Musk Is Upbeat As Tesla's Profitable Q4 Not As Good As Expected

Tesla's CEO Elon Musk made a profit for a second consecutive quarter in Q4 2018, but it wasn’t as much as analysts anticipated. And, in a surprise announcement at the end of its analysts’ call, CEO Elon Musk said that long-time CFO Deepak Ahuja is retiring from the company and will be replaced by vice president of finance Zach Kirkhorn. 

Tesla’s stock took a dive of 5% in after-hours trading despite CEO Elon Musk’s assurances that costs would be contained and suggestions that the Model Y electric crossover and a pickup truck are on the horizon.

Tesla’s lower-than-expected profit and an overall loss of $1 billion for 2018 renewed “questions about how it will fund its grand ambitions as it faces mass layoffs and billion-dollar debts,” Drew Harwell writes for the Washington Post



“Those profits were driven by pricey cars -- higher-priced variants of Tesla's new Model 3, which sell for $50,000 and up,” notes Camila Domonoske on NPR’s “Morning Edition.”

“But instead of doubling down on the strategy that proved profitable, Tesla is laying off thousands of people to slash costs, reducing production of the Model S and Model X, and building a new factory in Shanghai. It's all part of an aggressive push to make cars for the mass market that sell for $35,000.

“That’s because … Musk doesn’t want to just sell expensive cars to the world’s elite. He never did,” Domonoske continues, before  providing insights on what the CEO has called his “Secret Master Plan.”  

Musk was as positive as always yesterday (when he's not Twitter-bashing critics).

“Last year was definitely the most challenging year of Tesla’s history, but also the most successful,” he told analysts on an earnings call Wednesday transcribed by Seeking Alpha. He also said he expects sales to increase by 50% this year, which he called “crazy growth for the automotive industry,” WaPo’s Harwell relates.

Tesla said “it expects to make 7,000 Model 3 vehicles per week at a ‘sustainable’ pace at its Fremont, Calif., factory by the end of 2019. Meanwhile, the company expects to hit an annualized rate of more than 10,000 Model 3 vehicles weekly at its under-construction Shanghai factory sometime between the fourth quarter of 2019 and the second quarter of 2020,” Nathan Bomey reports for USA Today.

“The next vehicle in the company's lineup is the Model Y, which will share the same platform as the Model 3 to save costs. Tesla said that vehicle will ‘most likely’ be made at the company's battery plant in Reno, Nev. Pricing, styling and specifications haven't been revealed.”

Kirkhorn, the newly appointed CFO, was a McKinsey analyst before joining Tesla in 2010. He is a “34-year-old relative unknown,” writes Tim Higgins in a profile for the Wall Street Journal.

“A former Tesla employee said Elon Musk ignored Kirkhorn's prudent financial advice at least once. The CEO wanted to allocate some $7 million to an automation project at the company’s Fremont factory. Once Musk forgot about the appealing new equipment, which Kirkhorn had viewed as non-essential, the funds were used to cover overages on other projects already under way,” report CNBC's Robert Ferrisand Lora Kolodny. 

“I feel we're starting 2019 with a very strong financial foundation. We have enough cash to start new programs and develop new technologies,” Kirkhorn said yesterday. 

Musk also said that Tesla’s long-rumored pickup truck “may” be unveiled this summer.

“What do we know about the truck so far? Not much for certain. It will likely be a large pickup, with 6 seats, a large battery for long range and to allow towing, all-wheel drive, have high towing capacity, and will have a 240-volt and air compressor connections for power tools,” Jameson Dow writes for Electrek. “Elon says he’s in love with the ‘heart stopping’ design which is ‘cyberpunk Bladerunner.’”

But Dow cautions that several competitors -- the Rivian R1T, the Workhorse W-15, the tiny $5,000 Pickman by Chinese startup Kaiyun Motors (its max speed is 28 mph) -- are hitting the road. Not to mention that Ford says an all-electric F-series will be on the market by 2022. 

“The problem with the truck market is that brand loyalty is very high, and American companies do make pretty good trucks,” Dow writes.

There is indeed a warm spot in consumers’ hearts for the F-150 as frigid temperatures sweep much of the country this week. In fact, the F-150 Raptor tops Autotrader’s  Top 10 Coolest Cars for Winter 2019, Marketing Daily’s Tanya Gazdik informs us  this morning.

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