Brief Consumer: Tesla (TSLA): Model Y to Be Unveiled in L.A. On March 14 – What We Know So Far and more

In this briefing:

1. Tesla (TSLA): Model Y to Be Unveiled in L.A. On March 14 – What We Know So Far
2. Nio (蔚来) Lock-Up Expiry – Scattered Pre-IPO Investors to Be the Sellers
3. Rakuten: Lyft IPO Provides Timely Support for Mobile Deployment

1. Tesla (TSLA): Model Y to Be Unveiled in L.A. On March 14 – What We Know So Far

Other than CEO Elon Musk’s tweets, there is not a whole lot that has been announced about the Model Y other than that it will be unveiled at the company’s L.A. Design Studio on March 14.  Here is a brief list of what we know so far about the Model Y:

• Musk indicated during the 4Q earnings analyst call that Models 3&Y will have a 78% shared content ratio (see Tesla (TSLA): 4Q Earnings and First Impressions on the Company’s Strategy ), with media reports quoting Musk also referring to a 75% shared content ratio in other forums (see, e.g., https://electrek.co/2019/02/07/tesla-casting-lines-gigafactory-model-y-production/).
• Musk also had stated during the 4Q earnings call that the Model Y will begin production at the Shanghai Gigafactory 3 which is projected to be completed at the end of 2019.  The company has not confirmed that commercial production of the Y will begin in the U.S. simultaneously.
• There are no changes or additions in Musk’s tweets to previously announced commercialization target dates for the Model Y.  

Tesla’s new product launches historically have been mired in delays.  Assuming management does not repeat its assembly line prototyping mistakes prior to the Model 3 launch there should not be an issue currently with meeting its production target timeline of 1H20.  However, we also believe any such concerns would be legitimate given Tesla’s history.

A Tesla Model Y Teaser Shot

2. Nio (蔚来) Lock-Up Expiry – Scattered Pre-IPO Investors to Be the Sellers

NIO Inc (NIO US)‘s lock-up will expire next week on the 11th of March. Shareholding breakdown suggests that there will be overhang upon lock-up expiry due to the large number of scattered pre-IPO shareholders. 

In this insight, we will look at the principal and pre-IPO investors and analyze who and how many shares would likely be sold upon lock-up expiry.

3. Rakuten: Lyft IPO Provides Timely Support for Mobile Deployment

The publication of Lyft’s IPO prospectus is a clear positive for Rakuten Inc (4755 JP) . As a pure investment, Rakuten’s return on its Lyft investments could be 273-366% or ¥101-136 per share based on the $20-25bn valuation range reported by the press. There has been a lot of focus on the investment gains Rakuten should accrue but the real upside is a timely boost to liquidity plus accounting cover as mobile investment accelerates.  Whether one believes Rakuten can succeed in mobile or not, it has the capital and paper profits to support a splashy introduction and spending is already accelerating.