MARIA: WELCOME BACK.
TESLA DUE TO REPORT FIRST
QUARTER DELIVERIES TODAY.
WE'RE EXPECTING A DECLINE IN
DELIVERIES.
JOINING US RIGHT NOW IS AUTO
REPORTER TIM HIGGINS.
GOOD TO SEE YOU THIS MORNING.
THANK YOU FOR BEING HERE.
>> THANK YOU.
MARIA: WHAT ARE YOU EXPECTING
IN TERMS OF DELIVERIES FOR
TESLA, HOW WILL YOU ASSESS THE
COMPANY'S PERFORMANCE TODAY?
>> IT WILL BE A MESSY QUARTER.
WE'VE BEEN GUIDED IT WILL BE
DOWN.
ANALYSTS ARE EXPECTING IT DOWN
18% FROM THE FOURTH QUARTER.
THAT'S BECAUSE, A, TESLA
SUGGESTED THERE WAS A
PULL-FORWARD OF SALES IN THE
LAST QUARTER BECAUSE OF PHASING
OUT OF FEDERAL TAX CREDITS,
PEOPLE RUSHING TO GET CARS.
AND B, THEY'RE SHIPPING THE NEW
MODEL 3 TO EUROPE AND CHINA FOR
THE FIRST TIME AND IT'S BEEN BY
ALL ACCOUNTS MESSY AND DIFFICULT
AS THEY USED THEIR CALIFORNIA
FACTORY TO BUILD THE CARS AND
SHIP THEM OVERSEAS.
>> I FIND IT INTERESTING, THIS
USED TO BE ABOUT PRODUCTION WITH
TESLA.
AND THE NUMBERS ON PRODUCTION
AND NOW WE'RE MOVING TO THE
DELIVERY STORY AS YOU MENTIONED.
SOME OF THE HICCUPS THEY'RE
HAVING THERE.
ELON MUSK TWEETED OVER THE
WEEKEND THAT AMAZING WORK BY THE
TESLA DELIVERY TEAM ESPECIALLY
IN EUROPE AND CHINA.
ANYTHING TO MAKE OF THAT,
ESPECIALLY AS HE'S COMING UP ON
A TRIAL, A COURT DATE WITH THE
S.E.C. ON THURSDAY ABOUT HIS
TWEETS AND BEING HELD IN
CONTEMPT THERE.
>> RIGHT, THE QUESTION REALLY
HAS BEEN FOR A FULL BETTER OF
WEEKS NOW, WHAT EXACTLY IS THE
COMPANY PROJECTING FOR SALES AND
PRODUCTION THIS YEAR.
THERE'S BEEN A COUPLE STATEMENTS
OUT THERE, MOST RECENTLY SEEMS
LIKE ELON MUSK IS SUGGESTING HE
THINKS THERE'S DEMAND FOR ABOUT
HALF A MILLION MODEL 3s.
THE QUESTION THAT I THINK A LOT
OF ANALYSTS HAVE IS AT WHAT
PRICE POINT.
THE COMPANY'S BEEN SELLING THEM
ON AVERAGE LAST YEAR FOR ABOUT
$57,000.
BUT IN THE LAST FEW MONTHS,
TESLA'S BEEN PUSHING TO BRING
THAT PRICE DOWN TO $35,000,
WHICH HAS SPOOKED SOME INVESTORS
WHO ARE CONCERNED PERHAPS THAT
THEY PEAKED ON THAT PRICE, THAT
THERE'S NOT AS LARGE A MARKET
FOR THE MORE EXPENSIVE, MORE
PROFITABLE VERSION.
NOW THERE'S A RUSH TO GET THAT
PRICE DOWN.
>> TIM, GOOD MORNING.
MITCH ROCHELL.
ONE OF THE THINGS I NOTICED THAT
THE MODEL 3 IS THAT 29% OF ALL
NORWEGIAN CARS ARE THE MODEL 3.
SO, I MEAN, IS THE LOGICAL MOVE
TO BEGIN TO HAVE PRODUCTION
OFFSHORE?
BECAUSE JUST MAKE THEM HERE AND
SHIPPING THEM THERE DOESN'T SEEM
TERRIBLY EFFICIENT.
>> YEAH, FOR TESLA IT IS RIGHT
NOW A BALANCE OF CASH AND
BALANCING THE GROWTH OF THE
BUSINESS VERSUS THE DEMANDS OF
BEING PROFITABLE.
TESLA HAS PUT ITS EFFORTS RIGHT
NOW TO BUILD A FACTORY IN CHINA
WHERE THE WORLD IS REALLY IN A
HUGE RACE TO GET ELECTRIC
VEHICLES THERE.
AND THERE'S BEEN TALK ABOUT
DOING ONE IN EUROPE AS WELL.
NORWAY IS AN INTERESTING PLACE.
A LOT OF GOVERNMENT INCENTIVES
ON ELECTRIC VEHICLES THERE AT
THE FEDERAL AND LOCAL LEVELS TO
GET PEOPLE INTO ELECTRIC
VEHICLES.
YOU SEE THAT HERE IN THE U.S.
WHERE THE INCENTIVES ARE PHASED
OUT FOR TESLA VEHICLES AND
QUESTIONS ABOUT DOES THAT MAKE
THE MODEL 3 TOO EXPENSIVE
WITHOUT THAT.
DAGEN: I HAD A CONVERSATION
OVER THE WEEKEND WITH SOMEBODY
I'M REALLY CLOSE TO, WORKS IN
THE TECHNOLOGY INDUSTRY, ABOUT
HOWEVER MAJOR AUTOMAKER IN THE
WORLD, EVEN LUXURY AUTOMAKERS,
OUTSIDE OF TESLA, THEY DON'T
EMPLOY ANYBODY WHO KNOWS HOW TO
WRITE SOFTWARE.
THE INTERFACES ON THESE CARS ARE
GLITCHY AND AWFUL.
I DON'T CARE IF IT'S A FORD OR A
GM OR EVEN A BMW.
WHERE IS THAT OPPORTUNITY FOR
TECH COMPANIES?
JUST SEEMED -- I'M KIND OF
DUMBFOUNDED BY THE FACT THAT
SOME MAJOR TECH COMPANY OTHER
THAN TESLA HASN'T COME ALONG AND
BOUGHT AN AUTOMAKER OR REALLY
TRIED TO MAKE A CAR THAT APPEALS
TO MILLENNIALS.
BECAUSE MILLENNIALS DON'T CARE I
DON'T THINK ABOUT THE WAY THE
WHEEL FEELS.
THEY CARE ABOUT THE EASE OF
CONNECTIVITY BETWEEN THE PHONE
AND THE CAR INTERFACE.
>> WELL, YOU'RE HITTING ON A
HUGE ISSUE THAT'S FACING THE
AUTOMOTIVE INDUSTRY.
AS CARS MOVE TOWARD
ELECTRIFICATION, NOT TALKING
ABOUT HORSEPOWER AND THAT SOBT
OF THING -- THAT SORT OF THING,
THE REAL WAY CAR COMPANIES WILL
DIFFERENTIATE THEMSELVES IS
THROUGH THE TOUCH, THROUGH THE
SCREEN, THROUGH THE DIGITAL
INTERFACE AND IF YOU LOOK AT THE
HISTORY HERE, THAT'S BEEN A
STRUGGLE FOR THEM.
LOOK AT COMPANIES LIKE GOOGLE
AND APPLE, REALLY TRYING TO PUSH
THEIR WAY INTO THE CAR, INTO
THAT DIGITAL ECOSYSTEM, IT COULD
BE A POTENTIAL THREAT FOR CAR
COMPANIES AROUND THE WORLD.
YOU SEE SOME CAR COMPANIES
INVESTING IN SOFTWARE
DEVELOPMENT, BUT THEY DON'T HAVE
A CULTURE OF THAT KIND OF
DEVELOPMENT THERE.
MARIA: THE NATIONAL HIGHWAY
TRAFFIC SAFETY ADMINISTRATION IS
LOOKING INTO CAR COMPANIES,
HYUANDI AND KIA.
WHAT DO YOU MAKE OF THIS STORY,
THE AUTOMAKERS HAD VEHICLES
SPARK NON-COLLISION FIRES,
INJURING MORE THAN 100 PEOPLE.
HOW SERIOUS IS THIS?
>> WELL, QUITE SERIOUS, A NUMBER
OF PEOPLE INVOLVED IN THIS AND
IT COMES ON TOP OF A PREVIOUS
RECALL BY THOSE CAR COMPANIES
REGARDING FIRES.
THE ATTORNEY GENERAL IN
CONNECTICUT HAS SUGGESTED THAT
THEY ARE DOING AN INVESTIGATION
INTO THE WAY THESE COMPANIES
HAVE BEEN DOING RECALLS.
WHAT INVESTORS ARE -- IT MAKES
THEM JITTERY AND ANALYSTS ARE
TRYING TO FIGURE OUT WHAT'S THE
ULTIMATE COST GOING TO BE ON
SOMETHING LIKE THIS.
WE'VE SEEN IN PAST RECALLS THAT
IF CAR COMPANIES TRY TO GO TO
MORE COMMODITYIZED PARTS, YOU
SEE ONE RECALL AND IT
SEE ONE RECALL AND ET
SEE ONE RECALL AND EXPLODES INTO
NIEWJ
HUEWJ
HUGEJ