Near-future quarterly financial projections

[EVNow]

My opinion is that the street sees volume growth offset by lower prices (and margins) needed to drive that growth so EPS & stock price may not be going anywhere for a while.

Also that there is no meaningful cyber truck revenue for at least 18 months and a $25k car could be at least two years away from volume production given recent commentary about Giga Mexico

Yes - the other point is - Tesla is frequently compared here with other automakers showing how much better they are. That is true .... and Wall St accepts that. That is why Tesla is valued very differently by Wall St. So, the real comparison has to be to actuals vs long term expectations set by Tesla execs.

 

[30seconds]

Yes - the other point is - Tesla is frequently compared here with other automakers showing how much better they are. That is true .... and Wall St accepts that. That is why Tesla is valued very differently by Wall St. So, the real comparison has to be to actuals vs long term expectations set by Tesla execs.

What's the messaging coming from Tesla / Elon on why Q1 EPS would be so low compared to Q1 2022? Auto revenues are up, new GFs are at good volumes and commodity costs are coming down. Is it due to soft sales expectations for high margin S & X?

 

[EVNow]

What's the messaging coming from Tesla / Elon on why Q1 EPS would be so low compared to Q1 2022? Auto revenues are up, new GFs are at good volumes and commodity costs are coming down. Is it due to soft sales expectations for high margin S & X?

I was referring to long term expectations (50% CAGR) ... and recently 20% GM / $47k ASP .... and (unspecified) OM that they monitor and want the market to focus on.

Individual quarters, I'm sure Zach will have some good response. And as usual Elon will have some rambling answer about how "demand" is high but affordability is low (duh ! anyone can sell all they can make if priced low enough).

 

[petit_bateau]

I'm bushed after a long day on a project and not feeling great as I think I have another dose of flu. So it will be a while before I listen to the Q1 results, perhaps a week.

However I think a lot of folk have not fully understood the implication of the forecasts I do. In the forecasts I am simply taking Tesla at their word re stated objectives of 20m cars/yr by 2030, and 1500 GWh/yr by 2030, etc; and running the curve to get from here to there. My forecasts also include a resultant share price based on a rational investor with full fore-knowledge and I do it for various types of investors (PE, NPV | trailing or forwards).

Most folk find my shsareprice v forecast underwhelming, i.e. pessimistic. However at the same time the facts are that my quarterly results forecasts are consistently optimistic. Given that despite this my share price forecast happens to be pretty darn close (I forecast $181 at the beginning of the quarter and it is $182 as I type - the purple line is imho the one to watch for when Wall St is in charge of price action) , the implication is that there is still considerable irrational exuberance in the TSLA share price.

I don't think people have fully understood the implications of this.

and here is the annual version to mull over

and by the way, here is the Operating Margin in the annual version (OM%), out to 2030

What Tesla is doing strategically is perfectly reasonable and understandable and transparent and iaw the mission statemt. But that does not mean we should ignore the implications for the share price and the contradictions that the market will be chewing over (repeatedly) now and in the years to come.

Anyway, I really am going to bed.

 

[DarkandStormy]

Here's how I ended up.

 

[DarkandStormy]

Are any of these predictions including the IRA credits on the manufacturing side? As of Jan 1, those should all be fully in place.

Am curious to see the 10-Q / hear from Zach to see where these were booked.

 

[bkp_duke]

Am curious to see the 10-Q / hear from Zach to see where these were booked.

Yep. We don't have that level of insight at this time, as the credits are completely new.

I don't see any accounting of them at all in the quarterly report we got today.

 

[damonbrodie]

With tonight's shareholder report Tesla is now stating a production capacity of 2M vehicles, with guidance to produce 1.8M this year.

Their goal is to increase production YoY by 50%, which would mean 2.7M vehicles in 2024. I know they have room to grown in Berlin and Texas, and Texas is currently ramping up for CT for volume next year, but adding 900K of production for production next year seems like a pretty tall order.

I don't believe Mexico will be meaningful until 2025.

Current capacity:

Location​	Capacity​
Freemont (all lines)	650K
Shanghai	750K
Berlin	350K
Texas	250K
Total	2M

Both Freemont and Shanghai seem to be at capacity so even the following isn't enough:

Location​	Capacity​
Freemont (all lines)	650K
Shanghai	750K
Berlin	500K
Texas	500K
Total	2.4M

This leaves them short 500K of production capacity to meet their goals. I think the 50% YoY growth is in danger for 2024....

 

[heltok]

With tonight's shareholder report Tesla is now stating a production capacity of 2M vehicles, with guidance to produce 1.8M this year.

Current capacity:

Location​	Capacity​
Freemont (all lines)	650K
Shanghai	750K
Berlin	350K
Texas	250K
Total	2M

Both Freemont and Shanghai seem to be at capacity

Note that they say capacity larger than... For example in October 2022, Tesla produced 87,706 Model 3s and Model Ys in Shanghai

Tesla Shanghai adds to inventory at highest rate ever in October - brokerage data

Tesla added to its electric vehicle inventory in Shanghai at its fastest pace ever in October, brokerage data showed, at a time when automakers and investors are bracing for a downturn in the world’s largest car market.

www.reuters.com

Take this rate times 12 and you get >1M. So clearly they had capacity >1M/year back in October. Technically the boolean 87k/month > 750k/year = TRUE so they are not lying when they say >750k. But don't assume that this means = 750k.

 

[bkp_duke]

With tonight's shareholder report Tesla is now stating a production capacity of 2M vehicles, with guidance to produce 1.8M this year.

Their goal is to increase production YoY by 50%, which would mean 2.7M vehicles in 2024. I know they have room to grown in Berlin and Texas, and Texas is currently ramping up for CT for volume next year, but adding 900K of production for production next year seems like a pretty tall order.

I don't believe Mexico will be meaningful until 2025.

Current capacity:

Location​	Capacity​
Freemont (all lines)	650K
Shanghai	750K
Berlin	350K
Texas	250K
Total	2M

Both Freemont and Shanghai seem to be at capacity so even the following isn't enough:

Location​	Capacity​
Freemont (all lines)	650K
Shanghai	750K
Berlin	500K
Texas	500K
Total	2.4M

This leaves them short 500K of production capacity to meet their goals. I think the 50% YoY growth is in danger for 2024....

The 50% YoY is ALWAYS reported as a multi-year average. Tesla keeps emphasizing that, but people keep ignoring it.

 

[Thekiwi]

First pass at Q2 earnings estimate, assuming 450k deliveries & 17.7% Auto GM (ex reg credits)

(Note: I just include leasing in my auto calculation for estimating rather than breaking it out separately)

Net income up y-o-y with this estimate

(updated to fix error on services COGS)
(updated again to correct income tax provision)

 

[Thekiwi]

Full year 2023 estimate: based on 1.939m total 12 month deliveries & Auto margins slowly approaching 20% again by Q4.

Roughly flat year on year net income on this estimate, but I wouldn’t put too much weight in it yet.

(Again, as above ignore the lines relating to leasing - they only include actual separated totals from Q1 result, the remaining 3 quarters on my sheet have leasing total included in “automotive sales“ lines)

 

[EVNow]

First pass at Q2 earnings estimate, assuming 450k deliveries & 17.7% Auto GM (ex reg credits)

(Note: I just include leasing in my auto calculation for estimating rather than breaking it out separately)

Net income basically flat y-o-y with this estimate

(updated to fix error on services COGS)

So, Auto GM (ex-Reg credits and ex-lease) about 16% vs 18.3% in Q1 ? Also what is the ASP ?

 

[Thekiwi]

So, Auto GM (ex-Reg credits and ex-lease) about 16% vs 18.3% in Q1 ? Also what is the ASP ?

I don’t separate lease, so with it combined in modeling a 17.7% auto GM (ex credit), down from 19.0% in Q1.

- I have so far used a $2k drop in Model Y ASP in Q2 vs Q1,
- Have a $5k drop in S&X but I am assuming management indications that S&X Q1 drop was delivery logistics rather than sales slump, so have them rebounding back to 20k S&X deliveries in Q2, which even at a lowered ASP will actually have a positive impact on overall ASP across all models given their far higher price.
- Model Y capacity increase in Europe is all LR currently, so I think the EU Y mix is going to hold up ASP a bit there.
- Significantly, Tesla China hasn’t dropped prices yet this quarter (I think).
- Still might be way off of course and Y ASP drop might be significantly more than $2k.

The total all model ASP drop is only $560 quarter on quarter on my sheet to $45.42k, which does not intuitively sound right to me. But to give an indication of how big an impact S&X have, if we dial down the S/X deliveries from 20k to 10.5k, then overall ASP across all model lines changes to a ~$1650 drop.

Again this is just a first pass, so my estimates might jump around a bit if we see more price changes & get a better idea on delivery numbers, and I am unsure on model 3 ASP so far (haven’t changed it yet, despite pricing change outside China) as I want to see if we get some indication on how the new Model 3 RWD LR variant does for fleet deliveries in EU/UK and whether its offered elsewhere - could change the SKU mix higher and help with keeping ASP up. Also highland might end up being a new LR variant first in USA (but who knows when that will actually eventuate).

Am curious to see others early thoughts on Delivery numbers and ASPs for Q2? Is it worth doing bad/average/good scenarios?

Delivery wise, my bad/average/good would be 420k/440k/460k+
ASP wise: $44k/$45.5k/47k+

really shows how the China market ASP dominated by cheap SR models heavily outweighs the very high US market ASP.

 

[Doggydogworld]

Turns out this is not correct. After watching yesterday's TeslaDaily and rereading what Zach said - the 20% GM he is talking about is ex-Credits ex-Lease.

This is the first time I've seen Zach blow his credibility. He threw in "uncertainty about how the year will unfold" weasel words, but the question pretty specifically said ex-Credit, ex-Lease after the cuts and Zach said "above" 20% GM. Actual was 18.3%. FWIW Tesla did beat 47k ASP at 47,132.

Q4: 51.9k ASP - 39.5k COGS = 12.4k gross profit per car sold
Q1: 47.1k ASP - 38.5k COGS = 8.6k gross profit per car sold

The 4.8k ASP decline (9.2%) was less than the headline price cuts because, as Zach pointed out in January, many Q4 sales were lower priced backorders from earlier in the year and they also did some backdoor discounting in Q4 (e.g. giving US customers 7500 off to take delivery before the tax credit kicked in). I estimate dramatically lower S/X sales contributed about $800 of ASP decline and $600 of COGS decline. Adjusting for that 3/Y ASP only declined 4k, which is pretty impressive. Not so impressive is the $400 adjusted COGS decline, which pretty much debunks the "passing cost savings along" narrative.

 

[Doggydogworld]

The 50% YoY is ALWAYS reported as a multi-year average. Tesla keeps emphasizing that, but people keep ignoring it.

Five years is the most common CAGR time period. Here are the deliveries needed the next few years to sustain 50% five year CAGR.

2023 - 1.864m
2024 - 2.792m
2025 - 3.794m
2026 - 7.109m

 

[Hiline]

With tonight's shareholder report Tesla is now stating a production capacity of 2M vehicles, with guidance to produce 1.8M this year.

Their goal is to increase production YoY by 50%, which would mean 2.7M vehicles in 2024. I know they have room to grown in Berlin and Texas, and Texas is currently ramping up for CT for volume next year, but adding 900K of production for production next year seems like a pretty tall order.

You got close. I'm quoting myself here:

Playing around with the 50% CAGR starting in 2020 with 510k vehicles. In order to meet this goal, Tesla is going to have to produce this many vehicles each year:

2021: 765k
2022: 1.15M
2023: 1.72M
2024: 2.58M
2025: 3.87M
2026: 5.81M
2027: 8.71M
2028: 13.07M
2029: 19.61M

Now I see the basis for 20M units per year by 2030.

So Tesla needs to make 2.6M next year which is a tad under your 2.7M figure. I do agree that the 2024 target is in danger. Given the current economic environment, I think this is quite ok. Ramping up production too far ahead of demand growth is not financially advantageous.

 

[petit_bateau]

The 50% YoY is ALWAYS reported as a multi-year average. Tesla keeps emphasizing that, but people keep ignoring it.

As Space X just demonstrated, if the preceding stage fails, so too do the successive stages.

It is vital to scale fast through both 2023 and 2024 in order to have a credible chance at the 20m in 2030 target, which I increasingly think they will miss.

Anyway I've now read the deck, but not listened to the tape. This slide sticks out to me like the proverbial:

- GM% down from 29% to 19% in last 12-months
- OM% down from 19% to 11% in last 12-months

These are not good trends and definitely need to be controlled in next 12-months. Also note that FCF has come down from $2bn to $0.4bn over the same period. I can see what is going on, which is understandable. However we need to be realistic that this is running late, and on slimmer margins. And in the detail we can see (as I have been saying since forever) that Energy (i.e. storage) will not save the yummy EPS day, ever.

Anyway to bed again.

 

[EVNow]

- GM% down from 29% to 19% in last 12-months
- OM% down from 19% to 11% in last 12-months

We can look at this in 2 ways
- The increased GM and OM in 2021/22 was an aberration (caused by Covid induced supply constraints)
- This is a bad downward trend caused by increased production (which forces Tesla to reduce prices)

It may be difficult to tease out which of the two narratives is dominant. But, what can't be ignored are
- coming recession
- high interest rates

I think Tesla doesn't have to do anything special - just survive the recession intact and when the good times return, they will be in very good shape. So will the SP be.

 

[CorneliusXX]

Sasha has a great video out that summarises things pretty well IMO. Tesla the company is doing well but the stock is going to be in the toilet until they can regain control of their vehicle margins. The cageyness on some of the responses yesterday was also disappointing.