Boca Chica The next day, the sun was shining brightly.
When Zhao Chen's car drove into Launch Site, Starworm was already in place on the launch pad.
The prototype, nicknamed "Stainless Steel Water Tower" by aerospace enthusiasts around the world, stood quietly in the morning light of the Texas wilderness, its silver-gray stainless steel shell reflecting dazzling white light.
It is less than twenty meters high and nine meters in diameter. Its appearance is as rough as a Nongfu Spring mineral water bucket that has been enlarged ten thousand times.
But Zhao Chen knows that this iron can that looks like it will be blown over by a gust of wind at any time will rewrite the history of human spaceflight in a few years.
Elon Musk stood under the launch pad, wearing a gray T-shirt stained with engine oil, and his jeans were worn white at the knees.
He was bending down and discussing something with several engineers around an open Raptor engine, pointing with his fingers on the pipeline.
If they didn't know him, no one would believe that this man was running three companies that could change the world at the same time.
"Zhao!" Elon Musk straightened up and waved to Zhao Chen from a distance, with a tired but excited smile on his face.
He strode over, stretched out his hand and shook hands with Zhao Chen. The strength in his palms was stronger than the last time they met.
"You came just in time. There is a small problem with the ignition timing of Raptor engine. It can be solved before the test the day after tomorrow."
Elon Musk let go of his hand, took a step back, and looked Zhao Chen up and down.
"You look more energetic than last time. It seems like Wall Street's quagmire won't have any impact on you?"
"Of course, otherwise I wouldn't be standing here." Zhao Chen smiled.
The two walked side by side along the gravel road of Launch Site toward the office building.
Su Wantang and Lin Shicheng followed behind, keeping a close distance.
Elon Musk spoke first, "Era Vanguard's three hundred million US Dollar, will it be available before the end of the month?"
"Yes. Lawyer Lin is already going through the fund transfer process."
Zhao Chen has a smooth voice,
"Enter at a price of 186 US Dollar per share, with a valuation of 30.5 billion US Dollar, and Era Vanguard leading the investment of 300 million. Including the previous shareholdings, the total ratio will exceed 5.4%."
Elon Musk nodded and did not stop.
"In this round of 500 million US Dollar, in addition to you and Baillie Gifford, I also participated in part of the investment.
The first batch of Starlink satellites will be launched next year, and the network plan for 42,000 satellites will burn money faster than anyone imagines."
"But once the Starlink network is completed, SpaceX's valuation will not be 30 billion."
Zhao Chen took the words and his tone was as calm as stating an established fact.
"The global broadband access market has hundreds of billions of US Dollar plates every year, and Starlink doesn't need to eat them all.
Even if it only gets 10% of the share, SpaceX's valuation should be more than 100 billion US Dollar."
Elon Musk turned his head and glanced at him, with a hint of surprise in his eyes.
When most investors heard about the Starlink plan, their first reaction was "How much will 42,000 satellites cost?"
And Zhao Chen's first reaction was "How much money can I make?" These are two completely different ways of thinking.
"You are the second investor I have ever met who doesn't ask me about the cost of satellites." Elon Musk said.
"Who's the first one?"
"Myself." Elon Musk smiled, then put away his smile.
"Q3 Report of Tesla, you should have read it, right?"
"Revenue of 6.824 billion US Dollar, GAAP net profit 312 million US Dollar, operating cash flow 1.4 billion US Dollar, free cash flow 881 million US Dollar."
Zhao Chen reported the numbers without any pause.
"Model 3-week production capacity reached 5,300 units at the end of September, with the automotive business Gross Margin accounting for 25.8%.
This is the third single-quarter profit since Tesla was launched, and it is also the highest quality one."
Elon Musk stopped and turned around to look at him.
Boca Chica The wind blew his hair into a mess, but he didn't seem to notice it at all.
"You said 'highest quality'." His eyes were fixed on Zhao Chen's face, "Why?"
Zhao Chen also stopped, put his hands in his coat pockets, and spoke in a calm tone.
"Profits in the first quarter of 2013 depended on the higher-than-expected sales of Model S, but the production capacity at that time was too small and profitability was not sustainable.
The profit in the third quarter of 2016 relied on the sale of carbon emission points, and the main business was still at a loss.
And this time--6.8 billion US Dollar in revenue, more than 25% of the automotive Gross Margin, and more than 800 million US Dollar in free cash flow--
This is no longer a financial skill, it is the main business that really starts to make blood."
He paused.
"The scale effect of Model 3 has begun to materialize.
When the production capacity of a manufacturing company climbs from 3,000 vehicles per week to 5,000 vehicles and then to 8,000 vehicles per week, the unit manufacturing cost of each vehicle will continue to decrease.
This is not a linear decline, but a curved decline. Tesla The most dangerous time has passed."
Elon Musk was silent for a few seconds, then nodded.
This nod is small, but heavy.
"The Q4 delivery target is more than 90,000 units, of which more than 63,000 Model 3 units will be delivered."
He took steps again, with a kind of frankness in his voice that would not appear on the Financial Report conference call.
"Conservatively speaking, the revenue will exceed 7 billion US Dollar, and the GAAP net profit will be around Two Hundred Million US Dollar. There should be no problem in making profits for two consecutive quarters.
But what really concerns me is not the profit figures, but the cost curve of Model 3.
The production hours of Fremont Factory have been reduced by 30% compared to Q2, GAAP Gross Margin has exceeded 20%, and the cost of a single vehicle continues to decline.
If this trend can be maintained until the first half of next year, Tesla's profitability will completely widen the gap between it and traditional car companies."
Zhao Chen didn't answer the call immediately after listening.
He took a few steps forward before speaking.
"But I guess Q4 deliveries will probably be a little bit lower than market expectations, right?"
Elon Musk paused slightly.
"The market has fully anticipated the rushing installation effect of Federal Subsidies's decline."
Zhao Chen's voice is calm and determined,
"But if the actual delivery volume is a few thousand units lower than Wall Street's consensus expectation, even if it is only a three to five percent difference, Short Sellers will take the opportunity to exert its strength.
They will say that the real demand for Tesla has peaked after the subsidy was reduced."
Elon Musk turned his head to look at him, his eyes becoming serious.
"But you are looking at something farther away." Zhao Chen met his gaze,
"The difference in delivery volume by a few thousand vehicles doesn't matter at all.
What really matters is whether the automotive business Gross Margin in Q4 can be maintained above 20%, whether free cash flow can continue to be positive, and whether the progress of the Shanghai factory can be advanced as planned.
As long as there are no problems with these three items, the hole created by Short Sellers will eventually be filled in."
Elon Musk After listening, he suddenly laughed.
It's not the kind of polite smile in social situations, it's the kind of "you really understand" smile.