2015 Q1 Discussion thread for Delivery numbers, Earnings Report and Conference Call

[davecolene0606]

At last Thursdays event a couple of production engineers (pack) referred to Gigafactory V! and V2 and a very clear path to the regional factories (Europe, Asia) much sooner rather than later as well as Gigafactory V1 beginning production much earlier than anyone has been beaten on.

 

[Larken]

Yeah, i don't even know what he means by that... better than any SUV? OK, that was expected based on P85D. Better than P85D even? Do we even need that, I mean even those 700 horses are overkill. So maybe, just maybe we'll get a 100-105D for the X and it can do high speeds longer than 85?

just guessing here..

Elon did actually say in the beginning of the call that he was test driving the latest version of the Model X today and he explicitly said that it was the best SUV, by far.

 

[doggusfluffy]

At last Thursdays event a couple of production engineers (pack) referred to Gigafactory V! and V2 and a very clear path to the regional factories (Europe, Asia) much sooner rather than later as well as Gigafactory V1 beginning production much earlier than anyone has been beaten on.

That is exciting!

 

[Noble Ninja]

What I am excited about hearing from the ER CC:

EM - Production might double in Q4 if all goes right.

More Gigafactory details and still on schedule

In one week, 38,000 reservations for Powerwall, 2500 Powerpack reservations (10 Powerpacks per reservation)
Expecting 5-10x more utility than consumer sales for storage.
2500 companies want PowerPack solutions RIGHT NOW. They are "triaging requests."

Model X reveal in July

Free cash flow positive number will happen in Q4.

Show off Model 3 as early as March 2016.
Production goal for Model 3 still end of 2017.

 

[chickensevil]

Also, a whole 50% larger GF could be a total of 75 GWh for stationary?

So I see it as 50% of 35GWh, since you wouldn't be just expanding the pack assembly, right? So if you are expanding the factory by 50% the important metric here is likely to be cell production as the remaining 15GWh is coming from imports (like Japan and Panasonic's factories). So that would up the total pack output to 67GWh and the cell output to 52GWh.

Stationary "would take up the whole current factory" would mean to me the demand is tracking at 35GWh by itself. So that means the cars need to hold at least 50% of the factory in order to justify the size increase.

To see if that holds to previous comments, they originally expected 2/3 of the pack output to go to cars and 1/3 to stationary and other car manufacturers. 2/3 of 50GWh is ~33GWh.

67GWh (increased size output of the factory) - (minus) 33GWh (the original stated scope of the Tesla car business - note this number tracks on that 500k cars per year, which is important to hold to for other reasons) = 34GWh.

Bottom line take away, Tesla is still trending toward 500k cars a year by 2020 AND 34-35GWh of stationary storage sales.

If we continue to take this to its logical conclusion. Stationary Storage is currently trending as 50% of their business as they see it right now (that or they just need to add more scope for the car business, but that would require building another car factory somewhere else... so I will stick with it all being stationary). If they sell the 34GWh at 250$/kWh that is 8.5B$ a year revenue on stationary storage as they see it TODAY. At a target of 20% minimum GM that is 1.7B$ in Gross Profits from this business in 2020 on top of the car business at 500k a year (which there have been many different calculations there).

So yes, we have enough data for analysts to give PT starting with 2020 and the 500k cars a year, add on the 8.5B$ business do some extra fancy math and work back to a PT in one year. But let that 8.5B$ number sink in a bit... as this blows even our numbers here at TMC out of the water and all needs to be re-churned.

 

[AlMc]

What I am excited about hearing from the ER CC:

EM - Production might double in Q4 if all goes right.

In one week, 38,000 reservations for Powerwall, 2500 Powerpack reservations (10 Powerpacks per reservation)
Expecting 5-10x more utility than consumer sales for storage.
2500 companies want PowerPack solutions RIGHT NOW. They are "triaging requests."

Model X reveal in July

Free cash flow positive number will happen in Q4.

Show off Model 3 as early as March 2016.
Production goal for Model 3 still end of 2017.

After the CC I am beginning to think we should change the name from Powerwall to PowerBall........seems like TM/TSLA may have hit the lotto.

 

[Larken]

After the CC I am beginning we should change the name from Powerwall to PowerBall........seems like TM/TSLA may have hit the lotto.

I loled :biggrin:

 

[hockeythug]

Gonna have to go back and listen again to Musk KO that Bank of America analyst.

 

[doggusfluffy]

Let me just crunch a few conservative estimates here out of the car business. Assuming they take the MS and MX to 100k a year and stop there at 100k$ ASP (also a bit conservative), and then 300k M3 at a 50k ASP (I think that is a fair number, but we won't know for a while. That is 10B$ on the MS/MX, 15B$ on the M3, and an extra 8.5B$ on Stationary. Total 2020 revenues looking at 33.5B$ on a sorta conservative number. Assuming Tesla pulls off a modest 10% net profit at 3.35B$ 145M shares (and lets assume that number goes up to 160M by 2020 - This means no major capital raises and share dillution is just caused by stock compensation plans) would come out to 21$ EPS! Have fun with those numbers

Also didn't he drop the 1k a week run rate once the X is ready and drops? Many more than the 5 weeks needed to make the 5k guidance right?

 

[chickensevil]

Also didn't he drop the 1k a week rate once the X is ready and drops? Many more than 5 weeks to make the 5k guidance right?

Yeah, but it could take 2 - 3 months to ramp up to 1k. So assuming as a worst case first delivery is Sept 30th (so they can still claim Q3) and a worst case of 3 months to fully ramp to 1k (So Dec 31st), There is a lot of time gaps in between there for hiccups and such that I think 5k is still a reasonable estimate without going crazy low or crazy high.

- - - Updated - - -

To expand on that: 5k over 3 months (Oct - Dec) which is roughly 12 working weeks, would mean in a worst case they need to average 416 cars a week if the first delivery is Sept 30 and the ramp takes until Dec 31. This is why I say it is a fair number to account for inevitable issues that will come up.

 

[Vger]

Yeah, but it could take 2 - 3 months to ramp up to 1k. So assuming as a worst case first delivery is Sept 30th (so they can still claim Q3) and a worst case of 3 months to fully ramp to 1k (So Dec 31st), There is a lot of time gaps in between there for hiccups and such that I think 5k is still a reasonable estimate without going crazy low or crazy high.

- - - Updated - - -

To expand on that: 5k over 3 months (Oct - Dec) which is roughly 12 working weeks, would mean in a worst case they need to average 416 cars a week if the first delivery is Sept 30 and the ramp takes until Dec 31. This is why I say it is a fair number to account for inevitable issues that will come up.

Yes, but on the optimistic side, Elon indicates reasonably that there is HUGE upside available in that number. I wonder what his hoped for aspiration for Q4 deliveries is— 20K, 25K?

(MS and MX combined)

 

[chickensevil]

Yes, but on the optimistic side, Elon indicates reasonably that there is HUGE upside available in that number. I wonder what his hoped for aspiration for Q4 deliveries is— 20K, 25K?

(MS and MX combined)

Sure, and I too am cautiously optimistic, but I think it is too far out still to say with clarity that all your parts suppliers (he said over 1,000 unique parts in the car) will all come together with no issues at all. So it is best to give guidance on the lower end of your estimates in this case. Especially after last year. I don't think they want to repeat that all over again. Imagine another port strike? or some other unforseen craziness.

So I am hoping for 20k in Q4 as well since that would mean they hit 2k a week(ish) quite fast indeed. I would put the more reasonable numbers at 10k Q1, 12k Q2, 16k Q3 and 17k Q4 (some of the S production will be forced to shift into X production which is why there is no change on the total number of cars). The upside will come in Q4 where they could push quickly to 2k a week which if they ran all of Q4 at 2k a week that would be 24k cars produced in Q4. Delivered is another story... so lets drop off say 2k and you still see 22k deliveries in Q4 with a perfect 2k run rate. I don't know that they can do that, honestly. It feels like it is too much. As that would require a Sept 1 launch, ramping quickly on the MX to 1k, Let's assume that the S produced 15k in Q3 that would be roughly a 1250 run rate, so by the end of Sept they would have to be running the X at least at 750 a week, right? That seems too much... 20k might be doable in a best case for Q4 deliveries.

 

[cluster]

In their Q1 shareholder letter, they have dropped the phrase "production constrained".

Did they mention production constrained for cars in the conference call?

 

[brianman]

From the letter:

So far, our customers have Supercharged 111 million miles globally.

Given that we have (I lost track...) 8 model S flavors (40/60,60,85,P85,P85+,85D,P85D,70D) with different "Rated" conversion factors, what "mi./kWh" rate are they using for this figure?

 

[aznt1217]

In their Q1 shareholder letter, they have dropped the phrase "production constrained".

Did they mention production constrained for cars in the conference call?

It's mentioned that they need to scale up to meet demand... essentially same thing just less negative sounding.

 

[jhm]

What I am excited about hearing from the ER CC:

EM - Production might double in Q4 if all goes right.

More Gigafactory details and still on schedule

In one week, 38,000 reservations for Powerwall, 2500 Powerpack reservations (10 Powerpacks per reservation)
Expecting 5-10x more utility than consumer sales for storage.
2500 companies want PowerPack solutions RIGHT NOW. They are "triaging requests."

Model X reveal in July

Free cash flow positive number will happen in Q4.

Show off Model 3 as early as March 2016.
Production goal for Model 3 still end of 2017.

38k Pw + 25k Pp ~= $750M ~= 2.8 GWh
55k MS/X ~= $5,500M ~= 4.4 GWh

 

[AudubonB]

Bring on the terafactories!!!!

Hey!
You AND Elon!
I copyrighted that a good number of posts back. Stop Stealing My TeraThunder!:tongue:

...or I'll have to start in on Petafactories....Ekafactories....

 

[SteveG3]

I agree that it was an outstanding letter and call. I agree with the highlight lists I've seen. One key point I've not seen mentioned which I suspect will work its way into many of the analyst reports is the number of times Elon said the words "guessing", "early days", and "speculative." To me, Elon basically threw out the idea that stationary storage response is "off the hook" in the first week, making it logical to consider a 50% increase in plans for GF1, but added a hedge by using those words I mentioned repeatedly. It was a bit like he wanted the analysts to see where they see the numbers going, but he did not want the numbers he was using to be characterized as guidance (fwiw, I think the words "guessing", "early days," and "speculative" out of context convey more caution than I think Elon was actually signaling, but nonetheless, I do think he was presenting something of a hedge). One other point, Elon explicitly stated that a year from he thinks they'll have a very good picture on stationary storage.

Bottom line, I see the analysts putting in higher valuation for Tesla Energy than I thought they would before the call, but I see that based on best case 2020 Tesla Energy revenue talk going from $4-5 billion to $10-12 billion, but still with a considerably steeper discount than what they put on the vehicle business' 2020 revenue projections.

 

[aznt1217]

I agree that it was an outstanding letter and call. I agree with the highlight lists I've seen. One key point I've not seen mentioned which I suspect will work its way into many of the analyst reports is the number of times Elon said the words "guessing", "early days", and "speculative." To me, Elon basically threw out the idea that stationary storage response is "off the hook" in the first week, making it logical to consider a 50% increase in plans for GF1, but added a hedge by using those words I mentioned repeatedly. It was a bit like he wanted the analysts to see where they see the numbers going, but he did not want the numbers he was using to be characterized as guidance (fwiw, I think the words "guessing", "early days," and "speculative" out of context convey more caution than I think Elon was actually signaling, but nonetheless, I do think he was presenting something of a hedge). One other point, Elon explicitly stated that a year from he thinks they'll have a very good picture on stationary storage.

Bottom line, I see the analysts putting in higher valuation for Tesla Energy than I thought they would before the call, but I see that based on best case 2020 Tesla Energy revenue talk going from $4-5 billion to $10-12 billion, but still with a considerably steeper discount than what they put on the vehicle business' 2020 revenue projections.

I agree. I think the call was really good and Tesla did one thing I really liked, the focus on the long term. A lot of people don't see this and I guess now including Morgan Stanley bringing up the Cash Burn as a huge negative... I mean seriously?

 

[Rashomon]

BANG! Model 3 design reveal March 2016!

Yes, the CapEx for early engineering prototypes means real cars. Early clays are probably done (that doesn't cost much), and I would bet several hundred to thousands of hours have already gone into CFD. Nailing low aerodynamic drag (CdA) is essential to getting range with a smaller pack from the M3. The early engineering cars might be mules or have very prototype bodies, but there's a lot of testing that requires running vehicles. If they show something March 2016, the basic design will be frozen, but a lot of work will remain before all tooling can be ordered. But Tesla has the luxury of showing it early because the M3 is only a spoiler for other auto companies -- it won't cause significant drag on MS or MX sales.