brian45011
Active Member
Why? Doesn't depreciation based on useful life begin when the capital asset (and its capitalized interest) is placed in service?I don't think GF3 building and equipment depreciation will hit COGS. .
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Why? Doesn't depreciation based on useful life begin when the capital asset (and its capitalized interest) is placed in service?I don't think GF3 building and equipment depreciation will hit COGS. .
Mostly little things. They all moved in the same direction, which doesn't happen by accident, but there's no 'one big thing'.
I'm guessing here. I pretty firmly believe GF3 building and equipment are similar to GF2 - gov't owned and leased to Tesla for a nominal fee. Tesla will show the assets on their balance sheet with an offsetting liability, but they won't show as capex. Tesla may depreciate the assets, but that should be matched by amortization of the offsetting liability with only the tiny net difference feeding into Auto COGS.Why? Doesn't depreciation based on useful life begin when the capital asset (and its capitalized interest) is placed in service?
Compensation changes to salespeople ?The 51m cut in SG&A is another mystery. I figure they finished laying off SCTY people a quarter or two ago. Who else did they find to cut? Did they start capitalizing costs for people assigned to GF3/Y or something?
There is a lot of yada yada about Panasonic and their current and future battery agreements. The presence of something on the subject suggests to me that Panasonic is still in Tesla's future but we all know that Tesla is planning to build their own at some level.
51m? If they have 5k salespeople, which sounds way too high, that's 10k each. 40k/year annualized. I bet a lot of them don't even make 40k.Compensation changes to salespeople ?
Storage margin improvement came out of the blue. +45m impact. Maybe that will sustain, maybe not.
They basically stopped giving numerical guidance altogether. I don't attach any meaning to that, but it's unusual.
The change was to remove sales incentive per car. I guess it's only part of the savings. May be quite a few left because of that - so, they didn't have to lay off anyone.51m? If they have 5k salespeople, which sounds way too high, that's 10k each. 40k/year annualized. I bet a lot of them don't even make 40k.
This is consistent with laying off ~3k people. I haven't heard of anything like that since early Q1.
I'm guessing here. I pretty firmly believe GF3 building and equipment are similar to GF2 - gov't owned and leased to Tesla for a nominal fee. .
20 percentage points improvement in storage gross margin is $100+/kWh. That's some price cut!Since storage CoGs is dominated by cell costs, I bet this was due to the new cell pricing agreement with Panasonic.
157 is the net change, presumably they moved a bunch of stuff out of CIP and added a lot more than 157 to it during Q3. But what stuff that might be I can only speculate.CIP increased by $157 million in Q3. (not all that much, but still nothing like GF2)
Care to speculate on the September 2019 5,0 RMB credit line to finance vehicles in transit to China? Seems like that's about 8,000 vehicles at a conventional loan to value of security ratio. Transit time two Months max?157 is the net change, presumably they moved a bunch of stuff out of CIP and added a lot more than 157 to it during Q3. But what stuff that might be I can only speculate.
1 warranty issue is sort of a non-issue. warranty reserving levels are lower than they have been, but it also seems appropriate due to better reliability.
2 china revenue was surprisingly low, netherlands + norway > china. most estimates i've seen for units to china are about 10% too high given the 10q's china revenues.
3 netherlands making up such a big amount of quarterly revenue is a concern as there is a meaningful tax credit stepdown in 20q1.
4 forex gains were like 90m, which is a huge portion of the gaap profit. amazing people are busy focusing on warranty when forex is having such a big impact. have to assume that heads back towards zero next quarter.
5 deferred revenue recognition was not crazy, however you can see less and less revenue deferred per vehicle sold. by my estimate it's about $600 less per vehicle getting deferred - which automatically boosts current period gross margins vs prior quarters.
6 assuming i got #5 right above, the ~3% gross margin improvement seen in model 3 is coming from: ~1% non-deferral of sale price previously deferred, ~0.2% warranty reserve change, ~0.4% fixed costs spread over more units, with the rest from efficiency and pricing.
1 warranty issue is sort of a non-issue. warranty reserving levels are lower than they have been, but it also seems appropriate due to better reliability.
2 china revenue was surprisingly low, netherlands + norway > china. most estimates i've seen for units to china are about 10% too high given the 10q's china revenues.
3 netherlands making up such a big amount of quarterly revenue is a concern as there is a meaningful tax credit stepdown in 20q1.
4 forex gains were like 90m, which is a huge portion of the gaap profit. amazing people are busy focusing on warranty when forex is having such a big impact. have to assume that heads back towards zero next quarter.
5 deferred revenue recognition was not crazy, however you can see less and less revenue deferred per vehicle sold. by my estimate it's about $600 less per vehicle getting deferred - which automatically boosts current period gross margins vs prior quarters.
6 assuming i got #5 right above, the ~3% gross margin improvement seen in model 3 is coming from: ~1% non-deferral of sale price previously deferred, ~0.2% warranty reserve change, ~0.4% fixed costs spread over more units, with the rest from efficiency and pricing.
This one has me flummoxed. Both the timing -- just as they drastically reduce shipments to China -- and the excessive size.Care to speculate on the September 2019 5,0 RMB credit line to finance vehicles in transit to China? Seems like that's about 8,000 vehicles at a conventional loan to value of security ratio. Transit time two Months max?
Reduced deferred revenue per sale is really interesting. The new Panasonic cell pricing deal could be another 1% - it's big enough that they specifically mentioned "commercial negotiations with suppliers" in the 10-Q.5 deferred revenue recognition was not crazy, however you can see less and less revenue deferred per vehicle sold. by my estimate it's about $600 less per vehicle getting deferred - which automatically boosts current period gross margins vs prior quarters.
6 assuming i got #5 right above, the ~3% gross margin improvement seen in model 3 is coming from: ~1% non-deferral of sale price previously deferred, ~0.2% warranty reserve change, ~0.4% fixed costs spread over more units, with the rest from efficiency and pricing.
May be fewer % are buying FSD ? As share of 3 increases we should expect lesser uptake.Reduced deferred revenue per sale is really interesting.
This one has me flummoxed. Both the timing -- just as they drastically reduce shipments to China -- and the excessive size.
Maybe they have some backup plan to pre-ship a ton of S/X and 3-AWD there before a tariff hike? Or it covers more than they're saying? I really can't come up with anything that makes sense.
Reduced deferred revenue per sale is really interesting. The new Panasonic cell pricing deal could be another 1% - it's big enough that they specifically mentioned "commercial negotiations with suppliers" in the 10-Q.
I'm guessing here. I pretty firmly believe GF3 building and equipment are similar to GF2 - gov't owned and leased to Tesla for a nominal fee. Tesla will show the assets on their balance sheet with an offsetting liability, but they won't show as capex. Tesla may depreciate the assets, but that should be matched by amortization of the offsetting liability with only the tiny net difference feeding into Auto COGS.
This is all from reading the tea leaves and Nio's disclosures of terms for the factory Shanghai was going to build for them. Tesla has disclosed almost nothing.
That's also what Tesla Chair Robyn Denholm said in this CNBC interview at 9:25: Watch CNBC's full interview with Tesla Chairwoman Robyn Denholm.Government owned? In response to a direct question on the call, Zach or Elon said Tesla owns GF3.