2013 Q1 Earnings Report thread

[Right_Said_Fred]

No, actually they don't.

That's just not a credible interpretation of the guidance, let alone the data we have generated on this website. They are hanging their entire report on the "1/6th" multiplier that Elon mentioned. Elon also mentioned that he expected 15,000 U.S. sales this year, which is 50% higher than the report relies upon, and is much closer to the underlying demand that we have derived.

If a person makes two contradictory verbal comments over the course of a 40 minute interview its far more likely that the comment referencing a hard number (15,000) is accurate as opposed to one that requires a complex mental calculation made on the fly (1/6th).

Especially when Tesla would have sold ~9,400 units in the U.S. by the end of Q4 which leaves you with just 600 possible sales for the REST OF THE YEAR. Predicting 10,000 U.S. sales using this reasoning is just absurd.

But its even more patently ridiculous when you consider reservation data. There are under 4,000 reservations for Europe right now. We don't know how many reservations are in the U.S. but we DO know how much reservation money Tesla is holding. At the end of 2012, Tesla had ~$138m in reservation payments, which represented 15,000 worldwide reservations. At the end of March they had ~$130m in reservation payments, despite having delivered 4,900 vehicles in the mean time.

And during Q1 Tesla delivered the 200 Canadian Signature vehicles, which required ~$40,000 to reserve (for a total value of $8m) compared to the normal $5,000. If you account for the $8m in Sig deliveries, the total number of reservations outstanding is basically flat, meaning that Tesla has been getting new reservations at basically the same rate as they have been producing cars, and again the guidance for 2013 reaffirmed that the current reservation rate is ~20k/year.

Given that total reservations are flat (and started at 15k), and that there are fewer than 4000 reservations for Europe (remember that those have been accumulating for years, while there have been nearly 10,000 cars delivered in the U.S. in the last 6 months) and given that its apparent that Tesla has been sustaining a 20k/year reservation rate (with a 20k/year production rate), we know that most new reservations are in the U.S. and there is still a considerable backlog of approximately 10k U.S. reservations at this point. That backlog gets you to 15,000 without ANY additional sales this year (which itself is an absurd prediction).

The rational conclusion is that the 15,000 U.S. sales that Elon cited for 2013 is a conservative estimate. And 10,000 U.S. sales is just wrong.

In the conference call Elon said that the 21,000 deliveries would include about 5,000 cars for Europe and 1,000 for Asia. That leaves 15,000 for North America, so not the 10,000-12,000 inside EVs is calculating. I actually think it could be higher than 15,000 as Tesla said all European reservations until the End of April would be filled and that is only about 4,000 cars (500 Signatures + 3,500 general production), minus cancellations! And I wonder if they will already be delivering cars to Asia in 2013. That's the first time I have seen Asia and 2013 being mentioned in the same sentence, but maybe I missed something. Europe and Asia should should be a bigger piece of the pie in 2014.

 

[gregincal]

If a person makes two contradictory verbal comments over the course of a 40 minute interview its far more likely that the comment referencing a hard number (15,000) is accurate as opposed to one that requires a complex mental calculation made on the fly (1/6th).

I'll also point out that they've made an additional big implicit assumption, which is that North American sales will have the same distribution over the rest of the year. We all know that California had a huge percentage of sales and dominated the early adoption of the Model S. Tesla has data on current reservation rates that we don't, and perhaps the current mix doesn't favor California as much as it did earlier. Especially since we're talking about a lot of reservations that were made during the winter that were delivered in Q1.

 

[fjm9898]

I have seen a huge emergence of the S here in in WA and as they pointed out they are getting alot of word of mouth. If everything thing Elon has done to this point had a purpose I am willing to bet they are holding a few cards back in that earnings report to help spur on another jump when Q2 is released.

Elon is a sly fox.

 

[kenliles]

^^ yeah I'm in WA as well and noticed exactly the same ^^

By the way- I missed the first part of the earnings call- did they report cash balance?

 

[SFOTurtle]

We're all just guessing, but word of mouth and actually seeing these vehicles driving on the streets on a regular basis has generated a buzz around the SF Peninsula, which I know from personal experience is motivating some people to buy the car. There is confidence in seeing more and more of these driving and hearing so many positives and being able to have a friend drive you around in one. A friend and colleague is reserving one today after becoming virtually obsessed with the car, no doubt in large part to living here in CA and seeing them all the time.

I'll also point out that they've made an additional big implicit assumption, which is that North American sales will have the same distribution over the rest of the year. We all know that California had a huge percentage of sales and dominated the early adoption of the Model S. Tesla has data on current reservation rates that we don't, and perhaps the current mix doesn't favor California as much as it did earlier. Especially since we're talking about a lot of reservations that were made during the winter that were delivered in Q1.

 

[ModelS8794]

And during Q1 Tesla delivered the 200 Canadian Signature vehicles, which required ~$40,000 to reserve (for a total value of $8m) compared to the normal $5,000. If you account for the $8m in Sig deliveries, the total number of reservations outstanding is basically flat, meaning that Tesla has been getting new reservations at basically the same rate as they have been producing cars, and again the guidance for 2013 reaffirmed that the current reservation rate is ~20k/year.

There were 200 Canadian Sigs? I thought less... but more importantly, pretty sure just about all were delivered in 4Q12. no?

Edit: here's a Canada Sig thread - Looks like deliveries started 12/20/12. Most probably done that week. The long wait is finally over!!

Anyway, recall how massive reservations were in December, and how stagnant in January and bigenning of Feb. I fully expect the reservation list declined from 12/12 to 3/13, but that fact and the guidance on the call reflecting current demand at 20k/yr level are not mutually exclusive, IMO.

 

[CapitalistOppressor]

^^ yeah I'm in WA as well and noticed exactly the same ^^

By the way- I missed the first part of the earnings call- did they report cash balance?

All of the financials are in the shareholder's letter available here -

http://files.shareholder.com/downloads/ABEA-4CW8X0/2392125069x0x661989/ee71d11b-3563-489c-9471-9319fd963626/Q1%2013%20Shareholder%20Letter.pdf

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There were 200 Canadian Sigs? I thought less... but more importantly, pretty sure just about all were delivered in 4Q12. no?

Edit: here's a Canada Sig thread - Looks like deliveries started 12/20/12. Most probably done that week. The long wait is finally over!!

Anyway, recall how massive reservations were in December, and how stagnant in January and bigenning of Feb. I fully expect the reservation list declined from 12/12 to 3/13, but that fact and the guidance on the call reflecting current demand at 20k/yr level are not mutually exclusive, IMO.

Customer deposits is listed right under "liabilities." $138m end of December, $130m end of March. Not exactly much falloff. And I see no reason at all to suppose they were mostly done that week. Regardless, there haven't been much in the way of new Sig reservations, so the total number of reservations is as close to flat so as not to matter.

And yes, we know from the reservations thread that reservations were relatively low in January and early February, but that was the slow time of year for everyone. There is no reason to project those numbers forward when the financial statement still shows them holding a lot of reservations.

Of course, reservations might still really be "deferrals." But there isn't evidence of massive cancellations or drops in underlying demand, especially with anecdotal reports in the last couple of months of strong sales at the stores.

Edit: looked at the Canadian thread. Clearly a lot of Sig's were delivered in late December, but the photos show like 20 cars. No reason to suppose that 200 were delivered in a week. Regardless of where you put the Canadian Sig deliveries the $$ amount for deposits is basically flat Q4-Q1.

 

[Cattledog]

How many signature reservations are out there, 500 max if you count European Model S and all Model X. Max. So that's $20M in held deposits. That leaves $110M remaining and divide that by $5,000 and you get 22,000. So at the end of March they likely had over 22,000 cars on order? Something doesn't seem right.

 

[akula]

All of the financials are in the shareholder's letter available here -

http://files.shareholder.com/downloads/ABEA-4CW8X0/2392125069x0x661989/ee71d11b-3563-489c-9471-9319fd963626/Q1%2013%20Shareholder%20Letter.pdf

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Customer deposits is listed right under "liabilities." $138m end of December, $130m end of March. Not exactly much falloff. And I see no reason at all to suppose they were mostly done that week. Regardless, there haven't been much in the way of new Sig reservations, so the total number of reservations is as close to flat so as not to matter.

And yes, we know from the reservations thread that reservations were relatively low in January and early February, but that was the slow time of year for everyone. There is no reason to project those numbers forward when the financial statement still shows them holding a lot of reservations.

Of course, reservations might still really be "deferrals." But there isn't evidence of massive cancellations or drops in underlying demand, especially with anecdotal reports in the last couple of months of strong sales at the stores.

Edit: looked at the Canadian thread. Clearly a lot of Sig's were delivered in late December, but the photos show like 20 cars. No reason to suppose that 200 were delivered in a week. Regardless of where you put the Canadian Sig deliveries the $$ amount for deposits is basically flat Q4-Q1.

So what do you think of the idea that the EPS will not be as high in the 2nd quarter as in the first? The letter talks about higher R&D expenses and SGA expenses. I think the mix of cars will be much more diverse in contrast to the 1st quarter which was loaded with p85s mostly, which should lower the average revenue per car sold.

 

[kenliles]

So what do you think of the idea that the EPS will not be as high in the 2nd quarter as in the first? The letter talks about higher R&D expenses and SGA expenses. I think the mix of cars will be much more diverse in contrast to the 1st quarter which was loaded with p85s mostly, which should lower the average revenue per car sold.

along with fewer credits; Q2 and Q3 should be lower; tough sell to the market

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All of the financials are in the shareholder's letter available here -

got it thanks;
$231M in cash- very good; they never used the new cap raise. $200M to be spent in 2013. they'll need another Cap raise in 2014 when MX, GenIII ramp

 

[fjm9898]

remember dont count Q2 and Q3 for what that report says. Q1 was better then expected. i still bet that Elon held some things back for the Q2 predictions that way it seems like a big gain when they do better then expected.

 

[akula]

along with fewer credits; Q2 and Q3 should be lower; tough sell to the market

This is kind of what I am worried about in the near-term. Since there are so many naysayers as is, the moment you miss just a bit they will drive the price down. Long term I think this company will blow the roof of this joint but I think the wild ride is just beginning and we will have as many "sky is the limit" moments for TSLA as we will have what I will only call "gravity events." It's important to keep perspective long-term.

 

[CapitalistOppressor]

How many signature reservations are out there, 500 max if you count European Model S and all Model X. Max. So that's $20M in held deposits. That leaves $110M remaining and divide that by $5,000 and you get 22,000. So at the end of March they likely had over 22,000 cars on order? Something doesn't seem right.

Yes, I've been spending a little time puzzling that over. My best guess is the exchange rates. €40,000 is a lot more money than $40,000. If I recall correctly when trying to tabulate it, there were like 587 Sig reservations worldwide, with 500 in Europe. I'm not even certain the reservation amount is €40,000 though, so I didn't delve into it too much. But current exchange rate is €1.00 to $1.32, which is significant.

Even so, quickie napkin math wasn't quite getting me there and I didn't have time to think about it properly. First step is to know the reservation policy in each country.

 

[DonPedro]

Yes, I've been spending a little time puzzling that over. My best guess is the exchange rates. €40,000 is a lot more money than $40,000. If I recall correctly when trying to tabulate it, there were like 587 Sig reservations worldwide, with 500 in Europe. I'm not even certain the reservation amount is €40,000 though, so I didn't delve into it too much. But current exchange rate is €1.00 to $1.32, which is significant.

Even so, quickie napkin math wasn't quite getting me there and I didn't have time to think about it properly. First step is to know the reservation policy in each country.

Maybe model X reservations.

 

[DJ Frustration]

How many signature reservations are out there, 500 max if you count European Model S and all Model X. Max. So that's $20M in held deposits. That leaves $110M remaining and divide that by $5,000 and you get 22,000. So at the end of March they likely had over 22,000 cars on order? Something doesn't seem right.

I don't think you're counting Model X reservations correctly. There are ~200 Sigs and ~3,600 Prod just in the US.

 

[Zythryn]

How many signature reservations are out there, 500 max if you count European Model S and all Model X. Max. So that's $20M in held deposits. That leaves $110M remaining and divide that by $5,000 and you get 22,000. So at the end of March they likely had over 22,000 cars on order? Something doesn't seem right.

I would also guess that cars that were paid for, but not yet counted as delivered were counted as liabilities.
If there were 100 of those, that is another 7-8 Million.

 

[Cattledog]

So, spitballing here:

100 cars paid for - call it $10M
600 Signature Reservations - with Euros and $ mixed at 40,000/car, call it $25M
3,600 Model X Reservations - call it $18M

That's $53M, leaving $77M to account. Which is 15,400 Model S reservations/orders at $5K each.

Still puzzled. Is there something else creating liabilities?

Hope it's right, that would be staggeringly great reservations in hand, even with a loss factor (which is diminishing with new order policy). No wonder they say they're subscribed for 2013.

 

[gregincal]

So, spitballing here:

100 cars paid for - call it $10M
600 Signature Reservations - with Euros and $ mixed at 40,000/car, call it $25M
3,600 Model X Reservations - call it $18M

That's $53M, leaving $77M to account. Which is 15,400 Model S reservations/orders at $5K each.

Still puzzled. Is there something else creating liabilities?

Hope it's right, that would be staggeringly great reservations in hand, even with a loss factor (which is diminishing with new order policy). No wonder they say they're subscribed for 2013.

I think you're still low on signature reservations. According to the threads on this forum there's over 550 Model S sig reservations and 3-400 Model X sig reservations.

 

[ShortSlaver]

This is kind of what I am worried about in the near-term. Since there are so many naysayers as is, the moment you miss just a bit they will drive the price down. Long term I think this company will blow the roof of this joint but I think the wild ride is just beginning and we will have as many "sky is the limit" moments for TSLA as we will have what I will only call "gravity events." It's important to keep perspective long-term.

Same here. Their projections are great long term (more cars than expected) but they're investing into infrastructure to improve the overall experience which will pay in the not so long term. I have a feeling it will be interpreted as Tesla slipping. However, they made it a big point to mention Q2 will be lower than Q1.

If they hit or exceed their 25% margins and push out 22,000 cars instead of 21,000 somehow, they will be more than OK and over $100.

 

[Johann Koeber]

Yes, I've been spending a little time puzzling that over. My best guess is the exchange rates. €40,000 is a lot more money than $40,000. If I recall correctly when trying to tabulate it, there were like 587 Sig reservations worldwide, with 500 in Europe. I'm not even certain the reservation amount is €40,000 though, so I didn't delve into it too much. But current exchange rate is €1.00 to $1.32, which is significant.

Even so, quickie napkin math wasn't quite getting me there and I didn't have time to think about it properly. First step is to know the reservation policy in each country.

I paid 30k Euro for my euporean SIG reservation.

I got 26k back when I downgraded to R, needing the money to pay for my roadster.

So the exchange rate effect is only marginal.