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Near-future quarterly financial projections

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Q3 & Q4 looking very good with eye popping EPS numbers:

View attachment 824144
Thank you, as usual!

For Q4, $24.070B non-credit auto revenue on 450k deliveries is only $53.5k revenue per vehicle.

In Q1 it was $52.2k each, up from $48.8k in Q3 and $50.7k in Q4.

How did you derive $1.2k total increase in revenue per car from Q1 to Q4? That seems excessively conservative to the point of impossibility considering that that would be a drastic slowdown of the trend during a time when it looks like the trend will accelerate due to the immense price increases in the order backlog and increasing share of Model Y in the mix.
 
Thank you, as usual!

For Q4, $24.070B non-credit auto revenue on 450k deliveries is only $53.5k revenue per vehicle.

In Q1 it was $52.2k each, up from $48.8k in Q3 and $50.7k in Q4.

How did you derive $1.2k total increase in revenue per car from Q1 to Q4? That seems excessively conservative to the point of impossibility considering that that would be a drastic slowdown of the trend during a time when it looks like the trend will accelerate due to the immense price increases in the order backlog and increasing share of Model Y in the mix.
Yeah @The Accountant , I’d have to agree with @Gigapress , your ASP is too low. Like materially too low.

- Much more Y sales in Q4 2022 verses Q1 2022 with higher ASP and higher margin. Model 3 % of sales will be materially lower in Q3/Q4 thanks to both Berlin and Austin
- More price hikes that are very substantial will start to take place in Q4 in addition to the trailing price hikes from 2-3 quarters ago still not fully making their way into ASP (though we could see this in Q2 earnings)
- More focus on high trims due to Tesla seeming to very much favor the high trims with much shorter delivery time ls
 
More focus on high trims due to Tesla seeming to very much favor the high trims with much shorter delivery time ls
I was fooled by that last quarter with overestimating how much shorter delivery times implied mix improvement. At the time it looked like they were going to sell a lot more Plaids and Y performances than they apparently did. Upon further review I realized that the length of the backlog is a function of many factors that are unknown publicly so I’ve given up on using that as an estimator of mix shifts.
 
uch more Y sales in Q4 2022 verses Q1 2022 with higher ASP and higher margin. Model 3 % of sales will be materially lower in Q3/Q4 thanks to both Berlin and Austin
On top of this, Model Y prices in Europe are higher than other major markets, so increasing the European percentage of overall sales will have even more effect. Ys cost about $2-10k more in Europe than in North America, depending on which country you look at. Some Eastern European countries get cheaper Ys though, but they don’t buy as many.
 
Yeah @The Accountant , I’d have to agree with @Gigapress , your ASP is too low. Like materially too low.

- Much more Y sales in Q4 2022 verses Q1 2022 with higher ASP and higher margin. Model 3 % of sales will be materially lower in Q3/Q4 thanks to both Berlin and Austin
- More price hikes that are very substantial will start to take place in Q4 in addition to the trailing price hikes from 2-3 quarters ago still not fully making their way into ASP (though we could see this in Q2 earnings)
- More focus on high trims due to Tesla seeming to very much favor the high trims with much shorter delivery time ls
copying @Gigapress

There can certainly be upside with ASP in my model but I have some reasons for this.

First is "sales mix" with the Models S&X:
S&X account for 6.3% of deliveries in Q2 and I have that dropping back to 4.4%/4.2% as Shanghai, Berlin and Austin increase output of Models 3/Y
1656802116320.png


There is also a Leasing Impact:
Leases were a low 12% in Q2 for S&X and I assume it goes back up (I have 16%). The lease revenue is earned over 36 months.
Thus the increase in lease % from 12% to 16% spreads the good ASP on S&X sales to future periods.
1656802194722.png


Overall, my ASP pricing is not aggressive:
I am being cautious here as I assume that much of the S&X Plaid sales were aggressively pushed in Q2 leaving a lower mix of Plaid in Q3 & Q4.
The same is true for Model 3 SR. I had heard that very few Model 3 SR's were produced in Fremont in Q2 and I assume this lower price model increases in mix for Q3 & Q4.
Then there is China. A good portion of the sales in China which will increase significantly in Q3 and Q4 are lower trim models and they have a very low sales price. The model 3 RWD in China is about $41.6k and the Model Y RWD is only $47.4k. As China increases sales into the local market, I expect that to impact overall ASP.
1656802322713.png


I agree that there is potential upside but I will wait to get more details from the Q2 10Q before adjusting.
Thanks to you both for your input.
 
Thank you, as usual!

For Q4, $24.070B non-credit auto revenue on 450k deliveries is only $53.5k revenue per vehicle.

In Q1 it was $52.2k each, up from $48.8k in Q3 and $50.7k in Q4.

How did you derive $1.2k total increase in revenue per car from Q1 to Q4? That seems excessively conservative to the point of impossibility considering that that would be a drastic slowdown of the trend during a time when it looks like the trend will accelerate due to the immense price increases in the order backlog and increasing share of Model Y in the mix.

I answered in a separate post.
I have not been too far off on pricing in prior forecasts but I know that I will be caught flat footed at some point when the ASP rockets up. Maybe it will be Q3 . . .I am happy to be proven wrong here. My pricing model is not very sophisticated, I should improve that part of my model.
 
I answered in a separate post.
I have not been too far off on pricing in prior forecasts but I know that I will be caught flat footed at some point when the ASP rockets up. Maybe it will be Q3 . . .I am happy to be proven wrong here. My pricing model is not very sophisticated, I should improve that part of my model.
I think you gave good reasons that make the revenue number plausible while still being conservative.

The biggest question is how many low-end variants Shanghai cranks out to exploit the growing LFP battery supply. They’ll still probably have solid gross margins though, because the cost will be cheap.

At some point, especially when the March price increases hit and Berlin and Austin are pouring out Ys, ASP is going to blow up. Tesla is headed to like 75% Model Y and then Cybertruck and Roadster will drag up ASP even more.
 
The biggest question is how many low-end variants Shanghai cranks out to exploit the growing LFP battery supply. They’ll still probably have solid gross margins though, because the cost will be cheap.

This is one flaw in my model. For Q3 & Q4. I adjusted selling price down for increased sales of low-end variant models (e.g. SR) but I did not reduce my cost for this mix change. Mainly because I have had trouble calculating the difference between the cost to make an LR vs an SR. Maybe one less motor and less batteries? Not sure how much to adjust the cost of an SR car ($1k less? $2k less?).
 
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This is one flaw in my model. For Q3 & Q4. I adjusted selling price down for increased sales of low-end variant models (e.g. SR) but I did not reduce my cost for this mix change. Mainly because I have had trouble calculating the difference between the cost to make an LR vs an SR. Maybe one less motor and less batteries? Not sure how much to adjust the cost of an SR car ($1k less? $2k less?).
I don’t think it’s “less batteries” but instead, the cost of the metals/material of a lfp battery verses a nickel based battery.
 
@The Accountant Maybe a dumb question, but did you take EAP into account?

I think FSD sales dried up quite a bit in the past few quarters but EAP should bring some of that revenue back.

Thanks for the question. I don't have EAP upgrade revenue in my forecast. That would all be upside; but not sure how to compute it.
To increase EPS by once cent ($0.01) it takes $11m in profits.
 
Thanks for the question. I don't have EAP upgrade revenue in my forecast. That would all be upside; but not sure how to compute it.
To increase EPS by once cent ($0.01) it takes $11m in profits.
At 6K a pop, $11m is only 1,833 additional sales of EAP. I'm confident they will sell a lot more EAP than that in the next 6 months. But yes, it's very hard to say how much.
 
At 6K a pop, $11m is only 1,833 additional sales of EAP. I'm confident they will sell a lot more EAP than that in the next 6 months. But yes, it's very hard to say how much.
For some reason I was only focused on Q2 when I wrote that response. Yes, this could add up to a good amount of money this year.
There is upside with FSD as well. If "Autosteer on City Streets" gets wide released this year, there is a large amount of deferred revenue to recognize which I do not have in my forecast.
 
On top of this, Model Y prices in Europe are higher than other major markets, so increasing the European percentage of overall sales will have even more effect. Ys cost about $2-10k more in Europe than in North America, depending on which country you look at. Some Eastern European countries get cheaper Ys though, but they don’t buy as many.
But European prices include VAT and for those models imported from China the import duties and shipping costs. Made in Berlin Y will not have import duties or shipping costs and hence the potential for higher margins once ramped. This is why Elon is always talking about the advantages of having factories in each major market zone - North America, China and Europe.
 
Thanks as always for sharing your estimates.

Your Q4 delivery estimate looks on the low side. An extra 3 weeks of Shanghai production (at 20k/week) relative to Q3 would get you to 460k and Berlin/Austin ramp will be in addition to that.
I have to dig into Q3 and Q4 a bit more. At the moment, here are my production and delivery numbers per site:
1656848686301.png


All feedback is welcomed.
 
There is upside with FSD as well. If "Autosteer on City Streets" gets wide released this year, there is a large amount of deferred revenue to recognize which I do not have in my forecast.

I'm pretty confident that won't happen until 2023. Single stack needs to be in beta for awhile.

Wide release of FSD and single stack are two unrelated things.
There may be confusion due to ambiguity of terms.
Autosteer on City streets is a specific feature of FSD and its success is a prerequisite for moving Navigate on Autopilot to single stack.
FSD (Current option package) is only waiting on city street functionality.
Level 4 FSD (functionality beyond what is being sold now) will possibly wait on single stack.

Potential timeline:
Autosteer on City streets wide release (full revenue recognition for recent sales)
Navigate on Autopilot moved to single stack (after much testing)
Driverless FSD
 
Wide release of FSD and single stack are two unrelated things.
I believe they are not unrelated. Wide release of FSD for city streets depends on single stack. I don't think Tesla will recognize more FSD revenue until it can be rolled out to the users that are not part of the city streets beta program. Given that single stack is not even part of the beta program yet, I don't see how it can happen before 2023.
 
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