Near-future quarterly financial projections

[ProfTournesol]

I've finished my Q1'20 earnings forecast. For the reasoning behind my decisions, please refer to my blog.

[awesome spreadsheet ...]

Last year you shared your spreadsheet, do you have this one somewhere available? Makes it a bit easier to run though the numbers

 

[FrankSG]

Last year you shared your spreadsheet, do you have this one somewhere available? Makes it a bit easier to run though the numbers

TSLA Q1'20 Excel

TSLA Q1'20 PDF

TSLA Q1'20 Numbers

The Q2'20 - Q4'21 numbers in this spreadsheet are my bullish ones. I have another spreadsheet with more bearish predictions. The biggest difference in the bearish one is Fremont capping at 5k M3 and 5k MY per week, and Berlin ramping a bit later and slower. As a result EBIT in Q4'21 in that one is 'only' $1.75B.

 

[ProfTournesol]

TSLA Q1'20 Excel

TSLA Q1'20 PDF

TSLA Q1'20 Numbers

The Q2'20 - Q4'21 numbers in this spreadsheet are my bullish ones. I have another spreadsheet with more bearish predictions. The biggest difference in the bearish one is Fremont capping at 5k M3 and 5k MY per week, and Berlin ramping a bit later and slower. As a result EBIT in Q4'21 in that one is 'only' $1.75B.

Thanks! Will work though them today!

 

[Buckminster]

From main thread:

I expect Tesla to continue to give limited guidance. I'd be surprised if we hear anything more than that 2020 guidance remains unchanged.

FWIW, I'm only slightly more bearish than I was at the start of the year.

Negative developments in 2020 so far

• COVID-19 is impacting Q2 production negatively.
• COVID-19 will likely impact Q3 and Q4 demand for Model S and X negatively.
• COVID-19 will likely impact Q3 and Q4 demand for Fremont made Model 3 negatively, but Tesla was supply constrained before, so it remains to be seen whether demand will be impacted enough for that to change.

Positive developments in 2020 so far

• Giga Shanghai is ramping up faster than I think even most bulls expected. It's certainly ramping faster than I expected. I didn't expect them to reach 5k/week until later in the year, but it's looking like they'll easily achieve it before the end of Q2.
• The execution at Giga Shanghai gives more confidence for a swift Model Y ramp.

I was expecting 570k-650k deliveries for the year at the start of 2020. Now I'm expecting 550k-650k deliveries for the year.

Bear case:
Q1: 88.4k
Q2: 8k S+X, 40k 3 Fremont, 45k 3 Shanghai, 6k Y = 99k
Q3: 12.5k S+X, 65k 3 Fremont, 65k 3 Shanghai, 25k Y = 167.5k
Q4: 15k S+X, 65k 3 Fremont, 65k 3 Shanghai, 50k Y = 195k
Total: 549.9k

Bull case:
Q1: 88.4k
Q2: 10.5k S+X, 50k 3 Fremont, 50k 3 Shanghai, 11.5k Y = 122k
Q3: 17.5k S+X, 87.5k 3 Fremont, 65k 3 Shanghai, 35k Y = 205k
Q4: 20k S+X, 87.5k 3 Fremont, 65k 3 Shanghai, 65k Y = 237.5k
Total: 652.9k

1. I don't see any way in which Tesla could be demand constrained for Model Y this year, or even next year to be honest. SUV/CUV is a much larger segment than the Model 3, and there's at least some pent-up demand.
2. Based on numbers and reports coming out of China, I think it's safe to say Shanghai is producing at a rate of 3k/week. Considering how fast they got there, I'd be surprised if they don't reach 5k per week by the end of May, probably earlier. If 5 weeks of production @ 5k/week and 8 weeks of production at 3.5k avg/week, that'd be 53k vehicles produced in Q2 in Shanghai. There'll probably some in transit at the end of the quarter, but 45k seems plenty conservative to me.
3. Although we don't have hard proof, it really seems like demand in China is also no problem for the foreseeable future. I wouldn't be surprised if Tesla needs a 2nd Gigafactory in the country before it'll see any demand issues.
4. Non-China demand for the Model 3 after the various economies reopen is the biggest unknown. 65k/month would be an about 25% reduction from Tesla's previous run rate, but Tesla was supply constrained before, so 65k/month could be as much as a 30% or 35% reduction in demand. If somebody wants to be more bearish on those, I could see that, but I'm sticking with 65k for my bear case.

 

[EVNow]

Bear case:
Q1: 88.4k
Q2: 8k S+X, 40k 3 Fremont, 45k 3 Shanghai, 6k Y = 99k
Q3: 12.5k S+X, 65k 3 Fremont, 65k 3 Shanghai, 25k Y = 167.5k
Q4: 15k S+X, 65k 3 Fremont, 65k 3 Shanghai, 50k Y = 195k
Total: 549.9k

I see someone is a lot more optimistic than I am. These numbers are more than my pre-Covid estimates !

Its as if people posting in Coronovirus thread and the market thread are in different realities.

 

[FrankSG]

I see someone is a lot more optimistic than I am. These numbers are more than my pre-Covid estimates !

Its as if people posting in Coronovirus thread and the market thread are in different realities.

What parts do you disagree with and why?

I could see someone disagreeing with me about 3 Fremont, and perhaps S+X, but I think it's hard to argue against these Shanghai numbers when looking at the facts, and I think it's a reasonable bear projection for how fast they can ramp Model Y production.

 

[MC3OZ]

I see someone is a lot more optimistic than I am. These numbers are more than my pre-Covid estimates !

Its as if people posting in Coronovirus thread and the market thread are in different realities.

A meaningful update on 2020 financials will probably be provided in the earnings call.

There has been plenty of speculation on what is driving the current price action, but no one knows who is buying and selling and why...

Most speculation about short term price drops is aimed st timing the market, so far with possibly mixed success....

Most of us believe Tesla is a good investment with a 5-10 year time horizon, I'm not sure anyone has identified a better short term bet...

 

[EVNow]

What parts do you disagree with and why?

I could see someone disagreeing with me about 3 Fremont, and perhaps S+X, but I think it's hard to argue against these Shanghai numbers when looking at the facts, and I think it's a reasonable bear projection for how fast they can ramp Model Y production.

Q3 and Q4 depend on what happens when the economy is opened with essentially zero preparation. There are reasonable chances of second wave during the fall or earlier - forcing another round of lockdowns. I’d consider that in a bear case.

 

[cluster]

I see someone is a lot more optimistic than I am. These numbers are more than my pre-Covid estimates !

Its as if people posting in Coronovirus thread and the market thread are in different realities.

Has anyone paid attention to Troy's Model-3 and Model-Y google spreadsheet trackers? I am worried about the short-term demand across US and EU, because there is essentially zero new entry since late March. I hope I read his spreadsheet wrong...

 

[FrankSG]

Q3 and Q4 depend on what happens when the economy is opened with essentially zero preparation. There are reasonable chances of second wave during the fall or earlier - forcing another round of lockdowns. I’d consider that in a bear case.

So it's not a demand impact due to COVID-19, but an expectation of more lock downs that makes you more bearish?

It's true that we can't rule that out, and one could make a more bearish case for that situation yes.

I'm personally pretty optimistic that we won't see the same type of complete shut downs again (although likely other slightly less drastic measures), but I could be wrong. If am wrong, then yes, numbers might be worse than those bear numbers.

 

[MC3OZ]

Has anyone paid attention to Troy's Model-3 and Model-Y google spreadsheet trackers? I am worried about the short-term demand across US and EU, because there is essentially zero new entry since late March. I hope I read his spreadsheet wrong...

Tesla still shipping cars?

There are questions around how much Model Y inventory Tesla has, and how prepared they are to move it around...

Not surprisingly there are some still waiting for a Model Y.

The earnings call is around a bit more than 1 week away, that is when we will get meaningful answers..

In the meantime any speculation about demand and the future is merely a hunch, Tesla might even be blindsided and even their projections might not turn out accurate, but for now, they have the best data...

 

[cluster]

Tesla still shipping cars?

There are questions around how much Model Y inventory Tesla has, and how prepared they are to move it around...

Not surprisingly there are some still waiting for a Model Y.

The earnings call is around a bit more than 1 week away, that is when we will get meaningful answers..

In the meantime any speculation about demand and the future is merely a hunch, Tesla might even be blindsided and even their projections might not turn out accurate, but for now, they have the best data...

Delivering inventory cars is not a question.

The real concern is how much new orders (US, CA and EU) they will have for Q2.

A future Tesla owner may worry about their own financial situation/job security, as well as Tesla's production and on-time delivery during the pandemic. Therefore, customers may defer their orders to Q3, Q4...

 

[MC3OZ]

Delivering inventory cars is not a question.

The real concern is how much new orders (US, CA and EU) they will have for Q2.

A future Tesla owner may worry about their own financial situation/job security, as well as Tesla's production and on-time delivery during the pandemic. Therefore, customers may defer their orders to Q3, Q4...

It is hard to make accurate predictions on demand as this situation is unprecedented.

A bad quarter is possible, but more generally new cars sales dropping by around 34% in a downturn is not unusual.
IMO Tesla can grow demand and eat into that 34% drop but continuing to take sales off other car makers, especially with Model Y Q2/Q3 and in 2021 with Plaid Model S, followed eventually by Cybertruck..

And Tesla can start making the Semi...

Short term I'm more worried about production, and getting cars shipped to Europe for Q2 deliveries.

IMO most car buyers who want a Tesla may delay a purchase, but will not swap to another brand... and every day more car buyers are deciding their next car will be a Tesla.

Tesla also had around $8B in the bank at the start of the year....

I assume they are going to tell it like it is in the earnings call, not downplay or exaggerate any challenges... also that they will have a plan...

 

[EVNow]

So it's not a demand impact due to COVID-19, but an expectation of more lock downs that makes you more bearish?

Demand is much more complicated. Ofcourse we have shipping/delivery issues in Europe too.

Looks to me the market and many business leaders are assuming a V shaped recovery. If the lifting of lockdown does not go well (or gets delayed, like the extension of lockdown to June in your country, Singapore) - it is not just that we may have to deal with renewed restrictions - but also what that means for businesses. It could mean a prolonged recession - and that will mean more lay offs, no bonuses and deepening recession. That will hit demand.

Another way the demand is hit if people can't drive as much. Then the cars don't break down as much - and that will postpone the demand. Demand is going to be very difficult to predict.

Good thing Y is coming out now - and there should be enough demand for it. But 3 - and esp S&X - will take some demand hit.

 

[Doggydogworld]

What parts do you disagree with and why?

I could see someone disagreeing with me about 3 Fremont, and perhaps S+X, but I think it's hard to argue against these Shanghai numbers when looking at the facts, and I think it's a reasonable bear projection for how fast they can ramp Model Y production.

I've never seen that level demand inside China. IMHO GF3 will export to APAC and Europe. Fremont will focus on Model Y, plus ~100k Model 3s per year for North America.

I could be very wrong, of course.

 

[EVNow]

I've never seen that level demand inside China. IMHO GF3 will export to APAC and Europe. Fremont will focus on Model Y, plus ~100k Model 3s per year for North America.

I could be very wrong, of course.

Yes, 65k in China is quite a stretch - let alone a bear case in a deep recession.

This is my post from early this year. 65k a quarter in China would be more than Audi 3+4 at near peak auto sales.

Here is some interesting data.

Mercedes-Benz China auto sales figures

BMW in 2018 3L / total : 135k/465k
Audi 3+4 / Total : 250k / 620k
Merc C / Total : 150k / 500k

So, Model 3 can sell about 40k/quarter, if they sell in about the same volume as one of these 3. This would be similar to the numbers in US.

 

[FrankSG]

Another way the demand is hit if people can't drive as much. Then the cars don't break down as much - and that will postpone the demand. Demand is going to be very difficult to predict.

Agree with this.

Good thing Y is coming out now - and there should be enough demand for it. But 3 - and esp S&X - will take some demand hit.

My bear case of 65k M3s from Fremont per quarter does factor in probably ~30% hit to demand, which I think is a reasonable bear case at this point in time.

But obviously it's not a worst case, and yeah I can't argue with you if you think the M3 from Fremont and S+X could be impacted further.

 

[FrankSG]

Yes, 65k in China is quite a stretch - let alone a bear case in a deep recession.

This is my post from early this year. 65k a quarter in China would be more than Audi 3+4 at near peak auto sales.

Those Audi 3+4 numbers back up my theory that Tesla will not be demand constrained in China until at least a 2nd factory.

Audi 3+4 sells ~10k per quarter in the US, and ~60k per quarter in China.

Because the M3 sells ~45k per quarter in the US, by that logic you're using M3 would sell ~270k per quarter in China.

Another data point is one of @DaveT 's videos where he mentions that most luxury brands sell about twice as much in China as they do in the US. If true, that'd mean M3 could sell ~90k per quarter in China.

One more data point: In Europe, where the M3 is currently at a huge price disadvantage due to a lack of local production, it sells pretty much the same number of vehicles as these competitors you mentioned. So with local production in China, it seems highly likely the M3 will outsell these competitors by a large margin. Especially if you consider that EV incentives for consumers in the EU vary largely by country, but the Chinese government and some local governments are heavily pushing EV sales through various incentives.

 

[MP3Mike]

Another way the demand is hit if people can't drive as much. Then the cars don't break down as much - and that will postpone the demand. Demand is going to be very difficult to predict.

It works the other way too. A car sitting for a while can have things start to fail when they try to use it again. Though that usually takes more than a couple months.

 

[EVNow]

Those Audi 3+4 numbers back up my theory that Tesla will not be demand constrained in China until at least a 2nd factory.

Audi 3+4 sells ~10k per quarter in the US, and ~60k per quarter in China.

Because the M3 sells ~45k per quarter in the US, by that logic you're using M3 would sell ~270k per quarter in China.

You missed the deep recession point. News out of China is that people are working and manufacturing - but not consuming much.

Also Audi sells less than BMW or Merc in US. But sells most in China - that's why I used that number.

Model 3 sold 80k in Q3 '19 and 90k in Q4 '19. Out of that ~ 10k was in China - so lets say ~ 75k ex-China. 30% reduction on that would be ~ 50k. Out of this we should probably expect some amount of Model Y cannibalization.