Articles/megaposts by DaveT

[AlMc]

Dave will be along with his answer, but I read IR's response as "of course we haven't advised anyone, because that would be illegal, and we don't do that." Whether they do or don't, we can't know, but I (for one) give them the benefit of the doubt.

Totally agree. Just pointing out that this is basically the only answer they can give. I did not expect them to say...'we had Andrea and Jonas tour the factory yesterday and discussed production and delivery numbers for Q4 and
2014 with them.'
it is great that Dave contacted them with a good question based on the analysts report that contained very firm numbers. Dave has done this before and shared some good information with the forum. I just don't think this time we would expect any other answer.

Dave.....I appreciate your efforts on all our behalves! I consider you a TMC friend. Thanks Al

 

[maoing]

There are quite a lot very details of Q4 number and 1000 delivery miss is a reasonable number, I guess AJ might know some insider information. The strange thing is AJ didn't talk about 2015 guidance, I guess he might issue another note right before Q4 ER.

The firm is cutting their 4Q volume and ATP forecast to reflect hiccupin China ramp.Meanwhile, the firm's price target goes to $280 from $290. The firm's 4Q volumeforecast goes to 9,993 units from 11,165 units, taking full year volume to31,814 units, or morethan 1,000 below the company's FY target. This change, along with $20mm of FX headwinds (and lower ATPs) takestheir 4Qgross margin assumption to 28.0% from 29.6% previously. Their 4Q forecastincludes $20mm of regulatory credits.

 

[Auzie]

it is great that Dave contacted them with a good question based on the analysts report that contained very firm numbers. Dave has done this before and shared some good information with the forum. I just don't think this time we would expect any other answer.

Dave.....I appreciate your efforts on all our behalves! I consider you a TMC friend. Thanks Al

I second this!

Thanks Dave

 

[DaveT]

Dave: Good to hear from you. Thanks for the info. Is it your experience or opinion that IR would admit that they actually did talk to analysts about production/delivery numbers during the 'quiet period' before an ER?

Its possible Adam Jonas could have heard something before Q4 ended regarding production numbers, or perhaps he has some ongoing source regarding factory run rate. I just wanted to make sure that Tesla IR is or is not feeding him that info.

 

[AlMc]

Its possible Adam Jonas could have heard something before Q4 ended regarding production numbers, or perhaps he has some ongoing source regarding factory run rate. I just wanted to make sure that Tesla IR is or is not feeding him that info.

Got it. Thanks. Hope all is well in the Dave T household.

 

[chickensevil]

I have a few problems with the AJ number that inclines me to think that it is made up and intentionally negative (for whatever motive that may be). That number is deliberately below 32k so as to be sliding in just under any interpretation of guidance from Elon. They originally guided down to 33k and then there was the one instance of him saying 32-33k. So to me, it seems like they wanted to pick a number that was right under that 32k minimum for whatever reason.

This would be a horribly HUGE miss on guidance that would surely have negative effects on TSLA and people's impression of Tesla Motors that I believe would have much larger implications than just some tiny thing that could be blown off.

This would also have a pretty strong impact on Q4 ER that is going to be hard to make up in higher GM or higher ASP. A 1k miss I had calculated would take around a 29% GM and 111k ASP to make it stay within the 30-35 cents EPS that Tesla had previously guided. If we take this delivery number and just plug in previous numbers of 28% and 106k ASP we have a BIG problem. That's 296.6M in GP and roughly 13.9M in Net Income... or a BIG miss of only 9.6 cents EPS. Wouldn't a big miss like this have been pre-warned by the company well before now? The only way any of us would somewhat happily accept a 9.6 cent EPS was because of a higher spending on SG&A or R&D (assuming they explain the departure from the 15% increase they projected). They also did the ER in the middle of Q4... at that point it should have been obvious that they were going to miss by that much and should have been able to guide for a far lower EPS estimate.

Either Tesla is withholding SUBSTANTIAL information from investors or AJ is making up numbers. One involves jail and an investigation from the SEC... and the other... well... it just further kills an analyst's credibility but otherwise has not major effect. So who are we more inclined to believe? When has Tesla/Elon ever been THAT far off on guidance when they have already known what the first half of a quarter looks like when they give it? This would be a first instance to my knowledge.

 

[GenIIIBuyer]

You don't have to pre-warn, companies miss EPS by large amounts without giving warning all the time.

edit addition: SEC is considered with preventing and prosecuting fraud. As long as you accurately report financials every 90 days there is no requirement to give up to the minute guidance. Forward-guidance has forward looking statement disclosures and legalese for a reason.

 

[Subhuman]

I have a few problems with the AJ number that inclines me to think that it is made up and intentionally negative (for whatever motive that may be). That number is deliberately below 32k so as to be sliding in just under any interpretation of guidance from Elon. They originally guided down to 33k and then there was the one instance of him saying 32-33k. So to me, it seems like they wanted to pick a number that was right under that 32k minimum for whatever reason.

This would be a horribly HUGE miss on guidance that would surely have negative effects on TSLA and people's impression of Tesla Motors that I believe would have much larger implications than just some tiny thing that could be blown off.

This would also have a pretty strong impact on Q4 ER that is going to be hard to make up in higher GM or higher ASP. A 1k miss I had calculated would take around a 29% GM and 111k ASP to make it stay within the 30-35 cents EPS that Tesla had previously guided. If we take this delivery number and just plug in previous numbers of 28% and 106k ASP we have a BIG problem. That's 296.6M in GP and roughly 13.9M in Net Income... or a BIG miss of only 9.6 cents EPS. Wouldn't a big miss like this have been pre-warned by the company well before now? The only way any of us would somewhat happily accept a 9.6 cent EPS was because of a higher spending on SG&A or R&D (assuming they explain the departure from the 15% increase they projected). They also did the ER in the middle of Q4... at that point it should have been obvious that they were going to miss by that much and should have been able to guide for a far lower EPS estimate.

Either Tesla is withholding SUBSTANTIAL information from investors or AJ is making up numbers. One involves jail and an investigation from the SEC... and the other... well... it just further kills an analyst's credibility but otherwise has not major effect. So who are we more inclined to believe? When has Tesla/Elon ever been THAT far off on guidance when they have already known what the first half of a quarter looks like when they give it? This would be a first instance to my knowledge.

Not saying I'm buying Adam Jonas 1000 car miss but it is possible that Tesla may miss it's guidance due to the whole P85D seat debacle. I doubt the seat issue and subsequent delivery delays was foreseen at the time of the earnings call. Just something to consider.

 

[DaveT]

You don't have to pre-warn, companies miss EPS by large amounts without giving warning all the time.

edit addition: SEC is considered with preventing and prosecuting fraud. As long as you accurately report financials every 90 days there is no requirement to give up to the minute guidance. Forward-guidance has forward looking statement disclosures and legalese for a reason.

Yep, Tesla doesn't need to pre-announce a miss on Q4 earnings (that is if they missed).

- - - Updated - - -

Not saying I'm buying Adam Jonas 1000 car miss but it is possible that Tesla may miss it's guidance due to the whole P85D seat debacle. I doubt the seat issue and subsequent delivery delays was foreseen at the time of the earnings call. Just something to consider.

I have no crystal ball or special info but I wouldn't be surprised to see Tesla miss their 33k guidance for FY 2014. The P85 delays seemed to have been quite serious at the time and could have slowed production down more than anticipated.

 

[aznt1217]

Welcome back! I agree with your point that the P85D delays did seem serious. I was following it pretty closely at the time, but from what I understood there was like a ~2 week delay for SOME owners and Tesla resorted to batch deliveries (probably based on a mix of who could actually ship cars for them at the time). More importantly, about half a week into the delays non-D model S owners were getting delivery dates moved up. In the last ER I remeber them saying they produced more cars but couldn't deliver in time which made them lower the FY guidance wouldn't those show up in Q4? Anyway, we all know what matters is X and 15 guidance it seemed like Tesla learned from the delay this past summer and did extra work for the Q1 expansion (ex. Like having the robots already on site for precision training/tuning before getting set up on the line).

 

[DaveT]

Hmmm...

 

[FredTMC]

Hmmm...
View attachment 71985

Nice! I like this a lot

 

[DaveT]

Hmmmm (again)...

 

[hershey101]

"Elon musk thinks $TSLA is worth $4,000!" I wish that was tomorrow's headline.

 

[LargeHamCollider]

My own year by year model (made a few months ago) puts Tesla's current value at 190b, which was entertaining but I put very little stock in it. It uses similar numbers, 10% discount rate, average 45ish% growth ending with 15% margins. Maybe I'll weight it a little heavier now..

 

[Ocelot]

Hey Dave,
I have been a follower of yours for a while, and would appreciate any comments you have on the conference call/home energy storage system and how you see this effecting solar city stock. I have taken a beating (options down around 70%) and would appreciate any thoughts you have on this subject.

I would also like to show this link, which notes automotive sales/company/year, as I noted you seemed a bit incredulous about the pure amount of cars Tesla will have to manufacture to reach "apple's" market cap. Personally I feel Tesla can produce 5 million plus cars per year in the next decade...or even if that is aggressive and off by 50%, lets say 15 years for Tesla to move into the top 5, no problem!


Automotive industry - Wikipedia, the free encyclopedia

 

[CyberDutchie]

Dave, interesting thoughts on the Google+ hangout last night, but I really don't buy into the notion that Tesla is deliberately slowing production to staying production constrained. They keep saying they hope to be able to test the demand side next year, but simply can't catch up to demand, because their product is so far ahead of anything out there. It really is the best car available. I believe the relentless focus on quality and customer experience is the key strategy for Tesla to keep the demand up, and leave the competition scrambling for years to come.

Yes, a few thousand more cars produced would have been better for this particular ER, but in the grand scheme I really think they are right to not sacrifice on quality. I also think they will focus on improving efficiencies this first half so they can scale easier in the second half. This will have implications perhaps for the short term price as they might not beat Q1 or Q2 numbers. But come Q3 and Q4, hopefully the optimizations made in the factory will pay off and we see a huge ramp in those quarters. And a return to ATH.

- - - Updated - - -

Regarding the comment that the D was a distraction, I don't buy that either. I think launching the D was a necessary part of Model X development, as they share the same platform. The latest spy photos really show the Model X is just a larger Model S. So the work on the D was as much work on the X as the S.

 

[palmer_md]

Regarding the comment that the D was a distraction, I don't buy that either. I think launching the D was a necessary part of Model X development, as they share the same platform. The latest spy photos really show the Model X is just a larger Model S. So the work on the D was as much work on the X as the S.

I agree. The reconfiguring of the line was necessary for the X as were the chassis changes to the Model S, so that both the X and S shared the same chassis. They completely changed the suspension both front and rear and modified the chassis to accept the front wheel drive. This is true for all vehicles coming off the line after the reconfiguration whether its RWD or AWD. All of it was necessary for the X and those changes hurt the Model S production. D release seemed like a good idea, but unforeseen issues caused delivery issues due to some minor incomplete items, and once again they had some lost deliveries because of building cars that could not be delivered due to some missing components. Essentially the second half of last year was hit with two production issues that are both related to things that were necessary for Model X but hurt Model S sales. Now that they are past these issues, Model S should be much smoother for all variations, and Model X startup should be smoother as well.

oh, and it looks like you guys were pretty much correct last night about the $200 support and that it would not stay below for long if it did fall below...followed your predictions perfectly.

 

[clmason]

Hmmmm (again)...

View attachment 71989

Would be interested to see a projections of the market cap curve over time. As we march towards 2025, the first few years will require a lot of spending and not so much revenue (prior to Model 3 launch). At some point after Model 3 ships, probably the first quarter with 100,000 deliveries, there will be an second tsunami. The 10 year march won't be linear, might not be for the feint of heart, but will surely be quite epic if all goes as planned.

 

[FluxCap]

I wish I had bet on your closing price prediction last night, Dave -- well done!