Machines are apparently being delivered to Shanghai already. I realize they probably won't be billed until next quarter.
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Near-future quarterly financial projections
- Thread starter luvb2b
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- elon is an ass
Doggydogworld
Active Member
That's equipment. Tooling won't arrive for a while. IMHO building and equipment will not count as capex, similar to Buffalo.
I think the equipment in Shanghai does count as capex. Not sure about the building. The land is a lease (like all land in China) and must be accounted for as such, so I'd expect that the building would also be under lease accounting (since it is permanently affixed to the land). The equipment, however, has no such arrangement to my knowledge. (In Buffalo, the equipment is technically leased from SUNY, IIRC. I see no similar arrangement in Shanghai.)
EVNow
Well-Known Member
Even with unwinding of the wave I expect Model 3 inventory to grow and s+x to come down. So, given the extremely high inventory build up in Q1 ($800M), we'll actually see the inventory level go down. BTW, in luvb2b's Q1 model, the inventory building is a big miss. That makes his cash flow estimate miss the actuals by $300M.
Possibly. I just wanted to show how much they would have to spend to be in line with their guidance - and they would still be (cash flow - capex) positive for given # of deliveries.
I expect GF3 capex to be also covered by China loans.
EVNow
Well-Known Member
Equipment directly used for manufacturing (like robots) should count as capex - but probably with their own linear non-unit based depreciation. Unless on lease. Not sure what they are doing in Fremont.
Anyway, the line item we are talking about is "Purchases of property and equipment excluding finance leases, net of sales" - that definitely includes all fixed assets in the factory.
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Doggydogworld
Active Member
You could be right. As you say they haven't disclosed a building/equipment lease, just some Buffalo-like capex and annual tax revenue clauses. I'm sure it'll be on their balance sheet one way or the other, it's just a matter of how it gets there.
It is hard to imagine what else they'd spend 2.0-2.5b on this year. Or 2.5-3.0b, depending on which part of the 10-Q you read.
EVNow
Well-Known Member
I wrote this response in the Market thread. Wanted to expand on this a bit here.
Main assumptions for 2019 are
- Margin of 20%+
- ASP of 50k+, 100k+ for 3 & s+x
- No big inventory buildup like in Q1
- About $1B in SG&A + R&D.
I wonder how this will change for 2020, when GF3 coming online. My guess would be
- Margin will be maintained above 20%
- ASP will continue to be 50k+, 100k+. This is based on SR+ price in China being $47k (RMB 328k).
- Inventory needs should go down as China gets supplied mainly from GF3
- SG&A should go up to account for GF3. May be not that much.
- Depreciation may go up for GF3.
When Model Y starts getting produced,
- Margin may go up as initially expensive Ys will be made
- ASP will go up from 50k+, 100k+
- Inventory may not go up much depending on region they will be delivering
- SG&A should be about the same
- Depreciation may go up a little
One unknown in all this is FSD - or more accurately how they will show progress towards FSD. If NOA on city roads becomes available to the fleet, it would be a very novel new tech for everyone. No one has released anything close to that on city streets. I expect FSD take up rate to increase, which would increase ASP and Margin. Tesla will also get to recognize deferred revenue resulting in a one off windfall profit.
Main assumptions for 2019 are
- Margin of 20%+
- ASP of 50k+, 100k+ for 3 & s+x
- No big inventory buildup like in Q1
- About $1B in SG&A + R&D.
I wonder how this will change for 2020, when GF3 coming online. My guess would be
- Margin will be maintained above 20%
- ASP will continue to be 50k+, 100k+. This is based on SR+ price in China being $47k (RMB 328k).
- Inventory needs should go down as China gets supplied mainly from GF3
- SG&A should go up to account for GF3. May be not that much.
- Depreciation may go up for GF3.
When Model Y starts getting produced,
- Margin may go up as initially expensive Ys will be made
- ASP will go up from 50k+, 100k+
- Inventory may not go up much depending on region they will be delivering
- SG&A should be about the same
- Depreciation may go up a little
One unknown in all this is FSD - or more accurately how they will show progress towards FSD. If NOA on city roads becomes available to the fleet, it would be a very novel new tech for everyone. No one has released anything close to that on city streets. I expect FSD take up rate to increase, which would increase ASP and Margin. Tesla will also get to recognize deferred revenue resulting in a one off windfall profit.
@EVNow I'm wondering what's your reasoning for $105k ASP for S/X? I'd imagine ASP to trend lower due to the reinstatement of standard range models, and also due to the free ludicrous upgrade for existing owners.
EVNow
Well-Known Member
Mainly because of refresh and expected higher take rate of FSD. We'll see. There was a bit of discussion on this upthread - basically ASP of $100k instead of $105k would make an impact of $15M on p&l. Not a big impact in the grand scheme.
EVNow
Well-Known Member
Yes - hopefully they'll be ready with a refresh of X before Y is released !
By the time Y comes online, initially delivered X would be 4,5 years old. Hopefully enough of them re-order that Tesla doesn't need to find a lot of new buyers.
tmoz
S85D, Y LR, ex Prius PiP
Rework might be high for initial Model Y builds, not sure how that would figure. Model X was too big for me. Model 3 was too small. I'm hoping model Y will be just right. That is, can I carry everything in it I could in a Prius 2012 PiP.
EVNow
Well-Known Member
Anecdotal on TMC.
BTW, I won't be surprised if Q2 ASP is actually higher than 105k. They seem to be prioritizing LR deliveries over SR. Though, this may be offset by all the huge discounts they are giving pre-refresh S.
Post Q2, the ASP may go down a bit. Difficult to figure that out now.
Were you thinking the ASP would be substantially lower than $105k (like $95k or $90k) ?
EVNow
Well-Known Member
The rework would result in higher Service cost - but the volume should be low too, to start with.
Trunk space of Y seems to be >= that of Prius.
Model Y Cargo Space (poll)
It seems like the price of a fully-optioned long-range Model S/X has significantly come down in the past several months. This will affect ASP. I wouldn’t be surprised if Q2 ASP is under $100k and it drops to under $95k by end of year.
Tesla raised $2.7 billion (really $2.3 after fees), however, if you assume that past debt will be paid and cash reserves return to $0 then the net to Tesla was around $500MM. A non-bailout bailout if you will. They will not meet CapEx forecasted and they are not spending their forecast in R&D. Conserving cash? Hard to see how they return to profitability in 2019 and with ~$30b in debt, dropping S and X sales,
EVNow
Well-Known Member
That is possible - but difficult to tell since there are many moving parts, esp. this quarter.
As I said, every $5k drop in ASP brings down the profit by about $15M.
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EVNow
Well-Known Member
What timeframe are you talking about ?
What exactly do you mean by "profitability" - gaap or non-gaap. You don't need "profitability" to service debt, just positive cash flow, which is far easier to achieve. If they sell enough cars, they are likely to make $3B in cash rest of the year. Enough to service debt and spend on Capex.
Forecast and actuals in R&D has been around $350M(Mod: corrected obvious typo from B to M --ggr) a quarter. Can you give links to where they forecasted more ?
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Is that quarterly?
SG&A, however, is currently $2.2 billion/year, and I expect it to go up to $2.5 - $3 billion as the service centers are deployed geographically.
That would be a total of about $4 billion/year or $1/billion a quarter for R&D + SG&A. Is that the same as your estimate?
That would be a total of about $4 billion/year or $1/billion a quarter for R&D + SG&A. Is that the same as your estimate?
