Tesla Cheats with New Battery Supplier, Panasonic Forecast Plunges

Panasonic wasted no time lowering its guidance after its bread-and-butter customer, Tesla, announced it was buying another battery supplier to power its electric vehicles.

The lucky company Tesla chose to replace Japan-based Panasonic is California-based Maxwell Technologies.

On the news, Panasonic lowered its profit expectations by 9%. The possible loss of Tesla isn’t the only culprit that led to the lowered guidance. The struggling tech player revealed it was also being hurt by weak demand in China for auto components and factory equipment. China’s slowing economy and the overhang of trade wars have weighed on countries and tech companies all over the world.

Musk Praised Panasonic Just Three Months Ago

Back in November, it appeared that the partnership between Tesla and Panasonic was going well. CEO Elon Musk took to Twitter to sing the praises about Panasonic helping it boost profits.

Here’s the tweet.

However, Musk had other plans. CCN raised the caution flag on Panasonic last month. We pointed to Tesla’s November indication that it would diversify its sources after experiencing several problems with its Model 3 supply chain.

On the heels of that announcement, rumors swirled that Tesla was on the lookout for a new battery supplier.

In previous reports, CCN noted that Panasonic was also feeling the effects of the possibility of losing Tesla. Its stock price was down by more than 2% on the news that the carmaker was looking for a new supplier.

Tesla Giveth Then Taketh Away

Elon Musk | Source: Shutterstock

Interestingly, when this supply agreement was announced, Tesla stated:

“The agreement supplies Tesla with Panasonic’s lithium-ion battery cells to build more than 80,000 vehicles over the next four years. It guarantees the availability of enough cells in 2012 to meet Tesla’s aggressive production ramp-up and fulfillment of more than 6,000 existing Model S reservations. This supply agreement helps ensure Tesla will meet its cost and margin targets for Model S.”

The purchase of Maxwell Technologies comes less than a decade since Musk and company inked the deal with Panasonic. The electric vehicle maker had lauded Panasonic as being a battery cell manufacturer and a diverse supplier to the global automotive industry.

Musk’s Always Up To Something, Could Be Good This Time

The move is a disappointing one for Panasonic, but it’s a solid one for Tesla, which has been under financial pressure.

In January, CCN reported that Tesla enjoyed a solid Q4 2018 with record production and delivery numbers driving the company’s first profit in two years. The company posted a net profit of $311.5 million and $891 million in free cash flow. However, the company’s stock price slumped 9% after it failed to meet investor targets for delivery and production numbers.

Tesla’s stock price has traded wildly over the past several months.

Owning battery supplier Maxwell should help the company lower its operating costs. The heavily indebted electric car company, whose CFO stepped down just four days ago, is making the acquisition in an all-stock deal.

A Tesla stock shorter (Musk has extreme disdain for them) responded to the Maxwell announcement with this tweet.

Maxwell already supplies batteries to General Motors and Volkswagen subsidiary Lamborghini. Specifically, it provides so-called ultracapacitors that store electricity and complement battery cells.


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Author: Tedra DeSue 
Image Credit: Featured Image from Shutterstock

Why Vertical Research Thinks Tesla Shares Will Crash Another 70 Percent

It’s less than a week into the new year, but the market has revved into action, with companies feeling the heat on the trading floor. One such company is Tesla whose stock has fallen almost 10 percent.

However, Gordon Johnson, an analyst at Vertical Research Group, believes the automobile manufacturer still has some much darker days ahead in 2019. According to Johnson, Tesla’s stock price at the end of the year will be pegged at $88. If his predictions are right, the company could see its share price tank by 70% over the course of the year.

Speaking in an interview with CNBC’s Trading Nation, Johnson said:

If you take the Q3 numbers and you annualize them, I think Q3 is going to be the high-water mark for Tesla. I don’t think they’re ever going to reach that level of earnings again. If you look at what the stock’s trading at, you’re talking about like you know near a 100 times multiple on those earnings, and the company is clearly not growing at that level.

In Johnson’s analysis, this high-water mark was the company’s performance in Q3 2018, when the company beat delivery estimates for its electric cars and closed with a profit. October turned out to be the best month in over four years for Tesla, as the company posted a profit of more than 27 percent.

Disappointing Results for Q4

Tesla shares have been incredibly volatile over the past year.

However, things didn’t quite go too well for the company in Q4 2018. Following the publication of their results, Tesla’s stock crumbed by 9.7 percent on Wednesday and Thursday, even though the company finished 2018 with record production numbers. That’s because sales were slightly less than what analysts had hoped for. In addition, the company officially announced that they would implement a $2,000 price reduction on their Model X, Model S, and Model 3 vehicles as a means of offsetting the reduction in federal tax credits for electric vehicles. This tax credit, which saved the company $7,500 per vehicle, was cut in half on Jan. 1.

Can the Chinese and European Markets Save Tesla?

While Johnson believes that the demand for Tesla’s electric cars won’t be enough to help ramp up its stock price, investors will be given some glimmer of hope following an announcement that the company will begin delivering its Model 3 cars to China. Tesla stated that customers in China could start making orders and configurations of Performance and Dual Motor all-wheel drive versions of the vehicle from Jan. 4, while also confirming that initial deliveries will begin in March.

The announcement seemed to have helped the company, as its shares were up nearly 6 percent at Friday’s close.

The company also confirmed that European customers could begin configuring and ordering the left-hand drive versions of the Tesla Model 3 from Jan. 4. They claimed that while the people who ordered these vehicles last year will get their cars delivered in February, those who make their orders before the end of the week will get their cars in March.


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Author: Jimmy Aki
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Crypto Startup Puts Tesla, Apple, Facebook Shares On Ethereum Blockchain

According to a report from Bloomberg, DX.Exchange, an up-and-coming crypto startup headquartered in Estonia and Israel, will be putting a number of popular American equities onto a blockchain next week. As the firm’s name implies, DX.Exchange is an online trading platform that will allow investors to trade and transact shares of Apple, Facebook, Tesla, along with seven other household names listed on Nasdaq, even when markets are shuttered for the day.

If its inaugural trading sessions perform well, the startup intends to expand its crypto offerings to encompass shares listed on the New York Stock Exchange, coupled with those situated on Tokyo’s Nikkei and Hong Kong’s Hang Seng.

Each digital security token will be collateralized by one common share, and interestingly, stockholders will be purportedly be “entitled to the same cash dividends,” arguably making this offering just as good as buying stocks through TD Ameritrade, E*Trade, and the like. MPS MarketPlace Securities, a partner of DX, will be taking custody of the shares, allowing Ethereum tokens to be created that represent the securities.

But what are the benefits of the platform?

Well, as explained by Bloomberg, digital securities will allow traders to transact their holdings when markets are closed. This simple feature could catalyze the creation of secondary markets, drawing die-hard traders, even those without crypto knowledge and experience, to blockchain-based platforms, subsequently catapulting adoption.  Ethereum-based shares could also interact with other facets of the blockchain’s ecosystem.

These crypto tokens can also be divvied up, while trading fees can be minimized, lowering the bar for entry. The aforementioned factors, coupled with the fact that foreign investors will be able to gain access to U.S. shares, is undoubtedly a move towards financial inclusion — crypto’s underlying raison d’etre. 

And interestingly, this is all legal too. Speaking to the aforementioned outlet in a recent interview, DX chief Daniel Skowronski explained that his platform is licensed by the Estonian Financial Intelligence Unit, which has the backing of the European Union. So, DX has the legal capacity to make such an offering. Skowronski also expressed his excitement for his firm’s innovative platform, noting:

We saw a huge market opportunity in tokenizing existing securities… We believe that this is the beginning of the traditional market’s merge with blockchain technology. This is going to open a whole new world of trading securities old and new alike.

The Tokenization Of Everything

While DX.Exchange’s foray into blockchain-based securities is a step in the right direction and is something to be commended, the tokens aren’t fully decentralized, as there are still centralized counterparties. This lack of fully-fledged decentralization may introduce risk over time. But, a number of pundits believe that eventually, shares and other pertinent assets will become fully decentralized.

Anthony Pompliano, the founder of Morgan Creek Digital Assets and an anti-establishment figure, recently told BlockTV that he expects for all securities, whether it be stocks, bonds, real estate certificates, or otherwise, to be tokenized. The decentralist, well-known for his anti-bank, pro-Bitcoin rhetoric, claimed that this won’t be an easy task, however, quipping that this journey will take more than five years.

Jeremy Allaire, the CEO of Boston-based, Goldman-backed Circle, also echoed this sentiment in a recent CNBC interview. Speaking to the outlet, Allaire, who manages the aforementioned crypto startup, exclaimed that the “tokenization of everything” will eventually occur.

Allaire, who doesn’t seem to embody the hallmarks of a Bitcoin maximalist, noted he envisions a future filled with millions of crypto assets, whether they take the form of security, commodity, or utility tokens. In short, the long-time crypto advocate noted that he doesn’t believe cryptocurrencies are a “winner takes all” scenario, instead, he made it clear that a multitude of projects can live in relative harmony, due to this innovation’s ground-breaking potential.


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Author: Nick Chong
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Tesla Isn’t the Best Stock to Buy to Play the Extinction of Gas Engines

The internal combustion engine is on its way out for luxury car brands, and it’s a big opportunity for investors in chip stocks like Monolithic Power Systems.

Listen closely. It’s the sounds you don’t hear that count. The electric car revolution is happening.

Balding and mustachioed, Dieter Zetsche does not look the part of a futurist. Still, the Mercedes-Benz chief is pushing the 92-year old automaker headlong into the future. It’s electric.

The internal combustion engine is on its way out, and it’s a big opportunity for investors.

Electric propulsion has been softly creeping up on us for years. Prior to the new millennia, Toyota’s (TM) Prius was a hit with the Sierra Club set. Tesla (TSLA)  pushed the market beyond green patrons with a fleet of no compromise electric vehicles. A Tesla SUV recently crushed a $530,000 gas swilling Lamborghini. I commute on an electric performance motorcycle made in Santa Cruz, Calif., called the Zero S. Electric has also piqued the interest of luxury car markers

In addition to the 2019 Mercedes EQC, all electric SUV, Porsche is bringing Taycan to market. The head turning, swooped, stretched Targa sports car looks more concept than reality. And the Audi e-tron and the Jaguar I-Pace are muscular EV crossovers that look fast even when they are parked.

These vehicles are not supposed to be for soccer moms. They are designed for eye-stabbing flashes of neon light. They beg for drivers with a heavy foot.

They are being called Tesla killers, but this characterization misses the point.

The Trade

The Silicon Valley carmaker is an easy target. It has been plagued with production woes since inception. It can’t keep top brass, and Elon Musk, its brilliant chief executive, is an emotional mess eager to please. Too often, the result is over-promise.

The Germans are promise keepers. They know how to make cars. But they are not going to kill Tesla, at least not intentionally. In a way, they are surrendering to Musk’s vision of the future of cars. They are migrating production to electric propulsion.


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Author: Jon Markman
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Elon Musk will bring humans to Mars, and cryptocurrencies to the moon

Elon Musk, CEO and co-founder of SpaceX and CEO of Tesla has posted a series of tweets about his ambitions to start his own confectionery enterprise, adding that he was “super, super serious” about this new venture to spite sceptics.

And he dropped a hint of what his upcoming venture would be called, or maybe what it might involve: cryptocurrencies; specifically, “Cryptocandy.” Whether he was serious or not, we don’t know for sure. Some people suggested his business should be called chocolate bitcoins or moon rocks, while others stretched the connection between crypto and his theoretical candy business even further: “My candy better be airdropped from a space station or I want my money back,” one person wrote.

The tweets gained over 100,000 likes by Saturday and sent the Twitter sphere into a frenzy. People asked when his company was hiring, and how they could buy stock (or tokens?) as part of the possible venture.



Musk’s candy idea seems to have been part of an exchange between Musk and Warren Buffet. It started earlier this week when Musk, as part of Tesla’s earning report call, stated that economic moats were “lame.” The statement takes a jab at Buffet, and he is known to have coined the term to describe a company’s competitive advantage.

Buffet responded to Musk’s reward at his annual Berkshire Hathaway meeting, stating that moats are still a viable idea, and that one can look at his See’s Candies business as a great example.

“Then I’m going to build a moat & fill it w candy,” Musk tweeted in response. “Warren B will not be able to resist investing!” Musk said in another, provoking Buffet further.

Elon Musk is currently ranked as the 53rd richest person in the world according to the Forbes, and 21st on the list of The World’s Most Powerful People.

 


Here at Dollar Destruction, we endeavour to bring to you the latest, most important news from around the globe. We scan the web looking for the most valuable content and dish it right up for you! The content of this article was provided by the source referenced. Dollar Destruction does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products or other materials on this page. As always, we encourage you to perform your own research!

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Author:  Matthew North 
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The Chinese Car Invasion Is Coming

China’s rising automakers want to sell the future of driving all over the world.

On a bright spring day in Amsterdam, car buffs stepped inside a blacked-out warehouse to nibble on lamb skewers and sip rhubarb cocktails courtesy of Lynk & Co., which was showing off its new hybrid SUV.

What seemed like just another launch of a new vehicle was actually something more: the coming-out party for China’s globally ambitious auto industry. For the first time, a Chinese-branded car will be made in Western Europe for sale there, with the ultimate goal of landing in U.S. showrooms.

That’s the master plan of billionaire Li Shufu, who has catapulted from founding Geely Group as a refrigerator maker in the 1980s to owning Volvo Cars, British sports car maker Lotus, London Black Cabs and the largest stake in Daimler AG—the inventor of the automobile. Li is spearheading China’s aspirations to wedge itself among the big three of the global car industry—the U.S., Germany and Japan—so they become the Big Four.

“I want the whole world to hear the cacophony generated by Geely and other made-in-China cars, Geely’s dream is to become a globalized company. To do that, we must get out of the country,” Shufu said.

He’s not alone: At least four Chinese car makers and three Chinese-owned startups—SF Motors Inc., NIO and Byton—plan to sell cars in the U.S. starting next year. At the same time, Warren Buffett-backed BYD Co. is building electric buses in California; Baidu Inc. is partnering with Microsoft Corp., TomTom NV and Nvidia Corp. on a self-driving platform; and Beijing-based TuSimple Inc. is testing autonomous-driving big rigs in Arizona.

The industry is set for more upheaval as China unravels a two-decade policy that capped foreign ownership of car making ventures at 50 percent. The change may energize companies such as Volkswagen AG and Ford Motor Co. to seek a bigger piece of the world’s largest car market and allow Tesla Inc. to set up a fully owned unit. Car makers may get better visibility of their futures, and those Chinese companies that fear losing sales at home may sense a greater impetus to go abroad.

“They are in a better position now than they ever have been,” Anna-Marie Baisden, head of autos research in London with BMI Research, said of Chinese car makers. “They’ve had so much time working with international manufacturers and have become a lot more mature.”

We’ve seen this move before from China—in the smartphone industry. The nation used the shift in technology from basic flip phones to hand-sized computers to dominate the manufacturing industry, trouncing then-dominant makers from Finland, Sweden, the U.S., Japan and Germany.

Last year, three of the top five smartphone handset makers in the world were Chinese, according to Gartner Inc.

Yet the sequel may take longer to become a hit, given the brand loyalty that has existed since Henry Ford debuted the Model T in 1908. How will Chinese automakers convince Midwesterners to give up their Ford F-150 pickups or Tokyo residents to switch from their Toyotas?

“Chinese carmakers intend to come over, but what need will they fill?” said Doug Betts, senior vice president of global automotive practice at J.D. Power. “What is the reason to buy their cars?”

Chinese cars probably would compete more directly with Japanese and Korean models, said Bob Lutz, the retired vice chairman of GM. American consumers mostly cross-shop Asian brands.

“If they start coming in, they won’t be any more competent than Korean and Japanese cars,” Lutz said. “They would probably take share from other Asian brands because the vehicles will be more Asian in character. They’re not going to get much market share.”

And then there’s President Donald Trump. Trade tensions between the U.S. and China are simmering as both nations move to slap tariffs on each other’s products. This month, China said it would put an additional 25 percent levy on about $50 billion of U.S. imports, including automobiles and aircraft. The move matched the scale of proposed U.S. tariffs, with Trump threatening an escalation.


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That’s not to say the road is impassable. A few decades ago, South Korea’s Hyundai Motor Group was knocked for fragile engines and rust-sensitive body panels. Now it’s one of the five biggest manufacturers in the world, selling about 1.25 million cars in the U.S. last year, according to Bloomberg Intelligence. The group also has factories in Alabama and Georgia.

“Competitors emerging from China must be taken seriously,” said Matthias Mueller, former chief executive officer of Volkswagen, Europe’s biggest carmaker. “I visited China for the first time in 1989, and the development that has happened there since then is just impressive.”

The creeping global influence of China’s industry isn’t limited to getting their wheels on U.S. and European roads.

Equally important, the Chinese are getting under the hoods of foreign brands by buying up parts suppliers, making batteries for the world’s EV fleet and corralling supplies of the metals that give those batteries life.

Automakers such as Geely, Chery Automobile Co. and BYD started talking a decade ago about cracking the U.S. auto market with an array of low-cost passenger vehicles. Those efforts stalled, so the industry built a global presence through acquisitions.

Chinese companies have announced at least $31 billion in overseas deals during the past five years, buying stakes in carmakers and parts producers, according to data compiled by Bloomberg.

The most prolific buyer is Li, who spent almost $13 billion on stakes in Daimler and truck maker Volvo. Tencent Holdings Ltd., Asia’s biggest internet company, paid about $1.8 billion for 5 percent of Tesla.

As software and electronics become just as critical to a car as the engine, China is ensuring it doesn’t lag behind in that market, either. Baidu, owner of the nation’s biggest search engine, announced a $1.5 billion Apollo Fund to invest in 100 autonomous-driving projects during the next three years.

“We have secured a chance to compete in the U.S. market of self-driving cars through those partnerships,” Li Zhenyu, a vice president overseeing Baidu’s intelligent-driving unit, told Bloomberg News. “Everyone has a good chance to win if it has good development plans.”

Baidu and Tencent are among the Chinese corporations racing Alphabet Inc.’s Waymo, Uber Technologies Inc. and the major automakers to develop autonomous driving, with an aim for mass adoption by 2021.

The government’s aspiration to deploy 30 million autonomous vehicles within a decade is seeding a fledgling chip industry, with startups like Horizon Robotics Inc. emerging to build the brains behind those wheels.

Then there’s Contemporary Amperex Technology Ltd., the maker of electric-vehicle batteries that’s planning a $1.3 billion factory with enough capacity to surpass the output of Tesla and dwarf the suppliers for GM, Nissan and Audi.

The Ningde-based company plans to raise 13.1 billion yuan as soon as this year by selling a 10 percent stake, at a valuation of about $20 billion. The bulk of the new funds would pay for a manufacturing plant that would make CATL the world’s biggest maker of Lithium-ion batteries.

CATL already supplies Volkswagen and owns 22 percent of Finland’s Valmet Automotive Oy, a contract manufacturer for Daimler’s Mercedes-Benz.

To juice those batteries, Chinese companies are leading the way in securing necessary raw materials like cobalt and lithium. Chinese companies make about 60 percent of the world’s refined cobalt, according to trading firm Darton Commodities Ltd.

 


 

Musk says Tesla will be profitable in third-quarter, fourth-quarter

Tesla Inc (TSLA.O) will be profitable in the third and fourth quarters of this year and will not have to raise any money from investors, billionaire Chief Executive Elon Musk said on Friday, driving shares in the electric car maker up to 3 percent higher.

Tesla has already sought this month to play down Wall Street speculation that it would need to return to capital markets this year to raise more funds as it ramps up production of the Model 3 sedan seen as crucial to its long-term profitability.

The car maker, which has consistently fallen short of promised targets on production and is fighting bad publicity over a crash of a car using its Autopilot system, said 10 days ago it would have positive cash flow from the third quarter.

The Economist recently published a story claiming Tesla would need $2.5 billion to $3 billion this year in additional funding.

Musk took to Twitter to reply, “The Economist used to be boring, but smart with a wicked dry wit. Now it’s just boring (sigh.) Tesla will be profitable & cash flow+ in Q3 & Q4, so obv no need to raise money.”

Tesla shares, which have gained nearly 10 percent since disclosing the Model 3 production numbers on April 3, gained as much as 3.2 percent in premarket trade on Friday. They were up around 2 percent soon after the opening bell on Wall Street.

Wall Street brokerage Jefferies, which provided the funding estimate cited by The Economist, said in a note last week it expects refinancing risk to remain high for the Silicon Valley venture until it can consistently produce 10,000 Model 3s a week.

The company again missed its own 2,500 target for weekly production at the end of the first quarter, and analysts and fund managers doubt Tesla’s ability to keep production growing to a promised 5,000 Model 3s per week in three months time.

 


Here at Dollar Destruction, we endeavour to bring to you the latest, most important news from around the globe. We scan the web looking for the most valuable content and dish it right up for you! The content of this article was provided by the source referenced. Dollar Destruction does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products or other materials on this page. As always, we encourage you to perform your own research!

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Author: Sonam Rai
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