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Near-future quarterly financial projections

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Europe import duties of 10% or ~$5500....
Duty is based on landed cost, not retail price. Should be less than 4k. Shipping used to be a bit under 1k, don't know current price or how long Tesla locked in their prices.
They even seem to be off on the Market Share. Looking at this which doesnt have UK yet for 2021.


Tesla Marketshare went up 2% from 11.09% to 13.13%
VW Group went down 0.21% from 27.09% to 26.88%
Stellantis was 3rd going from 10.64% to 13.92%
His numbers are legit. It just so happens that Tesla grew faster (82%) last year in the 10 countries you included vs. counties like the UK (~42%) which you excluded. The year before was the opposite.
 
Thanks - this is helpful.
One other issue is the new Lathrop Megafactory. Tesla is targeting 40-48GW of Megapacks out of this site. It appears close to completion, but dependent on CATL batteries as well as local construction. I wouldn't expect this to start impacting the TE numbers until Q3, but we could start seeing 100% QoQ results once this starts production. I'm hoping they are working on a similar plant in Shanghai to keep CATL busy. Sawyer Merritt was saying the Lathrop plant could make about 17 billion in revenue. One exciting aspect is how much Tesla has downplayed this factory and kept it under the radar. An added 4 billion in Q4 would put revenue at about 30 billion in your form.
It's too early to even pencil this in, since there is no formal announcement of timing.

 
Europe Margin pros is primarily higher option packages and ASP's. China advantages are no import export costs and lower shipping costs. Additionally the lower ASP is also offset by lower cost LFP batteries from CATL. Those LFP batteries could be 20-30% cheaper than NCA (Nickel/Cobalt) batteries. That should have a big positive impact on margins to offset the lower ASP. We won't know until the end of the month and even then, it will be a lot of Sherlocking the earnings report. Tesla will not release their costs with CATL vs LG and Panasonic. If LFP is $60-80 vs NCA $100-120, they could be saving could be $3500 per car, or as little as $600 based on my Fischer Price math. Europe import duties of 10% or ~$5500 and optimistically ~$3000 on batteries and another $1500 on logistics, they could save as much as $10,000 per car MIC Sold in China (SIC) vs Sold in Europe. Not sure if we have good data on ASP in China. I did a quick look on Troy's site, but didn't see anything pop out.
Model 3 SR+ sold in europe and made in china has been with LFP packs for over a year now.
 
The question of MIC Model Y and Model Y gross margins seems to regularly arise, and has had no clear answers thus far.

I have just reviewed the Everbright Finance, Bloomberg New Energy reports as well as The Limiting Factor videos, CATL reports and BYD reports. Rather than link them all, I'll just give my conclusions, thus far, since most of us are probably already looking at most or all of these sources.

First, we obviously do not have access to an adequate level of detail from any source to make accurate judgements.
Second, we do have some decent judgement about pack level costs right now.
Third, we also know that every category of raw material is now experiencing price pressure
Fourth, we also assume cautiously that Tesla price rises have more than compensated for increased costs, since delivery lead times for everything other than Model S Plaid seem to be increasing.

Based on cautious reading of all the multiple sources, especially Everbright, I think that:
- CATL LFP packs are costing around US$80 kWh in their current Tesla supply contract. That is roughly a net per vehicle cost reduction of 10%.
- There is inadequate information to judge how much the LG cells may cost, but I suspect that we will not be too optimistic to assume US$85 for that, at cell level.
Then the Gigapress impact. We have no direct information on that, but lots of well informed speculation including that by The Limiting Factor. My guess is that the cost for vehicle produced drops by about 10% at a minimum, due to reduced capex and operating cost for robots, coatings, reduced part costs and overhead, assembly space and labor reduction.

I have not attempted to refine detail because all the sources have done that work.
My summary sheet for all the changes seems to show a total vehicle cost of at least 20% less than it was in 2020.

The conclusion overall is that 2021 Gross margin will have been comfortably above 30% for the year, with essentially all models contributing at or above that level. The only late 2021 headwind will have been shipping costs, outweighed by pricing changes and cost reductions.

For 2022 I do think there will be major cost benefits from the new CATL factory, coupled with the beginning of CATL produced 4680's. The Austin Gigapresses and Model Y production will have Q1 benefits, and some Semi production with 4680's should also be material.

Other people do much better than do I at quantifying all this.

FWIW, my two paid sources with quotations prohibited are consistent with these statements. Those two sources have predominately supplier data.
 
Model 3 SR+ sold in europe and made in china has been with LFP packs for over a year now.
The new CATL plant in Shanghai should drive more cost savings. We don't really know and Tesla could have agreed to no cost savings to get the project and volume commitment. I would guess each new CATL plant and increase in scale is going to drive cost reduction, even with raw material cost increases. The new CATL plant is still scaling up and my understanding was only at 60% capacity in December.
 
Q4 Actuals vs my Estimate

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Anyone know why auto leasing revenue jumped so much? Fleet size only grew about 10%. I was surprised no one asked on the call.

I noticed that too. The increase was so large that I suspect there is a one time accounting adjustment in Q4. Hopefully we will get some information when the 10Q is published.

Edit: I commented above on my accuracy schedule that I missed on Auto Rev because my ASP was too low. I see now that most of my miss was related to the unusually high lease revenue this quarter.
 
IIRC, Reply on Troys tweet on the same, suggested larger number of S and X,
Except S/X lease fleet shrank in Q4. They added ~2k new S/X to the lease fleet in Q4 2021 but ~3.6k leases from Q4 2018 expired.

I think The Accountant is on the right track. I first thought it was due to inflated resale value of cars coming off-lease. But that's only the 3.6k S/X because 3/Y leasing didn't start until spring of 2019. I can't see $200m of uplift from 3.6k off-lease cars (~60k per car!). And I've never really understood how and where they book the difference between residual and actual resale price, anyway. And the Euro RVG lease accounting is even more convoluted. Hopefully the 10-K will shed some light.
 
Looks like the deferred revenue increased more than usual in Q4?

Tracking the MIC production figures will be even more interesting this quarter given the ER comments/confirmation regarding both supply chain issues and Shanghai expansion. Keen to see how far they can ramp MY in Shanghai as an indication of the likely ultimate capacity for the Austin and Berlin lines.
 
Except S/X lease fleet shrank in Q4. They added ~2k new S/X to the lease fleet in Q4 2021 but ~3.6k leases from Q4 2018 expired.

I think The Accountant is on the right track. I first thought it was due to inflated resale value of cars coming off-lease. But that's only the 3.6k S/X because 3/Y leasing didn't start until spring of 2019. I can't see $200m of uplift from 3.6k off-lease cars (~60k per car!). And I've never really understood how and where they book the difference between residual and actual resale price, anyway. And the Euro RVG lease accounting is even more convoluted. Hopefully the 10-K will shed some light.
Could this be UK commercial leases? There was a big load of UK cars in Q4 as I thought some incentives were ending. Car leases are still a big tax deal in the UK.
 
I noticed that too. The increase was so large that I suspect there is a one time accounting adjustment in Q4. Hopefully we will get some information when the 10Q is published.

Edit: I commented above on my accuracy schedule that I missed on Auto Rev because my ASP was too low. I see now that most of my miss was related to the unusually high lease revenue this quarter.
I believe the increase may have to do with them adjusting the reserve for resale value guarantees. With how high resale values are they decreased the probability of someone actually invoking that guarantee.

Also, tax valuation allowance is now north of 9B was 2.xB almost all driven by Elon’s exercise of 2012 package. They also clearly state that the 2018 package won’t have the same effect given limitations on deductibility. Language also added that likely to be released over next few years. With that in mind, not sure we see any meaningful release this year. Not unless we have some major FSD breakthrough. Though once Texas is ramped, all bets are off.
 
This post is all about paint shop. It may be placed in another thread entirely, but I put it here because this single process is responsible for nearly as much saving as the entire GigaPress process, but seems a large amount less sexy. There have been massive advances from Fremont to Shanghai, again to Berlin with retrofits coming to Shanghai first, then Fremont. Austin appears to be a twin of Berin. First, the basic situation, as discussed in generalities from the manufacturer:

Energy use per car painted its rapidly dropping. My estimates:
Fremont 900 kWh
Shanghai 280 kWh
Berlin 200 kWh
The normal steps for paint include degreasing, surface conditioning, electro deposition, primer, clear coats and top coat(s). In the Geico Takisha process, which they call Pardis there is the capacity for automation of virtually the entire process.

Water use per car: about 90% reduction from Fremont to Berin. Purification and reuse of waste water is part of that. I do not know how to quantify the savings.
Labor use per car: about 80% reduction
From a 2004 very large OEM cost accounting project that I have roughly 33% of paint shop costs were for labor, about 15% for 'utilities' (combined electricity and water supply plus waste disposal) and about 25% for coatings themselves. The remaining ~25% was depreciation, amortization and overhead. Obviously those proportions have changes since then.

I have used the 2004 data, updated to include several different assumptions and landed at the estimate of per vehicle total paint costs at Fremont of ~$450
Shanghai, using 2017 level technologies, likely is about 2/3 or ~$300 per vehicle
Grùneheide using 2021 level is likely to be around 2/3 of that or ~$200 per vehicle.
I think those estimates are probably conservative.
Considering the advances in paint shop technology, coating technology and large castings (remember the Tesla castings tend to need no special preparations, no special coatings and little to no rework) the entire process of BIW to and including painting certainly has many major savings, but...

Perhaps the biggest benefit is in operating systems. The Teiko Takisha process is almost completed automated with easy changes, updates and modification, so long as the operators have the technical skills to handle highly automated systems and have the workforce flexibility to adopt continuous changes in process.
FWIW, ABB, Dürr, Eisenmann etc are also working on such advances. The impediment is, as usual, workforce quality and flexibility. Hence gaze at the recent pictures of new Ford paint shops full fo workers holding paint guns.

Tesla now has the ability in Grüneheide to make constant improvements, have more color flexibility, vastly reduce rework, have unprecedented paint quality, use less materials of every type. Scale and reliability have gone far up.

Soon this approach will be updated in Shanghai, with Austin probably already fitted and Fremont likely to be as soon as Grüneheide and Austin have scaled enough to allow the modification time to do the update.

Finally, lest we forget the Pardis approach requires roughly 18 months form plan to operation, or about two years less than does a traditional paint shop. Then of course it is not coincidental that the system also is somewhat scalable. Traditional paint shops are 100% NOT scalable.

SO, I estimate that the paint shop alone adds about 250 GM per vehicle to Grüneheide vs Fremont

For grins, just compare the brand new Ford Lightning assembly line:
 
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This post is all about paint shop. It may be placed in another thread entirely, but I put it here because this single process is responsible for nearly as much saving as the entire GigaPress process, but seems a large amount less sexy. There have been massive advances from Fremont to Shanghai, again to Berlin with retrofits coming to Shanghai first, then Fremont. Austin appears to be a twin of Berin. First, the basic situation, as discussed in generalities from the manufacturer:

Energy use per car painted its rapidly dropping. My estimates:
Fremont 900 kWh
Shanghai 280 kWh
Berlin 200 kWh
The normal steps for paint include degreasing, surface conditioning, electro deposition, primer, clear coats and top coat(s). In the Geico Takisha process, which they call Pardis there is the capacity for automation of virtually the entire process.

Water use per car: about 90% reduction from Fremont to Berin. Purification and reuse of waste water is part of that. I do not know how to quantify the savings.
Labor use per car: about 80% reduction
From a 2004 very large OEM cost accounting project that I have roughly 33% of paint shop costs were for labor, about 15% for 'utilities' (combined electricity and water supply plus waste disposal) and about 25% for coatings themselves. The remaining ~25% was depreciation, amortization and overhead. Obviously those proportions have changes since then.

I have used the 2004 data, updated to include several different assumptions and landed at the estimate of per vehicle total paint costs at Fremont of ~$450
Shanghai, using 2017 level technologies, likely is about 2/3 or ~$300 per vehicle
Grùneheide using 2021 level is likely to be around 2/3 of that or ~$200 per vehicle.
I think those estimates are probably conservative.
Considering the advances in paint shop technology, coating technology and large castings (remember the Tesla castings tend to need no special preparations, no special coatings and little to no rework) the entire process of BIW to and including painting certainly has many major savings, but...

Perhaps the biggest benefit is in operating systems. The Teiko Takisha process is almost completed automated with easy changes, updates and modification, so long as the operators have the technical skills to handle highly automated systems and have the workforce flexibility to adopt continuous changes in process.
FWIW, ABB, Dürr, Eisenmann etc are also working on such advances. The impediment is, as usual, workforce quality and flexibility. Hence gaze at the recent pictures of new Ford paint shops full fo workers holding paint guns.

Tesla now has the ability in Grüneheide to make constant improvements, have more color flexibility, vastly reduce rework, have unprecedented paint quality, use less materials of every type. Scale and reliability have gone far up.

Soon this approach will be updated in Shanghai, with Austin probably already fitted and Fremont likely to be as soon as Grüneheide and Austin have scaled enough to allow the modification time to do the update.

Finally, lest we forget the Pardis approach requires roughly 18 months form plan to operation, or about two years less than does a traditional paint shop. Then of course it si not coincidental that the system also is somewhat scalable. Traditional paint shops are 100% NOT scalable.

SO, I estimate that the paint shop alone adds about 250 GM per vehicle to Grüneheide vs Fremont

For grins, just compare the brand new Ford Lightning assembly line:

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