General Discussion: 2018 Investor Roundtable

[SteveG3]

like I said over the summer... eventually this will start trading differently because there's no escaping this situation... granted, my claim was that would start happening in Aug/Sept... but it took all this time to get here.

the M3 changes everything. this is what the story was about. there is NO recovery if they do not succeed... and succeeding at this valuation means 5k to 10k per wk in very short timespan to providing funding for all the incredible growth required to expand even more to fit the valuation.

how the hell are they going to raise capital under these conditions?... the SP must fall. it's actually in their interest at this point.

gotta say, I called it 50 minutes before its debut here on TMC,

"on the one hand it is a further delay, on the other hand, the bear thesis was that Tesla would not hit volume production period. look for new narratives/goal post moving (probably hammering, “wow, they must really need cash now, but at the worst time... what awful terms it would take” rubbish), but with a long term view none of that matters. what’s more, pretty clear Tesla will hit 200K US deliveries until Q2, which means larger tax credits for more people."

Market Action: 2018 Investor Roundtable

 

[Hogfighter]

I'm just not seeing this as changing many people's minds. Bears are gonna feel the same, bulls feel the same (awesome product, in the middle of the ramp). Would be surprised to see a major pullback.

 

[Reciprocity]

I did some quick guesstimation on the Model 3 ramp given the updated parameters (2,645 produced in 2017, 1k/week entering Q1 and ending Q1 at 2,500/week, and 2,500/week entering Q2 ending at 5,000/week) and assuming a fairly linear ramp tilted slightly to EoQ to remain conservative. I then also ran the same guesstimations through the end of the year assuming a similarly linear ramp to 10k/week at the end of December, minus the final week of the year for possible factory closure.

It's in a Google Sheet here for anyone interested.

Short summary:
Since these are effectively Tesla's official guidance at this point and their modus operandi is not to exceed official guidance significantly...
-I expect the Model 3 production by quarter to be around 22k in Q1, 49k in Q2, 83k in Q3, and 107k in Q4.
-I expect total Model 3 produced count by EoY not to exceed 265k.
-I'll hereby stick to my somewhat facetious 1/1/2018 guess posted here and say that we'll see 201,800 Model 3s produced in 2018. And my 'that'd sure be great' hope is that the 265k comes to pass.
-Any hopes folks had of Tesla approaching 500k vehicles produced in 2018 died today. If we assume reasonable growth of S/X ending 2018 at 125k between them, that's 390k total for the company when you add in 265k Model 3s. I think 400k would be extremely optimistic.

And to be clear before I get jumped on, I've thought all along that we'd be in at best the 350k-400k range for 2018 given conversion from Elon Time™ to Gregorian Time. So today's ramp change announcement doesn't surprise or particularly faze me. It's basically what I expected to see. I'm happy that 2017 Model 3 production exceeded 2,600 as I was guessing 2,000-2,500 after the Q3 earnings call. And 101k S/X is great.

Now back to waiting for my configuration invite...

Remember that 200,000+ model 3s in 2018 would effectively double the revs from 2017 and triple the total cars shipped.

 

[myusername]

gotta say, I called it 50 minutes before its debut here on TMC,

"on the one hand it is a further delay, on the other hand, the bear thesis was that Tesla would not hit volume production period. look for new narratives/goal post moving (probably hammering, “wow, they must really need cash now, but at the worst time... what awful terms it would take” rubbish), but with a long term view none of that matters. what’s more, pretty clear Tesla will hit 200K US deliveries until Q2, which means larger tax credits for more people."

Market Action: 2018 Investor Roundtable

it's not a "thesis"... it's reality.

 

[Hogfighter]

gotta say, I called it 50 minutes before its debut here on TMC,

"on the one hand it is a further delay, on the other hand, the bear thesis was that Tesla would not hit volume production period. look for new narratives/goal post moving (probably hammering, “wow, they must really need cash now, but at the worst time... what awful terms it would take” rubbish), but with a long term view none of that matters. what’s more, pretty clear Tesla will hit 200K US deliveries until Q2, which means larger tax credits for more people."

Market Action: 2018 Investor Roundtable

If bears make the 'gonna need a cap raise soon' thesis, they'd better factor in the close to $1B they just raised in customer deposits

 

[SteveG3]

it's not a "thesis"... it's reality.

so, to be clear, you agree with the common bear narrative that Tesla will never hit volume production on the Model 3 (5K and onto 10K per week)?

 

[Zaxxon]

Remember that 200,000+ model 3s in 2018 would effectively double the revs from 2017 and triple the total cars shipped.

Indeed. And while lots of folks here would probably look at 250k 3s plus, say, 110k S/X in 2018 as disappointing, that's still 360k vehicles and more than triple their 2017 deliveries of 103k. I think we'll see a bit of a drop tomorrow, but nothing huge.

 

[mrdoubleb]

I did some quick guesstimation on the Model 3 ramp given the updated parameters (2,645 produced in 2017, 1k/week entering Q1 and ending Q1 at 2,500/week, and 2,500/week entering Q2 ending at 5,000/week) and assuming a fairly linear ramp tilted slightly to EoQ to remain conservative. I then also ran the same guesstimations through the end of the year assuming a similarly linear ramp to 10k/week at the end of December, minus the final week of the year for possible factory closure.

It's in a Google Sheet here for anyone interested.

Short summary:
Since these are effectively Tesla's official guidance at this point and their modus operandi is not to exceed official guidance significantly...
-I expect the Model 3 production by quarter to be around 22k in Q1, 49k in Q2, 83k in Q3, and 107k in Q4.
-I expect total Model 3 produced count by EoY not to exceed 265k.
-I'll hereby stick to my somewhat facetious 1/1/2018 guess posted here and say that we'll see 201,800 Model 3s produced in 2018. And my 'that'd sure be great' hope is that the 265k comes to pass.
-Any hopes folks had of Tesla approaching 500k vehicles produced in 2018 died today. If we assume reasonable growth of S/X ending 2018 at 125k between them, that's 390k total for the company when you add in 265k Model 3s. I think 400k would be extremely optimistic.

And to be clear before I get jumped on, I've thought all along that we'd be in at best the 350k-400k range for 2018 given conversion from Elon Time™ to Gregorian Time. So today's ramp change announcement doesn't surprise or particularly faze me. It's basically what I expected to see. I'm happy that 2017 Model 3 production exceeded 2,600 as I was guessing 2,000-2,500 after the Q3 earnings call. And 101k S/X is great.

Now back to waiting for my configuration invite...

Thank you for doing the math. At this point I would be conservative on the 10k ramp prediction, but 250k Model 3 should be doable if things work out as planned.

There is one more aspect we should mention here. As international deliveries will only start in H2, all production will got to the US first. Starting January, Model 3 should take the No.1 spot on the InsideEVs charts even if they only deliver 4k this month. That should create some positive buzz going forward. Model 3 will become the car to beat and unlikely anyone will be able to.

 

[ggr]

So, great delivery numbers overall, lower production numbers (means less cash for CoGS) and almost all of the Model 3 CapEx was spent by Q3. Not only do I think that they don't need to raise more cash, I think it's possible that they will show positive cash flow for Q4. I wish someone would work out the numbers on that...

edit: oh, and deposits...

 

[BornToFly]

I thought Elon was being conservative when he said 5,000/wk end of Q1. I really thought they were going to say, "Surprise, 5,000/wk by February." The new ramp is definitely disappointing. We will be lucky to see SP at 400 this year.

 

[Ovulation]

I thought Elon was being conservative when he said 5,000/wk end of Q1. I really thought they were going to say, "Surprise, 5,000/wk by February." The new ramp is definitely disappointing. We will be lucky to see SP at 400 this year.

I think they are conservative, otherwise, statments like this wouldn't make sense
Tesla Model 3 production is increasing to 5,000 units per week, say suppliers

 

[NicoV]

I did some quick guesstimation on the Model 3 ramp given the updated parameters (2,645 produced in 2017, 1k/week entering Q1 and ending Q1 at 2,500/week, and 2,500/week entering Q2 ending at 5,000/week) and assuming a fairly linear ramp tilted slightly to EoQ to remain conservative. I then also ran the same guesstimations through the end of the year assuming a similarly linear ramp to 10k/week at the end of December, minus the final week of the year for possible factory closure.

Tesla said they would slow the ramp, not that they would switch to a linear ramp.
Slowing and exponential ramp from x10 in q417, x2.5 in q1, x2 in q2 may still mean x2 in q3. So with the info in the delivery press release you may as well conclude that the 10k/week can be reached end q3. Wishfull thinking probably.

 

[30seconds]

just for perspective the production rate for the Model 3 is the same / very similar to the Model S

 

[Esme Es Mejor]

Model 3 sales grew 238% from October to November. I projected that forward to December to get a baseline assumption of 800+ for December. I figured they’d beat that, and they did (1060, 307% growth), though not by as much as we would have wanted.

Applying those growth rates (either 238% or 307%) going forward suggests 2500-3200 deliveries in January. Again, I think they can beat those numbers & I hope they do, but that will be my baseline assumption.

I know this is reasoning by analogy, which is a terrible way to design new products, but it seems like a good way to set my expectations.

 

[Zaxxon]

Tesla said they would slow the ramp, not that they would switch to a linear ramp.
Slowing and exponential ramp from x10 in q417, x2.5 in q1, x2 in q2 may still mean x2 in q3. So with the info in the delivery press release you may as well conclude that the 10k/week can be reached end q3. Wishfull thinking probably.

Indeed, it's certainly possible that they hit 5k/week at the end of Q2 (as stated in today's guidance) and then hit 10k/week well before the end of December. I'm doubtful that that would happen, though, and am much more comfortable assuming it'll be a slow, linear slog from here to 10k/week. And of course linear isn't the worst possible outcome--they very well may spend Jan-May at the 1k-2k/week range before jumping to 5k by 6/30. That'd also meet their guidance from today but result in far fewer Q1 Model 3s.

I think assuming linear is granting enough optimism for now.

 

[NicoV]

just for perspective the production rate for the Model 3 is the same / very similar to the Model S

Also putting the ramp in prespective: within 1 or 2 weeks, Model 3 will be the long range EV with the highest production rate.

 

[NZ10K]

Indeed, it's certainly possible that they hit 5k/week at the end of Q2 (as stated in today's guidance) and then hit 10k/week well before the end of December. I'm doubtful that that would happen, though, and am much more comfortable assuming it'll be a slow, linear slog from here to 10k/week. And of course linear isn't the worst possible outcome--they very well may spend Jan-May at the 1k-2k/week range before jumping to 5k by 6/30. That'd also meet their guidance from today but result in far fewer Q1 Model 3s.

I think assuming linear is granting enough optimism for now.

Kind of inline with my thought too. They'll probably be in 1k/week in Q1 and Q2, and run up to 2+K in Q3 and Q4. There will never be a sudden jump from 2K/week to 5K/week at any point. Don't think production ramp can work that way, even at Tesla.

 

[Starno]

" As we continue to focus on quality and efficiency rather than simply pushing for the highest possible volume in the shortest period of time, we expect to have a slightly more gradual ramp through Q1 "

If they want they can make the ramp faster, they decided it to ramp slower.

 

[myusername]

Indeed, it's certainly possible that they hit 5k/week at the end of Q2 (as stated in today's guidance) and then hit 10k/week well before the end of December. I'm doubtful that that would happen, though, and am much more comfortable assuming it'll be a slow, linear slog from here to 10k/week. And of course linear isn't the worst possible outcome--they very well may spend Jan-May at the 1k-2k/week range before jumping to 5k by 6/30. That'd also meet their guidance from today but result in far fewer Q1 Model 3s.

I think assuming linear is granting enough optimism for now.

so they're supposed to deliver a semi in 2019... where's the money for the factory buildout going to come from?... push that back. for that matter, push back any factory expectations you had for 2019/2020... meaning no MY in 2020 either... how about the gross margin ramp for M3?... push that back. also, they never meet guidance on the "ramp"... so assume 1.5k exiting Q1 and 3k exiting Q2... assume 200k to 250k in 2018... assume reservation holder #400,000 will receive their vehicle in mid to late 2019... assume 400k to 500k for 2020... new factories come online in 2021... first deliveries of MY and Semi in 2021 ramping through 2022... first 1m year would be in 2022 or later.

and that's an OPTIMISTIC view.

this is not a $53b company growth company... if measured by comparison of other auto manufacturers while NOT including growth... the SP in 2022 would be half of what it is today... add in growth and you could consider it equal to today... that's the value including growth expectations in 2022!... not today!

 

[JRP3]

" As we continue to focus on quality and efficiency rather than simply pushing for the highest possible volume in the shortest period of time, we expect to have a slightly more gradual ramp through Q1 "

If they want they can make the ramp faster, they decided it to ramp slower.

If they want to put out crap cars they can ramp it faster, so, no not really.