LNG: TESLARATI

Chinese Premier Li Leqiang announced on Tuesday that the country would extend “new energy vehicle” subsidies for two additional years. The extension aims to combat economic downturns that have arisen from the halting of vehicle production as a result of the COVID-19 pandemic by encouraging consumers to buy electric and clean energy vehicles in its bid to promote environmental sustainability.

In China, the term “new energy vehicle” applies to any car with plug-in capabilities to receive power. This term refers to battery electric vehicles (BEVs), plug-in hybrid electric vehicles (PHEVs), and fuel cell electric vehicles (FCEVs).

The extension of the subsidies will benefit electric vehicle manufacturers who sell or manufacture their products in China. Tesla is one of the companies that will benefit from the longer subsidy period as the electric automaker continues to make an impactful presence in China, the largest automotive market in the world.

Currently, subsidies in China are applied to electric vehicles with over 400 kilometers, or about 250 miles, of range. Consumers who purchase an electric car that fits the range standards are subject to receive a 25,000 yuan (USD 3,600) subsidy that decreases purchase cost, giving citizens more reason to purchase an electric vehicle instead of a petrol-based car.

According to a press release from Ideanomics, a company focused on facilitating the adoption of commercial electric vehicles, the extension of the subsidies will also allow fleet operators and manufacturers additional time to secure financing from investors. The extra time could also enable manufacturers to recover from decreases in production due to the current COVID-19 pandemic that has affected virtually all automakers across the world in the first quarter of 2020.

The addition of these subsidies could certainly help China recover from economic repression due to the coronavirus. As many portions of the Chinese economy were shut down due to the ongoing spread of the pandemic, increased subsidies that will lead to lower electric vehicle prices could encourage consumers to take advantage of cheaper car prices while they are still available.

Additionally, the Chinese Government will also begin pushing for the replacement of diesel vehicles with an emissions rating of III or higher in key cities like the Chinese capital of Beijing, a measure that will crackdown on excessive amounts of pollution that is placed into the atmosphere because of diesel vehicles. Money utilized by the Chinese Government will be used to begin replacing diesel vehicles in large cities that exceed the country’s Stage III emissions rating. This new, more strict rating would eventually clear cities high traffic cities like Beijing from heavy-duty diesel vehicles that release more than 2.1 grams of carbon monoxide per kWh of energy used, according to dieselnet.com.

The addition of these more strict and aggressive emissions standards in large cities would limit the amount of pollution that is sent into the air in areas where the population is exceptionally high, and more cars are on the road. The Ministry of Ecology and Environment in China implemented level VI fuel standards in July 2019, a measure that was used to crack down on low-grade fuel and reduce the overall presence of harmful chemicals in the atmosphere, Reuters reported.

The Ministry reports that diesel trucks accounted for just 7.8% over 300 million vehicles, but contributed to 57.3% of the total nitrogen dioxide emissions in the atmosphere. Furthermore, at least 75% of airborne particulate matter also came from diesel trucks, Reuters said.

Additional efforts to improve diesel emissions standards in the world’s largest car market could help the world work toward cleaner forms of transportation. The combination of new energy vehicle subsidies and more strict diesel truck guidelines will both contribute to a cleaner future in China, along with providing an added boost to the Chinese economy after COVID-19 made its mark in a multitude of ways.

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Tesla (NASDAQ:TSLA) stock rose over 5% on Tuesday amidst the release of investment firm Credit Suisse’s adjusted delivery estimates for the electric car maker’s Q1 numbers. Credit Suisse estimated 75,000 and 80,000 deliveries for Tesla, a number that may very well be feasible due to the effects of the ongoing COVID-19 pandemic.

Interestingly enough, Credit Suisse actually reiterated its “Underperform” rating and $415 price target on TSLA stock together with its updated Q1 estimates, as reported by StreetInsider. Yet despite this, TSLA stock has risen, which may be due to the fact that Tesla actually has a realistic chance of reaching the firm’s estimates despite a slow production quarter due to the widespread effect of the coronavirus.

Tesla’s Giga Shanghai in China, for example, was reopened in early February after an extended shutdown due to the onset of the coronavirus in China. The company’s main production facility in Fremont, California was also subjected to a production shutdown as COVID-19 began to hit the United States.

Meanwhile, Morgan Stanley analyst Adam Jonas has suggested that the coronavirus will affect Tesla’s delivery figures, though his estimates are a bit more conservative than Credit Suisse’s expectations. Jonas believes 88,000 Tesla vehicles will be delivered when the first quarter comes to a close, a number that exceeds the Swiss firm’s predictions by about 10%.

Jonas noted that Tesla will still hold a relatively strong showing for Q1 deliveries, even though the company will not be able to take advantage of its increased delivery rate during the last two weeks of the quarter, a strategy that has become somewhat expected. “Tesla typically delivers a disproportionate share of its quarter’s units in the last two weeks of the quarter,” Jonas said in a report to investors according to Barron’s.

While production at Fremont was shut down recently, Tesla employees still delivered some vehicles earlier in March. Tesla recently started delivering its new Model Y crossover this month as well, even adapting a new “contactless” system at some of its stores across the world.

Tesla closed out 2019 with a strong final quarter by delivering 112,000 cars, a majority of them being the Model 3 sedan. While delivery figures will most likely be smaller in the first quarter of 2020 because of the global pandemic, Tesla can still take positives from the quarter. Despite closing multiple production facilities, the company will probably still deliver more vehicles than it did in Q1 2019, a potential year-over-year growth compared to last year.

All is not grim and dark in the Tesla world. Automotive industry veteran Sandy Munro has predicted that Tesla will be the quickest automaker to recover from the COVID-19 pandemic due to the company’s vertical integration. If the pandemic manages to end within the next month, Tesla could still churn out a productive Q2 by ramping up to full production quicker than any other automaker.

Tesla shares are up 5.59% at $530.21 per share.

Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours.

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Elon Musk has announced that he and his companies have access to additional FDA-approved ventilators that can be shipped worldwide free of charge using Tesla’s delivery network. The announcement comes amidst requests for ventilators from medical facilities across the country and in foreign territories currently dealing with the coronavirus outbreak.

Ventilators are used to aid COVID-19 patients who are in need of assistance when breathing. Still, there has been a reported shortage in units as the number of infected cases continues to grow. This is especially prominent in hotspots such as New York, as well as in countries such as Italy.

“We have extra FDA-approved ventilators. Will ship to hospitals worldwide within Tesla delivery regions. Device & shipping cost are free. Only requirement is that the vents are needed immediately for patients, not stored in a warehouse. Please [let] me or @Tesla know,” Musk tweeted on Tuesday.

Musk has served as a notable piece in solving the ongoing ventilator shortage in the United States amidst the COVID-19 pandemic. On March 23, Musk donated over 1,200 ventilators to the city of Los Angeles. Musk purchased the ventilators from China after the country had an oversupply of ResMed, Philips, and Medtronic brand machines. The ventilators were air shipped and delivered to the city free of charge.

Musk’s effort to provide cities in need went far outside of his home state of California. On March 27, New York City Mayor Bill de Blasio reported that a late-night conversation with Musk during the prior evening resulted in the Tesla and SpaceX CEO donating hundreds of additional ventilators to the state, including the region’s public hospitals. “We’re deeply grateful,” de Blasio added. “We need every ventilator we can get our hands on these next few weeks to save lives.”

Tesla’s vehicle production facility in Fremont, California, and its Giga New York solar production plant in Buffalo, NY, are both expected to be utilized for the manufacture of ventilators. “Giga New York will reopen for ventilator production as soon as humanly possible. We will do anything in our power to help the citizens of New York,” Musk announced on Twitter following a request from NY state officials.

Tesla is expected to begin manufacturing Medtronic ventilators soon. Medtronic’s CEO Omar Ishrak announced on CNBC‘s “Squawk on the Street” that Tesla was working swiftly toward the development and eventual manufacture of the company’s PB 980 ventilator, the company’s highest-volume product.

Together with the use of Tesla’s production facilities as potential sites for ventilator production, Elon Musk’s efforts at helping the public during the ongoing pandemic has shown that the CEO and his companies are willing to step forward when the situation calls for it. The fact that the recently-announced batch of ventilators will be free of charge and delivered for free using Tesla’s network is just icing on the cake.

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The progress of Tesla Gigafactory Shanghai is one for the record books. While Gigafactory 1 in Nevada has remained roughly 30% complete for a few years now, the first phase of Giga Shanghai was completed in less than a year since its groundbreaking ceremony. Now, the facility’s massive Phase 2 area is under construction, and if recent footage of the site is any indication, it appears that the next stage of Tesla’s Shanghai factory will be completed even faster than expected.

Tesla enthusiast and drone operator Jason Yang recently visited the Gigafactory Shanghai site, where he documented the new developments going on in the area. Based on his video, the gigantic Phase 2 area, which is larger than Phase 1 and comprised of two large buildings (referred to in the Tesla community as 2A and 2B for now), is already coming together.

The drone operator even remarked that the buildout of Phase 2A’s foundations have already been completed, and steel structures are now being built. The Phase 2B area, on the other hand, now has several pile drivers on the site, hinting that work on the upcoming structure’s foundations will likely begin soon as well.

Even more remarkable was that the first roof trusses in small sections of the Phase 2A building are already being built. Tesla community members who have followed the Gigafactory Shanghai site since its groundbreaking ceremony last year would recall that the progress of Phase 1 accelerated significantly once the foundations were finished and work on the building’s roof trusses was started. With this in mind, it would not be surprising if the buildout of Giga Shanghai’s Phase 2 zone becomes even faster from this point on.

The progress of Giga Shanghai currently stands as the gold standard for all of Tesla’s construction projects. Elon Musk, for one, challenged Germany by stating that the first phase of Gigafactory Berlin should be finished at roughly the same time as Giga Shanghai’s Phase 1 zone. Musk’s challenge seems to have worked so far, with the construction in Giga Berlin continuing at a reasonably rapid pace despite the outbreak of the coronavirus. That being said, the development of the Brandenburg site has met some challenges in recent months due to protests from opposing parties, which have resulted in delays.

Very few details are currently known about the intended purpose of Gigafactory Shanghai’s second phase. Phase 1 is being used for the Model 3 line, and Phase 1.5 (a nearby building) is reportedly set to be used for powertrain and battery pack assembly. Phase 2 is nothing short of gigantic, which means that there’s a pretty good chance it will not just be used for the production of the Model Y. Perhaps a site for Solarglass Roof production for the Chinese market is in order? The next few months will likely reveal the answer.

Check out Jason Yang’s recent drone flyover of the Gigafactory Shanghai site in the video below.

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Critics of the electric car movement have long used the argument that an EV’s manufacturing process cancels out its positive environmental impact. However, a new study from multiple European universities titled “Net emission reductions from electric cars and heat pumps in 59 world regions over time,” shows that electric vehicles are more emissions-friendly than their petrol-based counterparts. 

“We show that already under current carbon intensities of electricity generation, electric cars and heat pumps are less emission-intensive than fossil-fuel-based alternatives in 53 world regions, representing 95% of the global transport and heating demand,” the report’s abstract states.

Researchers at Cambridge, Exeter, and Dutch college Nijmegen University performed the study, which concluded that the myths surrounding electric vehicles and their possibly unfavorable impact on the environment only occurs in 1/20th of the world. Poland is the most notable country where this happens is, the BBC initially reported.

Researchers based their conclusions on the fact that “lifetime” emissions, meaning the amount of pollution a vehicle contributes toward the environment over the entire duration that the car is operable,w are up to 70% lower than petrol vehicles in countries where electricity comes from renewables and nuclear. France and Sweden are just two countries that fit this description.

Meanwhile, the United Kingdom offers around 30% less pollution for electric cars.

The lead author for the study, Dr. Florian Knobloch, states, “The idea that electric vehicles could increase emissions is a complete myth.”

The study indicates that as countries begin to maneuver toward more sustainable forms of energy, these figures will rise. With many countries around the world implementing petrol-bans that will take effect between 2030 and 2040, these numbers will grow as solar, wind, and other forms of clean energy are being used on a more broad scale.

Researchers also predicted in their report that at least 50% of the world’s vehicles could be electric by 2050. If this were the case, 1.5 gigatonnes of CO2 could be eliminated from the Earth’s atmosphere, a figure that is currently equivalent to the current emissions rate of Russia.

“We’ve seen a lot of discussion about this [topic] recently, with lots of disinformation going around,” Knobloch added.

Critics of the EV movement often point to battery production as being the most polluting part of a battery electric vehicle’s lifespan. This myth was dispelled in December 2019, when the IVL Swedish Environmental Research Institute, one of the firms responsible for the original anti-EV claim, completed a new study that showed a significant decline in CO2 emissions during lithium-ion battery production.

The explanation for this decrease in emissions is due to larger-scale battery production as EVs become more popular, and their power source is in higher demand.

The only remaining issue is getting countries all around the world to adapt to the electric vehicle movement. While the UK has implemented a 2050 climate goal of bringing greenhouse gases to net-zero, it ultimately falls on a consumer’s need for a new car, and whether they will choose to buy electric. With price parity with gas vehicles expected to be reached by 2023, cost will no longer be an issue.

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The Tesla Store in Wuhan, China, the city known as the center of the Chinese COVID-19 pandemic, officially resumed business on March 30 after a two-month closure.

Vice President of Tesla China Grace Tao shared the update on Weibo around lunchtime in China on Monday. The store located at 690 Jiefang Road in Wuhan at the International Plaza was shut down in early February after COVID-19 flooded through the Chinese city of over 11 million people. Tesla decided to close all of its retail locations in mainland China on February 6.

Tao shared with her followers that, “I received a video from my colleague in Wuhan before the meeting in the morning, and the Guoguang store was officially resumed. Wuhan friends went out to work for the first time in two months.”

This marks a significant turn of events for the Chinese city that has indicated its death toll from the pandemic could be in the tens of thousands based on local cremation figures, according to Newsweek. China’s number of infected was once exponentially higher than any other country in the world. However, a plateauing in the number of cases thanks to a nationwide quarantine effort from residents has allowed retail locations in some areas to resume business.

Wuhan has allowed many businesses to reopen amidst the virus, as authorities lifted the mandatory quarantine that lasted over two months. Wuhan’s government has permitted retail locations and malls to resume business to revive the world’s second-largest economy.

While residents are now being allowed to go out and shop in local malls and shopping centers, they are required to stay within the Hubei province that the city of Wuhan is located in until April 8.

Virtually every company in the world has felt the economic effects of the COVID-19 virus, and Tesla is undoubtedly no exception. The electric car maker has made every effort to keep customers and employees in China safe.

Tesla implemented home deliveries, unlimited Supercharging, and webcam-based customer service at many of its Chinese stores. This allowed customers to continue taking delivery of their vehicles or allowed new customers to ask questions to Tesla advisors at the retail location nearest to their residence.

For employees in China, Tesla took several measures to ensure safety and health for its workers. After the Giga Shanghai production facility was forced to close down for an extended period after the Chinese New Year, it reopened on February 10. Employees at the first Gigafactory outside of the United States were shuttled to work in large buses. Still, the intense spread of the virus caused the company to explore several additional measures that included daily disinfection of the facility, and body temperature checks before employees clocked in for their shift.

The reopening of Tesla’s retail location in Wuhan brings economic support to the employees of the store, and the company overall. While Tesla has implemented several ways to limit the damage that the pandemic has done to its business in China, face-to-face interactions at the Tesla store can officially resume.

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An employee working at Tesla’s Gigafactory Nevada facility has tested positive for COVID-19, according to an email sent to Panasonic employees working on the site. The correspondence was reportedly posted on Sunday, March 29, 2020. 

As noted by News4, the afflicted Gigafactory 1 employee was onsite at the Nevada facility for an hour on March 21 before going home sick. The employee has reportedly remained at home since. The email also remarked that the specific production area where the employee worked has no connection with Panasonic’s lines in the facility. 

With an employee testing positive for the Coronavirus, Tesla has reportedly activated a safety protocol for the scenario. These protocols include a 14-day quarantine for employees identified by their EHS team, as well as thorough cleaning measures for Giga Nevada. Some of these contingencies may be adapted from Tesla China’s experience with the C-19 virus, which forced a temporary shutdown of Gigafactory Shanghai during the peak of China’s outbreak. Tesla China has successfully battled the Coronavirus so far, with no cases having been publicly reported from Gigafactory Shanghai. 

Storey County manager Austin Osborne has recently noted that Tesla’s Gigafactory Nevada facility is reducing its onsite staff by 75%, similar to the Fremont Factory in CA. Meanwhile, Tesla is gearing up to reactivate Gigafactory 2 in Buffalo, NY for the production of ventilators and other pertinent medical equipment, as noted by CEO Elon Musk on Twitter. 

Amidst the news of Tesla’s Gigafactory 1 employee, Ford and the UAW have reported that two employees from the veteran automaker’s Dearborn plant have passed away due to the Coronavirus. One employee was reportedly based at Dearborn Stamping, and another was working at the Ford Data Center at Dearborn. Ford spokeswoman Kelli Felker confirmed the news in a statement to The Detroit Free Press.

“We are saddened to report that two Ford team members who worked in Dearborn passed away after contracting COVID-19. It is a tragic reminder that the coronavirus crisis is everywhere and requires the attention of all of us. Our thoughts are with their families, friends, and co-workers during this difficult time. Nothing is more important than the health and safety of our workforce, dealers, customers, and communities. We will continue to follow the guidance from global health experts to do all we can to keep our people healthy,” Felker said. 

American automakers are currently working to help support the country’s medical infrastructure. General Motors, for one, recently put hundreds of workers on an urgent project to build ventilators for medical workers. Despite criticism from US President Donald Trump, GM is expecting to start producing ventilators in mid-April, eventually ramping to a rate of 10,000 per month as quickly as it can. GM is currently working with Ventec Life Systems for the project. 

Tesla, on the other hand, is working with Medtronic to build ventilators at its Gigafactory 2 facility in New York. In an interview with CNBC, Medtronic CEO Omar Ishrak mentioned that one of his company’s ventilators would be produced by Tesla. “We’re also opening up with other partners who have come forward. Tesla is one that I think people have heard about. One of our ventilators will be made by them, and they’re fast on track to make that as well,” Ishrak said.

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It appears that Tesla is quietly nearing the completion of Gigafactory Berlin’s ground leveling activities. Despite the region being affected by the ongoing Coronavirus pandemic, work in Gigafactory 4 seems to be continuing, and the progress of the site has been substantial. 

Images taken from Tesla enthusiasts documenting the Giga Berlin site indicate that the Phase 1 zone of the upcoming electric car production facility is populated by numerous heavy equipment. Work appears to have been consistent over the weeks, and save for a few trees and sections where animals are currently residing, the entire area has practically been leveled. 

Tesla community member @Gf4Tesla, in a recent update, remarked that ground leveling activities for Giga Berlin Phase 1 seem to be on track to get finished by the end of the week. Other areas, such as the location where the upcoming electric car factory’s workers will be arriving and departing in, is also being renovated. 

Apart from the quiet progress of the Gigafactory Berlin site, Tesla’s facility has also received a boost from Brandenburg’s State Environmental Agency. According to recent reports, the government agency now wishes to grant advance permission for foundational construction at the GF4 site prior to final approval. 

A report from publication BZ Information further added that the environmental agency is looking to push Gigafactory Berlin despite the existence of 373 objections to the project. This is reportedly due to a positive forecast for the electric car factory’s final approval by the region’s Higher Administrative Court. While admirable, such a move does come with risks, as Tesla would have to dismantle everything it has built so far if its final permits are not granted by the courts. 

Gigafactory Berlin’s progress bodes well for the electric car maker. The auto market has pretty much been stuck in limbo due to the effects of the Coronavirus, which has spread across the globe. While several regions of Europe are locked down and social distancing is encouraged, Tesla’s work in Gigafactory Berlin has still continued. This may be due to the activities in the GF4 site not requiring groups of people to work together. Instead, most of the ongoing work relies on individuals operating heavy machinery, away from their colleagues. 

If Tesla were to follow Gigafactory Shanghai’s development, the next stage of the construction would involve a groundbreaking ceremony that was expected to be attended by executives such as CEO Elon Musk. Considering the ongoing C-19 pandemic, it may not be farfetched to speculate that a GF4 groundbreaking ceremony may be postponed or canceled altogether. Or if one does happen on schedule, it may be a ceremony with only a few executives in attendance. 

Check out recent drone flyovers of the Gigafactory Berlin site in the video below. 

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