.SGD":"Blackrock Next Generation Technology A2 SGD-H","LU1551013425.SGD":"Allianz Income and Growth Cl AMg2 DIS H2-SGD","LU1244550494.USD":"FRANKLIN GLOBAL MULTI-ASSET INCOME \"A\" (USDHEDGED) ACC","BK4532":"文艺复兴科技持仓","LU1720051108.HKD":"ALLIANZ GLOBAL ARTIFICIAL INTELLIGENCE \"AT\" (HKD) ACC","BK4585":"ETF&股票定投概念","LU0943347566.SGD":"安联收益及增长平衡基金AM H2-SGD","BK4534":"瑞士信贷持仓","LU0234570918.USD":"高盛全球核心股票组合Acc Close","LU1861559042.SGD":"日兴方舟颠覆性创新基金B SGD","BK4555":"新能源车","BK4533":"AQR资本管理(全球第二大对冲基金)","LU1839511570.USD":"WELLS FARGO GLOBAL FACTOR ENHANCED EQUITY \"I\" (USD) ACC","LU2357305700.SGD":"Allianz Global Artificial Intelligence ET H2-SGD","LU0053666078.USD":"摩根大通基金-美国股票A（离岸）美元","LU0823411888.USD":"法巴消费创新基金 Cap","TSLA":"特斯拉","BK4114":"综合货品商店","LU1551013342.USD":"Allianz Income and Growth Cl AMg2 DIS USD","LU0082616367.USD":"摩根大通美国科技A（dist）","LU0056508442.USD":"贝莱德世界科技基金A2","BK4527":"明星科技股"},"source_url":"https://www.bloomberg.com/opinion/articles/2023-01-26/musk-s-big-tesla-growth-target-is-a-problem","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2306374584","content_text":"The company’s forecast for vehicle production falls short of estimates and its focus on compound annual growth obscures 2023’s sharp slowdown.Tesla CEO Elon Musk has been testifying in a lawsuit over 2018 tweets saying he was taking Tesla private with funding secured. Photographer: Justin Sullivan/Getty Images North AmericaIt pays to parse the language of any company’s earnings report, but perhaps more so for Tesla Inc. You could say it’s in the corporate genes. After all, Chief Executive Elon Musk has spent much of the past several days trying to convince a jury that he really did have “funding secured” in 2018. That’s despite his mooted multi-billion dollar take-private deal seeming to have had less in the way of documented pre-approvals than your average household mortgage application.The line that caught my eye on Wednesday evening concerned guidance, with Tesla aiming to produce 1.8 million vehicles this year and, thereby, “remain ahead of the long-term 50% CAGR,” or compound annual growth rate. For a couple of years, Tesla has said it aims to grow annual production by half, on average, over a “multi-year horizon.” Compare that 2023 target with 2020’s output of just over half-a-million and you do indeed get a compounded growth rate of more than 50%. But actual growththisyear looks set to be 31%.Let’s acknowledge that is still phenomenal for any reasonably sized autos manufacturer. Just five years ago, Tesla produced only about 250,000 vehicles.But the tell here is the language, with Tesla going out of its way to emphasize that, technically, it will remain true to the “multi-year” target despite growth slowing sharply. Certainly, it has slowed more sharply than expected: The consensus forecast for 2023 is 1.95 million. Which gets at why Tesla likely felt the need for a growth-secured moment.The disappointing fourth-quarter deliveries and price cuts that have unnerved investors over the past month or so fed through to Wednesday’s results. Inventory jumped and implied average selling prices, excluding leased vehicles and regulatory credits, dipped under $52,000, their lowest in a year. Even that figure was boosted by roughly $800 via the recognition of $324 million of deferred revenue linked to Tesla’s generously named Full Self Driving package. Gross profit per vehicle sold, at about $12,300, was the lowest in almost two years. Free cash flow dropped by a third, year-over-year, well shy of forecasts.This is not surprising, but it is troubling. It isn’t surprising because companies chasing growth quite often run into the problem of boosting capacity faster than sales. Tesla produced 1.37 million vehicles last year but lists capacity of more than 1.9 million, with new and expanded factories expected in markets from Mexico to Indonesia.It is troubling because, despite the collapse in Tesla’s stock over the past year or so, it still trades at a 77% premium to the S&P 500 based on multiples of forward earnings estimates — estimates that look vulnerable after these results. Tesla remains priced for growth, but the growth story comes with the caveats of using average multi-year percentages and evident reliance on price cuts. The latter are especially inimical to Tesla’s aura because price cuts to move product are what you get from regular old car companies that trade on single-digit earnings multiples (Tesla’s is 32 times).Even worse, regular old car companies haven’t been cutting prices of late, despite lower deliveries. This owes partly to the pandemic-related disruption of supply chains, leaving dealer lots sparse and giving the industry a relatively rare dose of pricing power. The likes of Ford Motor Co. took this on board in terms of aligning production more closely with sales. That is, in effect, the opposite of what’s happened with Tesla as it chases growth.During Wednesday evening’s Q&A, Musk touted Tesla’s AI capabilities. Framing Tesla as being more than an autos company has long been an effective way of boosting its valuation — albeit less effective of late. This year’s challenge for Tesla won’t be delivering robotaxis or a walking robot. It will be dealing with soft demand amid a potential recession that Musk seems to regard as all but certain. For investors who have just undergone a year of deflating expectations, it will be bracing for another dose.","news_type":1},"isVote":1,"tweetType":1,"viewCount":285,"commentLimit":10,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"symbols":[],"verified":2,"subType":0,"readableState":1,"langContent":"EN","currentLanguage":"EN","warmUpFlag":false,"orderFlag":false,"shareable":true,"causeOfNotShareable":"","featuresForAnalytics":[],"commentAndTweetFlag":false,"andRepostAutoSelectedFlag":false,"upFlag":false,"length":3,"xxTargetLangEnum":"ORIG"},"commentList":[],"hasMoreComment":false,"orderType":2}