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California grants Tesla $34.7 million tax break to boost production

Tesla Motors' plans to expand just got a big boost, as the state of California has announced it will give the Palo Alto-based company a $34.7 million tax break to increase its production capacity. The EV manufacturer is being given a pass on sales and use taxes on up to $415 million worth of equipment, according to a report on the San Francisco Chronicle's website.
Tesla is currently on track to produce 21,500 cars, although the planned expansion should more than double that capacity to 56,500 units, adding 112 jobs at Tesla's Fremont factory. "I'm pleased we could take this action to encourage Tesla to expand its electric vehicle production in California, which will create green jobs and improve our air quality," State Treasurer Bill Lockyer said. The state estimates that between the additional jobs and (hoped for) increase in sales, it will recoup the costs of the tax break in more taxes.

Ferrari, not Tesla, might be the stock to buy

Last week Tesla's earnings – or lack thereof – were one of the big stories in the auto industry. As usual, the electric carmaker didn't make money, but the news sent the market, analysts, and Tesla's devoted fans into a lather. But another company, this plucky upstart called Ferrari, also attracted a positive reaction from the market and actually had the financials to back it up. Ferrari posted net revenues of $898 million (at today's exchange rates) EBITDA of $265 million (a slightly complicated way to snapshot financial performance) and an adjusted net profit of $136 million in the first quarter. The company delivered 2,003 cars, and sales of its V12 models increased 50 percent. It quietly made progress nearly a year and a half into its life as an independent automaker. For 2017, Ferrari expects to deliver 8,400 cars and rake in net revenue of $3.6 billion. No one thought Ferrari would flounder when Fiat Chrysler Automobiles spun it off in fall 2015. With a rich history, expensive products, and its own loyal fan base that's arguably even larger than Tesla's, the company seemed poised for success, though skeptics wondered how it might fare after longtime chief Luca di Montezemolo stepped down before the spinoff. Plus, the company remains within the FCA sphere, as its key stakeholders are largely connected to its former parent in some way, and Chairman Sergio Marchionne also steers FCA. Last week's results showed Ferrari is gaining footing in the evolving automotive world, and analysts responded. UBS analyst Michael Binetti reiterated Ferrari stock (RACE on the NYSE) as buy status and raised his target price from $85 to $92. Morgan Stanley's Adam Jonas was even more bullish, raising projections to $100 in the next 12 months. Shares were trading around $82 Monday morning. Both analysts viewed Ferrari as something different than a conventional automaker stock, with Binetti comparing it to luxury house Hermes, which produces high margins even for a specialty goods maker. Jonas suggested Ferrari's singular reputation and history (16 Formula One Constructors titles, the most ever) could insulate its products when autonomous and electric cars become even more commonplace. "In our view, a Ferrari is not transportation," he wrote in a note to clients. "Ownership is viewed as an exclusive club, and membership requires more than just money.

Elon Musk to get spot on The Simpsons

It's hard to believe that The Simpsons is moving into its 26th season, but there's good news for auto enthusiasts, especially of the EV variety. The show's executive producer, Al Jean, confirmed on Twitter that Tesla Motors CEO Elon Musk would have a guest spot on the show in the upcoming season. Even better, it sounds like a pretty significant role.
Elon Musk in ep 1/11 and not a "kiss ass" celebrity guest star turn: Burns tries to kill him, and we reveal Musk's master password.

- Al Jean (@AlJean) July 29, 2014