Near-future quarterly financial projections

[Darkfox021]

I tracked production and deliveries for 2018 and 2019. Interestingly, Tesla finished 2019 with less global inventory than 2018 (when Model 3 was US only).

ETA- this is not fully inventory #'s, this would assume Q1 2018 started at 0.

 

[EVNow]

I tracked production and deliveries for 2018 and 2019. Interestingly, Tesla finished 2019 with less global inventory than 2018 (when Model 3 was US only).

View attachment 496174


ETA- this is not fully inventory #'s, this would assume Q1 2018 started at 0.

What you have are just deltas for each quarter.

Here is what I have. ps : Doesn't take into account any writeoffs or sold as used.

 

[Darkfox021]

What you have are just deltas for each quarter.

Here is what I have.

View attachment 496178

I should have just downloaded yours!

We're ~350 off for some reason, will look deeper later. But, it seems Tesla is not only not unwinding the wave, they're perfecting it.

 

[EVNow]

I should have just downloaded yours!

We're ~350 off for some reason, will look deeper later. But, it seems Tesla is not only not unwinding the wave, they're perfecting it.

Mine may be a bit off too. There is difference between the numbers in P&D and in ER. We should take ER where available i.e. for all but the Q4 '19.

ps : My hope is - Tesla will sell off all their S&X inventory and produce only ordered cars. This will leave them with only display & test drive cars which they should sell off on a regular basis. That would be about 2k if we assume 250 stores/galleries and 8 cars per store. Plus 3k cars in transit for 2 weeks @ 1.5k/wk of production. So, looks like they can run with 5k cars in inventory.

 

[kbM3]

Yes, these are all upsides.

We don't know how much of GF3 costs will hit the P&L - I think it will be negligible, but we don't know. The other downsides are in things like other income (-40M once earlier) and subsidiary losses (70 once earlier).

What was the consensus as to what these were for ?


I have no insights into this. @Doggydogworld ?


IIRC, Musk thinks 3 demand is 700K and Y is more than that - so about 1.5M. BMW sales is 2M with a lot more models.
​

My recollection is that Elon estimated 0.5M to 0.75M for Model 3 and 1M to 1.25M for Model Y, so your number matches the low end of his estimate. Probably a good start.

I believe U.S. currently accounts for about half of demand, but I could easily see it dropping to 1/3 because GF3&4 should increase the international proportion.

 

[Darkfox021]

Mine may be a bit off too. There is difference between the numbers in P&D and in ER. We should take ER where available i.e. for all but the Q4 '19.

ps : My hope is - Tesla will sell off all their S&X inventory and produce only ordered cars. This will leave them with only display & test drive cars which they should sell off on a regular basis. That would be about 2k if we assume 250 stores/galleries and 8 cars per store. Plus 3k cars in transit for 2 weeks @ 1.5k/wk of production. So, looks like they can run with 5k cars in inventory.

I think you're right (differences due to various reports). I used the Q3'19 Update Letter to populate back to Q3'18 and then had to dig to fill in Q1 and Q2 '18 (and I made an entry error for Q1'18 delivers). It's not as obvious to find accurate data in any one report other than the Q3'19 Update letter.

In any case, the difference is less than 350 (over almost 20,000 when using your pre-2018 numbers), so not worth the time and effort to justify.

The ~2000 inventory reduction from end of 2018 vs. end of 2019 doesn't stand out as much when you factor in the starting inventory in 2018 (about 11% reduction), but I found it interesting that they were able to take a step further, worldwide, when we heard so much about the end of 2018 push in the US.

In any case, I mostly agree with you re: S/X. Keeping a lower inventory would have helped with the pre-Raven discounting in order to move the old stock.

 

[FrankSG]

Q4'19 - Q4'21 PDF
Q4'19 - Q4'21 Excel
Q4'19 - Q4'21 Numbers

I just expanded this model so I'd be able to account for differences in prices, costs, and margins between Fremont, Giga 3, and Giga 4. So it's rather large. Lots of notes at the bottom.

Automotive

Energy

Income

EDIT: Thanks to @Todesbuckler for pointing out a small error. I forgot to add a "-" sign before the interest expenses in 2021, so the GAAP Profit, and GAAP EPS are off a bit. EBIT remains correct though.

• Don't pay too much attention to regular solar. I'm not sure how accurate the separation between regular solar leases and regular solar cash and loan is going to be. I'm not assuming much growth there anyway, so it makes up a small % of overall Energy.
• The biggest assumption in this model is no battery supply issues. It assumes that Tesla realised their battery cell supply issues 12-18 months ago, and has taken the steps necessary to not be constrained in this aspect during the next 12-24 months.
• The second biggest assumption is that Fremont can produce 15k cars per week by mid 2021. It seems like @EVNow is sceptical about this for now.
• A third smaller assumption is that Giga 3 has the capability to produce 500k cars per year. I think this is pretty likely though, especially considering the rumors that are already floating around suggesting 280/cars per 10 hours. If these are true, they could already produce 280 / 10 * 24 * 7 = 4704 cars per week if there were to be zero downtime at the factory.
• About the 30% Giga 3 margins, I calculated these by calculating ASPs and COGS separately. ASPs are based off of MiC M3 price + subsidies + ~$1.5k for options (paint, FSD). The COGS were calculated by assuming M3 SR+ to be 15% margin on an ASP of $40.5k in Q3'19 in Fremont, and keeping this the same at Giga 3. So considering that Giga 3 is supposed to have been more capital efficient per unit of production, margins at Giga 3 could exceed 30% long term.
• No M3 production at Giga 4 by the end of 2021, because they've said they will start with Model Y there.

Besides the two big assumptions (cell supply and Fremont 15k/week), the model assumes solid execution of ramp ups of Giga 3 and Model Y, but I don't think these are overly aggressive. I could maybe see Model Y at Fremont ramping faster than this if things go really well.

The yearly runrates of 1.4M deliveries, $80B revenue, $20B gross profits, and $12B EBIT at the end of 2021 are pretty mind-boggling.

Feel free to poke holes in this and find places where it's incorrect or assumes the impossible. Constructive criticism is always helpful to improve my model.

P.S. Do we know if there are any plans to produce LR and P models at Giga 3 and/or Giga 4 in the future? Last I heard is SR+ only.

P.P.S. Got too carried away with next two years, but looks like I'm more pessimistic about Q4'19 than @EVNow, and pretty much the same as @Todesbuckler (although my revenue is higher). I have $7.22B in revenue and $203M in GAAP profits. I think there could be potential upside compared to my Q4'19 numbers, because I'm a bit conservative in Energy, and I have a decent uptick in OPEX.

 

[kengchang]

What was the consensus as to what these were for ?
​

Not much detail

BLD2020-03714: South paint modifications.

 

[EVNow]

The yearly runrates of 1.4M deliveries, $80B revenue, $20B gross profits, and $12B EBIT at the end of 2021 are pretty mind-boggling.

It would be. But I think we'll have to wait a few more quarters for that to happen. GF4 will be barely making volume production by end of 2021. They need to get to 10k/wk - along with GF3 and Fremont being at 10k/wk for 1.4M / yr to happen.

Otherwise there should be so much demand for 3/Y in US that Tesla wants to spend significant capex to increase capacity to more than even 15k/wk.

At 10k/wk, we are looking at perhaps 400k Model 3s and 600k Model Ys in NA. In other words at 400k Model 3 would be the largest selling car in US (Camry is about 350k). At 600k Model Y would be the largest selling SUV (Rav4 sold 427k in '18). So, we are saying even after this they will sell 50% more !

For eg. on the low end @Doggydogworld says the entire global demand for 3+Y is 500k/yr.

 

[RobStark]

IIRC, Musk thinks 3 demand is 700K and Y is more than that - so about 1.5M. BMW sales is 2M with a lot more models.
​

 

[kbM3]

Q4'19 - Q4'21 PDF
Q4'19 - Q4'21 Excel
Q4'19 - Q4'21 Numbers

I just expanded this model so I'd be able to account for differences in prices, costs, and margins between Fremont, Giga 3, and Giga 4. So it's rather large. Lots of notes at the bottom.

Automotive

View attachment 496229
View attachment 496230
View attachment 496231


Energy

View attachment 496232


Income

View attachment 496233

EDIT: Thanks to @Todesbuckler for pointing out a small error. I forgot to add a "-" sign before the interest expenses in 2021, so the GAAP Profit, and GAAP EPS are off a bit. EBIT remains correct though.

• Don't pay too much attention to regular solar. I'm not sure how accurate the separation between regular solar leases and regular solar cash and loan is going to be. I'm not assuming much growth there anyway, so it makes up a small % of overall Energy.
• The biggest assumption in this model is no battery supply issues. It assumes that Tesla realised their battery cell supply issues 12-18 months ago, and has taken the steps necessary to not be constrained in this aspect during the next 12-24 months.
• The second biggest assumption is that Fremont can produce 15k cars per week by mid 2021. It seems like @EVNow is sceptical about this for now.
• A third smaller assumption is that Giga 3 has the capability to produce 500k cars per year. I think this is pretty likely though, especially considering the rumors that are already floating around suggesting 280/cars per 10 hours. If these are true, they could already produce 280 / 10 * 24 * 7 = 4704 cars per week if there were to be zero downtime at the factory.
• About the 30% Giga 3 margins, I calculated these by calculating ASPs and COGS separately. ASPs are based off of MiC M3 price + subsidies + ~$1.5k for options (paint, FSD). The COGS were calculated by assuming M3 SR+ to be 15% margin on an ASP of $40.5k in Q3'19 in Fremont, and keeping this the same at Giga 3. So considering that Giga 3 is supposed to have been more capital efficient per unit of production, margins at Giga 3 could exceed 30% long term.
• No M3 production at Giga 4 by the end of 2021, because they've said they will start with Model Y there.

Besides the two big assumptions (cell supply and Fremont 15k/week), the model assumes solid execution of ramp ups of Giga 3 and Model Y, but I don't think these are overly aggressive. I could maybe see Model Y at Fremont ramping faster than this if things go really well.

The yearly runrates of 1.4M deliveries, $80B revenue, $20B gross profits, and $12B EBIT at the end of 2021 are pretty mind-boggling.

Feel free to poke holes in this and find places where it's incorrect or assumes the impossible. Constructive criticism is always helpful to improve my model.

P.S. Do we know if there are any plans to produce LR and P models at Giga 3 and/or Giga 4 in the future? Last I heard is SR+ only.

P.P.S. Got too carried away with next two years, but looks like I'm more pessimistic about Q4'19 than @EVNow, and pretty much the same as @Todesbuckler (although my revenue is higher). I have $7.22B in revenue and $203M in GAAP profits. I think there could be potential upside compared to my Q4'19 numbers, because I'm a bit conservative in Energy, and I have a decent uptick in OPEX.

‘Thanks so much for your efforts.

1) I would think GF3 COGS would be higher initially because of only 30% local content and then decline rapidly with scale and as they move towards 100% local content by the end of the year.

2) Also Tesla apparently just hit a rate of 28 vehicles per hour, and didn’t sustain that for very many hours. Even with 1 single 10 hour shifts, that would have produced 1k cars in 3.5 days and we know they built fewer. So they obviously only peaked at this rate. Based on the U.S. Model 3 ramp (even after they achieved 5k / week peak rate) I would go more conservative with q1 GF3 production. As @Fact Checking posited IIRC, they still need to ramp the supply chain now that production rates have been proven. Glad to see they apparently learned that lesson after the battery pack production fiasco in the initial Model 3 ramp, where it had apparently never been tested at speed before they ramped the supply chain

 

[jbcarioca]

... That will greatly increase long institutional holding which should put an end to rampant short manipulation.

It could have the opposite effect. Inclusion will decrease total active share float, since the majority of those shares will probably not participate in share lending. That would produce increased volatility and greater opportunity of algorithmic manipulations.

Mod: copy-moved to Big Thread. Continue there, please

 

[mongo]

Also Tesla apparently just hit a rate of 28 vehicles per hour, and didn’t sustain that for very many hours. Even with 1 single 10 hour shifts, that would have produced 1k cars in 3.5 days and we know they built fewer. So they obviously only peaked at this rate.

We can't determine much from the available data. If they did not intend to sell in 2019, then there is no reason to create inventory for inventory's sake. Rather, then could run a full shift of 280 cars to validate the ability to do so. Even running a half shift at rate without issue validates the build process, other than competent inflow and outbound logistics.
GF3 pack production only came on line at the end of December. Running at a high build rate without pack supply fully in place risks running out of GF1 sourced packs.
Further, they only have 1k of customer level cars. They built more than that.
They could have even used non confirming first shots from their supplies for training as opposed to just scrapping the parts.

 

[EVNow]

I took just BMW 2.1M in 2017, not Mini - which is 378k more. Not sure whether the above includes motorcycles.

BMW - Wikipedia

 

[EVNow]

It could have the opposite effect. Inclusion will decrease total active share float, since the majority of those shares will probably not participate in share lending. That would produce increased volatility and greater opportunity of algorithmic manipulations.

This is probably OT for this thread. May be @Papafox can comment in the other thread.

Mod: copy-moved to Big Thread. Continue there, please

 

[kbM3]

We can't determine much from the available data. If they did not intend to sell in 2019, then there is no reason to create inventory for inventory's sake. Rather, then could run a full shift of 280 cars to validate the ability to do so. Even running a half shift at rate without issue validates the build process, other than competent inflow and outbound logistics.
GF3 pack production only came on line at the end of December. Running at a high build rate without pack supply fully in place risks running out of GF1 sourced packs.
Further, they only have 1k of customer level cars. They built more than that.
They could have even used non confirming first shots from their supplies for training as opposed to just scrapping the parts.

I agree the main point is that they’ve basically just validated the line and processes and begun training. Now scaling production and the supply chain and adding a shift and more training are next. No one would love it more than I, if they average 2k / week in Q1 as Frank models. And I know it should go far smoother than the initial ramp. I’m just trying to remain slightly pessimistic.

 

[EVNow]

A 9% price cut to move 1000 cars a week. How many more cuts to move 3000 per week?

A price cut is always a concern - in the sense it reduces margin for sure. If the order book was really good and say booked for next 6 months of production - surely Tesla won't be cutting the price.

We have to now see if this is enough to move 3k/wk or whether we'll see further cuts next quarter. As they increase localization from current 30% they will have room for further cuts.

 

[EVNow]

At 10k/wk, we are looking at perhaps 400k Model 3s and 600k Model Ys in NA. In other words at 400k Model 3 would be the largest selling car in US (Camry is about 350k). At 600k Model Y would be the largest selling SUV (Rav4 sold 427k in '18). So, we are saying even after this they will sell 50% more !

This is wrong - somehow I took 10k/wk to mean 1M/yr.

At 10k/wk or 500k/yr - let us assume 200k M3s and 300k MYs. This would place Model 3 as the 4th best selling mid-size car in US and Model Y as the 5th best selling compact SUV. 200k is about what Model 3 is selling now. The assumption would be as Y is introduced, there would be some model 3 cannibalization, but the numbers would grow back.

To sell 15k/wk or 750k/yr, Model 3 would have to be nearly the best selling car & and Model Y to be nearly the best selling SUV in the US.

 

[ByeByeJohnny]

Is the consensus that there are 17k inventory at the end of Q4? Where would those cars even be? There are zero cars on ships. There are many showrooms and centers with zero or single digit cars left. I'm thinking all of Europe has maybe 1k cars left. China has zero US built M3s and less than 1k MIC. Can't see them having thousands of S/X in China either. Where are they keeping them all? What am I missing?

 

[pz1975]

Is the consensus that there are 17k inventory at the end of Q4? Where would those cars even be? There are zero cars on ships. There are many showrooms and centers with zero or single digit cars left. I'm thinking all of Europe has maybe 1k cars left. China has zero US built M3s and less than 1k MIC. Can't see them having thousands of S/X in China either. Where are they keeping them all? What am I missing?