Near-future quarterly financial projections

[Mario Kadastik]

Can someone explain how TSLA intends to handle its convertible notes? $900mi convertible paid out as cash this year, $600mi due in Nov, $1.3bi due early '21, $1bi due early '22.

A quick analysis of how these obligations - assuming they are paid out in cash - will impact the company?

Assuming positive FCF going forward and the fact that they have ~4B cash as of this cap raise, then I don't see an issue Their obligations are 2.9B so assuming net FCF over the entire period were 0 it'd leave them at a paltry 1.1B cash, but if the FCF is positive and varies between 100-500M then over that time period it should cover the notes easily...

 

[anon]

Here is my latest iteration of rough p&l. With an optimistic 92k deliveries, I get a non-GAAP EPS of $0.06 and revenue of $6.5B.

Yahoo finance avg analyst estimate today is : $-0.44 EPS (non-GAAP) and revenue of $6.22B.

The main difference from last time is that I've increased the deliveries, but also in Q4 assuming no GF3 deliveries and yet 117k deliveries. That pushes ASP up from earlier. Also I've made some changes @Doggydogworld suggested. Pushed up Energy generation & storage as well as services.

View attachment 411811

Thanks for the model. My view is that S/X ASP is likely lower for Q2 than Q1, as the 75 was discontinued for much of Q1 before being replaced with the Raven standard range in Q2, and Q2 will include a significant number of inventory car sales for the pre-Raven models - I have seen discounts of up to $17k mentioned on them.

 

[mongo]

Thanks for the model. My view is that S/X ASP is likely lower for Q2 than Q1, as the 75 was discontinued for much of Q1 before being replaced with the Raven standard range in Q2, and Q2 will include a significant number of inventory car sales for the pre-Raven models - I have seen discounts of up to $17k mentioned on them.

I may be mistaken, but wasn't the inventory write down covered in the Q1 adjustment?

As a result of Q1 pricing actions taken on Model S and Model X, we incurred net $121 million loss for increases in the assumed forecasted return rates for cars sold under our Residual Value Guarantee and Buy Back Guarantee programs, as well as inventory write downs for used and service loaner inventory.

On the up side

We also had a mismatch between orders and deliverable cars. For example, due to adjustments in pricing mid-quarter, the take rate for the performance versions of Model S and Model X increased faster than we were able to supply.

The Raven with free ludicrous offer for current owners (early adopters with non AP or AP1) may be a strong boost this quarter.

 

[anon]

The quote is just for used and loaner inventory, and the write down is only for Q1 pricing adjustments (when they substantially lowered the price on new cars). Additional discounts on pre-Raven inventory did not occur until after Raven was released in Q2.

 

[anon]

Also, although earlier write downs will help with Q2 profit, they don't affect ASP.

 

[mongo]

Also, although earlier write downs will help with Q2 profit, they don't affect ASP.

The second quote regarding P versions will help ASP though, right? (Cuts L, increases P )

 

[EVNow]

Thanks for the model. My view is that S/X ASP is likely lower for Q2 than Q1, as the 75 was discontinued for much of Q1 before being replaced with the Raven standard range in Q2, and Q2 will include a significant number of inventory car sales for the pre-Raven models - I have seen discounts of up to $17k mentioned on them.

Yes, but its difficult to figure out the net effect of all the moving parts. What would matter a lot is the order and production status of refreshed cars. I expect them to be making higher ASP s+x first, for eg.

If I decrease ASP from 105k to 100k, for eg, the P&L goes down by about 15M. So, while it would obviously matter sentiment-wise when the quarter is so close to non-gaap break even, the overall model is nowhere close to 15M in terms of accuracy

A big unknown, for eg., is "Net income (loss) attributable to noncontrolling interests and redeemable noncontrolling". It has ranged between -75M and +70M in the past 5 quarters (last 2 quarters being +70M and +35M and earlier negative). No way of knowing where it will land this quarter - will it go back to being negative or will it continue to be positive ? I've taken it as zero.

Essentially, looks like the quarter will be similar to Q3/Q4 in terms of deliveries but with lower ASP & Margin. So, lower revenue & profit. We need nearly double the deliveries of Q1 to hit gaap profit if the margin continues to be around 20%, instead of 25% as in Q3/Q4.

 

[tmoz]

How is the $2 B from the Chrysler-Fiat deal handled?

 

[EVNow]

How is the $2 B from the Chrysler-Fiat deal handled?

Part of auto revenue, so figures in ASP and margin.

 

[EVNow]

Can someone explain how TSLA intends to handle its convertible notes? $900mi convertible paid out as cash this year, $600mi due in Nov, $1.3bi due early '21, $1bi due early '22.

A quick analysis of how these obligations - assuming they are paid out in cash - will impact the company?

Is that $600M due in Nov part of the $900M due this year ?

I think most of that $900M this year, they will be able to generate internally even after Capex. The ones in '21 and '22 are easy. By then Tesla will making enough 3 to meet the demand and generate $1B+ every quarter. By '22 they will also be getting a lot of Y money.

 

[Doggydogworld]

I may be mistaken, but wasn't the inventory write down covered in the Q1 adjustment?

As @tentonine noted, the writedown was used inventory.

Moreover, you don't write something down then sell it at positive gross margin. Or at least you're not supposed to. Consider a new inventory Model S with 75k COGS that listed for 100k. If you bring out a new model and discount the Model S by 20k, you don't write it down. When it sells you simply book 5k gross profit. If it doesn't sell and you have to discount it an additional 10k, then you write the carrying value down to 70k and when it finally sell you book 0k gross profit.

There's a large enough gap between new car COGS and list price that write downs should be rare. The exception is loaner and demo cars which accumulate a lot of miles. They have to discount those significantly anyway, and when a new pricing scheme or something like Raven comes along they have to discount them even further. That can trigger a write down for any cars still unsold by the end of the quarter.

 

[Buckminster]

How is the $2 B from the Chrysler-Fiat deal handled?

Paypal

 

[EVNow]

Here is the rough cash flow statement. I've only done the Operating cash flow & Capex part - not the financing part. The delivery numbers used are optimistic (as shown here) at 92k, 105k, 117k for the next 3 quarters.

I've also included the excel file that has p&l and the cash flow for you to play with.

 

[SPadival]

Their obligations are 2.9B so assuming net FCF over the entire period were 0 it'd leave them at a paltry 1.1B cash

FCA will pay about $2 Billion of that. Thanks Fiat !

 

[La_crolle]

Thanks a lot for sharing your file @EVNow.

I have a few questions.

- Leasing
I do not understand why you compute it this way. Is the fixed 200 000M$ there to simplify the math ?
I would expect to have a cumulative of the leasing for each quarter minus the leasing from quarters of 3 years ago. As a result I expected a more dramatic increase of lease revenues due to increase of model 3 leasing? Or do I misunderstand the way it is taken into account in the P&L?

- Cars produced but not delivered
Do I understand correctly that the 14 119 cars produced but not delivered in Q1 are not taking at all into account in Q1 P&L. So cost and revenue will be in Q2?

I hope they will be able to pull out the increase of production you are estimating for Q3 & Q4 !

 

[tmoz]

How close have past estimates on this forum come to matching actual results?
All the press comments seem to be poorly informed - treating last quarter's lower sales as a trend, ignoring the overseas shipping issues/logistics.
Thoughts?

 

[EVNow]

How close have past estimates on this forum come to matching actual results?
All the press comments seem to be poorly informed - treating last quarter's lower sales as a trend, ignoring the overseas shipping issues/logistics.
Thoughts?

The ones by @luvb2b were fairly good. This is the first time I'm trying - so who knows

 

[EVNow]

Thanks a lot for sharing your file @EVNow.

I have a few questions.

- Leasing
I do not understand why you compute it this way. Is the fixed 200 000M$ there to simplify the math ?
I would expect to have a cumulative of the leasing for each quarter minus the leasing from quarters of 3 years ago. As a result I expected a more dramatic increase of lease revenues due to increase of model 3 leasing? Or do I misunderstand the way it is taken into account in the P&L?

Yes - quick & dirty calculation. Detailed ones get complicated and I don't have all the information from last 3 years.

- Cars produced but not delivered

Do I understand correctly that the 14 119 cars produced but not delivered in Q1 are not taking at all into account in Q1 P&L. So cost and revenue will be in Q2?

I hope they will be able to pull out the increase of production you are estimating for Q3 & Q4 !

Inventory doesn't affect P&L directly - just balance sheet & cash flow.

Instead of those cars being in transit, if they had sold the cars, they could have booked profit on those cars reducing the loss in Q1.

 

[La_crolle]

Yes - quick & dirty calculation. Detailed ones get complicated and I don't have all the information from last 3 years.


Inventory doesn't affect P&L directly - just balance sheet & cash flow.

Instead of those cars being in transit, if they had sold the cars, they c

Yes - quick & dirty calculation. Detailed ones get complicated and I don't have all the information from last 3 years.


Inventory doesn't affect P&L directly - just balance sheet & cash flow.

Instead of those cars being in transit, if they had sold the cars, they could have booked profit on those cars reducing the loss in Q1.

Thanks @EVNow, very clear. Hope your estimates will materialise!

 

[Doggydogworld]

Here is the rough cash flow statement. I've only done the Operating cash flow & Capex part - not the financing part. The delivery numbers used are optimistic (as shown here) at 92k, 105k, 117k for the next 3 quarters.

I've also included the excel file that has p&l and the cash flow for you to play with.

View attachment 412065

I don't see much I'd change. Leasing almost 4k Model 3s will be a ~175m hit to cash flow, but S/X lease fleet will shrink a little and partially offset that. If they partially unwind the wave inventory should grow some. AP/accrued would also grow if they build the ~80k Model 3s needed to deliver 75k and also unwind some.

I don't see 500m of capex. I know they guided 2.0-2.5b for the year, but they've been far below guidance for several quarters and I don't see any signs they've ramped back up. I don't think GF Shanghai will run through the cash flow statement, except ~500m of tooling which is a long way off.