Where at Tesla the profits really come from

Tesla founder Elon Musk has admitted that he was on the verge of bankruptcy. The stock market knew nothing of this. The question that remains is …

Tesla founder Elon Musk has admitted that he was on the verge of bankruptcy. The stock market knew nothing of this. The question that remains is how long Tesla can continue to rely on the business model with the state bonuses.

It’s hard to believe, but the glamor boy of the global electric car scene actually spoke up a notch. Elon Musk, the head of Tesla, recently admitted frankly that it wasn’t long ago that Tesla nearly went bankrupt. A fact that dossierB has been describing over and over again for a long time. Musk openly stated on Twitter that it was pretty close.

Elon Musk at the first topping-out ceremony on the construction site of the Tesla Gigafactory Berlin-Brandenburg. Grünheide, September 3rd, 2020
Elon Musk at the first topping-out ceremony on the construction site of the Tesla Gigafactory Berlin-Brandenburg. Grünheide, September 3rd, 2020

In the electronic “twittering” with a conversation partner, he spoke of the fact that the company was “only one month before bankruptcy”, particularly because of the Model 3. Musk also reports on “stress and pain” because of the Model 3.

It was precisely this car that was described in advance by alleged market experts as a beacon of hope. But then the production and delivery hell broke over the car manufacturer, who wanted to become a mass manufacturer with this car.

Musk: “The start-up phase of the Model 3 was extremely stressful and painful for a long time – from mid-2017 to mid-2019. Hell for production and logistics. ”Here is a comparison of what makes a mass manufacturer in terms of numbers: The Volkswagen Group (VW, Audi, Seat, Skoda) sold around 2.9 million vehicles worldwide in the first half of 2020,

For a long time, Tesla focused on the production numbers of the Model 3 and was considered the measure of all things. In addition, a new factory was started up in Shanghai, which did not alleviate the problems.

Because hardly anyone outside the company was aware of the concerns, the share climbed to unimaginable heights – plus 400 percent – due to the mass manufacturer’s claim, which ultimately led to a share split in order to keep the paper reasonably affordable for small investors. In the meantime, this turbulence has subsided, but the figures are still far from promising.

Because although the quarterly balance sheet is officially in the black for the fifth quarter in a row, it should be noted that Tesla’s profit is mainly based on the sale of environmental certificates, as recently criticized by a US analyst. In the car for money business, however, not a penny is left in the till. The company continues to rely on the sale of regulatory credits in the United States that exist for the sale of electric cars.

These bonuses are nothing more than emission rights with which fines due to excessively high emission values ​​can be reduced or avoided entirely. And because Tesla doesn’t offer any models with internal combustion engines, these government grants flow directly into the balance sheet.

It so happens that net income for the quarter ended September amounted to 331 million US dollars – an increase of 131 percent compared to the same quarter last year. But without the sale of these credits/emission rights to other car manufacturers with “dirty” engines, MarketWatch analyst Garrett Nelson criticizes, Tesla would not have been profitable.

Again, because it has been going on for a long time. Zachary Kirkhorn, Tesla’s Chief Financial Officer, told analysts in a conference call last quarter that that revenue from the sale of government credits will “roughly double” in 2020 compared to 2019. In the first nine months of 2020 alone, Tesla earned $ 1.179 billion in this way, according to Kirkhorn. In all of 2019, it was $ 594 million.

Here are the electric car sales worldwide in the first half of 2020

The question that remains is how long Tesla can continue to rely on the business model with the state bonuses. Because other car manufacturers have long since tackled the change to electromobility (see graphic above).

On the one hand, the competition in the e-car market will continue to grow, which on the other hand means that at Tesla, the million-dollar income from the sale of the credits will be less or will disappear completely, as other car manufacturers with electric vehicles on offer collect their own bonuses.

Already after the figures for the second quarter, analyst Gordon Johnson of GLJ Research indicated that the business model is based on “borrowed time” and that profits are likely to decline again soon, as the company has so far only been able to rely on government credits. Tesla is trying to counteract this with price cuts in order to be able to sell more cars in the event that these government grants are soon to become significantly fewer. The price for the Model S was recently revised downwards. And apparently, the automaker is considering lowering prices overall.

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Belgium in Brief: Is Bpost Cancelling Christmas?

Elon Musk, CEO of electric car manufacturer Tesla and founder of SpaceX has become the world’s third richest man according to the latest Bloomberg …

In the middle of discussions about if and how Christmas can be celebrated during a pandemic, Belgium’s postal service Bpost announced that it would no longer deliver all packages to the home address of customers.

Following news that contracted business clients of Bpost will be charged €1 extra for Christmas packages, the service has now said it will be unable to deliver all packages at home, forcing people instead to pick up the package at one of the 2,300 pick-up points across the country.

Last week, on Tuesday and Wednesday, Bpost handled more than 520,000 packages a day, and traffic is expected to go above 600,000 a day in the week between Black Friday and Sinterklaas – from 27 November to 4 December.

Since non-essential retail is closed for now due to the coronavirus restrictions, and Sinterklaas and Christmas are approaching, more and more people are turning to online shopping.

Even if the shops manage to open before the festive season, many people will prefer to shop from home rather than face crowded shopping streets.

For more news about what the Christmas period will look like in Belgium, we will have to wait until Friday, when the Consultative Committee is expected to discuss options and possibilities.

While we wait for clarity, here’s the news.

Belgium in Brief is a free daily roundup of the top stories to get you through your lunch break conversations. To receive it straight to your inbox every day, sign up below:

1. Coronavirus: around 2 million Belgians to get priority vaccination

Belgium will offer priority vaccination against Covid-19 to 20% of its population, amounting to over 2 million people, Prime Minister Alexander De Croo announced.

Health personnel, people over 65 years old and citizens with health conditions are set to be first in line to get vaccinated for the new coronavirus.

“Those three groups make up about 20% of of the population,” De Croo said. “By protecting them first, we can avoid putting too much pressure on hospitals if the virus started circulating again, because it is vulnerable people that end up in the hospital quicker.” Read More.

2. 440,000 citizens in Belgium are on long-term sick leave

There are some 440,000 people on paid long-term sick leave in Belgium, a figure that does not include the self-employed and public servants.

Social Affairs Minister Frank Vandenbroucke has said that he aims to make reintegration of citizens on long-term sick leave a priority in the next few years. Read More.

3. Coronavirus infections in Belgium drop below 4,000 new cases per day

The number of daily new coronavirus infections has dropped below 4,000, according to the latest figures published by the Sciensano public health institute on Monday.

Between 13 and 19 November, an average of 3,672.3 new people tested positive per day over the past week, which is a 28% decrease compared to the week before. Read more.

4. Elon Musk now world’s third richest man, after Jeff Bezos and Bill Gates

Elon Musk, CEO of electric car manufacturer Tesla and founder of SpaceX has become the world’s third richest man according to the latest Bloomberg Billionaire ranking, following a surge in Tesla’s market value.

According to the Bloomberg index, Musk’s wealth is valued at $121 billion. Tesla is the world’s most valuable car manufacturer, with a market value of nearly 400 billion dollars. Musk, who owns 20% of Tesla’s shares, has seen his fortune increase by $90 billion this year.

With this figure, he has overtaken Facebook’s CEO Mark Zuckerberg whose fortune stands at ‘only’ $104 billion. Read More.

5. Coronavirus immunity lasts up to six months, study shows

People who have contracted Covid-19 are unlikely to be re-infected within six months after recovery, according to a study by the University of Oxford and the University Hospitals of Oxford.

The research, presented on Friday and yet to undergo peer reviews, is based on tests conducted between April and November 2020 on 12,180 employees of the university’s hospitals. The health workers were tested regularly to determine whether they had antibodies and to see if they had COVID-19. Read More.

6. Brussels student out of danger after balcony fall at lockdown party

A Brussels student is out of danger following a fall from a fifth-floor apartment balcony during a lockdown party at the weekend.

The Brussels-Ixelles police zone received a nuisance complaint out of Ixelles’ Avenue de l’Université, near the main campus of the Université Libre de Bruxelles, at around midnight on Friday.

As police attempted to enter the property, one of the patrols heard a noise coming from around the building’s garages and discovered that one attendant had fallen down from the balcony of the fifth-floor flat. Read more.

7. Antwerp dad and daredevil baby make headline news in US

Kenny Deuss is a sound engineer from Antwerp for an events organiser, and the closure of the sector means he can stay home to look after Alix, now 18 months old.

And that is why new now has 40,000 followers on Instagram, articles in the Daily Mail and a report on Fox News in the US – Alix is the star of her own Instagram adventure, made up of photos of her in all manner of hair-raising, extremely dangerous situations, like sitting on the edge of a cliff, rocketing through space or taking a tour in a washing machine. Read more.

Maïthé Chini

The Brussels Times

These are the interview questions candidates hate the most

If you’re ever in a position to be interviewed by Elon Musk for a job at Tesla or SpaceX, chances are he’ll ask you this: “You’re standing on the surface …

According to Ashlee Vance, who wrote the Musk-authorized biography Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future, most candidates come up with the correct answer—the North Pole. But Musk will then ask where else it could be? Few can come up with option two, which, Vance shares in his book, is somewhere close to the South Pole, where, if you walk one mile south, the circumference of the Earth becomes one mile.

And if the thought of being in an interview with Musk sounds exhausting, you’re not alone. Resume.io, a résumé-building platform, recently did a survey to find out the worst questions candidates are asked, and the first one was an unusual one such as Musk’s.

The worst offenders

“How many gas stations are there in the United States?” was ranked the hardest question to answer.

“It’s a bit of a trick question,” says Rolf Bax, chief human resources officer at Resume.io. “Unless you’re interviewing for BP, your interviewer doesn’t really need this figure. Rather, they want to see how you think.”

Vance writes that “[Musk] tends to care less about whether or not the person gets the answer than about how they describe the problem and their approach to solving it.”

Another question candidates dislike is when they’re given a challenge like this: You have one minute to persuade me to buy this pen.

Fortunes 2020: Larry Page, Co-founder, Alphabet

Now mainly occupied with research on transhumanism, like other Californian billionaires such as Peter Thiel and Elon Musk. The quest to extend the …

When we think of the Gafa, typically the first name that springs to mind is Jeff Bezos, Mark Zuckerberg or Steve Jobs. Ironically, the average man on the street would have to Google the name Larry Page to find out who he is. Yet his impact on early 21st century life has arguably been greater.

Bona-fide geek

Born in 1973 into a Jewish family in Michigan, his parents were part of the first generation of IT ‘geeks’. His father, Carl Victor, who died in 1996, was a professor of computer science and AI at the University of North Carolina. His mother, Gloria, was a programming teacher.

So it was logical, then, that the young Larry Page was inculcated in a tech universe made up of lines of code, scientific journals and discussions of a highly intellectual nature. Nikola Tesla was one of the idols of the young Page, who was the first student at his school to hand in his homework computer typed.

“Nikola Tesla was one of the idols of the young Page, who was the first student at his school to hand in his homework computer typed”

Slowly, Page began to deviate from his parents’ career trajectory: he wanted to put his IT nous into practical, rather than academic, use. A computer science graduate from the University of Michigan, Page moved to the Tech-Mecca of California and joined Stanford, a breeding ground for entrepreneurs in Silicon Valley. There, in 1995, he met Sergey Brin. At first, they were not close, but a passion for all things computer and a shared vision for a post-college business drove them together. In 1998, in the favored domain of tech startuppers, the suburban garage, they created Google.


Transhumanist

As a web engineer, Page occupies a lead role in the Google story. He is the inventor of the famous webpage ranking system which consists of bringing up the most popular search results to the top of the search engine page.

Alphabet has grown to such a size that bankruptcy or financial trouble is not on the agenda, even in these trying economic times. Many states do not dare attack an entity that has become, in some respects, as powerful as them. On the financial side, things continue to go well for Larry Page, who owns 26.1% of the group’s shares and has a fortune of around $80 billion. Freed from some of his operational tasks, Page plans to focus more on his family, which includes his wife, the biologist Lucinda Southworth, and his two children, born in 2007 and 2009.

CEO of Google then of the parent company, Alphabet, Page vacated the position in December 2019 in favor of Sundai Pichar. Now mainly occupied with research on transhumanism, like other Californian billionaires such as Peter Thiel and Elon Musk.

The quest to extend the life of mankind through technology might sound far-fetched, but as the co-founder of Google likes to repeat, “anything you can imagine is probably achievable.”

Especially if you have almost unlimited means at your disposal.