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Near-future quarterly financial projections

CorneliusXX

Active Member
Jun 19, 2015
2,495
22,080
London
I personally would be shocked if Tesla dilutes for a cap raise at the moment.

  • Tesla reported a $164M decrease in cash in Q3 2021
  • Had $16.065B cash on hand at the end of Q3
  • Paid down debt of $1.5B
At this rate of cash burn, Tesla could continue for 100 quarters, however, within 2 quarters they will have paid down ALL of their debt. Additionally, within that time, they will have doubled the number of factories in production, reduced by 2 the number of new factories being constructed, and likely had a credit upgrade to investment grade.

Elon has stated that they are not capital constrained for production, but that they cannot find enough good uses to spend the war chest in an effective manner. With a year's worth of vehicle production already sold, FCF about to explode, and no place to spend the money, why would they dilute shareholders? It just does not seem like first principles thinking to do so.
I tend to agree with you - unless there are major CapEx expansion plans announced, it is likely Tesla has all the cash they need.

Even if they didn't, I think junk debt would still be cheaper than a capital raise if you think there is any amount of growth left in the company.
 

EVNow

Well-Known Member
Sep 5, 2009
12,604
33,657
Seattle, WA
Because if it goes 5x the equivalent rate is 2.5%. That excluded dividends too.
You mean if the SP goes 5x ? Why would that then be 2.5% ? It would still be 5%.

Tesla won't be giving dividends anytime soon.

ps : I'm not saying they should raise capital or even they are likely to. Just saying I won't be surprised if they do. They did raise capital after SP had a big run to ~ 900 in '19 (?). Its possible we'll see a split before a cap raise.
 

CorneliusXX

Active Member
Jun 19, 2015
2,495
22,080
London
You mean if the SP goes 5x ? Why would that then be 2.5% ? It would still be 5%.

Tesla won't be giving dividends anytime soon.

ps : I'm not saying they should raise capital or even they are likely to. Just saying I won't be surprised if they do. They did raise capital after SP had a big run to ~ 900 in '19 (?). Its possible we'll see a split before a cap raise.
I'm using very napkin math, but yes - the more the growth in the stock price plus dividend payments, the more the cost of an equity raise. In the example above 0.5% * 5x = 2.5% cost.

The last two equity raises, i feel, were somewhat different. The first raise was legitimately needed to give Tesla some balance sheet breathing room - and I believe the second raise was opportunistic thinking the stock price wouldn't stay as high as it has.

I'd be surprised if they'd be willing to part with more equity unless there were substantial CapEx requirements coming up that couldn't be funded via internal cash generation or debt raising.
 
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EVNow

Well-Known Member
Sep 5, 2009
12,604
33,657
Seattle, WA
I'm using very napkin math, but yes - the more the growth in the stock price plus dividend payments, the more the cost of an equity raise. In the example above 0.5% * 5x = 2.5% cost.

The last two equity raises, i feel, were somewhat different. The first raise was legitimately needed to give Tesla some balance sheet breathing room - and I believe the second raise was opportunistic thinking the stock price wouldn't stay as high as it has.
Not sure why you are multiplying 0.5% by 5.

The equity raise in Q1/Q2 '19 is classic case Tesla (more specifically Deepak) sleeping at the wheel. When the stock price ran up to 375 after Q3, there was a specific question about raising capital. Deepak said its not needed. How wrong was he ! As we now know, Tesla was close to bankruptcy and Musk tried to sell to Apple. Deepak and others should have known at that time the problems associated with expanding to Europe. So, instead of raising capital at 375, they were forced to do so at 175 (?).

I think that was the history that probably prompted them to raise capital when the stock price ran to ~900. Now that it is 5,000 (pre-split) - by the same logic, I'm thinking they will raise capital.

ps :

From Q2 10-Q

Owing and subject to the foregoing as well as the pipeline of announced projects under development and all other continuing infrastructure growth, we currently expect our capital expenditures to be $4.50 to $6.00 billion in 2021 and each of the next two fiscal years. Given the breadth of our various planned projects in 2021, as we make progress on such projects we expect that our actual spend will be on the higher end of this range in 2021.

From Q3 10-Q

Owing and subject to the foregoing as well as the pipeline of announced projects under development and all other continuing infrastructure growth, we currently expect our capital expenditures to exceed $6 billion in 2021 and be between $5 to $7 billion in each of the next two fiscal years.
 

Bet TSLA

Active Member
Dec 8, 2014
2,948
12,364
Cupertino, CA
Since the EV Tax credit is apparently effective starting next year - will we see a drop in US sales in Q4 ?

Not sure what options Tesla has to move the cars in Q4 ... deliver mostly to Europe ?
You really think that they won't be able to sell the cars if they can build them? With the current backlog? There are many for whom the tax credit is of no use. There are many who will jump at the chance to get the car now, regardless.
 
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Darkfox021

Member
Apr 8, 2019
150
629
USA
I assume that anyone with summer, or earlier, pricing that refuses delivery by the end of year will go to the back of the line and/or pay the current price.

I'm in this exact situation. I haven't spoken to Tesla, but the math works out as follows:

Take delivery at April pricing with no tax credit.
Delay and risk being put at the end of the line (next August for my Model Y trim). Pay current prices and save ~$2k after tax credit.
Delay and convert to a MYP. Probably get delivery in 1Q 2022. Pay extra $3k after tax credit.

I think many will try, but don't think many will delay.
 
You really think that they won't be able to sell the cars if they can build them? With the current backlog? There are many for whom the tax credit is of no use. There are many who will jump at the chance to get the car now, regardless.

All are valid concerns and statements. There are also many uninformed people that do not and will never realize the federal credit is potentially on the table.
 
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Causalien

Prime 8 ball Oracle
Nov 19, 2012
3,799
14,433
Pothead's Republic of Canukstan (PRC)
I agree. I am expecting Tesla to generate, at a minimum, $14B in Cash from Operations in 2022.
With say $8B in CAPEX, that leaves $6B to add to their bank account.
Ya I was reading that twitter exchange.

It looks like TSLA is hinting at dividends. Since they themselves admit even in hyper growth phase there'd more cash coming in than they can handle.
 

winfield100

Active Member
Supporting Member
Feb 16, 2013
3,310
14,112
vivant non-traveler
Ya I was reading that twitter exchange.

It looks like TSLA is hinting at dividends. Since they themselves admit even in hyper growth phase there'd more cash coming in than they can handle.
like a _stock_ dividend to owners of record?
fractional shares or perhaps fractional shares of SpaceX if you HODL.
 

Gigapress

Member
Sep 20, 2021
330
4,710
Seattle, WA
My first serious attempt at short term projections. This is my estimate for Q4 2022. Most of this applies to 3/Y only because it's the vast majority of production, but I did throw in some S/X profit estimates on one line.

Please criticize without mercy.

Q3 2021 ASP (Almost all 3/Y)$50,000
Q3 2021 Gross Margin (Almost all 3/Y)30.50%
BearBaseBull
Price increases, known as of Q4 2021$ 2,000$ 2,000$ 2,000
Price increases from even more demand (Hertz rentals, TSLA stock attention, Tom Brady ads all NFL season, rising oil prices, Cybertruck initial sales blowing people's minds, etc)$ 1,000$ 2,500$ 3,300
US Tax Credit$ 1,500$ 2,500$ 3,500
Mix (more model Y, more Shanghai, Euro pent up demand high end sales)$ 1,000$ 2,000$ 3,000
FSD Revenue Increase$ -$ 500$ 1,500
Total ASP Increase$ 5,500$ 9,500$ 13,300
Shipping + Tariff Savings$ (1,133)$ (1,300)$ (1,533)
More use of Giga castings in overall production mix (fully accounted savings including direct costs estimated by Jordan Giesege, plus overall cost of poor quality improvements, easier downstream assembly, less batteries needed bc of lower weight)$ (400)$ (1,000)$ (2,000)
New Berlin & Shanghai Paint shop$ (27)$ (67)$ (114)
Miscellaneous innovation$ (300)$ (500)$ (1,000)
Total CoGS savings$ (1,860)$ (2,867)$ (4,648)
Q4 2022 ASP$ 55,500$ 59,500$ 63,300
Q4 2022 CoGS Avg$ 36,500$ 35,400$ 33,700
Q4 2022 Gross Margin$ 19,000$ 24,100$ 29,600
52%68%88%
Q4 2022 Annualized KPIs
3/Y Production, annualized, kilocars150018002100
S/X Gross Profit, gigadollars$3.5$4.8$6.0
Opex, gigadollars$ 8.5$ 7.8$ 7.1
Operating profit, gigadollars$ 32$ 43$ 62
Operating Income, gigadollars$ 24$ 36$ 55
Probability30%60%10%
Price/Op Inc Multiplier6090120
Share Price$1,300$2,900$5,900
Expected Value$ 2,720
Today's Price$ 1,222
ROI2.2

Underlying calculations available here.
 
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ammulder

3P, X ordered
Supporting Member
Apr 11, 2019
1,452
5,493
Philly area
How much time do we have for price increases that affect cars delivered in Q4 2022? Some configurations are already sold out until end of Q3, right? I don‘t think there’s $7000 of increases coming in the next 2 months, and that’s pretty stiff for even the next 5 months. Model 3 starting at $50k? I don’t expect Austin to ramp so fast that the backlog comes down much in the first half of the year. So I feel like the ASP increases are on the high side, even if they make you buy upgrades to get a quicker delivery.
 

Gigapress

Member
Sep 20, 2021
330
4,710
Seattle, WA
How much time do we have for price increases that affect cars delivered in Q4 2022? Some configurations are already sold out until end of Q3, right? I don‘t think there’s $7000 of increases coming in the next 2 months, and that’s pretty stiff for even the next 5 months. Model 3 starting at $50k? I don’t expect Austin to ramp so fast that the backlog comes down much in the first half of the year. So I feel like the ASP increases are on the high side, even if they make you buy upgrades to get a quicker delivery.
Does Tesla stick to the original price when it's time to finalize the order? If not, then that portion of the projected increases may take not really fully come into play until Q1 2023. But on the other hand, most delivery dates are estimated for June at the latest it seems, at least in Seattle. More expensive configurations are delivering in Dec or Jan.

3/Y ASP as of today is probably at least $58k already, judging by US prices. Probably is less in China though, and some of this may already reflect expectations of the tax credit.

M3 RWD is $45k
M3 LR is $51k
M3 Performance is $59k
MY LR is $58k
MY Performance is $63k
These are only the base prices for standard options for paint color, interior color, wheels, and seating configuration, each of which can add $1-2k extra.

Model Y is going to be all of Berlin and Austin production in my model in Q4 '22 and probably most of the increased production in Shanghai.

It also remains to be seen how long the US govt would be willing to continue subsidizing Teslas like this but it does seem likely for next year at least.
 

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ammulder

3P, X ordered
Supporting Member
Apr 11, 2019
1,452
5,493
Philly area
Does Tesla stick to the original price when it's time to finalize the order? If not, then that portion of the projected increases may take not really fully come into play until Q1 2023. But on the other hand, most delivery dates are estimated for June at the latest it seems, at least in Seattle. More expensive configurations are delivering in Dec or Jan.

3/Y ASP as of today is probably at least $58k already, judging by US prices. Probably is less in China though, and some of this may already reflect expectations of the tax credit.

M3 RWD is $45k
M3 LR is $51k
M3 Performance is $59k
MY LR is $58k
MY Performance is $63k
These are only the base prices for standard options for paint color, interior color, wheels, and seating configuration, each of which can add $1-2k extra.

Model Y is going to be all of Berlin and Austin production in my model in Q4 '22 and probably most of the increased production in Shanghai.

It also remains to be seen how long the US govt would be willing to continue subsidizing Teslas like this but it does seem likely for next year at least.

Just FYI the base model 3 and Y are both showing October for the US. You’re likely seeing June because you have the upgraded tires selected.

It’s possible either the pre-selected tire upgrades or the earlier delivery date only with upgrades will drive ASPs up, but they’re mostly not over $1500, and some people were choosing them already, so I think these aren’t $2500 differences.

Likewise, while Performance deliveries are sooner, I think there’s a limit to how many people will upgrade to a P, even if the date is 6 months better. Maybe the 3 AWD will be better at driving ASP?

Finally, generally Tesla gives you the car for the price you reserved it for. The exceptions have been pretty notable, like the X refresh, not just because they bumped the price on your exact configuration in the mean time.
 

Gigapress

Member
Sep 20, 2021
330
4,710
Seattle, WA
Just FYI the base model 3 and Y are both showing October for the US. You’re likely seeing June because you have the upgraded tires selected.

It’s possible either the pre-selected tire upgrades or the earlier delivery date only with upgrades will drive ASPs up, but they’re mostly not over $1500, and some people were choosing them already, so I think these aren’t $2500 differences.

Likewise, while Performance deliveries are sooner, I think there’s a limit to how many people will upgrade to a P, even if the date is 6 months better. Maybe the 3 AWD will be better at driving ASP?

Finally, generally Tesla gives you the car for the price you reserved it for. The exceptions have been pretty notable, like the X refresh, not just because they bumped the price on your exact configuration in the mean time.
It might be because I'm in Seattle. I tried with all options and couldn't make the delivery estimate go past June. I bet they're delaying East Coast deliveries in anticipation of Giga Austin delivering instead of Fremont.
 

UkNorthampton

TSLA - 12+ startups in 1
Jun 15, 2019
916
7,971
Northampton, England
Just FYI the base model 3 and Y are both showing October for the US. You’re likely seeing June because you have the upgraded tires selected.

It’s possible either the pre-selected tire upgrades or the earlier delivery date only with upgrades will drive ASPs up, but they’re mostly not over $1500, and some people were choosing them already, so I think these aren’t $2500 differences.

Likewise, while Performance deliveries are sooner, I think there’s a limit to how many people will upgrade to a P, even if the date is 6 months better. Maybe the 3 AWD will be better at driving ASP?

Finally, generally Tesla gives you the car for the price you reserved it for. The exceptions have been pretty notable, like the X refresh, not just because they bumped the price on your exact configuration in the mean time.
UK: Mine was lowest of order price & current price (lower), so it was cheaper than when ordered. If that applies now, to your region (and I can't know), reservation is a good idea, even if not 100% sure as you only lose a little on cancellation, might get it cheaper or might be worth more than your final (order) price o delivery. Pretty sure delivery date will be later than Tesla say.

It also means that many of the large price increases take time to filter through to financials. There's even the possibility that if prices fall due to lower cost of parts or any other reason, very few cars will hit the highest prices. I think that's unlikely while Tesla is production/cell constrained.

@Gigapress
 

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