Near-future quarterly financial projections

[EVNow]

Musk said 350-500k Model 3s. Even if China somehow ran at full speed all of Q4, that requires 6.4k-10k/week from Fremont in Q2/Q3/Q4.

One thing that is stuck in my mind is that he said by end of this year, they will make 10k/wk - 7k in US and 3k in China.

The total figure has got complicated because of the tweet. But, assuming low 350k,
Q1 : 60k (5k/wk)
Q2 : 78k (6k/wk)
Q3 : 85k (6.5k/wk)
Q4 : 130k (10k/wk)

 

[Doggydogworld]

One thing that is stuck in my mind is that he said by end of this year, they will make 10k/wk - 7k in US and 3k in China.

The total figure has got complicated because of the tweet. But, assuming low 350k,
Q1 : 60k (5k/wk)
Q2 : 78k (6k/wk)
Q3 : 85k (6.5k/wk)
Q4 : 130k (10k/wk)

Yeah, the low end 350k is at least theoretically possible. 500k is just another Muskclown number, like his 100-200k in 2nd half of 2017.

 

[bdy0627]

They are obviously going to be very challenged to meet guidance yet again this year. 350k looks like a pretty significant stretch to me based upon current execution.

 

[tmoz]

They are obviously going to be very challenged to meet guidance yet again this year. 350k looks like a pretty significant stretch to me based upon current execution.

Regardless, that is a s**t-ton of EVs.

 

[bdy0627]

Regardless, that is a s**t-ton of EVs.

Definitely, but it sets Tesla up once again for a win not feeling like a win.

 

[KSilver2000]

One thing that is stuck in my mind is that he said by end of this year, they will make 10k/wk - 7k in US and 3k in China.

The total figure has got complicated because of the tweet. But, assuming low 350k,
Q1 : 60k (5k/wk)
Q2 : 78k (6k/wk)
Q3 : 85k (6.5k/wk)
Q4 : 130k (10k/wk)

Yeah, the low end 350k is at least theoretically possible. 500k is just another Muskclown number, like his 100-200k in 2nd half of 2017.

Given what we know so far, my bet would be for the under 350k. Even going from 5k/wk to 6k/wk is a 20% improvement, which would require quite a bit of efficiency improvements from their existing cell production of ~23GWh.

Unfortunately, with Tesla, what has been theoretically announced as feasible has not manifested into real world results. Higher chance this trend continues.

 

[kbM3]

A big slug of that 147k was MR at 38,500 after tax credit. About the same as SR+ in two months.

I expected Europe+China to be a bit less than US+Canada. Europe seems to have hit the wall at ~25k AWD/P. I think they'd have done another ~25k of LR-RWD/MR or whatever, but Tesla went straight to SR+ instead. That should produce a nice demand surge that lasts into Q3.

I have no idea what to think about China. They sent 8 boats and only delivered 6-7k Model 3s in Q1. It made sense to stockpile ahead of a possible tariff step-up, but the numbers were still much lower than I expected.

Musk said 350-500k Model 3s. Even if China somehow ran at full speed all of Q4, that requires 6.4k-10k/week from Fremont in Q2/Q3/Q4.


We don't know this yet. There should have been some pent-up demand, but it seems not.

Tesla is trying to shift the narrative away from Model 3 to FSD. There's a reason for that.​

Yeah, the low end 350k is at least theoretically possible. 500k is just another Muskclown number, like his 100-200k in 2nd half of 2017.

When did he say 500k Model 3’s? The only reference that I’m aware of was to a production rate achieved before the end of year.

 

[tmoz]

When did he say 500k Model 3’s? The only reference that I’m aware of was to a production rate achieved before the end of year.

Let's just hope the demand is there!

 

[Doggydogworld]

When did he say 500k Model 3’s? The only reference that I’m aware of was to a production rate achieved before the end of year.

He said 350-500k Model 3s in the 1/30 earnings call, but the context wasn't entirely clear. He was very specific In the "secret media call" on 2/28: 350-500k Model 3s and 70-100k S/X for 420-600k total production in 2019.

Investors know by now to ignore his blue-sky nonsense, but he still needs to cut it out. The company released an 8-k after the secret call to document that he changed Q1 guidance to a loss, but they specifically did not mention 420-600k. And they very clearly reiterated 360-400k deliveries in the P&D report. It's really a bad look to have you CEO out there at 50% above official company guidance.

 

[kbM3]

He said 350-500k Model 3s in the 1/30 earnings call, but the context wasn't entirely clear. He was very specific In the "secret media call" on 2/28: 350-500k Model 3s and 70-100k S/X for 420-600k total production in 2019.

Investors know by now to ignore his blue-sky nonsense, but he still needs to cut it out. The company released an 8-k after the secret call to document that he changed Q1 guidance to a loss, but they specifically did not mention 420-600k. And they very clearly reiterated 360-400k deliveries in the P&D report. It's really a bad look to have you CEO out there at 50% above official company guidance.

I believe he has also said he always talks rates. It is ok that he thinks that way, but I hate it when he leaves off the per year to make the units correct. Could he have been meaning rate in the secret call?

 

[neroden]

Well, Musk is now tweeting 500k cars next 12 months (i.e. roughly Q2 2019 - Q1 2020). (Seems like that includes S & X.) They can hit that even if they are stuck at low production rates (or low S/X sales) in Q2, but they really have to be back up to speed in Q3 in order to get there. (And Shanghai has to start producing in Q4 at the latest.)

 

[Doggydogworld]

I believe he has also said he always talks rates. It is ok that he thinks that way, but I hate it when he leaves off the per year to make the units correct. Could he have been meaning rate in the secret call?

He could have meant anything. As with "will make about 500k" he chooses words that neither say nor imply rate.

Tom Randall: [00:16:48] Hi Elon. Congrats on reaching this goal. You're pulling a lot of demand levers today. Obviously is going to open the car to a larger addressable market. Does this change your production plans at all compared to what you're forecast in your earnings call and your recent tweets - like has there been a shift in production that that allows you to open a larger addressable market?

Elon Musk: [00:17:10] Well in the earnings call um the if you say look at the range of numbers that were talked about talked about basically a pretty wide range because verticals predict the future. We don't have a crystal ball. So it's a 350,000 to 500,000 Model 3s is what I said in the earnings call. And then and then we would expect it to make somewhere between 70 and 100 thousand Ss and Xs. So the lower bound would be 350 plus 70 and then the upper bound would be 500 plus 100.

He refers to the earnings call, where he chimed in after Deepak gave a non-answer to a question about geographic dispersion of sales (not production):
"Yes. Maybe in the order of 350,000 to 500,000 Model 3s, something like that this year."

 

[tmoz]

I'm thinking of spurging for the X instead of waiting for the Y. But with talk of a refresh, I'm keeping my powder dry.
How many others are waiting as well?

 

[Fact Checking]

Let's just hope the demand is there!

Tesla Q1 2019 Vehicle Production & Deliveries | Tesla, Inc.

"Despite pull forward of demand from Q1 2019 into Q4 2018 due to the step down in the federal tax credit, US orders for Model 3 vehicles significantly outpaced what we were able to deliver in Q1."
​

Elon Musk on Twitter

"It was physically impossible to make more Model 3’s in Q1 due to cell constraints."
​

Elon Musk on Twitter

"Very much so. There are 2.5B cars & trucks on Earth. Even replacing 1% of that fleet would require making 25M vehicles per year. Tesla will make over 500k cars in next 12 months, but that’s a mere 2% of 25M or 0.02% of global vehicle fleet. Car industry slow -> demand >> supply."
​

Poll Finds Americans Feel Electric Vehicles Are The Future of Driving

'Three in four drivers even say that “EVs are the future of driving (74%).” Among EV drivers, this number rises to 79%.'

(Survey of 1,510 U.S. drivers, conducted by Harris Poll on behalf of Volvo.)​

 

[abasile]

Poll Finds Americans Feel Electric Vehicles Are The Future of Driving

'Three in four drivers even say that “EVs are the future of driving (74%).” Among EV drivers, this number rises to 79%.'

(Survey of 1,510 U.S. drivers, conducted by Harris Poll on behalf of Volvo.)

It seemed odd to me that only 79% of EV drivers would say that EVs are the future of driving, so I looked at the full results of the poll and found the following:

The EV sector includes HEVs (Hybrid Electric Vehicles), PHEVs (Plug-In Electric Vehicles), and BEVs (Battery Electric Vehicles).

I strongly suspect that this figure is skewed downward by the inclusion of hybrid drivers in the survey. If only 79% of Tesla owners were to say that EVs are the future of driving, that would be a serious negative! Plenty of Prius drivers might feel that EVs aren't necessarily the future.

 

[tmoz]

So perhaps the production numbers were limited by cell supply issues? Hoping Bloomberg's tracker isn't over estimating. If it is accurate, it would seem that they figured out their production bottleneck.

 

[Esme Es Mejor]

The production rate in Q1 improved more than most people realize.

The total number produced only went up by 2.5%. 62,950 vs 61,394

But Q1 only has 90 days, while Q4 had 92 days. Factoring that in, the daily production rate increased by 4.8%. 699/day vs 667/day

Finally, there appear to have been more non-production days in Q1 than in Q4. We know there was a delay in Euro-spec parts, and that they had to switch between variants more than in Q4.

I don’t have any solid data on total number of production days in Q1 vs Q4, but just 1-2 extra days off (because of parts delays or variant switches) suggests that the daily production rate increased 5-10% from Q4 to Q1.

 

[Doggydogworld]

US orders for Model 3 vehicles significantly outpaced what we were able to deliver in Q1."

Well, yeah. They launched SR+ a month before EOQ and didn't build very many. Meanwhile, they had 12k unsold MR, AWD, etc in inventory on 3/31.

"It was physically impossible to make more Model 3’s in Q1 due to cell constraints."

You aren't being true to your nom de plume. Do the math. 24 GWh/year is 6 GWh/quarter. A 60/30/10 mix of LR/MR/SR+ is ~72 kWh on average. 63k cars * 72 kWh = 4.5 GWh. Add 0.5 GWh for TE and it's clear cell supply isn't the issue.

Also compare this tweet to prior statements in the Q3 call last October:

JB Straubel
Sure. I can speak to that. This is JB. We have had a period, where the supply was fairly tight for Model 3, but it did not really constrain the Model 3 production in any significant way.
Elon Musk
Less than a week.​

They made 53.3k LRs in Q3, or 4.2 GWh. Since then Panasonic added three lines:

JB Straubel
And we continue to bring online new production lines. So even just in the last several weeks, we've started up yet another cell production line with Panasonic and through the end of the year, there's another line coming on, and then one shortly after that. So there is a steady increase in the total supply.​

They modified these new lines for higher output, 3 lines increased capacity 40%. This lines up with Musk's 24 GWh (vs. ~17 GWh sustained in Q3 from the 19-20 theoretical capacity Deepak quoted).

Managements spin numbers. Tesla is certainly no exception. The investor's job is to dig deeper.

 

[Fact Checking]

24 GWh/year is 6 GWh/quarter. A 60/30/10 mix of LR/MR/SR+ is ~72 kWh on average. 63k cars * 72 kWh = 4.5 GWh. Add 0.5 GWh for TE and it's clear cell supply isn't the issue.

Now the question is, does the 24 GWh Elon mentioned include scrapped cells or not? If scrap rate is ~15% as some of the leaks suggest then 24 GWh is ~20.5 GWh effective.

 

[Doggydogworld]

Now the question is, does the 24 GWh Elon mentioned include scrapped cells or not? If scrap rate is ~15% as some of the leaks suggest then 24 GWh is ~20.5 GWh effective.

I doubt it includes scrap, since they don't buy those cells and never even see most of them.

I can't imagine the scrap rate is that high on a continual basis, though. They've been running these machines for over a year, Panasonic would never put up with that kind of inefficiency.

I could see the new "improved" lines causing problems. Speeding things up isn't as easy as Musk makes it sound. Stuff breaks when you try. Let's say the 10 old lines do 3 million cells/day max, 2.7 million sustained after accounting for maintenance and scrap. If the first new line was supposed to add 0.4m cells/day but was only running at 0.2m, Tesla could have very easily been cell constrained in January when they were building 100% LR packs for Europe/China.

But with two more lines coming on early in the quarter and with Tesla downshifting to a mix of MR and SR+ packs in March, they had more than enough cells.

Here's my guesstimates of cell usage using 50/50 LR/MR mix in Q4 and 60/30/10 mix in Q1:

Q3 - 53.3k cars @ 78 kWh = 4.16 GWh
Q4 - 61.4k cars @ 71 kWh = 4.36 GWh

Q1 - 63.0k cars @ 72 kWh = 4.54 GWh

These increases are nothing compared to three new higher capacity lines ramping up.​