They are also estimating a demand drop of 25% for model S (US only?), now that M3 is in production.
People have queried insideevs in the past, but I find their little monthly synopses to end up being golden.
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People have queried insideevs in the past, but I find their little monthly synopses to end up being golden.
I had the same problem but if you refresh the screen the Tesla numbers for July show up.
Actually quite strong -- 3,075 combined X and S versus 1650 for January and 1840 for April (1st month of the quarter). Hard to make too much out of one month but seems to be off to a great start, especially considering the relatively low number of vehicles in transit.
erthquake
Active Member
I love seeing the Model 3 on that scorecard!
With all due respect to @Paraclesus, your use of that expression is so trite, it's meaningless. Elon used it in the context of applying physical science to natural phenomena. Your repeating it in a financial context illustrates a challenge in original self-expression.
I did not reason to anything. The OP pulled a key financial metric (operating profit margin) out of whole air. I tested the plausibility of the value he asserted by using the most recently available financial information and projecting it forward. What "first principles" are you using to estimate 2018 operating profit margin and what percentage does your "reasoning from first principles" inform?
Since you lecture others to keep a copy of the 10Q on the nightstand, do you even realize that only $5.2 million of the $213.9 million in reported 1Q17 Energy Generation and Storage Revenue was attributable to Tesla Energy? All the rest was from SCTY's run-off. How much additional revenue in 2018 for TE does your "reasoning from first principles" inform?
Here's what Elon predicted in a Conference Call from two years ago this week:
"Yeah. I do want to preface this with some degree of uncertainty, because this is quite new, and again, we've got that challenge of exponential ramp and then depending upon how you move the – on how the dates fit over an exponential ramp, the actual numbers in a given quarter could be quite different, but the demand has been really crazy, so it's well in excess of – I mean if you just take the reservations that have been made thus far, it's well over $1 billion worth of Powerpacks and Powerwalls. So – and that's with no marketing, no advertising, no sales force to speak of, really, we're not trying to sell it, it's basically a presentation and a webcast and 30 minutes of press Q&A.
So there's probably room to improve. So this is – I mean, really, we're basically sold out of what we could make in 2016 at this point. And assuming these orders are real, which they seem to be. So were looking at maybe, again, just to preface with meaningful uncertainty, $40 million to $45 million in stationary storage in Q4 and maybe as much as 10 times that number in for next year. [i.e 2016] So it's $40 million to $50 million that this year and 10x of that next year. And I mean that growth rate is probably going to just, keep going at quite a nutty level. It's probably at least a few billion dollars in 2017, somewhat speculative at this point, but I think that's likely. So it's sort of growing by half order of magnitude to an order of magnitude per year."
Unless mandated by governmental decrees and perceived emergencies (like Aliso Canyon and South Australia), market based energy storage projects have a lengthy gestation and execution period, viz. the Kauai project which was awarded in 3Q15 and those 52 MWhs will first appear in the Operating Statement for 2Q17.
You are misrepresenting that the bolding was a challenge to his revenue estimate as "too optimistic." It was not; it was to contrast his estimate for the growth in Revenue to what could happen to the growth in OpEX. IMO, his Revenue estimate is plausible if Tesla executes well. I challenged his operating profit margin as "too optimistic."
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Some commentary related to shorts.
I view them as largely three kinds, with three different arguments.
1) The Lutz argument: There are limited pool of EV buyers, Tesla will be dead once it exhausts them. Incentives and the competition to capture the incentives will make matters worse. In an nutshell EVs are largely undesirable niche products.
I believe a lot of these shorts would have exited by now. Model 3 order book is good enough to refute this argument. Maybe these are the shorts that exited out from mid-May to end of June ahead of the final unveil.
Lutz also believed that a Plug-in Hybrid of some sort is the right move. But so far sales don't indicate that preference in consumers. So hopefully that argument too is dead by now.
It's also possible the shorts that exited are the ones that got into TSLA via SCTY. Shorting SCTY is very different from shorting TSLA. These carryover accidental shorts had to exit at some point. Maybe this was it.
2) The Chanos argument: Tesla will never make any money. They don't believe that tesla has any operating leverage. As revenues grow, so will operating expenses. Thus Tesla will never be profitable, the same way it is not profitable today.
Based on Musk's past commentary Tesla will need to achieve 500K run rate to achieve sustainable profitability. But that includes lease accounting. Currently there is no lease option on model-3. It's conceivable that as long as Tesla is supply constrained they will not open leasing on model-3. If that were to hold Tesla might demonstrate profitability earlier.
We may have to wait an year or two for this argument to settle and (hopefully) these section of shorts exit out in defeat.
3) The Einhorn argument: aka Valuation argument. They look at Tesla in comparison to other auto companies. They believe that Tesla will never grow into it's current valuation, let alone growing much further.
What these idiots don't understand is that the reason other auto stocks are hammered down with low valuations is 'because' of Tesla. It only takes Tesla to grab the top 5 to 10% of the most profitable cars for these behemoths to fall on their own weights. Fixed costs will overwhelm and will force restructurings and/or bankruptcies.
Consider that Apple has very low percentage market-share of smartphones, or worse if you consider all cell phones. But it overwhelmingly owns vast majority of all the 'profits' in the smartphone/cell-phone markets. Tesla is positioning itself the same way. But they don't get it.
Alternatively Tesla can keep growing like Amazon. These same wizards of valuation have been naysayers and shorts in AMZN for years and in some cases decades in a row.
This group of shorts are the last ones to exit. It may take them a few years, and severe loses, for them to get out.
4) Bonus: Some people believe that there are oil companies, oil regimes etc. that are short Tesla just to suppress it's stock to make it harder to grow. Personally I think of this as conspiracy theory and don't buy into it. But if you were to believe this theory, these folks might get out ever further out after the third set above (valuation folk).
I view them as largely three kinds, with three different arguments.
1) The Lutz argument: There are limited pool of EV buyers, Tesla will be dead once it exhausts them. Incentives and the competition to capture the incentives will make matters worse. In an nutshell EVs are largely undesirable niche products.
I believe a lot of these shorts would have exited by now. Model 3 order book is good enough to refute this argument. Maybe these are the shorts that exited out from mid-May to end of June ahead of the final unveil.
Lutz also believed that a Plug-in Hybrid of some sort is the right move. But so far sales don't indicate that preference in consumers. So hopefully that argument too is dead by now.
It's also possible the shorts that exited are the ones that got into TSLA via SCTY. Shorting SCTY is very different from shorting TSLA. These carryover accidental shorts had to exit at some point. Maybe this was it.
2) The Chanos argument: Tesla will never make any money. They don't believe that tesla has any operating leverage. As revenues grow, so will operating expenses. Thus Tesla will never be profitable, the same way it is not profitable today.
Based on Musk's past commentary Tesla will need to achieve 500K run rate to achieve sustainable profitability. But that includes lease accounting. Currently there is no lease option on model-3. It's conceivable that as long as Tesla is supply constrained they will not open leasing on model-3. If that were to hold Tesla might demonstrate profitability earlier.
We may have to wait an year or two for this argument to settle and (hopefully) these section of shorts exit out in defeat.
3) The Einhorn argument: aka Valuation argument. They look at Tesla in comparison to other auto companies. They believe that Tesla will never grow into it's current valuation, let alone growing much further.
What these idiots don't understand is that the reason other auto stocks are hammered down with low valuations is 'because' of Tesla. It only takes Tesla to grab the top 5 to 10% of the most profitable cars for these behemoths to fall on their own weights. Fixed costs will overwhelm and will force restructurings and/or bankruptcies.
Consider that Apple has very low percentage market-share of smartphones, or worse if you consider all cell phones. But it overwhelmingly owns vast majority of all the 'profits' in the smartphone/cell-phone markets. Tesla is positioning itself the same way. But they don't get it.
Alternatively Tesla can keep growing like Amazon. These same wizards of valuation have been naysayers and shorts in AMZN for years and in some cases decades in a row.
This group of shorts are the last ones to exit. It may take them a few years, and severe loses, for them to get out.
4) Bonus: Some people believe that there are oil companies, oil regimes etc. that are short Tesla just to suppress it's stock to make it harder to grow. Personally I think of this as conspiracy theory and don't buy into it. But if you were to believe this theory, these folks might get out ever further out after the third set above (valuation folk).
Esme Es Mejor
Member
I love seeing that it's already outsold the I-MiEV, the Panamera, the Countryman, the Spark, and the Cadillac ELR. I know those are the dregs, but it feels good anyway. By the end of the year, the top 3 sellers could all be Teslas.
Well, I'm lined up to auto-buy via my short puts. No complaints.
ValueAnalyst
Closed
You clearly have not been following me for long, because I am well aware of what you pointed out. In fact, the following is what I included in my five-page excruciatingly detailed page-by-page analysis of the latest for 10-Q, which you can find online since moderators do not allow me to post my links on TMC:
- Page 33: Energy generation and storage revenue increased 840% or $191 million YoY to $214 million in 1Q17, but this was primarily due to the inclusion of revenue from SolarCity of $209 million, partially offset by a decrease in energy storage revenue of $17 million. In other words, energy storage revenue in 1Q17 was a mere $5 million. This is not in-line with Elon's prediction of "super-exponential" growth, but the energy storage business segment is still very new. Nevertheless, I will keep an eye on this in the coming quarters, as my forecast assumes very fast growth in energy storage revenue.
For the sake of other readers, I'm going to leave it here. Please be mindful of how the company has changed in the last 12 to 36 months going forward.
Gerardf
Active Member
I have not seen it mentioned here yet (although I have not be here to often lately and skipped many pages due to being too busy), but I think the Tesla sales for Europe and Asia might very well increase the second half of this year, above current expectations.
The reason for that thinking is the continued weakening of the US$. Just 6 month ago in January the exchange rate to the Euro was around 1,05 to 1,07. I just looked and it is above 1,18 today !
That is pretty significant. And not only will that make Tesla cars lower priced in Europe and Asia, it will also make the German competition more expensive in the USA.
Assumming Tesla can keep up with S and X production, and even increase that in parallel to ramping Model-3, we might be in for a nice surprise. That will however add to the ' Q3-4 Production hell", but Tesla might reward employees nicely if they can pull that off.
Also note that the cells for TE and Model-3 are produced in US, so that now also helps.
Would be great if Tesla can increase the 2H sales / delivery number tomorrow (as long as they still sand-bag it).
Not so nice for my US$ nominated TSLA, but great for Tesla !
(I will not sell my TSLA until 2020 earliest, so I am not really suffering there
)
The reason for that thinking is the continued weakening of the US$. Just 6 month ago in January the exchange rate to the Euro was around 1,05 to 1,07. I just looked and it is above 1,18 today !
That is pretty significant. And not only will that make Tesla cars lower priced in Europe and Asia, it will also make the German competition more expensive in the USA.
Assumming Tesla can keep up with S and X production, and even increase that in parallel to ramping Model-3, we might be in for a nice surprise. That will however add to the ' Q3-4 Production hell", but Tesla might reward employees nicely if they can pull that off.
Also note that the cells for TE and Model-3 are produced in US, so that now also helps.
Would be great if Tesla can increase the 2H sales / delivery number tomorrow (as long as they still sand-bag it).
Not so nice for my US$ nominated TSLA, but great for Tesla !
(I will not sell my TSLA until 2020 earliest, so I am not really suffering there
)
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jhm
Well-Known Member
Omg, the Bold outsold Model 3 by 13.3%!
We betrer hope Paulo Santos doesn't catch wind if this.
Wait a second, doesn't Elon's car count? Ok, Bolt only beat M3 9.7%. I think I can live with that.
ValueAnalyst
Closed
Tesla Model 3 is equipped with a driver-facing camera for Autopilot and Tesla Network
This is my opinion, not a fact: Tesla Network is coming sooner than some here expect.
This is my opinion, not a fact: Tesla Network is coming sooner than some here expect.
Yep. Removing all the buttons from the interior and making a smartphone app the main form of entry confirms the Model 3 is built for the future Tesla Network.
Waiting4M3
Active Member
"but Tesla only sold 60% of the M3 they built"
I predict interior refresh to the S and X soon.
jhm
Well-Known Member
That's even worse! Now we know the Model 3 is demand constrained. Why couldn't they find buyers for the other 40%? Management's not telling us something. Clearly demand for Model 3 is plateauing!
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Let me correct that for you: "You clearly have not been following me f̶o̶r̶ ̶l̶o̶n̶g̶ at all." I do not consider grinding widely optimistic projections generated through your "lens of first principles" in a DCF spreadsheet to in anyway render the results legitimate.
ValueAnalyst
Closed
Sorry folks, totally OT, but this is a nice read while the SP bores us all silly
The Model 3 Is Further Proof of Tesla's Asymmetric War Against the Auto Industry
The Model 3 Is Further Proof of Tesla's Asymmetric War Against the Auto Industry
Reciprocity
Active Member
So much good hear, but I would add that there is a good possibility that Traditional autos actually get bailed out instead of failing on their own. There is to much invested in terms of jobs and infrastructure that they will not be allowed to fail.
There will be a lease program, its just natural. A big reason they need a lease program is that people who can only afford a $35k car do not make enough to leverage the full tax credit. That might be fine for people buying a $44k car, but they will need a lease by years end for the cheaper cars.
To me this is the money shot. This is what will pressure change. My guess is that if these companies do fail, their governments will work with the survivors to pick up the pieces and that they will be forced kicking and screaming into EVs. VW maybe the only German car company to survive and they will need to get rid of many of the their brands to survive. For example, they might agree to bail out BWM but close down the Audi brand and replace it with the BMW brand. This consolidation must happen for these companies to survive, with government support of course. Hyundai/Kia and Toyota likely to survive as well. In the US, its hard to say if they will be bailed out again, but if I had to guess GM and Chrysler will merge and buy up what remains of Ford, unless ford can come out with an EV F150 soon, then it would flip. The problem with old school manufacturers is that they are to bloated with legacy issues and do not have enough technology or techy people to lead the push. They do not have much of value for an EV company to come in and buy them. Its cheaper to pick at the bones of the dead car companies, like Tesla did with the $50 Million stamping press for $6 from Detroit and of course the NUMMI plant for $50 Million. The old company didnt have anything else of value as Tesla needed all new Robots to maximize production speeds.
I see much the same type of consolidation in the oil industry, though that might even be trickier. The issue is that there will still be so many cars on the road even after oil prices finally collapse. This will actually drive the price of gas up because they will need to supply the fuel in very inefficient ways. Right now its fairly efficient because of economies of scale, but as companies fail this efficiency will decrease dramatically. Governments will be less likely to bail out oil companies, but some aid to consolidate might be made available and of course there is bankruptcy with exists to help these companies restructure their bad debts. Its just 100x more complicated because its much more diverse with hundreds of companies and different aspects of oil declining while some aspects stay the same, say Jet fuel or propane vs diesel which is already on the decline if you read the great works in the Shorting oil thread. This is going to get messy and some countries are going to implode under the weight of it all and it will not be fun to watch.
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