Mod: In accordance with Lord Vetinari's polite demand, I believe I have moved all the posts about the 3/23 crash to a separate thread. Please keep the followups there. --ggr
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What are the expectations you are asking about? The 25% GM when the M3 is being produced at full design capacity or the GM% for the next 12 months?
OpEX is going to grow because Tesla needs to ramp up its distribution and service capabilities as more M3s are produced and because it needs to spend additional R&D on the Y, Semi, Roadster II (and pick-up?) as well as the solar tiles and stationary battery technology. If it curtails R&D, growth will decline and/or it will lose ground to competitors.
The point many are missing is the difference between Cash from Operations and Free Cash (flow) i.e. including Cash used in Investments (aka CapEX). I'd love to see a quantitative explanation of how Tesla can generate enough Cash from Operations to repay the $1.2 billion in debt maturing in less than a year, let alone how it will fund completion of the Nevada GF and facilities to produce the Y and Semis in 2019.
sundaymorning
Active Member
I agree with this completely. Gross margins have mostly been on point.
On a different topic regarding Tesla’s financials and spending. If you look through Q3 2017 financials, they were entering Q4 2017 with $3.5 billion in cash. After Q4 2017, they were entering Q1 2018 with $3.4 billion in cash. So from one Q to the next, Tesla drew down $0.1 billion. This looks like pretty efficient spending to me and shows that cash flow is indeed getting stronger. This occurred even with MS/X margins taking a hit last Q. Elon did mention during CC that as 2018 progresses, internal margins for MS/x will be in low 30% by end of year. Now I don’t expect them to realistically hit 30%, but the point being here is that Tesla’s gross margin can get even better.
VIN 152XX is in the google spreadsheet.
Another indication that the ramp is entering the vertical part of the S curve.
Also, the fact that invites are now going to Canada means that quality is good enough to risk sending the cars to remote areas, without causing too much trouble for repairs. This is also a good indicator that the ramp is real.
Krugerrand
Meow
No, it's not*.
* - Speaking as someone with a name prone to similar near-constant misspelling.
Sorry, forgot the ‘ - Doug Field’s email.
I mean, I understand that Tesla has rampup issues but at least they are not parking
350000 cars under the sun and paying back 7.4 billion dollars.
VW storing around 300,000 diesels at 37 facilities around U.S.
350000 cars under the sun and paying back 7.4 billion dollars.
VW storing around 300,000 diesels at 37 facilities around U.S.
"The overall question is how the Model 3 becomes a car produced for $26,250 and sold for $35,000. Right now, it's hard to see a viable path, especially given the bad debt rating and weak liquidity position."
agreed that this is the magic question. Investors are likely to continue to give Tesla time (through Q3) to get the Model III to scale. If:
1. it gets to scale (5K a week)
2. They are producing with an ASP of between 40-45K (probably can't get to scale w/out going down stream on the configs anyway, so if 1 happens, 2 probably does)
3. They are showing sufficient future demand (250K a year) to justify 5K a week once the initial reservations are gone
4. The margins are over 15% - closer to 20%
Then it continues and the Y is funded (maybe Tesla decides to not move to 10K a week but instead goes to the Y?).
Otherwise - it goes down and probably to zero.
Why?
At their current op ex of 1B a quarter and current margins for the X/Y of 500K a quarter, they need another 500K a quarter from the III at between 15-20% margins to show some earnings
agreed that this is the magic question. Investors are likely to continue to give Tesla time (through Q3) to get the Model III to scale. If:
1. it gets to scale (5K a week)
2. They are producing with an ASP of between 40-45K (probably can't get to scale w/out going down stream on the configs anyway, so if 1 happens, 2 probably does)
3. They are showing sufficient future demand (250K a year) to justify 5K a week once the initial reservations are gone
4. The margins are over 15% - closer to 20%
Then it continues and the Y is funded (maybe Tesla decides to not move to 10K a week but instead goes to the Y?).
Otherwise - it goes down and probably to zero.
Why?
At their current op ex of 1B a quarter and current margins for the X/Y of 500K a quarter, they need another 500K a quarter from the III at between 15-20% margins to show some earnings
Conclusion: TSLA might go up or might go down.
ValueAnalyst
Closed
Oh yea. Feeling rampy. 12,500 produced and 10,000 delivered in 1Q with 2k/w exit rate sounds about right.
Shower thought: Is it easier to start a new rocket company than a new car company?
While I understand your meaning, I think Elon's ambition is so large that Tesla will be borrowing money until be break our carbon habit - i.e. essentially forever.
Reciprocity
Active Member
I would guess that less then 10% will be the base model with no options with the free color options being even a smaller portion, maybe 2 percent total. With nearly 80% take rate on EAP and 50% on fsd it's hard to see how the ASP is ever under $45k. Not to mention that fsd will eventually be enabled on every car ever made by at least one of its owners. Today's $35,000 car could be worth a total of $44,000 to Tesla with those options enabled in cars by second and even 3rd owners. So let's stop referring to this car as a $35,000 car because no one even wants that car. They all want the $40,000+ version. That's not Tesla's fault.. that's a testimony to how awesome those features are.
High 20s GM's are much easier to attain when you can sell $8000 worth of software and it's almost guaranteed over the life of the car. Especially considering the most expensive part in the car, the battery pack, is getting cheaper, faster, for Tesla then anyone else. 30% improvement in density is equivalent to 30% decrease in cost because it comes down to the raw material costs. Period.
Last, there is no competition and there won't be for a very long time. It's not because they can't compete. VW, Daimler, bmw could all make awesome EVs and make more cars then Tesla could ever dream of making. This is fact. If they wanted to snuff out Tesla, they could have. They really could have made mass market EVs by now if they really wanted to. Here is the main problem the completion has and it will dictate their actions. The more success they have selling EVs, the faster they go bankrupt because they will lose money on those EVs while they cannibalize they profitable Icev business. Not to mention the dealers won't like them unless they need long term and consistant maintenance. It's literally illegal for the manufactures to sell direct, so forget that idea. Dealers won't push them, they well talk then down and manufactures will have to massively incentivise them to push EVs, tough my guess is that consumers will do that for them anyway and dealers will find other ways to undermine the manufactures. Like long waits for repairs of EVs and no support for questions. No EV loaners. Anything and everything you can think of, because EVs means the end of their livelyhood long term.
The other reason completion is so far behind. They don't want to make them. They refuse to secure battery supplies. They refuse to build anything beyond compliance levels of cars. All the completion will suffer from more then one of the following week compared to Tesla's over the next decade or more; smaller, slower, less range, more expensive in the same category, limited availability, batteries that degrade faster, less charging options, slower charging, less dealer support, and on and on and on..
The magical year of 2020 is coming and it will be magnificent. Some 129+ models are coming from a dozen manufactures and they all will be almost as good as a 2012 Tesla S60. And they will all claim their bolt sized sub compact is as good as the model 3 and their tiny SUV is faster then a giant model x and that they are planning to mass produce atleast 1000s a month. Maybe. Probably not. Oh it's going to be magical. I really can't wait.
Tesla should be scared.. really scared.. That if they want to succeed at their mission they are going to have to do it alone. That should scare them, because it's unrealistic that they can make a billion cars. They really do need help. We can always how that the magical year of 2020 holds the answers.
you do realize that their workng capital turned from positive 500 million to around 1 billion negative right? which means your "0.1 billion draw" calculation is beyond laughable. You have to undestand accounting before you analyse financial statements...
NASDAQ shows short interest dropping from 28,706,689 on February 28 to 28,382,760 on March 15 (both are settlement dates so the trade dates are 3 days earlier)
It would seem short interest declined marginally during the first third of March. How does this reconcile with the 60-70% transactions? Do the shorts just enter and exit positions constantly?
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I think this is important. The company, as currently built, it built for substantial operational scale. What we don’t know is how much energy can contribute and how much further expansion would be needed to support model Y.
Expanding on my earlier thought. SpaceX was founded 14 months before Tesla. 14 months ago SpaceX had just returned to flight after blowing up 2 rockets within 11 scheduled missions. They've had 24 successful launches since then. What will Tesla look like in 14 months when it will have existing as long as SpaceX has today?
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