Sad and frustrating that analysts and business press are too lazy, stupid and/or biased to take this unique to Tesla quarterly reporting situation into account. Hopefully if M3 + MY become production constrained after ramping up, there will be a year or two where quarterly sales will even out until production again catches up with demand. After that the volume of production and revenue from that volume will make lower Q1 sales irrelevant.
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Near-future quarterly financial projections
- Thread starter luvb2b
- Start date
Sad and frustrating that analysts and business press are too lazy, stupid and/or biased to take this unique to Tesla quarterly reporting situation into account. Hopefully if M3 + MY become production constrained after ramping up, there will be a year or two where quarterly sales will even out until production again catches up with demand. After that the volume of production and revenue from that volume will make lower Q1 sales irrelevant.
EVNow
Well-Known Member
Tesla should clearly put out guidance for next 4 quarters - instead of us relying on off the cuff remarks by Musk to questions in ER. Esp., if Tesla expects lower deliveries or lower profits / higher losses. Make the analysts take the guidance into account when they are coming up with their estimates. That way the market expectations will start to follow guidelines.
Musk said he expects break-even in Q3 and we don't even know whether he meant gaap or non-gaap. He shouldn't be giving any guidance that is not in the letter - just explain why they are giving the guidance in ER to answer questions.
EVNow
Well-Known Member
This is from autonomous vehicles sub-forum - but would be of interest here. The discussion was about how many cars have AP2.0 and whether Tesla can upgrade them to HW3. Here is my calculation of how much of the deferred revenue is perhaps from FSD.
Older cars upgradable to newer Tesla chip?
Older cars upgradable to newer Tesla chip?
BTW, 35% FSD rate of 106k cars @ $3k comes to $111M.
Since Q3 of '17, further 150k of s&x and some 275k of Model 3s have been delivered. We don't know what the take rate of FSD for Model 3 is - but if its the same 35% - it comes to a total of ~500M in FSD revenue Tesla has collected over the years for some 185k cars. This is likely over estimated as Model 3 take rate of FSD is likely lower. If upgrading takes ~$1k cost, they will have to spend ~200M to upgrade the cars to recognize ~500M in revenue for a profit of ~300M. (Likely lower because not all 185k cars need upgrades).
ps : From 10Q we get these figures.
Total deferred revenue : $1.19B
Expected to be recognized over next year : $567M
This includes all kinds of deferred revenue. A large part of that $567M could be from FSD.
Since Q3 of '17, further 150k of s&x and some 275k of Model 3s have been delivered. We don't know what the take rate of FSD for Model 3 is - but if its the same 35% - it comes to a total of ~500M in FSD revenue Tesla has collected over the years for some 185k cars. This is likely over estimated as Model 3 take rate of FSD is likely lower. If upgrading takes ~$1k cost, they will have to spend ~200M to upgrade the cars to recognize ~500M in revenue for a profit of ~300M. (Likely lower because not all 185k cars need upgrades).
ps : From 10Q we get these figures.
Total deferred revenue : $1.19B
Expected to be recognized over next year : $567M
This includes all kinds of deferred revenue. A large part of that $567M could be from FSD.
Singer3000
Member
Almost two-thirds through the quarter, have we heard any snippets on how production has been going?
Do we have anything more to go on other than the 28kwh cell production rate mentioned on the Q2 call and the letter's vague: "All manufacturing equipment in Fremont has demonstrated capability of a 7,000 Model 3 vehicles per week run rate"?
Do we have anything more to go on other than the 28kwh cell production rate mentioned on the Q2 call and the letter's vague: "All manufacturing equipment in Fremont has demonstrated capability of a 7,000 Model 3 vehicles per week run rate"?
It seems then that it would be extremely important to get V10 to the fleet by the end of September. This explains the breakneck speed with the FSD team. If we get V10 in Sept this would help the Q3 numbers.
The Bloomberg VIN tracker is saying 520,000 Bloomberg - Are you a robot?
Would like to know the rate they disabled that function in June.
The Bloomberg VIN tracker is saying 520,000 Bloomberg - Are you a robot?
Would like to know the rate they disabled that function in June.
EVNow
Well-Known Member
Last tweet from Musk said V10 will be out after 4 to 8 weeks. I think it is highly unlikely V10 will be out in Q3.
BTW, what do you mean by "breakneck speed with the FSD team" ?
tmoz
S85D, Y LR, ex Prius PiP
EVNow
Well-Known Member
Enh Summon is ofcourse the big thing. Recognition of stop sign and traffic signal have been mentioned too - so would be difficult to drop (but have lower bar of quality).
Also when he responded about the 4 to 8 weeks. That was Aug 20, I also think that he is very aware of the deadline he wants to hit.
Tesla postpones Full Self-Driving price increase until V10 and Smart Summon - Electrek
I mean it seems that he let go of some of that team because they were not hitting their goals. In general, he has also always stated that he will always be where things are there worst. Elon's primary focus driving that team.
Tesla's head of Autopilot software leaves in restructuring - Electrek
There is a scenario where it would be preferable for V10 to arrive in Q4 instead of Q3.
Q3 will see the first deliveries in RHD countries, many of which will be the performance models, while existing EU markets are still seeing strong delivery numbers from what I can gather from TMC.
If Q3 is heading towards a good result already (break even or slightly above) - then having V10 arrive next quarter as ASP drifts slightly lower with higher SR+ mix, might be preferable?
that’s just a hypothetical on my part.
other factors that we might get before the late October/early November earnings report: Pickup reveal and/or first Shanghai built model 3 rolls off production line.
Q3 will see the first deliveries in RHD countries, many of which will be the performance models, while existing EU markets are still seeing strong delivery numbers from what I can gather from TMC.
If Q3 is heading towards a good result already (break even or slightly above) - then having V10 arrive next quarter as ASP drifts slightly lower with higher SR+ mix, might be preferable?
that’s just a hypothetical on my part.
other factors that we might get before the late October/early November earnings report: Pickup reveal and/or first Shanghai built model 3 rolls off production line.
Singer3000
Member
I haven’t paid much attention over the past 2 months. Anyone have any China data from
July and August?
July and August?
tmoz
S85D, Y LR, ex Prius PiP
That is motivation in itself - fall behind and get Elon Sleeping in your office until you finish your job - better avoid that at all cost.
It is probably too early to say, but if someone bought a Tesla, with insurance how would that increase margin? Hopefully, a cr*p ton of people in California, buy insurance for there T's.
The good thing about insurance it is a recurring margin.
I would have preferred this 2 months ago with more than one state. But I will gladly take it.
The good thing about insurance it is a recurring margin.
I would have preferred this 2 months ago with more than one state. But I will gladly take it.
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EVNow
Well-Known Member
It is not clear what exactly Tesla does with insurance. There is talk in the market thread that they get 15% cut like a broker. Until they get significant % of owners enrolling, the effect on margin will be minimal.It is probably too early to say, but if someone bought a Tesla, with insurance how would that increase margin? Hopefully, a cr*p ton of people in California, buy insurance for there T's.
The good thing about insurance it is a recurring margin.
I would have preferred this 2 months ago with more than one state. But I will gladly take it.
Also, the revenue may be counted against a separate line item than auto sales - so no effect on margin (but will affect the bottom line).
tmoz
S85D, Y LR, ex Prius PiP
This makes sense because he should be able to to reuse the insurance money and use to funds to development other projects.
Similiar to Berkshire Hathaway.
Similiar to Berkshire Hathaway.
Stars aligned
Member
In defence of Musk, not sure if he has this infallibel crystal ball. Too big and unrealistic expectations, to express it more clearly. Even if he is as genius he is not able to predict every tiny bit of the future development. And I'm quite happy with that.
If he had, people would be invited to game it, and it would become untrue. So easy to blame him, so trappy.
EVNow
Well-Known Member
You are missing the point. Musk said they would "break-even" in Q3, have a difficult Q1 '20. He obviously mean this in terms of "something" - we just don't know. So, if they actually publish this in the letter (we expect to break-even non-gaap in Q3 etc) - we'll know what he is talking about when he says break-even or "difficult".
BTW, I do think it was poor of them to have not anticipated some problems with Q1 and guided for that - and more importantly developed a plan for that instead of doing all kinds of flip-flops in Q1.
