EVNow
Well-Known Member
I think chances of people subscribing are higher than outright buying. At the current rate of $200 ... it can pay for 6 years of FSD. Probably how long most people keep their Teslas ...
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Near-future quarterly financial projections
- Thread starter luvb2b
- Start date
If we interpret this to mean Giga Berlin just had their first week of 3k Model Y produced (which I think is the correct interpretation) that average of 2750/week for the quarter I suggested above is probably a bit too high. Maybe both Berlin and Texas will be in the high 20 thousands produced for Q4. Which would suggest something like what @petit_bateau estimated.
petit_bateau
Active Member
Just a quick follow-up to point out that so far the EU's "retaliatory" response to the IRA has been to propose subsidies to bolster the local clean energy industry, rather than "cut off its nose to spite its face" by imposing tariffs on clean energy products it desperately needs. Germany and France seek to match US green industry subsidies
Tesla would be a huge winner if a "subsidy war" breaks out and it applies to stationary storage (which is not clear yet -- examples of clean energy technology mentioned in the French-German manifesto on the topic linked above are solar, wind, heat pumps and hydrogen). Tesla is already highly likely to build one or more Megapack factories in Europe and if Europe boosts subsidies for local production that should, if anything, accelerate their plans.
Also, there was some concern expressed that pricing estimates on tesla.com might not reflect negotiated prices with customers, which are often not public. One tidbit that did recently become public is that Tesla RAISED prices significantly on several large projects with PG&E that were in the pipeline. 'Unprecedented market conditions' force PG&E to up price on 2GWh of battery storage contracts (at least the 1.2 GWh Nighthawk and 200 MWh Strata projects will use Megapacks according to other reports).
Based on this, I think a reasonable starting point is to assume that the first major Megapack price hike posted to the website in March 2022 -- from $328/kWh to $412/kWh for a 10 Megapack system (26%) -- will start showing up in financials in a major way in Q1 2023, the first available delivery date at that time. Tesla hikes Megapack prices as backlog extends to next year The full effect likely won't be seen until a little later as not every project completed with revenue recognized in Q1 will have this pricing.
A reasonable starting for the second major price hike (described here: Near-future quarterly financial projections) is to assume that it will start showing up in financials in a major way in Q2 2024, the first estimated delivery date with the new pricing. Tesla Increases Megapack Energy Capacity by 50%, Size and Weight Grows - TeslaNorth.com
It's possible Tesla negotiated for higher prices before they updated the website estimates, but given the escalating price and cost environment and growing backlog of orders it seems unlikely that pricing was materially LOWER than on the website, except for projects where installation was delayed for some reason after contract.
tl;dr we should start seeing significant increases in Megapack $/kWh in Q1 2023 and by the end of 2024 average Megapack price per kWh is likely to increase by over 60%.
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petit_bateau
Active Member
Interesting info re price hikes. Other players are increasingly active. Still seems to be a sellers' market though. I'm putting in 30kWh of SolarEdge at half the price of Tesla Powerwall at the moment, hency my day job of ditching for cables.
China connects 220 MW/440 MWh battery to grid
The WTO pathway that EU has commenced pre-action protocols on, if pursued will allow for countervailing tariffs on whatever the EU selects. So - for example - it could select to raise duties on pork and whisky, even though the US-IRA deals with BEVs etc. It is normal practice to target countervailing duties at totemic products and in swing sensitive political constituences. In particular one avoids targetting them at products one still intends to import. It is the quantum that should be comparable in size, not the products.
I am painfully familiar with this process after the Trump administration imposed countervailing tariffs on one of my major food groups -- French wine -- after the WTO gave them the green light to respond to Airbus subsidies. Quelle horreur!
While I stand ready to be very wrong about this. I actually am cautiously optimistic about the Q4 deliveries number. I've been watching inventory on the Tesla site periodically throughout the day and after last night stuff is just straight up disappearing. There are no Model 3s available in SoCal, The Bay Area, Seattle etc. And I've watched Model Ys steadily dropping in SoCal, none in Seattle.
Notably they appear to have dumped demo cars into inventory as well after this, in many places those appear to now be completely gone too. Obviously we don't know the rate that new cars will be added to inventory for this last week, and if this demand will sustain, but seeing the demo cars go up and disappear in particular is encouraging.
Combined with some anecdotes about Giga Berlin asking buyers to come to the factory to get their cars suggest they are going to try to deliver every single car out of Berlin.
Now of course the discounts come with an impact to earnings, but if we get strong deliveries to hold us up until earnings and Energy is able to surprise on the upside... we might be okay. Maybe... or not. Why would anything good ever happen anymore.
Notably they appear to have dumped demo cars into inventory as well after this, in many places those appear to now be completely gone too. Obviously we don't know the rate that new cars will be added to inventory for this last week, and if this demand will sustain, but seeing the demo cars go up and disappear in particular is encouraging.
Combined with some anecdotes about Giga Berlin asking buyers to come to the factory to get their cars suggest they are going to try to deliver every single car out of Berlin.
Now of course the discounts come with an impact to earnings, but if we get strong deliveries to hold us up until earnings and Energy is able to surprise on the upside... we might be okay. Maybe... or not. Why would anything good ever happen anymore.
petit_bateau
Active Member
It is not just EU, the UK is also squeaking, not that the UK has a particularly loud squeak these days.I am painfully familiar with this process after the Trump administration imposed countervailing tariffs on one of my major food groups -- French wine -- after the WTO gave them the green light to respond to Airbus subsidies. Quelle horreur!
:quality(70)/cloudfront-eu-central-1.images.arcpublishing.com/thenational/HPDRMEDDUFCQ6I2WHA3XXVOCWQ.jpg)
UK joins EU in lambasting US green stimulus package
International Trade Secretary Kemi Badenoch says US plan is protectionist
www.thenationalnews.com
"Europeans have said that the bill breaches World Trade Organisation rules. They are particularly concerned by one of the act's provisions to restrict a $7,500 subsidy for purchase of US-made electric vehicles.
EU Commission President Ursula von der Leyen last week described its “buy American logic”, discriminatory tax breaks and protection subsidies as “particularly worrisome.”
She called for a “European IRA” and is expected to put forward a full response in January.
EU officials, who have been negotiating with US counterparts for the past weeks as part of a high-level task force, have also made public their desire to be granted exemptions similar to Canada and Mexico.
In her letter, Ms Badenoch said that “the UK expects to be and should, as the closest of US allies, be part of any flexibilities in the implementation of the IRA.”
Earlier this month, Mr Biden said that he could “tweak” the act to include European countries during a state visit by French President Emmanuel Macron. Some members of the French government have called for the EU to file a complaint against the US at the WTO.
Speaking at the last summit of European leaders in Brussels on December 15, Mr Macron called on Brussels to simplify rules for companies to receive green subsidies in addition to putting more money on the table to match the US. “We have to catch up,” he said.
Some European countries have stayed quiet on the act out of fear that an all-out trade war between the US and the EU would benefit competitors such as China at a time of geopolitical uncertainty amid a war in Ukraine."
Yep, thats pretty much what I'm expecting for production Q4. I do think deliveries will be more like 430K though, unless they decide to countermand that "unwind the wave" for this quarter and push all deliveries like they used to do. Either way I'd be happy with numbers like these.
Doggydogworld
Active Member
92k exports from Shanghai seems to be it for Q4. Official OCT+NOV domestic sales plus DEC insurance registrations are trending toward 130k. That's 222k total sale+export. Your 262k production estimate would mean another 40k inventory build within China (on top of the 9k build in Q3).
We agree another 40k inventory build seems unlikely. But you put a lot more faith in the somewhat feeble denials of a Shanghai production cut than I do. Do you have any reason to disbelieve the ~222k Shanghai sales+exports data?
They no longer export meaningful volume from Fremont, so "unwinding the wave" really only applies to Shanghai these days. They did a mini-unwind in Q3, exporting a little third month production. But unless the stalkers somehow missed a bunch of cars heading to the docks this month, Q4 looks like a classic wave with monthly exports of 54.5k / 37.8k / 0.
On the delivery side of things, the normal EOQ rush seems to be happening in the US and Europe, but not China. Unless something dramatic happens in the final two weeks, December will be down vs. November and down significantly Y/Y. I've heard some blame Covid, but BYD is delivering like crazy -- 50k insurance registrations last week vs. 10k for Tesla.
EVNow
Well-Known Member
Definitely looks like there are exports this month from Shanghai - from multiple reports.
Doggydogworld
Active Member
Thanks, I hadn't checked for a few days but it seems the dock is now full of cars! I don't know if these will be on the water by midnight, 12/31, but is may not matter. I've heard cars on the dock with completed paperwork count as exports in the current month.
Besides export there is also the possibility of domestic fleet sales. These sometimes sidestep insurance registration reports. Tesla has not done fleet in China for years (if ever), but other EV makers do it to goose EOY numbers.
All that said, Wuwa who posted the dock video also says Shanghai will shut down the final week of the year. So ..... it's all still up in the air.
damonbrodie
Member
Are there any Q4 EPS guesstimates out there yet? The Street has it at $1.07/share (GAAP EPS):
petit_bateau
Active Member
Here is my running forecast FWIW. I've not yet added in the known Semis on this one. Anyway I'm currently at $1.41 ........
Todesbuckler
Member
I adjusted my delivery forecast for Q4 due to China demand concerns and my gross margin assumptions due to rebates in China, US and Europe. Overall, I think that my forecast is really cautious and hopefully too low on margins and deliveries.
Right now, I assume production is 145k in Fremont, 55k Berlin+Austin and only 235k in China (59k in December). In total 435k produced.
For deliveries, I assume a gap of around 10k in China (delta in export cars compared to Q3 and local inventory). However, with the rebates and Q3 ending inventory of around 30-40k cars, I could also see that deliveries exceed production on a global basis.
Here is my current model with GAAP EPS of 1,05 $ and non-GAAP EPS of 1,15 $ for Q4.
Would love to have feedback regarding Gross Margin and deliveries.
Right now, I assume production is 145k in Fremont, 55k Berlin+Austin and only 235k in China (59k in December). In total 435k produced.
For deliveries, I assume a gap of around 10k in China (delta in export cars compared to Q3 and local inventory). However, with the rebates and Q3 ending inventory of around 30-40k cars, I could also see that deliveries exceed production on a global basis.
Here is my current model with GAAP EPS of 1,05 $ and non-GAAP EPS of 1,15 $ for Q4.
Would love to have feedback regarding Gross Margin and deliveries.
damonbrodie
Member
Wow - that's quite a spread between @Todesbuckler and @petit_bateau !
@petit_bateau you reference Produced/qtr. I assume you are equating Produced and Delivered since TSLA only really uses vehicles delivered in their quarterly earnings?
I’m seeing a lot of models dramatically drop margin to 24-26%. I’d like to add a little reasoning why I think that might be too pessimistic.
— I don’t believe the bulk of the price increases ever came through. I ordered a Y for $61,000 configured Dec ‘21. Received the order in mid November this year. If that is typical, it means there were very few full priced orders, and that most of the full priced orders probably discounted back to the price I had locked in at, so will have no net negative effect on margin.
— raw material costs have moderated significantly. Lithium is 10% down from the peak, and other inputs are down more.
— Texas and Germany plants are ramping, so fixed cost amortization and labor per unit will be a tailwind to margin.
— I don’t believe the bulk of the price increases ever came through. I ordered a Y for $61,000 configured Dec ‘21. Received the order in mid November this year. If that is typical, it means there were very few full priced orders, and that most of the full priced orders probably discounted back to the price I had locked in at, so will have no net negative effect on margin.
— raw material costs have moderated significantly. Lithium is 10% down from the peak, and other inputs are down more.
— Texas and Germany plants are ramping, so fixed cost amortization and labor per unit will be a tailwind to margin.
petit_bateau
Active Member
My forecasts generally come out on the optimistic side. (Well, to my eyes I am optimistic, though some other forecasts are wild).
In my calculation of historical quarterly I use Delivered and I also back out the stock vehicles number from the stock days number. Right now my forecast for future quarters uses Produced as I do not take a view on potential future stock changes, i.e. I assume zero stock change in absolute numbers. I am mulling over including that as a specific line item, but I have to ask myself if there is sufficient trustworthy dataflow for me to make a meaningful guess at a global forecast EOQ stock. In particular, notwithstanding the brave talk of "unwinding the wave", the reality right now seems to be more like driving stock to zero through the mother of all waves. My guess right now is that EOQ stock may be only whatever is on the high seas (is there any ?) and whatever is in provincial China (is there any ?), so if anything there is as much chance of a stock reduction this quarter as there is for a stock increase.
(As a general rule I really dislike putting variables into models unless there is a good reason, as one can get terribly confused with too many knobs & dials, or at least I do. )
Looking at @Todesbuckler very good forecast it uses 26% auto GM% whereas I use 28%. I roll forwards the last quarter's GM as being the best indicator of the next quarter, unless I have reason to think that there was an aberration in the last quarter. My guess right now is that there are as many reasons why GM% should have improved since last quarter (e.g. price increases from way back working into the blend, greater volume in Berlin & Austin absorbing factory costs) as for it to have worsened (e.g. end-quarter discounts & reduced sales prices, worsened mix) so I have not tinkered with that.
My energy and services revenues are higher than @Todesbuckler and my energy GM% is also higher. For now my service revenue is driven as a % of automotive as I have found that a reasonable predictor, so if my auto is unduly high, then so too is my service. On the energy side I have a product ramp forecast - which until last quarter I was increasingly viewing as absurdly optimistic - but then in the last quarter energy division started to get its act together and it caught up with my forecast. Therefore I still have my original forecast in place, in hope that Lathrop et al will find their mojo. If anything energy is my weakest forecasting area, and also Tesla's weakest operating area, and so I may very well be unduly high.
I also don't allow for the continual drip of # of shares, as various employees get theirs.
Todesbuckler
Member
Gross margin is really difficult to estimate this quarter:
- Price decreases should have a strong negative effect
- Higher utilization of Berlin+Austin positive effect
- Less delayed orders with lower prices -> positive effect
- Positive effects from Euro/USD and Euro/CNY increases since Europe consumes more cars than it produces
- Continuous production improvements: positive
- For raw materials, Tesla argues that price decreases take some time to be visible. So, I would not assume huge effects this quarter. Maybe some positive impact from materials like steel. Regarding Lithium, the price is still higher than at any point in Q3 (but also here the weaker CNY exchange rate helps):
Doggydogworld
Active Member
China NEV insurance registrations for last week are out. Tesla fell to 8915. Barring the possibility of fleet sales that I mentioned earlier, China sales are trending toward ~45k for December vs. 62.5k in November and 70.6k December last year. Q4 looks closer to 125k now, vs. 116k last year.
This seems to be mostly a Tesla issue. BYD had 51k registrations again last week. The latest press reports say Shanghai will run January 3-19 then shut down for Lunar New Year. Q1 is seasonally soft in China, more so this year with planned subsidy cuts, but Tesla demand has historically held up pretty well.
I get the feeling China demand at Q4 price levels is settling in at 400-500k/year. If so, they need to launch the Model 2 or whatever they call it in 2023.
This seems to be mostly a Tesla issue. BYD had 51k registrations again last week. The latest press reports say Shanghai will run January 3-19 then shut down for Lunar New Year. Q1 is seasonally soft in China, more so this year with planned subsidy cuts, but Tesla demand has historically held up pretty well.
I get the feeling China demand at Q4 price levels is settling in at 400-500k/year. If so, they need to launch the Model 2 or whatever they call it in 2023.
