Musk heard it and was about to criticize them again.
text/Gao Xiaoqian
Tesla just elaborated on its ambitious production plan, but had to deal with the tight funding problem.
htmlOn May 18, Goldman Sachs released a research report on Tesla's overseas expansion, production capacity, profit and financing needs. The overall tone is not optimistic. It is not only judging that Tesla will need tens of billions of new capital before 2020, but it is also recommended to short Tesla stocks.At the financial report meeting in the last quarter, the straightforward boy
criticized many analysts on the spot, saying that their problems were too stupid or too boring. I don’t know what kind of evaluation he will make about Goldman Sachs’ latest report.
At the above meeting, Tesla said that the weekly production capacity of Model 3 will reach about 5,000 vehicles in the next two months. More importantly, Tesla, which has always had a tight capital chain, may make a profit in Q2. So Musk said bluntly that Tesla does not need financing. However, Goldman Sachs pressed the negative button for this.
Goldman Sachs analyst David Tamberrino analyzed in the research report that considering Tesla's operating conditions, new car spending and increased production capacity, it is expected that Tesla will need at least US$10 billion to increase external capital and refinancing for maturing debts by 2020. In order to raise funds, Tesla can do it through various forms such as bonds and equity.
After analysis, Goldman Sachs expects Tesla to have a capital demand of US$10.5 billion by 2020, mainly injecting capital into expensive operations; it also includes building new factories for producing cars and batteries in China.
A large part of the funds raised by Tesla will be spent on the Chinese market. 36Kr once reported that on May 10, Tesla spent 100 million yuan to register and establish wholly-owned company in Shanghai, with its business scope including technical development in electric vehicles and parts, batteries and other products.
During the earnings call, Musk said, "We will announce the site selection results of Tesla's Chinese super battery factory soon." The research report also analyzed that Tesla will explore the dual possibilities of car manufacturing and battery production in China, and the possibility of releasing major announcements in the near future is increasing.
Goldman Sachs said that Tesla may need to invest US$4 billion to US$5 billion in the Chinese market. Among them, it takes US$2.5 billion to build a car (annual production of 500,000 vehicles), and a super battery factory (gigafactory) requires US$2 billion to US$2.5 billion.
Tesla also needs to keep burning money on new products. In addition to Model 3, Tesla has also developed several product lines at the same time, including Model Y, electric semi-mounted truck Semi Truck, battery components, solar roof and household lithium battery energy storage system Powerwall.
Goldman Sachs expects Tesla's capital expenditure to be $2.9 billion in 2018, and will rise to $3.6 billion per year by both 2019 and 2020.
However, Goldman Sachs does not agree with Tesla's previously announced production capacity plan. Goldman Sachs believes that Model 3 will not achieve the goal of sustainable production of 5,000 vehicles per week by the end of this year, and accelerating production will require more labor and will further squeeze the gross profit margin.
Goldman Sachs' production and gross profit expectations for Model 3 are lower than Tesla claims. By 2020, Goldman Sachs expects to produce 5,000 Model 3s per week, while Tesla expects to produce 10,000 units per week; during the same period, Goldman Sachs expects the gross profit margin of Model 3 to be 21%, while Tesla expects to produce 25%.
Based on the above analysis, Goldman Sachs analysts said they will maintain their "sell" rating for Tesla, believing that the target price in the next six months is $195, which is nearly 32% downside from the closing price of $284.54 on May 17, Eastern Time.
In addition, Goldman Sachs analysts recommend shorting Tesla stock in March 2019 with a call option of $3330, and buy Tesla convertible bonds that expire in March 2019 and have a face rate of 0.25%.
If Tesla shares fall below $330 by then (15% premium space compared to now), investors will receive an annualized rate of return of 9.2%.
