|Bid||71.08 x 0|
|Ask||71.08 x 0|
|Day's range||70.91 - 71.95|
|52-week range||58.04 - 78.30|
|Beta (5Y monthly)||1.32|
|PE ratio (TTM)||6.57|
|Earnings date||18 Mar 2020|
|Forward dividend & yield||3.50 (4.92%)|
|Ex-dividend date||17 May 2019|
|1y target est||93.69|
(Bloomberg) -- German rangers stand guard to shoo away visitors from a nondescript stretch of forest near Berlin, where a sign nearby warns of “Lebensgefahr” (mortal danger).The precautions are part of the frantic activity underway to set up Tesla Inc.’s latest assembly plant, Elon Musk’s most daring attack on the German auto establishment. Workers wielding metal detectors have started combing through an area covering some 200 football fields to search for errant ammunition lurking beneath the sandy surface of tiny Gruenheide.It’s the first stage to prepare a site that could churn out as many as 500,000 cars a year, employ 12,000 people and pose a serious challenge to Volkswagen AG, Daimler AG and BMW AG. Once deemed free of World War II explosives, harvesters and trucks will roll in to clear thousands of trees in the first stage of development. The work needs to be done by the end of February to meet Tesla’s aggressive timetable. The project represents a second chance for the quiet town, nestled between two lakes on the edge of a nature reserve southeast of Berlin.Gruenheide lost out on a similar factory two decades ago, when BMW opted for Leipzig. That missed opportunity helped town officials to move quickly when Tesla expressed interest in building its first European factory in Germany, with a plot set aside for industrial use and offering easy access to the Autobahn and rail lines.Read More: Elon Musk’s German Factory Started With Love Letter From Berlin“The investment is a unique opportunity,” Mayor Arne Christiani said in his office, where a map of the Tesla project hangs on the wall. “It gives young people with a good education or a university degree the possibility to stay in our region—an option that didn’t exist in past years.”If it clears Germany’s red tape, the plant will make batteries, powertrains and vehicles, including the Model Y crossover, the Model 3 sedan and any future cars, according to company filings. The factory hall will include a pressing plant, paint shop and seat manufacturing in a building that will be 744 meters (2,440 feet) long—nearly triple the length of the Titanic. There’s space for four such facilities.Musk is taking his fight for the future of transport into the heartland of the combustion engine, where the established players long laughed off Tesla as an upstart on feeble financial footing that couldn’t compete with their rich engineering heritage. He casually dropped the news at an awards ceremony in Berlin in November, leaving the top brass of Germany’s car industry shell-shocked.“Elon Musk is going where his strongest competitors are, right into the heart of the global auto industry,” said Juergen Pieper, a Frankfurt-based analyst with Bankhaus Metzler. “No other foreign carmaker has done that in decades given Germany’s high wages, powerful unions and high taxes.”Building a factory in Europe’s largest car market is a major test of Musk’s global ambitions. Demand in the region is flat, and buyers are more loyal to local brands. Meanwhile, labor costs in Germany’s auto sector are 50% higher than in the U.S. and five times what they are in Poland, just an hour’s drive away from Gruenheide.Gruenheide TimelineEnd February: Finish tree logging before migrant birds nest March 5: Deadline for comments from nearby residents March 18: Public meeting to discuss the project Mid-2020: Construction expected to begin July 2021: Targeted start of productionOn the positive side, electric cars require less labor to build, and Germany has a deep reserve of auto experts. The location also offers the soft-power advantage of proximity to the country’s leaders.Under pressure for being slow to pick up on the electric-car shift, Chancellor Angela Merkel’s government extended a welcoming hand to Musk. Economy Minister Peter Altmaier offered to try to ease regulatory hurdles that may snag construction. “There’s a lot at stake” in Tesla’s plan, he said soon after the project was announced.Musk’s incursion comes at a strategically opportune time. Riding a wave of optimism after successfully starting deliveries of its China-built Model 3 sedans a year after breaking ground on a factory there, Tesla’s stock has doubled in the past three months.Meanwhile, German peers are struggling with the costly shift away from combustion engines. Volkswagen and Mercedes-Benz parent Daimler announced thousands of job cuts last year, when German car production fell to its lowest level in almost a quarter of a century. For Gruenheide, the planned investment has suddenly transformed the town of 8,700 people into a sought-after location. Local officials receive development proposals on a daily basis: anything from 22-story apartment towers to U.S.-style shopping malls, said Christiani, who hopes the plant will help unlock financing for public transport, schools and medical facilities.In the town hall, five thick binders are available for locals to peruse the project’s details, including 463 trucks expected to roll into the plant each day, a rail spur for train deliveries and an on-site fire brigade.Tesla still has to jump through a number of hoops. Residents have the chance to raise objections, and some have bemoaned that they’ve seen little from the company since its blockbuster announcement. Meanwhile, the local water utility warned it won’t be able to supply the site in time and raised concerns over its location in a zone meant to help protect drinking water supplies.And then the company has to carry out initiatives to protect wildlife—including scaring off any wolves in the area, relocating hibernating bats and removing lizards and snakes until construction is finished. The U.S. carmaker also has to replace felled trees.The mayor expects these hurdles to be cleared so that the first made-in-Gruenheide Teslas can roll out in July 2021.“The forest is classified as a harvest-ready, inferior pine forest,” Christiani said. “It was never supposed to be a rain forest.”—With assistance from Hayley Warren (Adds criticism from water utility in 17th paragraph.)To contact the author of this story: Stefan Nicola in Berlin at firstname.lastname@example.orgTo contact the editor responsible for this story: Chris Reiter at email@example.com, Craig TrudellChad ThomasFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Today we'll take a closer look at Bayerische Motoren Werke Aktiengesellschaft (ETR:BMW) from a dividend investor's...
BMW said it sold 2.52 million BMW, Mini and Rolls-Royce vehicles in 2019, making it the best-selling premium car group, ahead of rival Daimler . Daimler said on Thursday it had sold 2.34 million Mercedes-Benz passenger cars in 2019 for a ninth consecutive year of record sales.. BMW said its BMW brand posted a sales record of 2.17 million vehicles in 2019.
(Bloomberg) -- CES has long been a showcase for automotive gadgetry and a chance for tech companies to pitch their gear to carmakers. This year, the consumer electronics show is embracing an increasingly valuable byproduct of all this activity: data.Modern cars roll out of factories packed with cellular connections, powerful processors and growing suite of sensors, including cameras, radar and microphones. That’s turning them into the next information goldmine, rivaling the data-creating capabilities of smartphones.Amazon.com Inc., Intel Corp., Qualcomm Inc. and BlackBerry Ltd. are at the Las Vegas conference this week to pitch data-crunching services and partnerships to an auto industry searching for new revenue streams and business models.“CES will highlight the next big industry transformation that revolves around how this data can be monetized,” said Brian Rhodes, an automotive technology analyst at IHS Markit. “This market is no longer strictly focused on selling hard parts.”Automakers are trying to control the data generated by their vehicles and avoid being marginalized by technology giants. It’s a challenge because car companies lack deep software talent and are already battling the incursion of smartphones and related technology. Apple Inc.’s CarPlay and Google’s Android Auto software, installed on vehicle dashboard screens, funnel data to and from smartphones and largely bypass carmakers’ systems.The industry “passed a while ago a very important line in the sand,” said Henrik Fisker, chief executive officer of electric vehicle manufacturer Fisker Inc. “People suddenly felt that their smartphone was more important to their freedom than their car.”After years of setbacks and delays, Fisker will show off its Ocean electric SUV at CES for the first time. The company wants to generate the majority of its profit from software and services over the long term. Fisker has an app for ordering, lease payments and upgrades that it hopes will generate recurring revenue over the life of each vehicle.Intel will announce a new automotive tie-up for its Mobileye unit during CES, adding to existing relationships with Nissan Motor Co., BMW AG and Volkswagen AG. The carmakers use Mobileye’s driver-assistance technology and provide the Intel unit with some of the data that those cameras, chips and sensors collect as the vehicles drive around. Mobileye aggregates this anonymous information to create detailed maps that the carmakers use to enhance their vehicle navigation systems.At CES, Intel showed off a map of Las Vegas created in 24 hours with information from BMW cars that drove around the city over an undisclosed longer period. Intel says such fresh information is more valuable than traditional navigation systems, which use special survey vehicles that collect and send in images and data for updates that can take months. The newer approach has more chance of spotting and avoiding a broken traffic signal or road work. Intel thinks the data will be really useful for other things, too. A utility company could check on infrastructure without sending workers to every site, for example.Intel predicts the market for such data will be worth as much as $3.5 billion a year by 2030. McKinsey & Co. sees a much larger opportunity. A few years ago, the consulting firm said up to $750 billion of value would created from car-related data by 2030. That includes revenue from services like connected maps and targeted advertising, along with the sale and analysis of anonymous information via third parties to reduce costs.“The value pool includes avoided costs and incremental revenue” McKinsey partner Michele Bertoncello said. “If you monitor a car and you avoid a breakdown or you avoid warranty fraud, you don’t generate incremental revenue, but you avoid a cost.”On Monday at CES, cloud-computing giant Amazon Web Services teamed up with BlackBerry, owner of QNX, an operating system that’s widely used in cars. The two companies unveiled a new service that helps automakers update security and software features, monitor vehicle health, access data from car sensors, built new applications and apply artificial intelligence models to the information.Chipmaker Qualcomm announced its first chips and software for fully autonomous vehicles at the CES show. Its radio chips already support cellular links for most of the world’s connected cars. The new offering will be available in coming years and will reduce the cost and power needed to develop and run driverless cars, Qualcomm said. The company also rolled out a “Car-to-Cloud Platform,” a package of hardware and software that lets automakers securely update the software in their vehicles. The system offers a way to charge vehicle owners for updates and other services.Vehicle-generated data is crucial to Ford Motor Co.’s future, Chief Technical Officer Ken Washington said. The company’s commercial business is working with Digit, a robot designed by Agility Robotics that travels with delivery vehicles, unfolds itself, then carries packages from the curbside to the door. Digit will use data from Ford vehicle sensors to find its way.Advanced data capture and analysis is crucial for improving designs and bringing them to market more quickly, and for creating new businesses as carmakers try to become broader transportation companies, according to Washington.“We’re taking this very seriously,” he said. “I watched the internet happen and I watched what happened to businesses that embraced it and those that ignored it.”(Corrects in the ninth paragraph to say that Intel built the map with data collected over a longer period.)To contact the reporters on this story: Ian King in San Francisco at firstname.lastname@example.org;Ed Ludlow in San Francisco at email@example.comTo contact the editors responsible for this story: Alistair Barr at firstname.lastname@example.org, Andrew PollackFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Rolls-Royce Motor Cars had a record-breaking year in 2019 selling over 5,000 cars to customers in over 50 countries across the globe, 25% jump from the previous high set in 2018.
(Bloomberg) -- Elon Musk was apparently excited enough about Tesla Inc.’s prospects in China that he was moved to dance, sending the electric-car maker’s shares to new highs.The chief executive officer awkwardly waltzed across a stage at Tesla’s new factory outside of Shanghai on Tuesday during an event to hand over the first Model 3 sedans to public buyers. Musk, 48, also elaborated on previously announced plans to produce the upcoming Model Y crossover at the plant.“Ultimately, Model Y will have more demand than probably all of the other cars of Tesla combined,” Musk said, reiterating a prediction made during the company’s last earnings call. He said Tesla will reveal more in the future about advanced manufacturing technologies the company is applying to Model Y.Tesla shares rose 3.9% to close at a record $469.06 on Tuesday. The stock has surged 84% since Oct. 23, when the company reported a surprise profit and said the Model Y will launch this summer, months ahead of schedule. Its market capitalization is approaching General Motors Co. and Ford Motor Co.’s combined.The kickoff of Model 3 deliveries to local customers marks a major step in Musk’s global push for electric-vehicle domination and heralds what could be the dawn of real competition in the world’s largest EV market. Local production is allowing Tesla to drop prices of the car, narrowing the price premium relative to models from Chinese manufacturers NIO Inc. and Xpeng Motors, and undercutting global giants such as BMW AG and Daimler AG.Musk also said Tesla plans to open a design-and-engineering center in China so that it can eventually develop a new car there.The company named after famed inventor Nikola Tesla, who died 77 years ago today, will now need to avoid a repeat of the glitches it experienced in its original car factory in California. Tesla went through months of what Musk called “production hell” as it ramped up Model 3 production starting in 2017. After consistently falling well short of the CEO’s ambitious targets, the electric-car maker burned through billions of dollars and came within weeks of running out of money.The China plant is already assembling 1,000 cars a week and aims to double that rate over the next year, Song Gang, the manufacturing director at the facility, said on Dec. 30. The company has said it plans to ramp up production to 150,000 Model 3 vehicles a year, or about 3,000 a week, when the first phase of the factory is completed.Tesla plans to boost production capacity to 500,000 a year after the following phase, though it isn’t clear when exactly Tesla expects to achieve those goals.Charm OffensiveMusk’s charm offensive in China has paid off. Originally just a muddy plot about a 90-minute drive away from Shanghai’s city center, the China plant has quickly come online since it broke ground at the start of 2019. It took twice as long for Tesla’s Gigafactory near Reno, Nevada, to begin churning out batteries.Tesla has been winning various concessions from local authorities ranging from approvals to preferential loans — all the more notable given the trade war with the U.S.Various government officials including Mayor Ying Yong and Zhu Zhisong, deputy secretary general of the Shanghai municipal government, were among the dignitaries attending Tuesday’s event. Vice Mayor Wu Qing said at the event that no foreign company has invested in a bigger manufacturing facility in the country.The locally built Model 3 was included last month on a list of vehicles qualifying for an exemption from a 10% purchase tax in China. It also qualified for a government subsidy of 24,750 yuan ($3,560) per vehicle.Price CutsThe subsidies have helped Tesla cut prices, with the company announcing last week it would reduce the starting cost of the Model 3 by 9% to 323,800 yuan, or 299,050 yuan after incentives. Prices could go down further, as people familiar with the matter have said Tesla is considering further lowering the price of the sedans by using more local components and reduces costs.About 30% of the parts now used at the Shanghai facility are sourced locally, and Song, the manufacturing director, said on Dec. 30 that the company plans to increase that to 100% by the end of the year.Those prices put Tesla closer to some models from domestic EV makers, such as Xpeng Motor’s latest P7 sedan, which starts at 240,000 yuan. NIO’s SUVs start from 358,000 yuan, though that price doesn’t take into account subsidies.Volkswagen AG’s Audi plans to start selling nine new-energy vehicles in China during the next two years, with more than half of them being pure battery-electric models. The first electric model, the e-tron, debuted in November at a starting price of about 693,000 yuan.Daimler’s Mercedes-Benz made its EQC available in October starting at 580,000 yuan. BMW plans to start building the iX3 crossover in China next year and is working with a Chinese partner to electrify its Mini model.\--With assistance from Dana Hull.To contact Bloomberg News staff for this story: Chunying Zhang in Shanghai at email@example.comTo contact the editors responsible for this story: Young-Sam Cho at firstname.lastname@example.org, Craig Trudell, David WelchFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
At its CES press conference, BMW today unveiled its new gaze detection system, which can track what you're looking at outside of the car and then present relevant information about it. The German automaker is showing off this feature in its i Interaction EASE concept car, which made its debut last October. "The BMW i Interaction EASE demonstrates what mobility might feel like in the future once autonomous driving becomes commonplace: luxurious, human, and intuitive,” explains Adrian van Hooydonk, senior vice president BMW Group Design.
(Bloomberg Opinion) -- Barely a year has passed since Aston Martin Lagonda Global Holdings Plc listed shares in London and persuaded investors it deserved a premium valuation similar to that of Ferrari NV. The luxury carmaker’s preliminary yearly results, published on Tuesday, were a reminder that its management badly misjudged both the strength of the brand and the resilience of its balance sheet.In reality Aston Martin isn’t a patch on Ferrari and instead faces an uphill battle just to keep the lights on. A year ago the U.K. company told investors that its dealers would probably purchase about 7,200 vehicles in 2019. In fact, wholesale volumes fell 7% to a dismal 5,800 (or about 5,900 if special models are included).Instead of the 24% Ebitda margin promised in 2019, Aston Martin achieved only 13%. This means it almost certainly lost money for the second year running. The ratio of Aston Martin’s indebtedness to Ebitda — at more than 6 times — is alarmingly high. About 3 billion pounds ($3.9 billion) of equity value has gone up in smoke since the initial public offering.Aston Martin wants investors to look past all this and focus on promising orders for the DBX sports utility vehicle, on which the fate of the company depends. Access to a second $100 million tranche of debt financing was contingent on quickly gaining 1,400 orders for the DBX, which Aston Martin has achieved.While that’s a relief, that Aston Martin now plans to draw on this very expensive borrowing reveals how fragile its finances have become. And even this might not be enough to tide the company over until DBX sales start in the second quarter.Management is reviewing funding options, including the possibility that strategic investors make an equity investment. A capital injection would reassure Aston Martin’s bondholders — while the sterling bonds sold off on Tuesday, they remain well above the October lows. But existing shareholders, who’ve suffered plenty already, must fear getting diluted (unless they engineer a takeover).In view of its salience to cash flow, the focus on the DBX is understandable, yet it shouldn’t distract from the pretty lamentable performance of Aston Martin’s core business. On Tuesday luxury rival Rolls-Royce (owned by BMW AG) confirmed its sales increased by one-quarter last year. Ferrari is expected to report a 34% adjusted Ebitda margin for 2019, almost treble what Aston Martin achieved.The British carmaker has been guilty of pushing too many cars to dealers, which puts downward pressure on pricing. Rectifying this will be a slog. Residual values for luxury cars have softened, according to Goldman Sachs Group Inc. analysts, which might make customers reluctant to pay top dollar for a new car and can make leasing expensive. Aston Martin managed to cut an inventory overhang toward the end of the year only by stepping up financing support and marketing spend.Though difficult to quantify, negative headlines about Aston Martin’s finances probably aren’t helping dealers shift models. Plenty of its customers are banker types who’ll know better than most how precarious the situation has become.To contact the author of this story: Chris Bryant at email@example.comTo contact the editor responsible for this story: James Boxell at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Chris Bryant is a Bloomberg Opinion columnist covering industrial companies. He previously worked for the Financial Times.For more articles like this, please visit us at bloomberg.com/opinion©2020 Bloomberg L.P.
(Bloomberg Opinion) -- The made-in-China Tesla has arrived. That’s getting investors excited about everything that goes into the electric vehicles — from valves and auto glass to headrests and seats. The enthusiasm for Tesla’s Chinese suppliers may be premature, though.Beijing has given Elon Musk all that the U.S. couldn’t: cash, concessions and cheap development costs. Tesla Inc.’s revenue from China accounted for about 11% of its total for the quarter ended September, up from 6% a year ago. Last month, Tesla secured an additional $1.6 billion loan from Chinese banks. On Tuesday, the Tesla chief executive officer was in Shanghai for a ceremony to hand over the first China-made Model 3 sedans to customers.China has been production heaven for Musk. Tesla’s capital expenditure for the Shanghai factory declined 65% on a unit production capacity basis compared with its U.S. manufacturing hub in Fremont, California, according to analysts at China International Capital Corp. The Shanghai plant was built in less than a year and can already produce more than 3,000 cars per week. Compare that to the depths of what Musk called his “production hell” in 2018, when he was sleeping on a couch or under a desk as the company struggled to meet a weekly goal of 5,000 cars in Fremont.That progress is fueling a rally in shares of Chinese suppliers. Take Zhejiang Sanhua Intelligent Controls Co., one of the country’s largest providers of heating, ventilation and air-conditioning components. Sanhua shares have risen more than 70% in Shenzhen since the middle of last year, as made-in-China Teslas came closer to becoming a reality. Shanghai Baolong Automotive Corp., which provides tire-pressure monitoring systems, has seen a similar advance over the same period; Ningbo Huaxiang Electronic Co., a maker of rear-view mirrors, has climbed more than 60%.Tesla will have to sell a lot of cars in China to justify those gains. The auto sector accounts for only a small portion of Sanhua’s revenue. Its valves, which help heating and cooling efficiency, contribute about 250 to 400 yuan ($36 to $58) to the value of a Model S and X, and about 1,000 yuan per Model 3, according to CICC analysts. Prices of the Model 3 will start from 299,050 yuan in China, Tesla said last week.Granted, Tesla isn’t the Chinese company’s only auto customer. It recently signed a 600 million yuan contract with BMW AG, and has contracts with other carmakers. That’s all cause for optimism. However, much of the excitement pushing up the stock lately has been driven by Tesla’s prospects. While this points to confidence in Sanhua’s valves (and the components produced by other suppliers), it doesn’t mean there will suddenly be huge demand.Tianjin Motor Dies Co., another maker of parts for Tesla, attributed “irregular” movements in its stock price to the U.S. company in a filing to the Shenzhen exchange on Tuesday as its shares jumped by the 10% daily limit. Tesla is no different from other customers including Mercedes-Benz AG and BMW, and its business with the U.S. electric-car maker carries “market development risk,” Tianjin Motor Dies said. The company’s shares have surged 28% this year.Meanwhile, China is scaling back subsidies for electric vehicles and plowing money instead into the infrastructure that will support them. Sales have been falling since the government reined in its largesse and are running below Beijing’s annual target of 2 million cars. Demand is uneven and significant barriers to adoption remain.Even if Tesla operates the Shanghai plant at its full capacity of around 150,000 cars, that won’t translate into a bonanza for suppliers. In addition, the subsidies that have helped the U.S. electric-car maker lower its prices could mean component makers soon start feeling pressure to cut their own prices.China’s electric-car sales targets will require more than 100 billion yuan of subsidies, according to estimates by Goldman Sachs Group Inc. analysts. That looks expensive, compared with the cost of past stimulus packages. The government may balk. After all, it knows all too well how helping favored industries too much can lead to overcapacity.The bottom line is that Musk’s Chinese plans lean heavily on government support. If any part of that falters, the rosy projections that have buoyed suppliers’ shares may implode. Under its agreement with the government, the U.S. company is required to make 14.08 billion yuan of capital expenditures and generate more than 2.23 billion yuan of annual tax revenue starting at the end of 2023, according to Tesla filings. The company says it can hit both those targets even if car production is “far lower” than what it has forecast.Musk may have found his heaven in China. For Tesla’s suppliers, it’s still a world away.To contact the author of this story: Anjani Trivedi at email@example.comTo contact the editor responsible for this story: Matthew Brooker at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Anjani Trivedi is a Bloomberg Opinion columnist covering industrial companies in Asia. She previously worked for the Wall Street Journal. For more articles like this, please visit us at bloomberg.com/opinion©2020 Bloomberg L.P.
(Bloomberg) -- Tesla Inc. is back on top -- this time, it seems, with some real staying power.The Model 3 maker delivered a record 112,000 vehicles in the fourth quarter and has begun production at a new factory near Shanghai. With the stock soaring to close Friday at an all-time high, Tesla’s market capitalization finished the week just short of $80 billion -- more than double Ford Motor Co.’s stock value. And the Model Y, its next crossover SUV, is slated to launch this summer.“Tesla is close to escape velocity,” said Gene Munster, managing partner of the venture capital firm Loup Ventures. “Demand for electric vehicles is real, and people are stretching to buy a Model 3. Everything is beginning to gel.”That’s saying a lot for a company famous for taking big steps forward, only to then slip steps back. Take 2019: after finishing strong the year before, Elon Musk decided to dismiss 7% of the workforce. First-quarter deliveries were dismal. Customers and employees alike were whipsawed by a shifting retail strategy, and the chief executive officer remained a magnet for controversy.But after years of drama, there’s a growing sense among investors that Tesla is finally hitting its stride. The company reported a surprise third-quarter profit in October and the shares have been on a tear ever since.Established automakers have taken their shots at Musk with so-called “Tesla Killers,” but no serious competition has materialized thus far. U.S. sales of General Motors Co.’s fully electric Chevrolet Bolt plummeted 47% in the fourth quarter and finished down down 9% for the year.During Tesla’s last earnings call, Musk said he thinks the upcoming Model Y will outsell the S, X and 3 combined, without giving a time frame. He announced plans in November to build a third auto factory, near Berlin -- the backyard of German automakers BMW AG, Daimler AG and Volkswagen AG, whose initial electric offerings haven’t drawn much demand.China, the world’s largest auto market, is the big wild card for this year. Tesla said Friday that battery production for its cars there began in late December.Local pack supply is the gating factor standing in the way of the plant boosting output. Tesla said it’s already managed to assemble almost 1,000 cars that are ready for sale. With more battery production, it will be capable of 3,000 a week, according to the company.“Shanghai deliveries should be the next catalyst to drive volume growth,” Ben Kallo, a Robert W. Baird analyst with the equivalent of a buy rating on Tesla, wrote in a report. “Importantly, the factory appears to be ramping faster than we expected.”In 2012, the year Tesla launched the Model S sedan, the company delivered just 2,650 cars. Seven years later, that was up to 367,500 -- 138 times as many.Loup Ventures’ Munster said Tesla should meet what he says are Wall Street’s expectations for 2020. Analysts on average are predicting 463,000 deliveries for this year -- another 28% annual jump.“If Tesla can successfully launch the Model Y,” he said, “they will have fully arrived.”To contact the reporter on this story: Dana Hull in San Francisco at email@example.comTo contact the editors responsible for this story: Craig Trudell at firstname.lastname@example.org, Anne ReifenbergFor more articles like this, please visit us at bloomberg.com©2020 Bloomberg L.P.
(Bloomberg) -- Tesla Inc. is about to find out whether the second time is the charm for Elon Musk making bold predictions about how many cars the company can build and sell.The electric-car maker handed over the first 15 Model 3 sedans assembled at its new multibillion-dollar plant near Shanghai -- its first outside the U.S. -- to company employees at the facility on Monday. Tesla took the same approach when it started production of the sedan in California in July 2017, delivering its first Model 3s to staff.After reaching that milestone more than two years ago, Tesla went through months of what Musk called “production hell.” After consistently falling well short of its chief executive officer’s ambitious targets, the electric-car maker burned through billions of dollars and came within weeks of running out of money.Investors have been betting this time will be different, with Tesla shares on a tear since the company reported a surprise quarterly profit in late October. The carmaker is on much steadier footing, having worked out the kinks that limited initial production of the Model 3 and managing to far outpace sales of many other automakers’ electric vehicles. The China plant is already assembling more than 1,000 cars a week, and aims to double that rate over the next year, according to Song Gang, the manufacturing director at the facility.‘Over Exuberance’Despite all the progress made, Musk still has his doubters. Jeffrey Osborne, an analyst at Cowen & Co., predicted Monday that Tesla will fall short of the low end of its delivery forecast for this year. He predicts the company will hand over about 101,000 vehicles in the fourth quarter, coming roughly 4,000 units short of its annual target for at least 360,000.Tesla shares plunged as much as 4.9% on Monday and traded down 4% to $413.05 as of 11 a.m. in New York. The stock is still up about 62% since the company reported third-quarter earnings on Oct. 23.Osborne, who rates Tesla the equivalent of a sell, is skeptical that demand for the Model 3 will continue at current rates. He’s concerned consumers will be less interested in the car as subsidies drop in China and the Netherlands, and as a federal tax credit expires in the U.S.“The large amount of over exuberance related to the demand for Tesla’s products in the mid to long term has increased over the past few months, and we believe much more successful penetration is baked into the stock than is likely to play out,” Osborne wrote in a report. “While Tesla has built a very dedicated fanbase that has been willing to excuse poor build quality, customer service, and service infrastructure, we continue to be skeptical around broader adoption.”Marriage ProposalThe dip in Tesla shares stands in stark contrast to the jubilant mood at the company’s ceremony to mark the first deliveries of Model 3s assembled near Shanghai. A crowd of about 200 people, including media and employees, gathered inside the plant to clap and cheer as Tom Zhu, Tesla’s head of greater China, handed over the first cars. One employee receiving a car presented it to his girlfriend along with flowers and proposed to her. She accepted with a nod and they kissed.More workers will receive vehicles over the next couple of days, and deliveries to customers will start in January, company officials said at the event.The Chinese plant represents a cornerstone of Musk’s plans to make Tesla a truly global carmaker. The company last month announced plans to build a factory in Germany to cater to burgeoning European demand for electric vehicles.The China plant could also help Musk build on recent momentum for the company in the world’s largest market both for EVs and autos in general. The Model 3 will compete with electric offering from local manufacturers including NIO Inc. and Xpeng Motors, as well as global companies such as BMW AG and Daimler AG.Demand for the locally built Model 3 is “very good,” and Tesla is confident it will sell all vehicles manufactured at the site, Allan Wang, general manager of Tesla China, said at the plant. “Our aim is to kill all internal-combustion engine cars.”Volume GoalWhile deliveries to customers haven’t started, Monday’s milestone caps several months of wins for Musk. The latest came Friday, when the locally built car was included on a list of vehicles qualifying for an exemption from a 10% purchase tax in China.Tesla said in October the locally built Model 3 will be priced from about $50,000. On top of the tax exemption announced Friday, the China-built model this month qualified for a government subsidy of as much as about 25,000 yuan ($3,600) per vehicle.Tesla’s original and for long its only car factory in Fremont, California, spent months trying to hit a 1,000 weekly rate. Musk has said a weekly production rate of 3,000 at the China plant is a target at some point.The China factory broke ground at the start of this year. Originally just a muddy plot about a 90-minute drive away from Shanghai’s city center, it is now a crucial test of Musk’s bid to prove Tesla can be consistently profitable.As part of its China expansion, Tesla plans to add dozens of locations in the country over the next year for showcasing its vehicles and providing charging and other services, Xue Juncheng, director of China aftersales, said at the ceremony.The company may lower the price of the locally assembled sedans by 20% or more next year as it starts using more local components and reduces costs, people familiar with the matter have said.About 30% of the parts now used by the Shanghai facility are sourced locally, and the company plans to increase that to 100% by the end of 2020, said Song, the manufacturing director.To contact Bloomberg News staff for this story: Chunying Zhang in Shanghai at email@example.comTo contact the editors responsible for this story: Young-Sam Cho at firstname.lastname@example.org, ;Craig Trudell at email@example.com, Ville Heiskanen, Kevin MillerFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
INVESTIGATION REMINDER: The Schall Law Firm Announces it is Investigating Claims Against Bayerische Motoren Werke AG.
(Bloomberg) -- Tesla Inc. will start delivering China-built cars on Monday, a major milestone for Elon Musk’s company as it expands in the world’s largest electric-vehicle market.The first 15 units of Model 3 sedans assembled at Tesla’s new multi-billion-dollar Shanghai plant -- its first outside the U.S. -- will be delivered to company employees on Dec. 30, capping several months of wins for Musk. The latest came Friday, when the locally built car was included on a list of vehicles qualifying for an exemption from a 10% purchase tax in China.The shares closed little changed at $430.38 on Friday. The stock has surged since the carmaker reported a surprise profit on Oct. 23, and is now more than double its year low of $178.93 in June.Chief Executive Officer Musk is counting on the China plant to help build on recent momentum for the company in the world’s largest market both for EVs and autos in general. The Model 3 will compete with electric cars from local contenders such as NIO Inc. and Xpeng Motors, as well as global manufacturers including BMW AG and Daimler AG.The Shanghai Gigafactory broke ground at the start of this year. Originally just a muddy plot about a 90-minute drive away from Shanghai’s city center, it is now a crucial test of Musk’s bid to keep his carmaker profitable as he bets big on Chinese appetite for electric cars.With Tesla’s volatile stock price and strained finances, investors will be watching closely how the ramp-up unfolds. The multibillion-dollar investment will be a deciding factor to determine whether Tesla will be able to take on local competitors and fend off challenges by the likes of Mercedes-Benz, BMW and Audi.Junheng Li, an analyst at JL Warren in New York, noted that the made-in-China Model 3s are not fully manufactured there yet. Tesla is importing parts and assembling them at the facility near Shanghai, with production localization expected later in 2020.“Localization of suppliers has been very slow,” said Li in an email Friday. Tesla didn’t immediately respond to an inquiry seeking comment.Although Musk has said he’s never seen a factory built so quickly, the first delivery will come only a day before the end of 2019. Back in April, the CEO predicted Tesla would make at least 1,000 cars a week in Shanghai by the end of the year — a volume the company’s original factory in California spent months trying to hit. He’s also said a weekly rate of 3,000 is a target at some point.Tesla said in October the locally built Model 3 will be priced from about $50,000. On top of the tax exemption announced Friday, the China-built model this month qualified for a government subsidy of as much as about 25,000 yuan ($3,600) per vehicle.The company may lower the price of the locally assembled sedans by 20% or more next year as it starts using more local components and reduces costs, people familiar with the matter have said.The launch will also provide clues about Tesla’s ability to truly go global. The company is planning to follow up with a production facility in Europe.\--With assistance from Dana Hull.To contact Bloomberg News staff for this story: Chunying Zhang in Shanghai at firstname.lastname@example.orgTo contact the editors responsible for this story: Young-Sam Cho at email@example.com, Cécile Daurat, Chester DawsonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Tesla Inc. won exemption from a 10% purchase tax for its China-built Model 3 sedans, a potential boon for Elon Musk’s company as it prepares to begin deliveries of locally manufactured electric cars in the country.The Model 3 was included on a list of models qualifying for the exemption published by the Ministry of Industry and Information Technology on its website Friday. An exemption means buyers will need to shell out less. Tesla said in October the locally built Model 3 will be priced from about $50,000.Chief Executive Officer Musk is counting on Tesla’s new China plant to help build on recent momentum for the company in the world’s largest market both for electric vehicles and autos in general. The Model 3 will compete with electric cars from local contenders such as NIO Inc. and Xpeng Motors, as well as global manufacturers including BMW AG and Daimler AG.The exemption wasn’t completely unexpected, given Tesla’s imported vehicles were already granted one in August. Further helping Tesla, the China-built model this month qualified for a government subsidy of as much as about 25,000 yuan ($3,600) per vehicle.The company may lower the price of the locally assembled sedans by 20% or more next year as it starts using more local components and reduces costs, people familiar with the matter have said.To contact Bloomberg News staff for this story: Chunying Zhang in Shanghai at firstname.lastname@example.orgTo contact the editors responsible for this story: Young-Sam Cho at email@example.com, Ville Heiskanen, Dave McCombsFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
INVESTIGATION ALERT: The Schall Law Firm Announces it is Investigating Claims Against Bayerische Motoren Werke AG.
Rosen Law Firm, a global investor rights law firm, announces it is investigating potential securities claims on behalf of shareholders of Bayerische Motoren Werke AG (OTC: BMWYY) resulting from allegations that BMW may have issued materially misleading business information to the investing public.
(Bloomberg Opinion) -- The auto industry’s yuletide gift to investors turns out to be another dent in its credibility. Family-controlled BMW AG has a reputation for being run conservatively and yet it’s become the subject of an investigation by the U.S. Securities and Exchange Commission into how it accounts for U.S. sales. It’s getting harder and harder to rely on numbers provided by the auto industry, whether we’re talking emissions figures or financial performance.The alleged practices are unlikely to have yielded seismic benefits to the Germany luxury car giant. Dealers may have registered cars as sold when the vehicles were still on the forecourt, according to the Wall Street Journal. The possible scenario is that retailers sold cars to themselves, thereby inflating BMW’s monthly sales figures, then marketed them as nearly new at a discount. The vehicles would technically be second-hand but have limited mileage, having been used as demonstrators or loan cars for customers of the service department. BMW said it had been contacted by the SEC and would cooperate fully.There are limits to how many vehicles a dealer can “sell” in this way. So even if malpractice is proven, it’s questionable whether it would have plumped up the carmaker’s sales volumes that much. What’s more, history suggests the financial impact of the regulatory response could be muted. Fiat Chrysler Automobiles NV paid just $40 million to settle similar charges from the SEC that it misled investors about its monthly U.S. sales figures.But the fact remains that there’s sometimes a difference between what a reasonable person might understand as a “car sale” — a customer buying a car from a retailer — and what the manufacturers and dealers call a car sale. That leaves investors in the dark. The urge to demonstrate leadership of the U.S. market is intense because it brings marketing bragging rights, which might explain some of the pressure to increase sales figures. BMW and Mercedes fight it out every year for the largest premium automaker crown. Clearly this development is not what BMW needs. It may not have been at the center of the industry’s recent emissions and financial scandals, but it’s not been immune and investors are concerned that the carmaker’s range is getting tired and that it needs to accelerate its electric vehicle program.Meanwhile, the alleged episode adds to the impression that this is a cheating industry, with consumers and investors regularly hoodwinked. That will probably increase the carmakers’ cost of capital, which will depress share prices. In turn, that will make companies feel they need to do more to show they are performing on revenue metrics. And so it goes on. Stiffer penalties might force the industry into financial reporting that means what it says, and break the cycle.To contact the author of this story: Chris Hughes at firstname.lastname@example.orgTo contact the editor responsible for this story: James Boxell at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Chris Hughes is a Bloomberg Opinion columnist covering deals. He previously worked for Reuters Breakingviews, as well as the Financial Times and the Independent newspaper.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg) -- BMW AG is being scrutinized by the U.S. Securities and Exchange Commission over its sales reporting practices, months after the regulator extracted a penalty from Fiat Chrysler Automobiles NV over similar issues.The German automaker has been contacted by the SEC and will cooperate fully with its investigation, Phil DiIanni, a spokesman, said by phone. The agency doesn’t comment on the existence of any probes, SEC spokesman Kevin Callahan said.The inquiry creates a new headache for BMW just as it shows signs of recovering from a series of stumbles. The company last month reported a jump in earnings under new Chief Executive Officer Oliver Zipse as he presses ahead with a cost-cutting program after a slump in European car sales.Last month, BMW agreed to pay a 28 million-euro ($31 million) fine to settle a German antitrust investigation of the industry’s steel-buying practices. The company has also set aside 1.4 billion euros for a European Union probe into alleged collusion by the country’s automakers to delay the rollout of cleaner-emission cars.BMW has been in a tight race with Daimler AG’s Mercedes-Benz for leadership of the U.S. luxury auto market. While Mercedes has owned bragging rights the last three years, BMW leads by fewer than 3,300 units this year through November. Bernhard Kuhnt, who took over as president of the latter automaker’s North America business in early 2017, has reinvigorated sales with an onslaught of new sport utility vehicles.Dealers have criticized BMW in the past for pressuring them to buy vehicles from the manufacturer to stock their fleets of car loaned out to customers who are having their vehicles serviced. Bloomberg News reported on bonuses or allowances the company paid to dealers in late 2015 and mid 2012 that helped inflate sales results.Dealers are required to mark the cars as sold. To re-sell them to consumers as used models, they typically have to do so at depressed prices. In the meantime, the retailers also have to foot the costs of carrying the cars in inventory.Fiat Chrysler agreed in September to pay a $40 million penalty related to years of sales reports the SEC said were fraudulent. The Italian-American automaker misled investors by wrongly claiming a years-long streak of monthly gains and inflated results by paying dealers to report fake sales, according to the agency.The Fiat Chrysler practices came to light following a dealer lawsuit filed in January 2016. Some carmakers have backed away from monthly U.S. sales reporting since last year.BMW’s American depositary receipts fell 1.3% to $26.96 in New York trading on Monday. Financial markets are closed Tuesday in Germany.The Wall Street Journal reported on the SEC’s investigation of BMW earlier.(Updates with earnings, other probes in paragraphs 4, 5.)\--With assistance from Tim Loh.To contact the reporters on this story: Gabrielle Coppola in New York at firstname.lastname@example.org;Gregory Mott in Washington at email@example.comTo contact the editors responsible for this story: Craig Trudell at firstname.lastname@example.org, Eric Pfanner, Chester DawsonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg Opinion) -- This is Bloomberg Opinion Today, a palaver sauce of Bloomberg Opinion’s opinions. Sign up here.Today’s AgendaSweden tries a wild experiment: raising rates. Boris Johnson has a Bank of England problem. Impeachment hints that the Constitution isn’t dead yet. Unicorns can’t subsidize your lifestyle any more.Fine, Let’s Try Raising Interest RatesOne of 2019’s best movies was “Midsommar,” about an unorthodox Swedish summer-solstice party. Now real-life Swedes are doing some unorthodox winter-solstice central banking, hopefully with much less human sacrifice.Sweden’s Riksbank, zigging while the rest of the world zags, just raised interest rates, despite anxiety about the economy and sluggish inflation. It’s a bit of desperation central banking, Mohamed El-Erian explains. Rates around the world are at or below rock bottom, without supercharging growth. Meanwhile savers and banks suffer, which may defeat the purpose of low rates, and wild gambling with cheap money fosters zombie companies and boosts the odds of a blow-up.Ferdinando Giugliano suggests Sweden is panicking about negative rates for nothing. There’s no proof they’re doing real damage yet, he argues. Hiking rates, meanwhile, could definitely hurt the economy, forcing the Riksbank to reverse its decision.Still, central bankers around the world clearly fear their go-to post-crisis tools of QE and negative rates have lost their edge. One big reason for this, as Mohamed notes, is that fiscal policy hasn’t done its share of the work. Central bankers are now openly calling on governments to do more, which is a slippery slope toward uniting the two, writes Alberto Gallo. Central bankers joining forces with politicians may make stimulating economies easier, but at the cost of central-bank independence. And it could make market distortions even weirder and scarier — not in a “Midsommar” way but more like a “Cats” way.Is Everything OK, Bank of England?The U.K.’s central bank, meanwhile, has its own set of problems. Most importantly, it will soon need a new leader to replace its departing rock-star governor, Mark Carney. The list of candidates that Prime Minister Boris Johnson has floated is … uninspiring, suggests Ferdinando Giugliano. The trouble is that the Bank of England needs an especially skillful leader to deal with Brexit — but thanks to Brexit, the best candidates have run screaming the other way.Meanwhile, the BOE is dealing with an embarrassing scandal: A contractor that records its press conferences sold audio to traders to give them an eight-second edge over the poor saps waiting for the slower video feed. This was a silly oversight on the BOE’s part, writes Marcus Ashworth, although Carney rarely says anything interesting in these gaggles. And if this helped market efficiency, Matt Levine asks, who did it really hurt? If you’re a regular person trading around BOE press conferences, maybe you should reconsider your life choices.Bonus British Reading: Labour is in an existential crisis because it stopped listening to voters. — Matt Singh Representative Democracy Just Needs to Lay Down For a MinuteThe House of Representatives impeached President Donald Trump last night, while he was at a rally suggesting the late Rep. John Dingell was in hell. Then the impeachment train stalled before it could even leave the House, with Speaker Nancy Pelosi feuding with Senate Majority Leader Mitch McConnell over terms of the eventual trial. Honestly, you could be forgiven for suspecting the American experiment is nearing the end of its useful life. Trump’s presidency has certainly put an unusual strain on the Constitution, writes Noah Feldman. But this impeachment, as imperfect as it may be, is a sign the old document still has breath in it.Not that Republicans defending Trump have played a productive role; they rely either on lies or disingenuous complaints about process, writes Jonathan Bernstein. But it’s possible the handful of old-school Republicans still in the building — cough, Mitt Romney, cough — could redeem the party, and maybe save its future, by at least taking the Senate trial seriously, writes Frank Wilkinson.Further Impeachment Reading: Trump’s own defense has a “royal we” problem. — Jonathan BernsteinUnicorns Can’t Keep Coddling YouThe public-market flops of Uber Technologies Inc. and other former unicorns, followed by the spectacular swan dive of WeWork, have venture capitalists doing some soul-searching (OK, maybe not all of them). One upshot is that Uber and its ilk are chasing profitability earlier than they might have liked, writes Shira Ovide. That means they’re much less likely to keep burning money to attract customers. This means your car rides, dog walks, food delivery, etc., will be less “disrupted” — meaning more expensive. This trend is spreading through the non-unicorn universe, too, writes Alex Webb: BMW and Daimler just ditched their own car-sharing service.Telltale ChartsIndividual investors keep retreating from leveraged-loan funds, and a new Financial Stability Board report won’t ease anybody’s worries about them, writes Brian Chappatta.Flight-shaming isn’t changing behavior in a meaningful way, writes Leonid Bershidsky. Personal carbon trading could be the answer.Further ReadingThe job market isn’t as healthy as it seems because the jobs are increasingly terrible McJobs. — Daniel Alpert and Robert Hockett Someday we’ll wonder why we tried to quash vaping; it’s better than just letting people smoke cigarettes. — Joe Nocera Why buy expensive U.S. stocks when overseas ones are so much cheaper? — John Authers 2019 was the year cities rose up against nation-states, and the trend’s not going away. — Leonid Bershidsky Lebanon’s new prime minister is too beholden to Hezbollah to be a change agent. — Hussein Ibish Anarchy’s time has come again. — Pankaj Mishra Special Holiday Section: Bloomberg Opinion Book ClubHere are the 11 books you must read (15 if you count each “A Song of Ice and Fire” novel separately) in 2020.ICYMIScottish First Minister Nicola Sturgeon wants an independence referendum.How Wall Street avoids its MeToo reckoning.The optimist’s guide to 2020.KickersWakanda is no longer an official U.S. trading partner. (h/t Zoe DeStories)Homo erectus lasted a lot longer than we thought. (h/t Scott Kominers)Trees started rooting much earlier than we thought.Don’t sweat the decade’s end because time’s not real.Note: Please send vibranium and complaints to Mark Gongloff at email@example.com.Sign up here and follow us on Twitter and Facebook.To contact the author of this story: Mark Gongloff at firstname.lastname@example.orgTo contact the editor responsible for this story: Tracy Walsh at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Mark Gongloff is an editor with Bloomberg Opinion. He previously was a managing editor of Fortune.com, ran the Huffington Post's business and technology coverage, and was a columnist, reporter and editor for the Wall Street Journal.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.