Elon Musk wowed millions of people who watched the livestream of a flawless first launch of SpaceX’s Falcon Heavy rocket, which carried a Tesla roadster into space, capped by the elegant, simultaneous landing of two boosters. Musk’s euphoria was undiminished as he shifted gears on Wednesday to Tesla, pointing to a silver lining for the high-flying carmaker that capped a year of big losses and production headaches for its critical Model 3 sedan.
The company reported a whopping $675.4 million net loss for the final quarter of 2017 and a $1.96 billion deficit for the year, the most ever on both counts. Loss per share was $4.01 on a GAAP basis, or $3.04 per share excluding some items. That was better than consensus estimates for adjusted EPS losses of $3.10 to $3.19, and likely the result of bigger than expected sales of emissions credits. Tesla shares plunged 8.6% to $315.23 on Thursday.
Musk and Tesla CFO Deepak Ahuja acknowledged 2017’s challenges in a letter to investors but also said the table was set for a much better year in 2018. Notably, they predict operating income will become “sustainably positive” at some point this year and that production of Model 3, as well as the S and X crossover, will continue to grow.
“2018 will be a transformative year for Tesla, with a high level of operational scaling,” the two said. “As we ramp production of both Model 3 and our energy products while keeping tight control of operating expenses, our quarterly operating income should turn sustainably positive at some point in 2018.”
The company stuck with its production guidance for the Model 3, nominally priced from $35,000, to reach 2,500 units a week by the end of the first quarter, and then 5,000 a week at the end of the second quarter. The Palo Alto, California-based company didn’t say when it will hit its ultimate target of 10,000 Model 3s a week, enough to hit Musk’s goal of 500,000 a year.
“Even this Tesla realist and Model 3 deposit holder has doubts about Tesla ramping up to 10,000 units/week, essentially promising production levels of over 250,000 units in 2018,” said Rebecca Lindland, executive analyst at Kelley Blue Book’s KBB.com. “I think they’ll be lucky to get 150,000 units out the door in 2018, and even that would be an incredibly impressive feat, requiring an average weekly rate of over 3,000 units for every single week left in 2018 with no breaks. Elon Musk needs a team of forecasters that he’ll listen to so he can finally provide Wall Street and depositors with achievable targets.”
Last month, Tesla cut its Model 3 production target for a second time after building just 2,425 in the fourth quarter. Total production, including the higher-priced Model S and Model X, was 101,027 units in 2017.
Still, the fact that the company affirmed its production goals, which were revised down in January, was the best news in the report, said Jeff Reeves, analyst and executive editor of InvestorPlace.com.
“There are never any guarantees, but Elon Musk hasn’t been shy about cutting back forecasts in recent months so he certainly would have pulled back on the reins if Tesla wasn’t confident,” Reeves told Forbes. The company also managed to burn far less cash in the fourth quarter, trimming it to $276.8 million in the quarter, compared with $1.42 billion in the third quarter and $969.8 million a year ago, he said.
“It’s always about growth with Tesla, not the bottom line,” Reeves said. “But it’s also encouraging to see a smaller-than-expected loss and a cash burn that dropped significantly from Q3 to Q4.”
Tesla’s sales of zero-emission vehicle, or ZEV, credits to other automakers that need them to comply with California’s tough emissions rules, were up significantly from a year earlier, to $179 million compared with $20 million in the final quarter of 2016. Barclays analyst Brian Johnson predicted $10 million for the quarter. Exceeding the forecast provided Tesla an adjusted net loss that was slightly better than expected.
Tesla completed the integration of SolarCity into its operations in 2017 and aims to significantly boost shipments of solar panels and power storage units this year.
“We expect energy storage products to experience significant growth, with our aim to at least triple our sales this year,” Musk and Ahuja said. “We expect energy generation and storage gross margin to improve significantly in 2018 as we enter the year with a backlog of higher-margin commercial solar projects and a more profitable energy storage business due to manufacturing efficiencies from scaling.”
Capital expenditures will continue to rise in 2018, to expand output at the Gigafactory battery plant in Nevada and continued investment in production capacity at Tesla’s Fremont, California, plant, the company said. Tesla will also start investing this year to add production of the Model Y, a small electric crossover that will be the next vehicle in its lineup.
“We are going, as you suspect, to need to make some capital investments in the second half of this year, in late Q3, Q4, for Model Y. We want to wait probably three to six months before announcing any definitive plans on production location or details associated with that,” Musk said in a conference call with analysts.
His expectations for Model Y, which hasn’t yet been unveiled, are enormous.
“To give you some flavor for optimism for Model Y… we might aim for something like maybe capacity of a million units a year, just for Model Y alone. I think we’ll be able to do that for capex that is less than Model 3 capex at the half-million-unit level”, Musk said.
Notably, customer deposits for Model 3, as well as the recently announced Semi and Roadster became a major balance sheet item for Tesla, totaling $858 million at the end of 2017, up from $663 million a year earlier. While most of those funds are from the nearly half-million reservations Tesla has for the Model 3, a growing portion comes from the battery-powered Class 8 truck and high-end sports car.
Separately, Musk said that Jon McNeill, who had been head of the company’s sales and service group, had left the company. Musk said he’ll oversee those functions himself. Lyft said it hired McNeil as its chief operating officer.
“Jon is a world-class leader who brings deep experience as a highly successful entrepreneur and executive,” Lyft CEO Logan Green said in an emailed statement. “Last year, the Lyft community experienced more growth than in all previous years combined, growing rides by 2.3x and increasing market share by more than 50%. Jon is the right leader to build upon this momentum with his unique background of starting companies from scratch and managing at scale.” – Written by ,
Walmart Sues Tesla Over Solar Panels That Allegedly Caught Fire
Topline: Walmart is alleging in a lawsuit that Tesla solar panels caused fires on the roofs of seven Walmart stores, and is accusing Tesla of breach of contract, gross negligence and failure to comply with industry standards.
- Walmart claims that Tesla installed faulty solar panels that eventually spontaneously combusted and caught fire at seven Walmart stores around the country.
- The lawsuit alleges that Tesla inspectors didn’t notice defects that were visible to the naked eye, used cable connectors that weren’t compatible with one another and failed to see that loose and hanging wires were present at multiple sites.
- Walmart says in the lawsuit it believes the failures were the result of rushed installation because Tesla’s solar division “adopted an ill-considered business model that required it to install solar panel systems haphazardly and as quickly as possible in order to turn a profit, and the contractors and subcontractors who performed the original installation work had not been properly hired, trained, and supervised.”
Tesla did not immediately respond to a request for comment from Forbes.
Key Background: Tesla got into the solar business after it acquired SolarCity in 2016 for $2.6 billion. But production of its residential solar panels under Tesla has been mired with delays and plunging sales.
Just this week, CEO Elon Musk announced a revamped pricing plan in an effort to boost the slowing business. The new pricing model allows residents in six states to rent solar power systems starting at $50 a month ($65 a month in California) instead of buying them up front.
Further Reading: Read the full lawsuit here.
-Rachel Sandler, Forbes
How To Cut The Cord: The Top Smart TVs For Streaming 2019
Freeing yourself from the shackles of cable or satellite television is easier to do than you might think, especially if you have a smart or connected television.
Smart TVs have integrated internet and interactive features that allow users to stream music and videos, browse the Web and view photos. Almost every new high-end television sold within the last two years or so has smart capabilities. So how do you choose?
If you want to take advantage of streaming services like Netflix, Hulu, Amazon Prime and more, then look at these television sets.
LG C9 OLED 65-inch TV
In addition to a beautiful, detailed picture and a big soundstage, this 4K OLED sports cutting-edge connectivity, including an HDMI 2.1, and a comprehensive feature set including both Google Home and Amazon Alexa built in. It also comes with Home Dashboard, a new tool that turns the set into the central control hub of all your connected home devices—from doorbell cameras to smart thermostats to appliances like a washing machine or a stove.
On the streaming front, it provides a single place to browse and search for TV shows and movies from sites such as Hulu, Amazon Prime Video, ESPN, PlayStation Vue, and more. It also lets users rent, purchase and watch TV shows and movies from Apple’s iTunes store.
Vizio 55-inch M-Series Quantum
At under $700, the 55-inch M-Series Quantum offers a serious value in the smart TV arena. Not only does it deliver an excellent picture and sound, but it is also equipped with updated SmartCast 3.0 software, which includes support for Apple AirPlay2 and HomeKit (making it just as suitable for iOS users).
The update also has a more vibrant selection of locally installed apps, including Netflix, Amazon Video, Hulu and Vudu. Thanks to a partnership with PlutoTV, the Vizio also offers a dedicated streaming channel called WatchFree, which gives you a TV-watching experience with more than 100 free channels, including sports, news, cartoons, and movies. You can also pair the set with an Amazon Echo device for voice control with Alexa.
Sony Master Series 65-inch A9F OLED TV
If money is no object and you want a TV with loads of features, an incredible picture and terrific sound, go with the Sony A9G. The A9F is one of the first Sony Android TVs to ship with the newest version of its smart OS. The most notable names in video are preloaded, including Amazon Prime Video, Google Play Movies & TV, Hulu, Netflix, Sling TV,and YouTube. For music, Google Play Music, Pandora, SiriusXM, Spotify, Tidal and a slew of internet radio stations.
This Sony 65-incher also comes with Google Assistant, which lets you search for content, find online information, use online services and even control smart-home devices.
TCL 43S517 Roku Smart 4K TV
Great things can come in packages costing less than $400. Not only will you get a terrific picture, robust sound and a slew of genuinely exciting features, this TCL 43-inch model sports Dolby Vision HDR, Dolby Atmos audio support and integrated Roku voice search.
The Roku TV interface is uncluttered and easy to navigate, with big square tiles for all of your apps and streaming services, including Netflix and Hulu. There are also apps for major broadcasters, major sports leagues, and premium channels such as HBO and Showtime. Of particular interest to cord-cutters will be support for Sling TV, which provides a cable-like experience without the expense of a cable subscription.
Insignia 43-Inch 4K Fire TV Edition
Amazon finally seems to have a Fire TV that can compete with the Roku-powered smart sets. This 4K television with HDR support is packed with features for the Amazon faithful, with Alexa voice interaction built-in, Amazon’s huge selection of Fire TV apps, and a smart TV experience that puts Prime Video centerstage.
This 43-incher costs less than $300 and offers most of the streaming apps you would expect, such as Netflix, Hulu, HBO Go and HBO Now, as well as Amazon Prime Video. Plus, Fire TV will soon get an official YouTube app packed with services such as YouTube Kids, YouTube Music and (most critical for cord-cutters) YouTube TV.
-Chuck Tannert, Forbes
Multi-Disciplinary Education In The 4IR Era
There is an adage that states “if you want to know the future of a nation, study the behavior of its teachers”.
The most potent force for political, economic and social progress in society is education. The measure of how great a nation will rise is determined by how many people in its population are educated. The African continent today has a total purchasing power parity gross domestic product (GDP) of $6.7 trillion, and a population of 1.2 billion people.
According to the United Nations Educational, Scientific and Cultural Organization (UNESCO), in 2016, sub-Saharan Africa had a literacy rate of 76% compared to 89% in South and West Asia, 87% in the Arab states and 98% in the developed nations.
This literacy rate in sub-Saharan Africa is far from adequate, and calls for urgent and practical action to improve it.
READ MORE | Amid Trade Wars, What Africa Must Do
We are living in an era characterized by the fourth industrial revolution (4IR) where technologies such as artificial intelligence (AI) and blockchain are changing all aspects of our lives. Factories are automating. Because of these changes, the nature of work is changing.
Many jobs are disappearing altogether, and new types of jobs are being created. For example, we now have jobs that did not exist 20 years ago, such as Data Scientists. AI is now able to diagnose severe diseases such as pulmonary embolism, epilepsy and leukemia complementing the work of medical professionals. Because of the rapid automation in the medical field, doctors today require an in-depth knowledge of technology.
These changes in society because of 4IR require new sets of skills. Are our education systems ready to capacitate our people with the requisite skills to tackle the problems of 4IR? Do we have enough teachers at all levels of our educational systems to be able to give our people skills that will make them useful in the 4IR era? Do we have enough educational institutions to be able to skill our people? Unfortunately, the answers to these two questions are in the negative.
READ MORE | Data Is The New Gold
Given that we do not have enough teachers nor educational institutions to provide a critical mass of our people the requisite capabilities that will help them survive in the 4IR, what is to be done? One way of tackling this problem is to take a lesson from the first Indian Prime Minister, Jawaharlal Nehru, who realized that for India to thrive in the 20th century, it needed to invest in elite technical education. In this regard, he introduced the Indian Institutes of Technology (IIT).
Nehru had this to say in 1956 at the first convocation address of the first IIT in Kharagpur, a city in West Bengal: “…Here in the place of that Hijli Detention Camp stands the fine monument of India, representing India’s urges, India’s future in the making. This picture seems to me symbolical of the changes that are coming to India.”
It is vital that African countries create a few elite institutions that will drive the African continent into the 4IR. The Pan-African University supported by the African Union is a good start, but we can do more.
Additionally, these elite institutes should not be limited to higher education only but must also focus on primary and secondary education. One example in Johannesburg is the African Leadership Academy (ALA), which targets gifted 16-to-19-year-olds. Today, the ALA has alumni from 46 different countries making an impact on the political, economic, and social aspects of the African continent.
READ MORE | The 4IR Strategy To Move Forward
For us to thrive in the 4IR era also requires our educational experience to be multi-disciplinary. In our limited institutions of higher learning, students enrolled for programs in the human and social sciences must also study technological subjects.
Those enrolled in technological programs must study human and social subjects. Technological subjects should focus on the issues that confront the African continent, such as affordable and appropriate technology, limited and incomplete data, and cost-effective manufacturing.
The human and social subjects should focus on the urgent issues facing Africa today, such as social cohesion, connectivity, stability, conflict and unity. Due to the limitations of physical infrastructure and good teachers, African countries should pull their resources together and invest in online platforms to facilitate education through modern techniques such as blended and augmented learning.
The outcome of the education system, whether at primary, secondary, or tertiary levels, should be logical, numeracy and verbal skills. These skills will give our people the capacity to tackle the challenges of the 4IR such as coding, problem-solving, critical thinking, creativity and decision-making.
– Tshilidzi Marwala is a professor, Vice-Chancellor and Principal of the University of Johannesburg. He deputizes President Cyril Ramaphosa on the South African Presidential Commission on the Fourth Industrial Revolution.
Subscribe to Forbes
Comedian Jim Gaffigan Rakes In $30 Million By Ditching Netflix And Betting On Himself
Mr Eazi On A Global Campaign To Mentor And Fund African Artists
Walmart Sues Tesla Over Solar Panels That Allegedly Caught Fire
Trevor Noah Is Laughing All The Way To The Bank
Executive Travel: Reneilwe Letsholonyane’s Manchester
Arts2 days ago
Trevor Noah Is Laughing All The Way To The Bank
Cover Story3 weeks ago
Feisty And Fearless Pioneers Thandi Ndlovu & Nonkululeko Gobodo
Entertainment4 weeks ago
The Movie Buff With A Happy Ending In Business
Wealth3 weeks ago
Jeff Bezos Sells About $1.8 Billion Worth Of Amazon Shares In Three Days
Opinion4 weeks ago
Amid Trade Wars, What Africa Must Do
Wealth2 weeks ago
Jeff Bezos Unloads Another $990 Million Worth Of Amazon Shares In Early August
Entertainment4 weeks ago
Is Celluloid Dead?
Entrepreneurs1 week ago
The Maverick In Tech