Near-future quarterly financial projections

[DarkandStormy]

No, because 2020 to 2021 was an 87% jump. You don't RESET each year, this is what people such as yourself keep mis-assuming.

Start at 2018, do 50% YoY each year. Some years they are over that 50% (sometimes a lot), some years they are below that 50%.

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Guess we will disagree. I am citing the CEO and CFO speaking at the end of Q2. Unless you're implying they think everyone is dumb, it's pretty obvious "close" to 50% growth rate in 2022 was meant for that 1.4m number.

That or you think they thought it would be "close" to getting to 1.2m for the year. Those are your choices.

Obviously Tesla leadership has thrown around "50%" multiple times and with different meanings. I'm sure if the "alien dreadnought" was actually a thing we wouldn't be parsing the words this much but that never came to fruition.

I think it's pretty clear they wanted a 50% growth rate over 2021 (as evidenced by the Q2 call) but when they didn't get it, they re-emphasized the multi-year timeline. Now that it has been more defined, there's less gray area going forward.

 

[damonbrodie]

I don't see how Tesla can sell 2.6M cars at 20% margin if they can't sell 1.8M cars at that margin.

• CT will have good (20%) margin with excellent demand for several years - but not a factor until mid 2024.
• Semi will have even better margin, though it probably won't matter much for several years
• Next Gen vehicle will have 20% margin at scale and have excellent demand for several years (starting in 2025).
• A model 3 refresh will spark fresh demand and likely allow them back to 20% margin (timing?)
• 4680 at scale will eventually improve Model Y margins, though it isn't clear when it gets to the majority of Model Y.
• Declining interest rates in 2024 will help demand, though I suspect they won't decline more than 1-2%
• Opening in new markets (as Elon said was "high time to start" on the earnings call) will take some pressure off demand in existing markets

With all the above I think 20% vehicle margin in 2024 is dicey though. Personally I think will be in the 16-18% range in 2024. I think Energy Storage stays well below 20% until Shanghai Megapack factory is ramped in 2025.

 

[30seconds]

I don't see how Tesla can sell 2.6M cars at 20% margin if they can't sell 1.8M cars at that margin.

and more specifically how Model Y delivery numbers can substantially increase through Q2 and Q3 2023 at this margin level. Feels like Elon & Zach kept pointing to decreasing the price to drive additional demand which would (more or less) offset any increase in margin due to factory scale up efficiency.

seems that other solutions (highland, CT) are end of year items

 

[EVNow]

With all the above I think 20% vehicle margin in 2024 is dicey though. Personally I think will be in the 16-18% range in 2024. I think Energy Storage stays well below 20% until Shanghai Megapack factory is ramped in 2025.

To add to that list we should consider this ...
- Recession starting in Q3/Q4 and lasting 2 to 3 quarters
- Recession that has already started for white collar workers (the kind who buy Teslas) "Richcession"

 

[petit_bateau]

No, because 2020 to 2021 was an 87% jump. You don't RESET each year, this is what people such as yourself keep mis-assuming.

Start at 2018, do 50% YoY each year. Some years they are over that 50% (sometimes a lot), some years they are below that 50%.

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If you do it correctly, 50% beginning from the 2018 base number (first year of Model 3 production), it comes out to:
2019 - 367,800
2020 - 551,700
2021 - 827,550
2022 - 1,241,325


Elon has been consistent in the message, WS just keeps wanting to "reset the base" each year in order to manufacture a "miss" for their FUD machine.

Actually I think that Tesla is simplifying with the 50% number because it is too awkward to talk about S curves as that involves explaining that ghrowth will in time reduce.

It is pretty obvious that in 2029-2030 growth will be far lower than 50%. Therefore Tesla needs to be growing above 50% in the 2023 and 2024 years in order to remain on track. Note also that the aggregate of the other companies are actually growing faster than Tesla.

Basically Tesla has set out a goal (20m/yr in 2030), and yet the data that is coming in tends to indicate it will substantially miss that goal. So sales volume (revenue) down as well as % profitability down. One should naturally expect mainstream investors to be very suspicious given this data.

(The only get-out-of-jail-free card I see might be if the price war that is patently in progress in turn drives competition out of the market, which would be the normal outcome in these situations. And where Tesla is likely to be one of the better placed survivors in most scenarios. Except that most nation-states understand the strategic nature of having a viable automotive industry in their country, so normal rules do not always apply.)

 

[transpondster]

I like your idea of S curve, but more like sum of S curves of each model

 

[bkp_duke]

I like your idea of S curve, but more like sum of S curves of each model

Bingo. As the S-curve for one model is tapering off, one or more newer models is picking it up. We was this with the S/X --> 3/Y transition, and we should expect to see it with the CT and low-cost future model.

 

[petit_bateau]

Bingo. As the S-curve for one model is tapering off, one or more newer models is picking it up. We was this with the S/X --> 3/Y transition, and we should expect to see it with the CT and low-cost future model.

Yes, you are beginning to get it.

The aggregate market S curve (which is the one I have drawn) is the sum of EITHER the individual models in the market OR the individual brands in the market.

And importantly, these are the crucial years where 'we' (the world) are getting to define the slope of the centre section which is fairly linear. So .... given that Tesla is growing slower than the sum of all the other BEV competitors (and it is) then if Tesla misses the pace during these two years then it will come to the end of the S curve (in 2030) with much lower than a 20m/yr market share.

 

[bkp_duke]

Yes, you are beginning to get it.

The aggregate market S curve (which is the one I have drawn) is the sum of EITHER the individual models in the market OR the individual brands in the market.

And importantly, these are the crucial years where 'we' (the world) are getting to define the slope of the centre section which is fairly linear. So .... given that Tesla is growing slower than the sum of all the other BEV competitors (and it is) then if Tesla misses the pace during these two years then it will come to the end of the S curve (in 2030) with much lower than a 20m/yr market share.

No, I have gotten it. The aggregate is not an S-curve, if you are constantly introducing new models, with each having a larger TAM the the previous. It's an exponential curve.

 

[Hiline]

Actually I think that Tesla is simplifying with the 50% number because it is too awkward to talk about S curves as that involves explaining that ghrowth will in time reduce.

It is pretty obvious that in 2029-2030 growth will be far lower than 50%. Therefore Tesla needs to be growing above 50% in the 2023 and 2024 years in order to remain on track. Note also that the aggregate of the other companies are actually growing faster than Tesla.

Basically Tesla has set out a goal (20m/yr in 2030), and yet the data that is coming in tends to indicate it will substantially miss that goal. So sales volume (revenue) down as well as % profitability down. One should naturally expect mainstream investors to be very suspicious given this data.

(The only get-out-of-jail-free card I see might be if the price war that is patently in progress in turn drives competition out of the market, which would be the normal outcome in these situations. And where Tesla is likely to be one of the better placed survivors in most scenarios. Except that most nation-states understand the strategic nature of having a viable automotive industry in their country, so normal rules do not always apply.)

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When was this S-curve drawn?

I suspect the curve is going to be stretched horizontally due to the incoming recession, or the anticipation of one anyway. Electric vehicles are still relatively expensive, and until the economic picture stabilizes, people are going to prioritize saving money over getting an expensive car.

 

[petit_bateau]

No, I have gotten it. The aggregate is not an S-curve, if you are constantly introducing new models, with each having a larger TAM the the previous. It's an exponential curve.

Then you haven't gotten it.

Unless the total automotive market grows in vehicles/year terms (and the evidence is, if anything, in the other direction) then there is a natural limit to growth. That is precisely why S curves are the natural outcome in these situations.

(And it makes very little difference whether you set the outcome market size to be 84m/yr or 94m/yr.)

When was this S-curve drawn?

I suspect the curve is going to be stretched horizontally due to the incoming recession, or the anticipation of one anyway. Electric vehicles are still relatively expensive, and until the economic picture stabilizes, people are going to prioritize saving money over getting an expensive car.

By me in early 2023. I've done the numbers three different ways, they all come to the same outcome +/- a few months. I posted all the results up here at the time, so trawl through posts of merit etc and my other posts at about the same time answering the relevant questions.

The curve is developed using data that was impacted by Covid, so if anything it is likely overly cautious. Basically all the green dots are years that go into the curve generation. I'll rerun the algorithm when we have the 2023 data in one year's time.

Note that the curve is simply maths. It does not care whether we are talking bees or humans, mobile phones, microwaves, or cars. It is simply showing us the message that is in the data that we already have. Actual data, not opinions or beliefs. What we do with the information is up to us. All I am doing is trying to explain the implications for Tesla if it does not change its trajectory vis a vis the market it is in.

 

[Doggydogworld]

Actually I think that Tesla is simplifying with the 50% number because it is too awkward to talk about S curves as that involves explaining that ghrowth will in time reduce.

It is pretty obvious that in 2029-2030 growth will be far lower than 50%. Therefore Tesla needs to be growing above 50% in the 2023 and 2024 years in order to remain on track. Note also that the aggregate of the other companies are actually growing faster than Tesla.

Basically Tesla has set out a goal (20m/yr in 2030), and yet the data that is coming in tends to indicate it will substantially miss that goal. So sales volume (revenue) down as well as % profitability down. One should naturally expect mainstream investors to be very suspicious given this data.

(The only get-out-of-jail-free card I see might be if the price war that is patently in progress in turn drives competition out of the market, which would be the normal outcome in these situations. And where Tesla is likely to be one of the better placed survivors in most scenarios. Except that most nation-states understand the strategic nature of having a viable automotive industry in their country, so normal rules do not always apply.)

View attachment 930574

I don't expect the world to follow that S Curve. I'm guessing 18-19% instead of 21% this year and 24-25% instead of 33% next year. I expect growth of ~3.8m units this year vs. 3.6m last year and 3.4m in 2021. After two years averaging >100% y/y growth China only grew ~25% in Q1. I don't expect it to stay that low, but CPCA's ~45% forecast sounds realistic. That's 2.6m unit growth vs. 2.7m last year. China is >30% EV now, in the linear part of their S Curve, so I just assume 2.7m unit growth for the next few years. It's hard to overstate China's effect -- they provided 75% of global unit growth last year.

Europe is still in a 95g flat spot. Look for 12-15% growth again this year, or 0.3m. Things should pick up a bit next year as OEMs prepare for 95g's next leg up in 2025.

The US and ROW will see good percentage growth, but overall we're too small to move the needle. Putting it all together I see 2.7 China + 0.3 Europe + 0.4 US + 0.4 ROW = 3.8 million unit growth. I expect Tesla to gain EV share in Europe, lose a little in China (barring a Model 2 surprise) and lose a little of their ridiculously high US EV share.

I see 4.5m unit growth in 2024. 2.7m from China again plus Europe, USA and ROW at 0.6m each. Just guesses, really.

 

[XHabjab]

No, I have gotten it. The aggregate is not an S-curve, if you are constantly introducing new models, with each having a larger TAM the the previous. It's an exponential curve.

Disagree.

There is no scenario I can imagine where EVs exceed 100% of total vehicles. That’s what an exponential describes.

EV models don’t matter in this analysis. The aggregate of all EV models and brands is on an S curve compared with ICE (and “other” if you want to include hydrogen etc.).

 

[petit_bateau]

I don't expect the world to follow that S Curve. I'm guessing ........... I see 4.5m unit growth in 2024. 2.7m from China again plus Europe, USA and ROW at 0.6m each. Just guesses, really.

That may be so, and is why I pointed out that this is simply what the data says before any human 'tuning' is applied. I'll be very interested to run the algo next Spring and see what pops out as the 2023 and 2024 years are the ones that set up for the quasi-linear region's ramp rate.

Your logic is good. However so far the non-Tesla growth rate (last 3-years) has exceeded the Tesla growth rate. The growers get it that their survival is on the line. Therefore they may continue to give us upside surprises. On the other hand some players have made poor cell-type bets and come badly unstuck, and that is taking them a year or so of no-growth to rectify - and there may be further weevils to come out of that rotten biscuit.

imho it is still all about cells.

 

[JohnnyEnglish]

Looking at the recent Gary Black Tweet about inventory in Europe I was struck by a couple of things:

• the inventory bounces about a bit but does not show any increasing trend
• although Gary says inventory remains high the peak level (early) in the quarter is less than 2% of quarterly sales. This does not seem particularly high, and if it does not show any consistent increase it does not seem worrying.

Given that Berlin production went up by almost 2k/week over this period this graph does not seem to have the negative connotations Gary mentions. Rather it seems to indicate that demand in Europe is matching the increased level of supply. I am not expecting Berlin production to experience another large step up until they introduce another shift (first shift on the second line) but it is not clear if they have started recruiting for that yet.

Looking on the Tesla UK website inventory falls into two categories : 'available for delivery' and 'coming soon'. The latter seems to be a significant proportion of the total and I am guessing that these vehicles are in transit from Shanghai. All in all it seems Europe is quite some way from having showrooms and delivery centres full of unsold vehicles which is what Gary appears to be worried about.

I believe Austin is still operating 2 shifts. Is anyone able to confirm this or provide any info as to when they are intending to move to 3 shifts?

Thanks

 

[Right_Said_Fred]

Just posting here for some discussion - thought on some ballpark 2024 figures - would appreciate some feedback of where you think the numbers are high or low:

View attachment 930393
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You’re estimating a revenue of $9.5 billion for energy generation and storage in 2024. Taking out solar and Powerwalls would leave about $8 billion for the Megapacks from Lathrop (and perhaps some production from the new facility in China). Do you expect Tesla in 2024 to reach only half of the planned yearly production of 10,000 Megapacks? Or do you expect Tesla to lower the price from $2.1 million to $0.8 million? Given the large backlog both scenarios don’t seem very realistic.

 

[damonbrodie]

Hi folks,

I'm slowly building my own model of TSLA like many of you have. I'm looking for constructive criticism regarding some of my assumptions:

• In Q1 - average S + X average costs were $73000/unit - remaining constant in Q2
• In Q1 - average 3 + Y average costs were $35600/unit, declining $600/unit in Q2
• In Q2 Storage deliveries will grow from the reported 3889MWh in Q1 to 5300MHh
• Auto Leasing has declined 3 Qs in a row- I modeled it declining linearly for Q2
• Services Margin has increased in the last three Qs - continue growing at the same rate in Q2?
• Cap Ex will stay around the same at 2.07B

Feel free to comment on one or more of these. Adding reasoning to your ideas is appreciated.

 

[EVNow]

Auto Leasing has declined 3 Qs in a row- I modeled it declining linearly for Q2

Leasing will probably increase if S&X deliveries increase.

BTW, the lease is complicated as it's the sum of past 33 to 36 months of leasing activity.

 

[damonbrodie]

Leasing will probably increase if S&X deliveries increase.

BTW, the lease is complicated as it's the sum of past 33 to 36 months of leasing activity.

I wondered why leasing seems to "wander" from Q to Q. Thx for the tip.

 

[Doggydogworld]

• In Q1 - average S + X average costs were $73000/unit - remaining constant in Q2
• In Q1 - average 3 + Y average costs were $35600/unit, declining $600/unit in Q2

I figure they leased 1090 S/X and 22,267 3/Y. That leaves 9605 S/X and 390,913 3/Y that were actually sold and feed into the 15,433m COGS amount. Using your 73k S/X and 35.6k 3/Y estimates gives:

73k * 9605 + 35.6k * 390,913 = 14,618m Cost of Automotive Sales

That's too low by 800m. I'd guess closer to 37.5k 3/Y and 80.5k S/X.