Near-future quarterly financial projections

[EVNow]

Now you two have me thinking that this jump in Lease Revenues and Profits may be due to Q4 2021 being the first quarter where Tesla sold returning leased cars (at least in significant numbers).

My impression was this would go into service revenue. Basically selling lease returns and any trade-ins are part of service.

I had a complicated lease revenue/cost model a few quarters back (before I gave up on forecasting). You need to figure out how many cars exist in the lease pool and at what ASP and calculate their margins etc. It is like analyzing last 36 months / 12 quarters numbers ... (ps : or like I'm suggesting here do it as a delta from last quarter).

Near-future quarterly financial projections

@EVNow -- Agreed on all of that. My post was most relevant to some of the P/E ratios being bandied about in this thread. Market participants may focus on the 10-20% top-line growth of 2019 rather than the 80% of 2018 and 50% (or whatever) of 2020. And that would impact the P/E that they...

teslamotorsclub.com

 

[Artful Dodger]

Rob Maurer of Tesla Daily is estimating a 35% gross margin for Austin Std Rge AWD Model Y:

That's gonna be amazing, because that's for the 'base' model, w/o any Options. If Tesla can prioritize* deliveries for FSD-equipped orders, that g.m. goes to over $50k gross profit per each STD Model Y sold, and a g.m. approaching 66%.

Yowzers!

*Temper this g.m. bump for employee-only deliveries, since reports are that employees recieve FSD and access to FSD beta as a no-cost 'perk' with their Tesla purchase. C'mon, ramp!

 

[Artful Dodger]

that g.m. goes to over $50k gross profit per each STD Model Y sold, and a g.m. approaching 66%.

Pardon, that should be over $31K gross profit for Austin AWD Y, and g.m. > 43%

 

[Bobfitz1]

Rob Maurer of Tesla Daily is estimating a 35% gross margin for Austin Std Rge AWD Model Y:

That's gonna be amazing, because that's for the 'base' model, w/o any Options. If Tesla can prioritize* deliveries for FSD-equipped orders, that g.m. goes to over $50k gross profit per each STD Model Y sold, and a g.m. approaching 66%.

Yowzers!

*Temper this g.m. bump for employee-only deliveries, since reports are that employees recieve FSD and access to FSD beta as a no-cost 'perk' with their Tesla purchase. C'mon, ramp!

Any idea if the gov't certification of Austin LR and P MY is done or in progress?

In guesstimating when Austin LR and P MY will become available, it seems to me that Austin GF won't take long to produce the number of SR MY needed for a number of employees to get cars and put the desired mileage on to satisfy the last battery heat concerns. Perhaps 2 months?

When this point is reached and deliveries to customers begin, won't the increased margin for SR having fewer batteries (7 KWh per car) be well outweighed by increased margins from FSD take rate being higher for the pricier models?

I don't know if anyone has insight into how many 4680 lines are up and running. Do you believe last week's event at least suggests they are well positioned to ramp battery output as quickly as general assembly? Thanks for your thoughts.

 

[Artful Dodger]

Any idea if the gov't certification of Austin LR and P MY is done or in progress?

I think they need more battery cell production before they can build more models at Austin. 500k/yr Std AWD capacity by the end of 2022 would be a win. Then Cybertruck is the next priority, then Semi.

So I expect LR/P to come from Fremont for at least 2 more years. An operational Cathode plant (Project Bobcat) should be our next clue.

Cheers!

 

[JusRelax]

Based off of Gary Black's tweet, it seems street estimate for Q1 is $2.27. Yahoo finance's consensus estimate is $2.26. Are in for an absolutely massive beat?

https://twitter.com/x/status/1516111321481322498

PS - I'm writing this here instead of in the main thread because I don't want the stupid consensus estimates to start rising lol (yes, I do believe that some of those analysts browse through the main thread).

 

[khorton]

PS - I'm writing this here instead of in the main thread because I don't want the stupid consensus estimates to start rising lol (yes, I do believe that some of those analysts browse through the main thread).

And it would never occur to them to read a thread titled "Near-future quarterly financial projections"?

 

[JusRelax]

And it would never occur to them to read a thread titled "Near-future quarterly financial projections"?

At the very least it is MUCH less likely. The Main thread gets MUCH more public exposure due to Google links, etc than this thread does.

 

[Gigapress]

I want to revisit this post quoted below in more depth here.

I agree with all of the parameters in @The Accountant ‘s Q1 model except for average selling price.

The estimated delivery month from Tesla’s website during Q4 and Q1 indicated that Plaid and Performance variants began to be heavily prioritized, with 1-month lead times during a new era of unprecedented demand and order volume, the Profound Awakening. (The Model X was an exception because there’s still an extra-big X backlog from the botched ramp in the middle of 2021.)

Effective as of Nov 4th, the extra price premium for top variants was:
$14k for 3P vs 3SR+
$8k for 3LR vs 3SR+
$5k for YP vs YLR
$35k for SP vs SLR
$15k for XP vs XLR

3&Y accounted for 95% of delivery volume in both Q4 and Q1, so those models dominate the following calculations.

Additionally, from October thru mid-November, the price of the 3P rose $2k and YP rose $3k.

If the delivery estimates were accurate, then all 3/Y Perf price increase started fully hitting around early December and all delivered in Q1 had the new higher price.

Some of this already went into effect around December, so that’s included in using Q4 ASP as a baseline for comparison.

Thus, the main uncertainty is just what was the change in mix from Q4 —> Q1. Unfortunately there are too many unknowns to solve for this directly with the information publicly available. Other uncertainties include:

• How much FSD sales got prioritized
• Insurance expansion
• How much Y vs 3 mix changed in favor of Y

Nevertheless, all of these factors are positive so we can be highly confident that ΔASP > $0.

My estimate, reflecting these uncertainties, is a 95% chance that:
$2k < ΔASP < $7k

Across 310k deliveries this translates to rounded revenue impact of:
$0.6B < ΔR < $2.2B

The premium variants use more batteries and motors, so they would also add to CoGS, but they have much higher gross margin than base models, so the cost impact I’d estimate as:
$0.2B < ΔC < $0.7B

Therefore, I estimate the overall pretax profit impact of all this as:
$0.4B < ΔP < $1.5B

This bumps GAAP earning per share from @The Accountant ‘s $2.50 estimate to around $2.90 for a bear case and $3.80 for a bull case.

A lot of the price increase and mix improvement effect should already be arriving in Q1, so Q1 financials will be the first good test of whether my estimation technique is accurate or if the model needs rework.

The big wave of price increases happened Oct 6th, 22nd and 23rd, and Nov 4th. One more $1k Model Y bump came Nov 11th before a 4-month lull.

Your experience with long delays for your X was most likely because of the refreshed X production ramp debacle. Tesla’s website indicated 3/Y/S premium variants were shipping in December with the new prices. It looks like they essentially put a moratorium on base model production at Fremont until they can’t continue to sell out of Performance and Plaid variants at those prices.

US delivery estimates as of Nov 4th:
3 SR+ Jun 2022 (7 month delay)
3 LR Dec 2021 (1 mo)
3 P Dec 2021 (1 mo)
Y LR May 2022 (6 mo)
Y P Dec 2021 (1 mo)
S LR Jun 2022 (7 mo)
S Plaid Dec 2021 (1 mo)
X LR Jun 2022 (7 mo)
X Plaid Aug 2022 (9 mo)

To qualify for the delivery time for any of the base models the buyer had to include premium sport wheels, adding $1.5k for 3&Y, $4.5k for S and $5.5k for X.

This HEAVY prioritization of premium variants is a win-win because almost 100% of the 2021 price increase effect would be felt by around Dec/Jan and these variants are $5k-$30k more expensive in the first place.

At some point Tesla may honor the lower prices for base model orders but at this rate that will be by summer at the earliest.

In all, if Tesla’s public delivery estimates were even remotely accurate, Q1 will be a blowout for revenue and net income.

US: Tesla Model 3/Y Prices Increase By $1,000

Tesla has just applied an additional $1,000 price increase on all Model 3 and Model Y versions in the U.S.

insideevs.com

 

[The Accountant]

I want to revisit this post quoted below in more depth here.

I agree with all of the parameters in @The Accountant ‘s Q1 model except for average selling price.

The estimated delivery month from Tesla’s website during Q4 and Q1 indicated that Plaid and Performance variants began to be heavily prioritized, with 1-month lead times during a new era of unprecedented demand and order volume, the Profound Awakening. (The Model X was an exception because there’s still an extra-big X backlog from the botched ramp in the middle of 2021.)

Effective as of Nov 4th, the extra price premium for top variants was:
$14k for 3P vs 3SR+
$8k for 3LR vs 3SR+
$5k for YP vs YLR
$35k for SP vs SLR
$15k for XP vs XLR

3&Y accounted for 95% of delivery volume in both Q4 and Q1, so those models dominate the following calculations.

Additionally, from October thru mid-November, the price of the 3P rose $2k and YP rose $3k.

If the delivery estimates were accurate, then all 3/Y Perf price increase started fully hitting around early December and all delivered in Q1 had the new higher price.

Some of this already went into effect around December, so that’s included in using Q4 ASP as a baseline for comparison.

Thus, the main uncertainty is just what was the change in mix from Q4 —> Q1. Unfortunately there are too many unknowns to solve for this directly with the information publicly available. Other uncertainties include:

• How much FSD sales got prioritized
• Insurance expansion
• How much Y vs 3 mix changed in favor of Y

Nevertheless, all of these factors are positive so we can be highly confident that ΔASP > $0.

My estimate, reflecting these uncertainties, is a 95% chance that:
$2k < ΔASP < $7k

Across 310k deliveries this translates to rounded revenue impact of:
$0.6B < ΔR < $2.2B

The premium variants use more batteries and motors, so they would also add to CoGS, but they have much higher gross margin than base models, so the cost impact I’d estimate as:
$0.2B < ΔC < $0.7B

Therefore, I estimate the overall pretax profit impact of all this as:
$0.4B < ΔP < $1.5B

This bumps GAAP earning per share from @The Accountant ‘s $2.50 estimate to around $2.90 for a bear case and $3.80 for a bull case.

For non-GAAP EPS, your numbers would be $3.23 bear case and $4.13 bull case.
If actual results come within this range the stock will go to the moon even with the Shanghai Q2 worries.

 

[Gigapress]

For non-GAAP EPS, your numbers would be $3.23 bear case and $4.13 bull case.
If actual results come within this range the stock will go to the moon even with the Shanghai Q2 worries.

Yeah it’s be amazing!

Do you see any flaws in the analysis? I’m not quite sure about the step where the price differences are translated to revenue and cost estimates. Basically I conservatively guessed that around 15% of sales were shifted from base to premium, resulting in a 2 * 15% = 30% swing in favor of premium models. (E.g. if previously it was 50% base 50% prem then taking 15% from base puts it at 35% Base & 65% Prem). Then if the average premium price bonus plus price increase was around $12k between all models (with 3/Y being most influential), the total ASP impact is $12k * 0.3 = $4k.

 

[The Accountant]

Yeah it’s be amazing!

Do you see any flaws in the analysis? I’m not quite sure about the step where the price differences are translated to revenue and cost estimates. Basically I conservatively guessed that around 15% of sales were shifted from base to premium, resulting in a 2 * 15% = 30% swing in favor of premium models. (E.g. if previously it was 50% base 50% prem then taking 15% from base puts it at 35% Base & 65% Prem). Then if the average premium price bonus plus price increase was around $12k between all models (with 3/Y being most influential), the total ASP impact is $12k * 0.3 = $4k.

The math looks right; the only question is whether there was a shift from base to premium models.
My financial forecast assumes the mix went the other way: from premium to standard models.
I have no data to support this and it's only based on my prior business experience on how a product launches. I could be wrong on this.

 

[Gigapress]

The math looks right; the only question is whether there was a shift from base to premium models.
My financial forecast assumes the mix went the other way: from premium to standard models.
I have no data to support this and it's only based on my prior business experience on how a product launches. I could be wrong on this.

I did notice one mistake. The GAAP EPS bull case actually adds up to $4.00, not $3.80.

(2.5+1.5=4)

 

[Doggydogworld]

Basically I conservatively guessed that around 15% of sales were shifted from base to premium, resulting in a 2 * 15% = 30% swing in favor of premium models. (E.g. if previously it was 50% base 50% prem then taking 15% from base puts it at 35% Base & 65% Prem).

FWIW, they say nearly half of their cars were LFP, and they put LFP in most of their standard range cars. So it sounds over 50% were standard range. I think std range is the vast majority in China and Europe, opposite in the US & Canada.

Interesting that both Austin and Berlin will produce a mix of structural 4680 and non-structural 2170 cars. Also they changed the Cybertruck language slightly from "subsequent to Model Y" to "subsequent to Model Y ramp".

 

[ammulder]

Question on the financial results:

What is the "Changes in operating assets and liabilities, net of effect of business combinations" line (p 25) that had a 1.5B shift (in the bad direction) from last quarter to this quarter and caused the "Net cash provided by operating activities" to decline QoQ?

 

[FrankSG]

Question on the financial results:

What is the "Changes in operating assets and liabilities, net of effect of business combinations" line (p 25) that had a 1.5B shift (in the bad direction) from last quarter to this quarter and caused the "Net cash provided by operating activities" to decline QoQ?

It's basically working capital. There is a more detailed breakdown of what is included in the 10-Ks and 10-Qs. Items like inventory, accounts payable/receivable, deferred revenue, etc.

Note that it's the effect of these items on cash flows. So if inventory goes up, it's a negative effect on cash flows, because money was used to buy materials/parts.

Once the 10-Q comes out, you'll be able to see exactly why it was negative this quarter.

 

[The Accountant]

Question on the financial results:

What is the "Changes in operating assets and liabilities, net of effect of business combinations" line (p 25) that had a 1.5B shift (in the bad direction) from last quarter to this quarter and caused the "Net cash provided by operating activities" to decline QoQ?

Accounts Receivables went up by $0.4B (I assume that is regulatory credits cash not yet received).
Inventory went up about $1.0B (likely due to the Shanghai shutdown and Berlin/Austin Ramp).
Prepaid Expenses which has normally been flat went up $0.3m
Some offsets in payables.

 

[mongo]

Question on the financial results:

What is the "Changes in operating assets and liabilities, net of effect of business combinations" line (p 25) that had a 1.5B shift (in the bad direction) from last quarter to this quarter and caused the "Net cash provided by operating activities" to decline QoQ?

Yeah, it's a bit confusing.
From 10k:

But I haven't gotten the numbers to work from just the slide deck. 10Q will break it down. It's an adjustment between cash and income, not necessarily an actual loss.

 

[Doggydogworld]

Accounts Receivables went up by $0.4B (I assume that is regulatory credits cash not yet received).
Inventory went up about $1.0B (likely due to the Shanghai shutdown and Berlin/Austin Ramp).
Prepaid Expenses which has normally been flat went up $0.3m
Some offsets in payables.

Payables and Accrueds up a bit over 1.3b offsets the growth in Receivables and Inventory.
Deferred Rev and Customer Deposits generated 0.5b of cash, which should more than offset the Prepaids.
So all that together should produce a slight cash inflow. Where is the 600m+ outflow?

I think they include the cars they've leased out as an operating asset, that was a 0.2b cash drain. The rest of the change was maybe in "Other non-currenet assets"?

 

[mongo]

Yeah, it's a bit confusing.
From 10k:

View attachment 796056

But I haven't gotten the numbers to work from just the slide deck. 10Q will break it down. It's an adjustment between cash and income, not necessarily an actual loss.


View attachment 796071

Okay yeah...
I just compared 2021's 10Q to that slide deck and, while similar, the line items are not identical.
(Unless I'm missing something).