Near-future quarterly financial projections

[Pras]

I expect pressure on gross margin this quarter. Commodity cost is higher, copper, steel, and maybe some battery material. Also impact of little S/X delivery may also pressure the cost. Lastly we don’t know the impact from chip shortage (if there was a price impact). Some of this will be offset with increase in FSD price.

 

[The Accountant]

When are technically vehicles counted towards produced, I am assuming it's not by when they leave the factory, perhaps after some level of quality check and internal certification?

I believe, in China, right after Dec-31 passed, after midnight several trucks fully loaded with Model-Ys were seen leaving the Shanghai factory. Is my seeming recollection of this correct? If yes, do estimates you guys came across factor these in?
At that time, I was wondering if that was deliberate to cushion Q1-2021.

You have it right. As vehicles get assembled on the manufacturing line, they are classified as Work-In-Progress Inventory. Once a fully assembled vehicle gets Quality Control sign-off, the vehicle moves to Finished Goods Inventory. The vehicle moves from Inventory status on the Balance Sheet to Revenue on the Income Statement once title transfers to the customer. Most forecasters estimating deliveries and sales take into consideration the increases and decreases to inventory. I am sure this is obvious to all but I will state it anyway: when Prodution for the Qtr exceeds Deliveries, inventory goes up and when Deliveries are > then Production, inventory goes down.

 

[XHabjab]

When are technically vehicles counted towards produced, I am assuming it's not by when they leave the factory, perhaps after some level of quality check and internal certification?

I believe, in China, right after Dec-31 passed, after midnight several trucks fully loaded with Model-Ys were seen leaving the Shanghai factory. Is my seeming recollection of this correct? If yes, do estimates you guys came across factor these in?
At that time, I was wondering if that was deliberate to cushion Q1-2021.

It is not clear to me what time zone the financial information is reported in. After all, just after midnight Jan 1 in China is still morning Dec 31 in California. Tesla (and of course any other company) could report transactions for most of Jan 1 in the Far East as applying to Q4.
I don't know if Tesla is playing that game but it would give them another day's production if they needed it. Of course you wouldn't be able to do that both ways but they could probably swing it one way or the other if they needed just a few more sales for the quarter.

 

[ByeByeJohnny]

Why not just sell and rebuy? Maybe it would be even possible to this transaction on a private exchange.

Let's say the $1.5Billion goes to $15Billion. Great, Tesla could book a $13.5Billion profit by doing that at some point if they need a profit.

The only problem is that when it goes back to $5Billion (or whatever) the quarter after they now have a $10Billion loss they HAVE to book that quarter, no matter how untimely that might be.

 

[Criscmt]

China Jan and Feb P&D is known already.

True, but my question was if some vehicles produced before the end of Dec-31-2020 ended up under "produced in" Q1-2021.

 

[mongo]

True, but my question was if some vehicles produced before the end of Dec-31-2020 ended up under "produced in" Q1-2021.

Deliveries are counted based on local midnight. A vehicle assembled in Q4, but final checked in Q1 would should up on Q1's numbers.

Regarding Shanghai Model Y, those were stockpiled and none were shipped until Q1 with first deliberies around Jan 18th. My thought is that they did not want to complicate end of quarter and it also allowed them to internalize the beginning of the production ramp. Based on the Q4 P&D report, these were probably counted in Q4 (not that there was a material number of vehicles either way if one reads 'has begun' as a Jan 1or2 action (final quality check after removing the extra car covers)).

PALO ALTO, Calif., January 2, 2021 – In 2020, we produced and delivered half a million vehicles, in line with our most recent guidance. In addition, Model Y production in Shanghai has begun, with deliveries expected to begin shortly.

A weird thing is, if a factory is near a time zone border, there could theoretically be a car delivered the year before it was built. Numbers are aggregate, so that potential event is inconsequential. China is one big time zone, so that won't happen at GF3.

 

[tmp131]

1) Troy: 165.1K

https://twitter.com/x/status/1377373265174274050

2) Fact set: 162K (from Troy's twitter above via Barron's)
3) "Analyst Consensus": 173.8K Tesla is about to reveal how many cars it sold in the first quarter of 2021 — here's what to expect
4) Others: Tesla is approaching Q1 2021's end: Here’s what TSLA bulls and bears are saying
-Gene Munster: "closer to 160,000"
-Pierre Ferragu: 165K
-Dan Ives: 174K
-Gordon Johnson: 188K !!
I think Troy is going to be right.
-Fact set of 162K seems low to me; market might already priced in a beat of 162K???

 

[JohnnyEnglish]

Electrek reporting on potential credit sales (to VW) in China. Another complication to the quarterly estimating (but welcome).

Edit: Also reported on Teslarati but same source report

 

[thx1139]

Seems some numbers from Europe trickling in.
Norway is up 2634 vs 1409
Netherlands is down 394 vs 1595
Spain is up 509 vs 415
Sweden is down 1359 vs 1663
Ireland is down 331 vs 345

Assuming all the data at Electric Vehicle registrations in Europe: 11 countries, 80+% of BEV market is complete for those countries.

 

[JohnnyEnglish]

I have assumed no S/X deliveries in Q1 but have more than 170k 3/Y deliveries (always optimistic ) so revenues and GAAP earnings are broadly in line. I have assumed lower credits and slightly higher R&D.

Wow! Even my optimistic estimate was almost 5k below actual deliveries, Amazing. Looking forward to the updated figures from @The Accountant but with record deliveries (and revenues?) from vehicles, GAAP profit looks as if it will be close to $0.5B.

 

[Zaxxon]

Q1 2021 Scenarios
Below I have outlined Q1 P&L scenarios for deliveries of 160k, 165k, 170k, 175k and 180k.
In all scenarios, the results look good. The only numbers that change with each scenario are Auto Revenues, Cost of Revenues and Income Taxes.
The main risks to these numbers would be lower Reg Credits (I'm estimating $420m) and higher Stock Compensation (estimating $433m).

View attachment 649297

*eagerly awaits the addition of another column*...

 

[The Accountant]

Revised Q1 2021 Forecast
With Q1 deliveries of 184,800, I am projecting:

• $10.5B Revenues (2nd highest Qtr behind Q4 2020 of $10.7B)
• $ 2.2B Gross Profit (all-time high)
• $866M Operating Income (all-time high)
• $515M GAAP Earnings (all-time high)
• $948M non-GAAP Earnings (all-time high)
• EPS of $0.84 would also be an all-time high

Items that could materially impact this forecast:

• Stock Based Compensation – I am assuming $433M
• Regulatory Credits – I am assuming $420M
• Recognition of Deferred Tax Benefit – I am assuming no recognition
• Additional Interest Expense if further conversion of debt occurs (in Q4 this increased interest expense by $105m)

 

[The Accountant]

My projections versus Q4 2020:

 

[StarFoxisDown!]

My projections versus Q4 2020:

View attachment 650310

One possible nice surprise is since there was no S/X production for the quarter, you have to wonder what happened with the battery supply for the quarter that is normally for S/X production. I could see Energy & Storage actually being higher verse Q4 2020

 

[MP3Mike]

One possible nice surprise is since there was no S/X production for the quarter, you have to wonder what happened with the battery supply for the quarter that is normally for S/X production. I could see Energy & Storage actually being higher verse Q4 2020

No, because S&X use 18650 cells with the vehicle formulation, while Tesla Energy products use 2170 cells with a storage formulation.

It either allowed Panasonic to pause the lines, and possibly do maintenance or improve them, or it allowed Tesla to stockpile cells/packs so that once they get going they can produce S&X faster until they use up the backlog of batteries.

 

[CorneliusXX]

My projections versus Q4 2020:

View attachment 650310

PE would drop to c.300 if this comes to pass.

 

[Thekiwi]

Chances of recognizing the tax benefit must surely be increased now - given how unlikely it is that there will be unprofitable quarters going forward now.

 

[XHabjab]

No, because S&X use 18650 cells with the vehicle formulation, while Tesla Energy products use 2170 cells with a storage formulation.

It either allowed Panasonic to pause the lines, and possibly do maintenance or improve them, or it allowed Tesla to stockpile cells/packs so that once they get going they can produce S&X faster until they use up the backlog of batteries.

The Panasonic 18650s also come from Japan, not Nevada. This facilitates several possibilities:

• Panasonic production pause, as you suggest
• Batteries are stuck in container ships offshore. There is a huge shipping backlog resulting in numerous ships at anchor off the West coast.
• Tesla is refreshing Model S and X. It's not clear (to me at least) which of the new trims will still use Japanese Panasonic 18650s (and maybe Panasonic will ship 2170s or 4860s or something else)
• Other possibilities of course

I'm surprised at the amount of time the Model S/X lines have been inactive. This smells to me to be more than a refresh. The S/X changes for the EU tells me that Tesla has known something for quite a while.

In all of this, Panasonic could also be changing chemistry or form factor. Tesla is battery constrained. I don't see them dropping a battery vendor, but I could see them shifting product details.

 

[WattsHappening]

My projections versus Q4 2020:

View attachment 650310

Thanks as always for your analysis.

What are reasons you think operating expenses are going to be lower in Q1 vs. Q4? Is this typical for Q1s?

 

[The Accountant]

Thanks as always for your analysis.

What are reasons you think operating expenses are going to be lower in Q1 vs. Q4? Is this typical for Q1s?

Good quesiton: This is all driven by reduced costs from Stock Based Compensation (most of this reduction is attributable to lower costs from Elon's CEO Award). I actually have R&D increasing by $10m and SG&A increasing by $20m before the Stock Based Compensation reductions.

I am expecting lower stock based compensation to:
- Reduce Cost of Sales by $32m
- Reduce R&D by $40m
- Reduce SG&A by $128m

See the bottom of this table: