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Tesla wants potential EV customers to stop worrying about electric range when it comes to the Model S

Tesla Motors recently made a coast-to-coast road trip possible in the U.S. with its all-electric Model S sedan, and the automaker wants travelers in Europe to have the same experience.

According to Tesla, there are big plans for an expansion of Supercharger stations throughout Europe in 2014. These stations rapidly charge Tesla's Model S for free, where a full charge takes around 75 minutes. New stores and service centers will be making their way to select European countries as well.

Currently, Tesla has 14 Superchargers throughout Norway, Germany, Switzerland, and the Netherlands. But the automaker is looking to place more within those countries and expand to the UK, France, Spain, Italy, Austria, Denmark, and Sweden by the end of the year. It's not clear how many will be placed total.

 
Tesla will also open 30 new service centers and stores around Europe. Service centers will be placed in Sweden, Italy, and France for the first time, and stores will open in Birmingham and Manchester in the UK, Lyon and Bordeaux in France, Gothenburg in Sweden, and many more. 

Tesla wants potential EV customers to stop worrying about electric range when it comes to getting from point A to point B, and placing more Superchargers between major cities and frequented destinations is the way to do it. 

The automaker recently placed more Supercharger stations between Los Angeles and New York City in the U.S. as a way of relieving range anxiety for its American users. 

Tesla is making its way into China as well, where CEO Elon Musk recently said that the country might match the U.S. in volume "as early as next year" regarding the Model S. 

Source: Tesla Motors



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RE: Nice.
By amanojaku on 3/7/2014 3:01:52 AM , Rating: 5
Reclaimer, I'm not a fan of government subsidies or loans, either. However, you either refuse to acknowledge all of the details. I'm not sure if you're directing your anger and/or disgust at Musk or Tesla (or both), but here's what I know:

Musk was a millionaire long before he was associated with Tesla. He had at least $22M in 1999 from the sale of Zip2. He then purchased PayPal, and later sold it to eBay and received $165M in stock in 2002. Much of that was invested into SpaceX ($100M) and Tesla ($74M). Considering his $1 salary at Tesla, nearly all of his wealth comes from his stock (SpaceX is private, so I'm unaware of any salary info).

Tesla was initially funded by private investors, and raised $278M over six financing rounds. After its IPO, it raised another $30M in private funding.

Government funding came in the form of loans from California ($10M) and the federal government ($465M). I think you live in NC, so you probably don't care how California spends its money. The federal loans were part of the Bush-era Advanced Technology Vehicles Manufacturing Loan Program approved by Congress. Tesla paid all of it back, including $26M in interest. At the time the loan was granted, Tesla was making a profit. Consider, too, that the loan was far less than what was granted to Ford and Nissan, who have yet to repay their loans. Tesla has not had a government loan since.

As far as the supercharging stations are concerned, Tesla started building them in October 2012. There are 65 in the US already, 14 in Europe, and they cost $39.5M to build ($500K each). I don't see how Tesla's building stations in Europe negatively affects its progress here in the US. From what I can see, Musk is delivering what he promised. I'm also at a loss as to why you care. You've made it clear that you like your ICE, so how does Tesla affect you?


RE: Nice.
By sorry dog on 3/7/2014 1:05:10 PM , Rating: 2
quote:
Tesla paid all of it back, including $26M in interest. At the time the loan was granted, Tesla was making a profit. Consider, too, that the loan was far less than what was granted to Ford and Nissan, who have yet to repay their loans. Tesla has not had a government loan since.


As I've said above, Telsa paying these loans back is not exactly a sign of financial health. To the contrary, why would Telsa want to payoff a loan with an interest rate of 1.6%?
A quick google search reveals the Ford and Nissan interest rate is 5% which, although 3 times Telsa's rate, right now is a pretty good cost of capital and you don't see those companies paying off early.

Now 2009 wasn't exactly a favorable year to obtain capital through equity offering, and things changed a lot in 3 years, but I company that ditches amazing low cost loans for equity isn't exactly confidence inspiring....


RE: Nice.
By sorry dog on 3/7/2014 1:39:30 PM , Rating: 2
I got curious and found another article that goes into further detail...

quote:
He explained in his Seeking Alpha article that the Leverage Ratio terms prohibited Tesla’s consolidated debt from exceeding 6.5 times Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) for the 4th quarter of 2012, and 4.5 times EBITDA for each quarter in 2013. Because the company could not meet those standards, DOE lend-o-crats awarded a waiver in Feb. 2012 that delayed the effective dates of those ratios, but also required Tesla to set aside its loan payments ahead of time in a segregated account. A second waiver that delayed the Leverage Ratio requirement was granted on March 1, 2013, but the requirements to accelerate repayment of its loan became even more onerous as a result. “Both waivers were presented to the market as triumphs of financial engineering,” Petersen wrote, “but they were basically an up-market equivalent of a credit card issuer increasing minimum payments for a troubled cardholder.” Because, according to Petersen’s analysis, Tesla had no chance of raising 2013 earnings (EBITDA) high enough (an estimated $220 million, which Tesla would fall far short of) to cover the Leverage Ratio requirements for the year, the company would need to either renegotiate or repay the loan by the end of the year. Those facts were not disclosed in its SEC filings, nor was Musk forthcoming about the situation on a May 7 1st quarter conference call, after he was asked by a participant about the need to raise more capital. “We don’t have any plans right now to raise funding,” Musk responded. “Potentially we expect to be – we were positive cash flow in Q1 and we expect to be there relatively sort of neutral on cash flow in Q2. But if it was possible, we could be optimistic about raising a round, but we have spent no time on that at all.” But only eight days later Tesla announced a $1 billion public offering backed by heavy hitters Goldman Sachs, JP Morgan and Morgan Stanley, which enabled the payback of the $465 million DOE loan and “shore(d) up a dismally feeble balance sheet that had $124.7 million of equity and a $14.2 million working capital deficit on December 31, 2012,” Petersen wrote.


http://blog.heartland.org/2013/09/tesla-had-to-rep...

So, it appears that at best Musk in withholding information and at worst possibly committing investment fraud.

According to Yahoo finance TSLA market cap is 30.55 billion while Ford's market cap is 61.54. Ford's operating income for 2013 is 5.4 billion. Telsa's is negative 61 million.

Anybody else see a disconnect? I'd short TSLA stock right now, but I bet it's hard to find brokers who can borrow the shares...not to mention by its very nature, it can be hard to predict when financial lunacy will come back to reality.


RE: Nice.
By amanojaku on 3/7/2014 1:56:28 PM , Rating: 2
No one said Tesla is financially healthy TODAY. It doesn't sell enough cars to be self-sufficient and everyone knows this.

Reclaimer's argument is that Tesla exists due to government funding. That's not entirely true, and I pointed this out in my post. Tesla has done what all large companies have done: ask for outside funding to build and expand its business. This is an age-old practice. Reclaimer wouldn't care if Tesla got ALL of its funding from private companies. However, since the government loans were available it was a no-brainer to seek them. Considering the amount, and the positive press, it is likely that Tesla could have raised this privately, but loans don't come with investor strings attached (board seats, a desire to interfere with the business, etc...)

The fact that Tesla had to pay the government loan back by a certain date is immaterial. It DID pay back the loan, because it COULD, and this was accounted for in its loan terms. Ford and Nissan haven't paid them back yet because they CAN'T, and this was accounted for in their loan terms. You're arguing an entirely different point from the OP.

As a follow up to your second reply, and other posts, your sources are biased. They're conservative groups, and Heartland in particular is critical of government spending, so I wouldn't expect objective analysis from either.


RE: Nice.
By sorry dog on 3/7/2014 3:18:55 PM , Rating: 2
quote:
Reclaimer's argument is that Tesla exists due to government funding. That's not entirely true, and I pointed this out in my post.
I agree with you on it's continued existance, yet it's hard not to think that the DOE loan was offered for political reasons rather than one that made financial sense.

The main thing I want to make clear is that there is a lot of Pro-Telsa talk that uses the loan being paid back early as evidence that Tesla is successful as company. That sound good on it's face, yet when you look deeper at the circumstances of the loan it actually shows financial weakness rather than strength.

The sources I linked to may generally be biased, yet enough facts are laid out such as why on earth would Tesla pay off a 1.6 percent loan, unless there are other terms that would require it. The article states that certain financial health ratio criteria (which are common on large project loans) were likely to put Tesla in default, and since it was a DOE loan, making modifications to the terms would not go unnoticed. Getting another loan of that size would be difficult and probably impossible at that rate, so Musk turned to the equity market which had improved dramatically since the loan originated. Problem is possibility of default was mentioned in any filings and, unless the article is lying, Musk even down played the possibility of other funding on a conference call only days before the equity offering announcement. Some might say that was shrewd, but it can also be called dishonest.

As for Ford and Nissan, I'm sure they could cover the loans if they had to, but probably not at the same rate... most of Fords bonds are trading over 5%, so it's cheap money for them. Compared that to Tesla, who if not for Goldman's equity placement ability, if they had to float a bond two years ago, what rating would S&P or Moody's likely assign to it?

Considering their cash performance, I'm guess it would something closer to junk status rather than Ford's investment grade BBB- status.

Anything I've said so far does not reflect on my opinion of the product they sell. I just wonder if the conviction some have about their product becomes misplaced onto to Tesla as a company.


RE: Nice.
By Reclaimer77 on 3/7/14, Rating: 0
RE: Nice.
By weaponzero on 3/7/2014 4:58:58 PM , Rating: 2
quote:
People ARE saying that...


Because Tesla is financially healthy.

quote:
Tesla is the company it is today because of the Government loan. The massive tax subsidies, and of course the California carbon credit scam designed to prop them up at the cost of other automakers.

Now I'm not saying Tesla wouldn't be around today without those things, but it's hard argue they've been essentially crutched by the American taxpayer every step of the way.


The loan helped but was not crucial, considering how fast they repaid the loan they could have taken the loan from anywhere. Obviously since the government offered the cheapest loan they took the most financially sound option.

The tax subsidies are completely irrelevant. Do you honestly think 6-10% in tax credits would effect a company who can't keep up with demand?

And what California carbon credits? If you are talking about ZEV credits. They do not govern carbon dioxide or any global warming. They govern local pollution like NOx(smog and acid rain), O3(lung damage) and etc. You could make an EV that gives off nothing but CO2 and still make ZEV credits. That said, as of Q4, Tesla made 0$ in ZEV credits.

quote:
They borrowed from Peter to pay Paul, as the saying goes. Musk's bookkeeping is borderline criminal. His non-GAAP numbers nonsense. Tesla is a bubble waiting to burst.


There is nothing criminal about it. And there is nothing non-sensual about non-GAAP numbers. At issue is that Tesla introduced a new way of buying cars which is a financing with buyback component. GAAP has no way of accounting for it, so they are forced to file it under lease accounting which makes Tesla break up the earnings by month. So despite having 100% of the money on hand, Tesla has to file it in pieces. Kind of like some DMVs make you fill out a form stating how many gallons of gas your electric car has.(And 0 is not an option). In due time, GAAP will have to update their rules to account for this from of financing cars.


RE: Nice.
By weaponzero on 3/7/2014 5:12:39 PM , Rating: 2
quote:
why would Telsa want to payoff a loan with an interest rate of 1.6%?


Other then the fact the industry was willing to give Tesla a loan at 1.5%?

quote:
A quick google search reveals the Ford and Nissan interest rate is 5%


No, a quick google says their interest rate is around 2%. Since 1.6% is around 2% I am guessing their rate is very similar.


RE: Nice.
By sorry dog on 3/7/2014 5:41:55 PM , Rating: 1
quote:
Other then the fact the industry was willing to give Tesla a loan at 1.5%?


That's not what happened. Musk stated they had enough liquidity on hand specifically mentioning the DOE loan, but shortly after that a large stock offering was announced. The offering pretty much financed the DOE payback. This is not unusual in corporate finance. However, 1.6% is VERY cheap money, and doing an offering to because the company is likely to default on the loan is remarkable... remarkable enough that it probably should have been disclosed. Since that time the stock has done O.K. so nobody is bitching, but had it not you can bet some shareholder suits would be in the mail. I think it's worth noting that a pretty big financing gamble had to be made to keep the company out of default.

Ford's DOE rate may be lower, what I read was general about it, however it's all the more reason Ford would not pay the loan back... because it's a good deal...and further proof TSLA was going to default on theirs.

As for Telsa making money... according to Dec 2013 filing,

EBITDA is negative 38.5 million. It's hard to invest negative profits. Considering the recent talk of plant investment, one can conclude more outside cash will be needed at some point....or maybe the DOE can give them another loan!


RE: Nice.
By weaponzero on 3/7/2014 6:32:26 PM , Rating: 2
quote:
That's not what happened.


But that is what happened, Tesla along side the public offering did a bond offering at a rate of 1.5%.

quote:
However, 1.6% is VERY cheap money, and doing an offering to because the company is likely to default on the loan is remarkable


Let us look at it hypothetically if that was true. Even if that were the case, Tesla had more than enough money to make the monthly payments on the loan. Having Tesla default on the loan due to conditions set by the loan would have been a huge blow to the loan program. Just like the previous wavers, Tesla would have just gotten another waver. Simply because they had the money to make the payments. But again, that is if it is true. Anything mentioned by Peterson about Tesla should be taken with a grain of salt. There is no indications though that Tesla would not be compliant or default on the loan as they were already compliant with the terms in 2012.

quote:
As for Telsa making money... according to Dec 2013 filing,

EBITDA is negative 38.5 million. It's hard to invest negative profits. Considering the recent talk of plant investment, one can conclude more outside cash will be needed at some point....or maybe the DOE can give them another loan!


You can invest gross profit just fine actually. EBITDA is money AFTER investments. As for financing, they did another bond offering in the tune of 1.6 billion which will cover the factory at a rate of 1.5%.


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