Doggydogworld
Active Member
Just to be clear, it was 5500 at end of Q4 2020 and 3500 at end of Q1 2021.
They sell some cars as "demos" after a six months or a year or so with a few thousand miles on them. All dealers do that. Tesla very occasionally lists a longer term car (2-3 years old) for sale in the US or Europe.
They moved ~1500 long term cars from Finished Goods Inventory to PP&E a year or two back. I assume they've done this other times, but the amounts were too small to mention. I assume auditors won't let them keep cars in FGI more than a year. If they sell while still in FGI it counts toward deliveries and Auto Sales Revenue. It also dings margin due to discounting for the miles on the odometer. Once moved to PP&E they depreciate it. I assume depreciation expense goes into Services & Other, but Tesla doesn't say. After they depreciate it down far enough they can sell for cheap, maybe to an employee or something. I assume these sales count in Services & Other, same as used cars, and would not affect Auto Sales Revenue or Auto gross margin.
The real question is whether they count older cars sold out of PP&E as deliveries. I assume they do. If not then those 3500 cars could have been sold years ago, with no way for us to track them. Tesla doesn't disclose any of this, and analysts rarely ask. One did ask a few years ago if they depreciated demos and loaners, but Deepak blew him off with a non-answer.
Also, some people say Tesla counts "engineering cars" which never get sold in their production totals, and that explains a big chunk of the 3500 gap between production and deliveries. I think it's unlikely they include such cars in their production count. Even if they do it's dozens of cars, not thousands.
