2017 Q4 earnings estimates

[schonelucht]

Yeah. I struggle to find anything good in the numbers for this report. Gross margins on S/X declined even from last quarter while they were supposed to rebound. How? Why?

 

[ValueAnalyst]

Yeah. I struggle to find anything good in the numbers for this report. Gross margins on S/X declined even from last quarter while they were supposed to rebound. How? Why?

Tesla liquidated "new inventory," which sits on the Balance Sheet in Finished Good Inventory until sold at a discount:

6k unit inventory liquidation * $15,000 avg "new inventory" discount = nearly $100m hit to gross profit vs. custom build margins.

$100m vs. $2.5B automotive rev excl. Model 3 = 4% hit to S/X gross margin in 4Q17, which should reverse in 1Q18.

This is a rough back-of-the-envelope calc presented in order to encourage feedback.