Near-future quarterly financial projections

[Fact Checking]

I'm going to go out on a limb and predict 87K world deliveries for Q2, based on other people's hard work researching numbers. I'm figuring 55K US + 22K Europe + 10K China/Other.

So Canada is part of 10k China+ROW? Or is "55k US" really "55k North America"?

That feels a bit low. Troy estimated Q2 10k deliveries for Canada alone:

Troy Teslike on Twitter

​

And Troy is generally making conservative estimates:

• His 19.7k estimate for Europe is in line with what @Doggydogworld and @schonelucht are expecting based on the Q2 current data and historic trends.
• The recent Electrek leak suggested 33k NA deliveries in April+May already, with a June sales target of 33k-36k, which maps to 66k-69k sales target. The very latest leak of Elon's email suggests a delivery scheduling shortfall of about 5k units in NA - which reduces the range to 61k-64k. Troy's USA+Canada estimate is (slightly) below that range at 60.8k.
• Troy's Asia/Pacific estimate doesn't match seasonal patterns for June. Furthermore, there's apparently a full blown inventory flush campaign happening in China, with the GF3 pricing announcement and the leasing demand levers pulled. I believe they have not shipped Ravens to China yet and want to sell all pre-Raven inventory, including showroom models and loaners. I.e. Troy's estimate of 9k for APAC is possibly too low as well.

Based on all that I have trouble coming up with lower deliveries than 89k.

Also note another effect: if Tesla manages to deliver more S+X than they make in an attempt to flush pre-Raven inventory, that is going to disproportionately help cash levels, and maybe also GAAP income, because the fixed costs not part of the per VIN CoGs tracking system will be distributed among more units.

 

[Fact Checking]

Fred's June 5 article said North America April+May was 30.5k and InsideEVs says 28.3k in the US alone.

BTW., regarding the Electrek article, it said:

https://electrek.co/2019/06/05/tesla-sales-high-bonuses-leak/

"Now sources familiar with the matter told Electrek that Tesla executives held a call today with sales and delivery managers in North America to discuss the status ending into the end of the quarter."

"According to sources on the call, Tesla has already delivered 33,000 vehicles in North America this quarter."

"The level of deliveries is already extremely high after the first two months of the quarter, but Tesla is aiming to deliver another 33,000 vehicles in North America in June alone."​

So Fred's article was published on 8pm ET which is 5pm Pacific, on Wednesday June 6, and I assume the leak and the article took a few hours, so I suspect the call was held sometime during the working day and was probably only informed about deliveries on the previous day.

I.e. the 33,000 deliveries correspond to 30+31+4 days of deliveries, with a June 1/2 weekend that probably saw in excess of 1,000 daily deliveries. So I'd say the April+May North American numbers are probably ~29,000 based on the Electrek leak.

(Assuming the leaker isn't playing some sort of disinformation game here but is trying to manage market expectations.)

 

[mrdoubleb]

So Canada is part of 10k China+ROW? Or is "55k US" really "55k North America"?

That feels a bit low. Troy estimated Q2 10k deliveries for Canada alone:

Troy Teslike on Twitter

View attachment 423819
​

And Troy is generally making conservative estimates:

• His 19.7k estimate for Europe is in line with what @Doggydogworld and @schonelucht are expecting based on the Q2 current data and historic trends.
• The recent Electrek leak suggested 33k NA deliveries in April+May already, with a June sales target of 33k-36k, which maps to 66k-69k sales target. The very latest leak of Elon's email suggests a delivery scheduling shortfall of about 5k units in NA - which reduces the range to 61k-69k. Troy's USA+Canada estimate is (slightly) below that range at 60.8k.
• Troy's Asia/Pacific estimate doesn't match seasonal patterns for June. Furthermore, there's apparently a full blown inventory flush campaign happening in China, with the GF3 pricing announcement and the leasing demand levers pulled. I believe they have not shipped Ravens to China yet and want to sell all pre-Raven inventory, including showroom models and loaners. I.e. Troy's estimate of 9k for APAC is possibly too low as well.

Based on all that I have trouble coming up with lower deliveries than 89k.

Also note another effect: if Tesla manages to deliver more S+X than they make in an attempt to flush pre-Raven inventory, that is going to disproportionately help cash levels, and maybe also GAAP income, because the fixed costs not part of the per VIN CoGs tracking system will be distributed among more units.

Checking the latest data (6/26 from Spain and the Netherlands, real time 6/27 from Norway) via eu-evs.com, it seems Q2 is about 15% lower than Q1 on the same day. This is only 3 countries from ~30, but Norway and the Netherlands are a big chunk of overall European sales. 23k (Q1) minus 15% is 19,550... so yeah, I am getting a bit more optimistic on European sales as well.

At this point, I think available data and leaks point to

• 10k China
• 20k Europe
• 61k needed from NA + ROW to break the record.

 

[Fact Checking]

Checking the latest data (6/26 from Spain and the Netherlands, real time 6/27 from Norway) via eu-evs.com, it seems Q2 is about 15% lower than Q1 on the same day. This is only 3 countries from ~30, but Norway and the Netherlands are a big chunk of overall European sales. 23k (Q1) minus 15% is 19,550... so yeah, I am getting a bit more optimistic on European sales as well.

BTW., the end of Q2 slowdown in Europe is kind of expected unless it's caused by logistics problems such as homologation or other regulatory hick-ups.

The end of Q1 rush was abnormal in that it was caused by delays and an attempt to squeeze as much into March as possible. A couple of hundreds (maybe two thousand) deliveries still slipped to April.

If they planned this better for Q2 then they'd not concentrate all deliveries at the end of the quarter in a similar fashion, and they'd also make sure that they have all customer deliveries scheduled before the end of the quarter, and they'd allocate the remaining production to the North American market where delivery times are the lowest.

This would necessarily mean that Tesla would run out of Q2 inventory a couple of days before the end of the quarter in a few European markets. We might be seeing that process already - this week's deliveries are much slower in the Netherlands already.

 

[Doggydogworld]

BTW., the end of quarter slowdown in Europe is kind of expected unless it's caused by logistics problems such as homologation or other regulatory hick-ups.

The end of Q1 rush was abnormal in that it was caused by delays and an attempt to squeeze as much into March as possible. A couple of hundreds (maybe two thousand) deliveries still slipped to April.

If they planned this better for Q2 then they'd not concentrate all deliveries at the end of the quarter in a similar fashion, and they'd also make sure that they have all customer deliveries scheduled before the end of the quarter, and they'd allocate the remaining production to the North American market where delivery times are the lowest.

This would necessarily mean that Tesla would run out of Q2 inventory a couple of days before the end of the quarter in a few European markets. We might be seeing that process already - this week's deliveries are much slower in the Netherlands already.

The trackers show plenty of inventory in Europe. The last three days in the Netherlands vs. early last week shows acceleration, not slowdown:

M - 79 vs. 54
T - 96 vs. 70
W - 145 vs. 58

Today may come in lower than last Thursday's 139 and I certainly wouldn't count on Friday matching last week's Q2 record of 203. But the trend seems healthy enough. Spain also seems healthy. Norway is fading fast, though. IMHO the last ship brought a ton of SR+ that they couldn't get to Norway in time so they redirected those cars to delivery centers in Benelux and nearby countries. Norway is partially compensating by dumping pre-Ravens. Sales of S/X were an amazing 40% of the mix yesterday and today vs. only 9% in March.

 

[EVNow]

According to Insideevs the record for Model 3 in US is 25K in December '18. If they actually manage to deliver 30k+ this month in NA, they will probably beat this record. They will also beat the 91k record set in Q4 for worldwide.

I'm still leaning for the total to come close to 90k, but not beat 91k. Conservatively I'd put the number around 87.5K, with a range of 85k to 92k.

 

[Spacemanspliff]

According to Insideevs the record for Model 3 in US is 25K in December '18. If they actually manage to deliver 30k+ this month in NA, they will probably beat this record. They will also beat the 91k record set in Q4 for worldwide.

I'm still leaning for the total to come close to 90k, but not beat 91k. Conservatively I'd put the number around 87.5K, with a range of 85k to 92k.

Yea to me Elon’s last email seemed like a trying to not let employees take their foot off the gas email. I don’t think they get 90+ anymore, I think it’s closer to 87.


I don’t see them doing 11,000 in 6 days.

 

[neroden]

I should emphasize that I don't really care exactly where the Q2 delivery number comes in at; I think it's immaterial. The real question is what steady-state delivery and production looks like now, and we can't get that information from the Q2 numbers due to Raven ramping up, end-of-quarter shenanigans in both Q1 and Q2, etc. I'm hoping to get a cleaner picture of Tesla's state by the end of Q3.

 

[EVNow]

I should emphasize that I don't really care exactly where the Q2 delivery number comes in at; I think it's immaterial. The real question is what steady-state delivery and production looks like now, and we can't get that information from the Q2 numbers due to Raven ramping up, end-of-quarter shenanigans in both Q1 and Q2, etc. I'm hoping to get a cleaner picture of Tesla's state by the end of Q3.

I'm sure there will be some weird stuff in Q3 too. BTW, even if we think we can figure out the steady state demand in Q3 - Q4 & Q1, Q2 '20 changes that - again, because of year end and Chinese GF starting. Then in Q3, Q4 we'll see Y ramp up. In Q1, Q2 '21 they will start Pickup / Semi production.

Basically, Tesla is an ever changing story. Delivery numbers will keep going up in step fashion, rather than a smooth ramp, with occasional step downs too, like Q1.

I just don't know when (and if) the market will get used to it.

 

[generalenthu]

Here is my latest iteration of rough p&l. With an optimistic 92k deliveries, I get a non-GAAP EPS of $0.06 and revenue of $6.5B.

Yahoo finance avg analyst estimate today is : $-0.44 EPS (non-GAAP) and revenue of $6.22B.

The main difference from last time is that I've increased the deliveries, but also in Q4 assuming no GF3 deliveries and yet 117k deliveries. That pushes ASP up from earlier. Also I've made some changes @Doggydogworld suggested. Pushed up Energy generation & storage as well as services.

View attachment 411811

Haven't been following the conversation fully, but looking not too closely, we might be slightly below the estimate here. Are folks running with a 200Mill gaap lots estimate still?

 

[EVNow]

Haven't been following the conversation fully, but looking not too closely, we might be slightly below the estimate here. Are folks running with a 200Mill gaap lots estimate still?

Estimates have gone down.

Yahoo finance avg analyst estimate is :

May 24 : $-0.44 EPS (non-GAAP) and revenue of $6.22B.
Jun 27 : $-0.61 EPS (non-GAAP) and revenue of $6.17B.

 

[defc0n]

I'm sure there will be some weird stuff in Q3 too. BTW, even if we think we can figure out the steady state demand in Q3 - Q4 & Q1, Q2 '20 changes that - again, because of year end and Chinese GF starting. Then in Q3, Q4 we'll see Y ramp up. In Q1, Q2 '21 they will start Pickup / Semi production.

Basically, Tesla is an ever changing story. Delivery numbers will keep going up in step fashion, rather than a smooth ramp, with occasional step downs too, like Q1.

I just don't know when (and if) the market will get used to it.

The one constant you can get used to is the market freaking out over it every quarter one way or the other

 

[SPadival]

Any idea about the current FactSet estimate? That’s the one favoured by the “analysts” trying to game a miss.

 

[schonelucht]

At 90k deliveries I estimate 300m GAAP loss. A few thousand deliveries one way or the other doesn't really move the needle, margins are the issue now.

What are your gross profit estimations per car? For lack of better idea I have 9k on the Model 3 and 18k on S/X. My GAAP loss too ends up around $300M with 90k deliveries total, so I want to verify if our inputs are also in the same ballpark.

 

[Right_Said_Fred]

Today may come in lower than last Thursday's 139 and I certainly wouldn't count on Friday matching last week's Q2 record of 203. But the trend seems healthy enough. Spain also seems healthy. Norway is fading fast, though. IMHO the last ship brought a ton of SR+ that they couldn't get to Norway in time so they redirected those cars to delivery centers in Benelux and nearby countries. Norway is partially compensating by dumping pre-Ravens. Sales of S/X were an amazing 40% of the mix yesterday and today vs. only 9% in March.

Thursday came in higher actually, at 194 (and Wednesday at 144). I believe that now makes Q3 officially a better quarter than Q2 in The Netherlands, with still a few days to go. For sure they will keep on delivering this weekend.

 

[neroden]

I'm sure there will be some weird stuff in Q3 too. BTW, even if we think we can figure out the steady state demand in Q3 - Q4 & Q1,

Oh I'm not talking about demand. Demand is infinite, as far as I'm concerned (though there seems to be some limit to Model S demand).

I'm talking about production rate. I'd love to have the sort of factory leaks we used to have -- "paint is the bottleneck right now, at XXX cars/day", etc. Tesla has successfully clamped down on all such leaks, however.

There were so many weird things going on in Q1/Q2 that I don't have good insight into production rate. GF1 is apparently over 1000 Model 3 packs / day, and Fremont is bottlenecked at "less than that" but there hasn't been a single leak as to what part of the production is the bottleneck, or how *much* less than that. So I don't know what Tesla's current Model 3 production rate at Fremont is.

It appears that deliveries are bottlenecking production, but deliveries are super lumpy due to all the end-of-quarter-rush / wave nonsense, so I don't even know what the current sustainable average delivery rate (i.e. without dragging in employees from other departments and using excess overtime, but also without building new delivery centers) amounts to. If they unwound the wave, I'd be able to get a much better sense of their current run rates.

After the Raven-related reconfiguration of the S & X lines, we don't know what their combined production capacity is. *That*, we should find out by the end of Q3, when they will have been producing at full production all quarter. (I'm assuming that, with Raven, S+X demand will be above S+X production.) But we can't find out from Q2 data.

 

[EVNow]

After the Raven-related reconfiguration of the S & X lines, we don't know what their combined production capacity is. *That*, we should find out by the end of Q3, when they will have been producing at full production all quarter. (I'm assuming that, with Raven, S+X demand will be above S+X production.) But we can't find out from Q2 data.

Yes, S+X should be able to produce at full capacity in Q3 - but if they make, lets say 20k, we won't know whether it is the max rate or the order book. I'd guess they will only make S+X to order. No point producing a lot that they may need to discount because of wrong mix.

Till recently they were selling more S than X. Only in 2 quarters have they sold more X than S. But going forward, it seems clear they will sell a lot more X than S. This alone should make them only produce to order.

3 of course, they will try to produce as many as they can, as long as they see healthy order rate >= production. Still, the mix (and thus ASP & Margin) is difficult to get right. BTW, they should expect 3 order rate to get affected because of Y next year.

 

[mongo]

Yes, S+X should be able to produce at full capacity in Q3 - but if they make, lets say 20k, we won't know whether it is the max rate or the order book. I'd guess they will only make S+X to order. No point producing a lot that they may need to discount because of wrong mix.

Till recently they were selling more S than X. Only in 2 quarters have they sold more X than S. But going forward, it seems clear they will sell a lot more X than S. This alone should make them only produce to order.

3 of course, they will try to produce as many as they can, as long as they see healthy order rate >= production. Still, the mix (and thus ASP & Margin) is difficult to get right. BTW, they should expect 3 order rate to get affected because of Y next year.

S and X should good on margin, based on the Q1 letter:

... We also had a mismatch between orders and deliverable cars. For example, due to adjustments in pricing mid-quarter, the take rate for the performance versions of Model S and Model X increased faster than we were able to supply.

 

[EVNow]

S and X should good on margin, based on the Q1 letter:

We have to balance this against all the discounts they gave to sell pre-Raven cars. Margin on S/X in Q2 is difficult to predict.

In general I think they will continue to maintain good margin on S&X going forward. The question is around mix for 3.

 

[mongo]

We have to balance this against all the discounts they gave to sell pre-Raven cars. Margin on S/X in Q2 is difficult to predict.

In general I think they will continue to maintain good margin on S&X going forward. The question is around mix for 3.

Yeah, it's not 3, but I like a little up side
Wasn't the hit on Q1 non-raven inventory was already taken in Q1 with the price adjustment expense?