EVNow
Well-Known Member
Thanks for this. This doesn't sound like the problem has been fixed or will be fixed for Q2. Beginning to feel the deliveries will come lower than guidance.
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Near-future quarterly financial projections
- Thread starter luvb2b
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- elon is an ass
I dont see why that would be the case sounds like batteries are sufficient for current production levels, what was guidance for Q2 something like 90k cars overall?
Esme Es Mejor
Member
The average battery pack size should be substantially lower in Q2, due to the wide availability of the SR+, so unit production should increase even if battery cell production doesn’t.
That should shift concern from vehicles produced/delivered to margins. The FCA pooling agreement should be very helpful there, with the per-car credit (roughly 5k euro?) doing much more to juice the margins of SR+ than the AWD or the P.
EVNow
Well-Known Member
If US ASP has stabilized around 50k it will be the EU ASP that would be going down as they start getting SR+. Is China getting SR+ yet ?
Basically for every 2 LR Model 3, Tesla can make 3 SR+ (~50 kwh and 80 kwh). We'll have to play around with this to see how much more Tesla could make in Q2.
BTW, are people in agreement that the battery production hasn't improved in Q2 ?
Basically I don't think the cell production has improved much at all in Q2. So, I was saying, 3 production won't improve either (except as stated above when SR+ replaces LR).
SR+ is available in China.
It sounded like based off Elons tweets that Panasonic just got to 24Gwh run rate at the end of Q1 so no nothing in Q2. Except for maybe some potential runs of the 24 to 35Gwh equipment.
The weekly production rate was roughly 4.8k avg for Q1, assuming production got better at the end of the month with switching and by all accounts it has then Model 3 production should improve into the 5's. 5.3k a week gets them 70k Model 3's produced.
Batteries at a 24Gwh run rate weekly should not be a constraint on 5.3k 3's a week, if they are truly hitting 24Gwh (or 23) now then they can support 7k a week with a 65kwh avg pack
EVNow
Well-Known Member
That's right. I hope Tesla can make 6k/wk and produce 78k Model 3s in Q2. This is my optimistic estimate. This will allow them to sell about 70k 3s and build the pipeline a little bit too.
So according to Elon the cell production was much less than 24GWh in Q1 - so they could only make 63k 3s.
This is super important. It confirms the yield problems but says that Panasonic believes they know how to fix them and are fixing them, but they won't be fixed until June. So "Full yield" not until Q3.
Doggydogworld
Active Member
Notes I read from the fund-raising call said that. Might be a misquote. Everyone agrees he told analysts to stop nitpicking on margins and focus on the glorious robotaxi future. I read that as a strong signal margins will be lower.
It's a call spread, so it protects against dilution to 607.50. Curiously, shareholders suffer double-dilution above 607.50. Well, except Musk. That's the point where his comp package kicks in and gives him a boatload of new shares. Normal metrics for a convert would have warrant strike around 460 with only single dilution. That would have brought in roughly the same 175m, but Musk would have suffered dilution along with his fellow shareholders.
Anyway, cost to hedge dilution entirely is ~8.6%:
1840 - 476 = 1364 net proceeds
1364 with 18.4 semi-annual coupon and 1840 due on maturity = 8.6% APR
It's actually a bit higher since underwriting fees reduce net proceeds. This is in line with the 2025 bonds which trade around a 8.4% ytm.
Selling the 607.50 warrants reduces their cash APR to 5.9% (~6% including fees). They should recognize something close to the 8.6% as interest expense, though. That's about 30m the first few quarters climbing to ~40m the last quarter. The old converts were about 11m the last few quarters.
EVNow
Well-Known Member
If the margins won't improve - and ASP keeps going down, Tesla won't make a profit even if they sell 100k a quarter. Infact, they have to sell 125k for break-even.
Even if variable costs stay constant, fixed cost per vehicle decreases with volume. Thus margin cannot stay constant unless one of those costs increases. Further, gross vehicle profit improves with volume at the same margin. So, unless something on expense side moves in kind, margin should improve along with profit as volume increases.
EVNow
Well-Known Member
Unless, the volume is basically coming from lower margin trims - like SR+.
My math, assuming fixed costs of about $6B/year, says 100K Model S/X + 400K Model 3/Y gets to breakeven with a 20% GM, ASP of $50K on the Model 3/Y, and ASP of $100K on the Model S/X.
This is very rough, but there's no point in more precision than that. 100K Model S/X is pretty reliable and the ASP going to be about right (worldwide) for a long time.
The important point is that they need to get to that 10K/week production level, which they won't hit until Shanghai is in full production and the Fremont/Sparks bottlenecks are resolved. That gives them 500K Model 3/year, then they're set.
Tesla isn't going to sell 400K Model 3 this year. It's already mid may. Strong demand is surprisingly shallow in every new market Tesla enters with the model 3.
Evidence, as opposed to hope, suggests we are still in a pre mass market EV world.
The "production bottlenecks" in Fremont are suspensions to save labor expense.
Evidence, as opposed to hope, suggests we are still in a pre mass market EV world.
The "production bottlenecks" in Fremont are suspensions to save labor expense.
He's speaking in generalized terms, not making predictions for 2019. Just divide it by 4 and thats what Tesla needs to do a quarter roughly.
I don't think they will be selling 750k M3's yearly but everyone making assumptions on demand are jumping the gun way too soon. They made their first international deliveries roughly a 1 month ago.
Since they don't advertise demand is going to be generated by word of mouth. We won't see true demand for this car till the end of the year. Thats why delivery experiences and having good service experiences are important, your customer is your advertising team.
So when does the call spread execute?
The 18.4 semi annual figure, how did you come up with that? The 16% hedge fee plus the interest?
That's ludicrous nonsense.
We now know from the horse's mouth at Panasonic that they failed to deliver the number of battery cells they were supposed to. Production bottlenecks are real. Believe it.
Demand is infinite. Supply is limited.
Tesla and Panasonic are actually not doing so well at ramping up production. They're doing better than everyone else, but they are missing their goals quite massively.
Why am I quoted two week delivery on a new model 3?
Because they always say two weeks, regardless of how long it actually takes. This has been going on for years. Didn't you know that? Not really paying attention to Tesla are you?
bdy0627
Active Member
What's the evidence for your statement that demand is shallow in every new market for the model 3? Do we really have enough information to conclude that? I don't think we can even say what U.S. demand looks like yet. We are just now coming into the heavy car sales season. It seems to me that we should have a solid idea of model 3 demand by Q3.
