Q2 2013 Results - Expectations and Projection

[Benz]

According to this article of Motor Trend, Tesla Motors did not reach their target of 4,500 Tesla Model S deliveries in the US. Source: Autodata Corp


"The second quarter, which ends with June sales, was not as successful. In June, Tesla sold 1,425 vehicles and ended the first half of the year with 8931 units sold, according to Autodata Corp. That’s 4181 units for the second quarter, which is 569 units off the first quarter mark and 319 units off Tesla’s 4500 units a quarter mark.

Read more: http://blogs.motortrend.com/lessons...s-longer-to-recharge-29699.html#ixzz2YqnwFZCM

This just cannot be true, I am expecting at least 5,000 units for Q2 2013.

 

[ckessel]

According to this article of Motor Trend...
This just cannot be true, I am expecting at least 5,000 units for Q2 2013.

Yea, I don't know if I expect 5,000 since Tesla didn't advise 5,000 in the last earnings call, but Motor Trend knows nothing and is just repeating Autodata who also know nothing.

And the reporter flunked basic math by reporting numbers with high precision even though it's impossible to be that accurate. False precision - Wikipedia, the free encyclopedia

Looking forward: I think Tesla sales will level out and sell 17,824 units for the year,

 

[AudubonB]

reporting numbers with high precision even though it's impossible to be that accurate

That is my favorite shibboleth for determining if a writer can be trusted. Sadly, ignorance in mathematics is so widespread throughout our culture that I'm having to lower my standards, which hurts.

 

[Sunnyday]

Yea, I don't know if I expect 5,000 since Tesla didn't advise 5,000 in the last earnings call, but Motor Trend knows nothing and is just repeating Autodata who also know nothing.

And the reporter flunked basic math by reporting numbers with high precision even though it's impossible to be that accurate. False precision - Wikipedia, the free encyclopedia

At Teslive yesterday, Elon said they're currently producing cars at an annualized runrate of 25,000/yr, which of course works out to 2,083 per month or 6,250/quarter. Does anyone know what the stated runrate was at the beginning of the quarter?

 

[JRP3]

Wasn't it around 400/week?

 

[hobbes]

Wasn't it around 400/week?

If that´s true and they were scaling up linearly to 500/week right now (25,000/yr/50 weeks), the average for the quarter would be 450/week. Times at least 12 weeks in the quarter we would have 5400 total for the quarter! Am I missing anything? Sounds a lot better than missing the 4500 target.

 

[Acmykguy]

That is what I have heard as well....as quickly as in under 1 week.

 

[Volker.Berlin]

If that´s true and they were scaling up linearly to 500/week right now (25,000/yr/50 weeks), the average for the quarter would be 450/week. Times at least 12 weeks in the quarter we would have 5400 total for the quarter! Am I missing anything? Sounds a lot better than missing the 4500 target.

Question is: Are you talking vehicles produced or vehicles sold? Don't forget that there may be vehicles in transit to Europe that already have consumed resources to be produced but cannot yet be accounted for as sales.

 

[Acmykguy]

I heard that as well....but he did toss out the date April 1. Jerome also said that since April 1 the service centers have doubled. Why would that growth be so high? I see two reasons; 1. More cars to deliver , and 2. The obvious to service more cars.

Now if you factor in what Elon said that the production is more than 400 per week and not by a trivially number this would make sense. I think they beat expectations on production and earnings both.

 

[MikeC]

If that´s true and they were scaling up linearly to 500/week right now (25,000/yr/50 weeks), the average for the quarter would be 450/week. Times at least 12 weeks in the quarter we would have 5400 total for the quarter! Am I missing anything? Sounds a lot better than missing the 4500 target.

The first week of the quarter the workers are on vacation and the factory is retooled - so 11 weeks in the quarter.It appears for the first month or two, they were right around 400/week, but I've seen posts from people who visited the factory in June and they were reporting numbers like 542/week, 550/week, and 600/week. The question is how many of those produced in June were delievered to customers before June 30.

 

[clmason]

My company has a 4/4/5 week month fiscal calendar. Jan feb are 4 weeks, march is 5 weeks. Total of 13 week quarter on fiscal calendar. Repeat 4/4/5 each quarter. Do public conpanies do this? Tesla? If yes, it might change some assumptions...

 

[bollar]

My company has a 4/4/5 week month fiscal calendar. Jan feb are 4 weeks, march is 5 weeks. Total of 13 week quarter on fiscal calendar. Repeat 4/4/5 each quarter. Do public conpanies do this? Tesla? If yes, it might change some assumptions...

Some public companies do 445, but it doesn't appear that Tesla does. Their quarterly reporting coincides with month-end.

 

[FredTMC]

Question is: Are you talking vehicles produced or vehicles sold? Don't forget that there may be vehicles in transit to Europe that already have consumed resources to be produced but cannot yet be accounted for as sales.

I don't believe many (or even any) EU cars were sent to EU (on the boat) during Q2.

 

[clmason]

Some public companies do 445, but it doesn't appear that Tesla does. Their quarterly reporting coincides with month-end.

Ok but the math works out as follows:
April - 30 Days
May - 31 Days
June - 30 Days
Total 91 days / 7 = 13 weeks in the q
Less 1 for vacation = 12 production weeks
???

 

[Benz]

"Currently producing at an annualized rate of more than 25K units (saw a flat panel on the factory tour that indicated 5,454 units produced in the 2nd quarter."

That's what an owner saw himself at a factory tour during the TESLIVE event.

Here is the link: http://teslamodels.wordpress.com/

But how many of these were actually sold to customers (and paid for) and delivered to them as well?

 

[FredTMC]

"Currently producing at an annualized rate of more than 25K units (saw a flat panel on the factory tour that indicated 5,454 units produced in the 2nd quarter."

That's what an owner saw himself at a factory tour during the TESLIVE event.

Here is the link: http://teslamodels.wordpress.com/

But how many of these were actually sold to customers (and paid for) and delivered to them as well?

Dont forget that there were some cars produced at the end of Q1 (March 31st) that weren't delivered until April (i.e. "Q2").

It's a "heads and tails" thingy

Also, I distinctly recall Elon saying on the Q1 earnings call that they were extremely conservative at recognizing deliveries. If the paperwork was wrong but car was delivered then they didn't count it as a delivery from a rev recognition standpoint

 

[maekuz]

Lease accounting will obviously have a significant effect on q2 results and a profit in q2 is a really long shot.

But i am wondering if they didnt try anyway: Production for Europe apparently started not until q3 and less Superchargers have been built in q2 than anticipated. It looks to me as if they were trying to shift costs from q2 to q3.

 

[Johan]

Lease accounting will obviously have a significant effect on q2 results and a profit in q2 is a really long shot.

But i am wondering if they didnt try anyway: Production for Europe apparently started not until q3 and less Superchargers have been built in q2 than anticipated. It looks to me as if they were trying to shift costs from q2 to q3.

This. I think that if you've been paying a lot of attention (like many of us here) there all too many small indicators pointing to this - that they saw a chance of ending up with a (small) profit in Q2 and tried for it. In addition to what you are mentioning with the EU production there has been: the alleged "push" with increased production rate in the factory the last weeks of June (with a strategic week off right after the shift to July), the many late June deliveries in the US - stories on this forum of how Delivery Specialists seemed to really be working hard to get cars delivered within the month of June, all the selling of loaners instead of keeping them as loaners (Tesla has taken some flak for this, you know what I mean if you listened to Joost de Vries' speech/session at Teslive, but still they did sell most of them very quickly).

So while I agree a profit in Q2 would be a very pleasant surprise, I wouldn't think the odds for this to be 10% v.s. 90% but in my mind as of now rather a 50/50 situation. I have far OTM call options with August and Sept. strikes that I very likely will hold 'til after the earnings call.

 

[sleepyhead]

Lease accounting is just accounting! Wall Street will "normalize" earnings anyway. On this adjusted basis, I feel that TSLA will shock and have at least $0.30/share unless ZEV goes down 50%+. Even on a non-adjusted basis I am fairly certain that they will be profitable.

They will raise guidance significantly for the second half of the year and will be very profitable in 2013. On an adjusted basis I believe that $1 EPS is a sure thing and I have faith the Wall Street will be using these adjusted numbers going forward. You cannot penalize Tesla for Lease Accounting when all other manufacturers recognize revenue at moment car is delivered to dealer (no matter if sold to end customer or not). It represents cash flow better too.

TSLA will shock everyone. It is going to be a very good quarter. Guidance will be raised to 23,000 cars for 2013 (maybe 22,500 if they subtract some potential in transit vehicles). They will also say that on an adjusted basis, Q3 and Q4 will be profitable.

Everything is happening a lot sooner than expected!

 

[maekuz]

$1 EPS would send the shares immediately to $200. :smile: