Near-future quarterly financial projections

[bdy0627]

Nowadays, there is so much information about Tesla and their missed deadlines, questionable build quality, deteriorating financials that they are likely being pressed much harder by their vendors when going on credit. Basically, as you said, Tesla's credit isnt very good right now.

Mush, as with most narcissists, believes this has to be somebody elses fault. So when hit with all these new demands that dont go away with a cool PR video of tunnels that will neer be built, and he sees the same comments being made by journalists, makes the connection that one must cause the other. Guy is a total loon.

Sorry but I've got to rant here a little bit about this post, because I really like this thread. I appreciate pertinent financial questions to try to get at the most realistic financial forecasts, but a personal general bias against Tesla is obvious in your post. There are other threads for that. When you casually include the idea of Tesla having "questionable build quality." What are you referring to there? Early Model 3 panel gap criticisms? The CR brake issue (which doesn't sound like a build quality problem)? Many owners of the Model 3 appear to highlight the build quality rather than suggest it is poor. I am planning to order one and I most definitely would not if it was apparent to me that build quality was poor. I've been reading as much as I can about the experiences of those with a Model 3. I have only read a handful of stories suggesting poor build quality, mostly from last Fall, vs many stressing the opposite. Many actually comment on how it seems to be better built than the model S, or at least the earlier versions of the S. The S of course is the car that forced CR to alter their scoring chart because it scored so high in their review.

I think your sentence would be much more objective if it said "Nowadays there is so much information about Tesla's slower than expected Model 3 ramp and the resultant financial stress to the company." The problem is that I think that reduces the point you are trying to make about suppliers wanting to get paid quicker. Therein lies the reason for your wording. You need the story to fit the point you are making. At least in this thread, let's let the story just be what it is in the financials rather than what we want it to be. If the future financials look ugly and suggest an unsustainable future, I want to know that, which is why I am tuned in to this thread.

Along the same lines, let's keep opinions about Elon's possible psychological issues out of this financial forecast thread. This is not the place for that.

What new demands are you referring to that Elon is getting hit with that won't go away? That's an honest question as I don't know to what you are referring.

 

[Reality]

Sorry but I've got to rant here a little bit about this post, because I really like this thread. I appreciate pertinent financial questions to try to get at the most realistic financial forecasts, but a personal general bias against Tesla is obvious in your post. There are other threads for that. When you casually include the idea of Tesla having "questionable build quality." What are you referring to there? Early Model 3 panel gap criticisms? The CR brake issue (which doesn't sound like a build quality problem)?

I agree that including personal bias against Musk and Tesla should be kept to other threads. Apologies as I too love the forecasting threads here and this was the reason i came to this forum.


With regards to build quality, you just asked me what im referring to then listed like 12 build quality concerns. That doesnt even count the scathing review by edmunds. The most respected car critics have all but called the car a lemon wrt build quality (only fair to mention the bottom half of the car and the performance of the car, because its an EV, are considered impressive).

When referring to supplier relations, i think that is relevant and puts a strain on teslas ability to push AP up to astronomical levels even if they are consistent with historical DPO. Which was my point until i tangented to personal bias topics.


Again, I agree with your sentiment that personal bias should be kept elsewhere and i will do my best to keep to that.

 

[trentbridge]

I assumed that the auto leasing 11% of deliveries only applied to the Model S and X in 2018.
Therefore I'm puzzled by the revenues from leasing:

Scenario: Only Model S and X are leased..

Q1 2018 deliveries 21815 so 2400 leased.
Q2 2018 deliveries 22000 so 2420 leased.
Q3 2018 deliveries 27000 so 2970 leased.
Q4 2018 deliveries 28000 so 3080 leased.

Your leasing AUTO gross revenue is this:

Q1 2018 $173,436,000
Q2 2018 $175,192,000
Q3 2018 $180,913,000
Q4 2018 $186,903,000

This results in revenue per car leased as this:

Q1 2018 $72,265
Q2 2018 $72,393
Q3 2018 $60,913
Q4 2018 $60,682

So are you assuming Model 3 is leased in Q3 and Q4?

 

[Reality]

I think he is accounting for the fact that PREVIOUS period leasing revenue is flowing into the current period from deferred, which is correct.


edit: wait you are noting the decline, good question

 

[trentbridge]

One of the biggest variable is of course the model 3 GM. I constructed a separate model here with sources for some of the assumptions. Feel free to play with the numbers or point out where it could be improved.

View attachment 303333[/QUOTE]

I think this is an interesting approach to estimating the Model 3 costs..
I have some difference with you on the cost of materials : $39881

If we deduct the battery pack cost - based on $160/kWh at 75 kWh size for LR version - $12,000.
So the rest of the car becomes $39881 - $12,000 = $27881.

The 2018 Toyota Camry retails for $23,000 so giving the dealer a 10% margin, it costs Toyota $20,700. Then add in $1500 for direct labor at Toyota 30 hours at $50/hr) , this makes the components cost $19,200.

This suggests using the Toyota example that Tesla is paying 45% more for it's sourced-parts than Toyota: ($27881/$19200)

I'd think 25% is more reasonable ($19200*1.25) so $24000 plus $12,000 battery pack = $36,000.

 

[bdy0627]

I agree that including personal bias against Musk and Tesla should be kept to other threads. Apologies as I too love the forecasting threads here and this was the reason i came to this forum.


With regards to build quality, you just asked me what im referring to then listed like 12 build quality concerns. That doesnt even count the scathing review by edmunds. The most respected car critics have all but called the car a lemon wrt build quality (only fair to mention the bottom half of the car and the performance of the car, because its an EV, are considered impressive).

When referring to supplier relations, i think that is relevant and puts a strain on teslas ability to push AP up to astronomical levels even if they are consistent with historical DPO. Which was my point until i tangented to personal bias topics.


Again, I agree with your sentiment that personal bias should be kept elsewhere and i will do my best to keep to that.

The Edmunds article included a statement from one of the reviewers that they would rather have the Model 3 than a BMW. That puts a little different perspective on build quality issues. If the Model 3 is a lemon with serious build quality issues but is preferred to a BMW, what does that say about its build quality relative to BMW? It's build quality is awful but it is still better than a BMW? That doesn't pass the common sense test, but what does is that build quality issues were mostly in the first few months and probably blown out of proportion, as is not uncommon with Tesla, and are not a substantial problem at this point. The inconsistent emergency braking distance from 60 mph discovered by CR, which I believe was the only issue they brought up that could be considered a build quality issue, appears to be something that Tesla needs to evaluate and fix. That's the only one I'm aware of currently. The car that CR evaluated was from February.

 

[kbM3]

With 23k model 3 deliveries and 22k S/X the 200k limit would already be breached in June. Assuming a very generous 5k deliveries in Canada you can have at most 15k total Model 3 deliveries. Tthere is no sign of Tesla rerouting Model S or Xes to countries elsewhere so those will soak up the usual 10k units per quarter. Since we are roughly 180k at the start of the quarter that’s what’s left over.

If you remember Elon stated they are going away from the geographic push at the end of a quarter to maximize deliveries in the quarter as it puts too much strain on the delivery system.

Wouldn’t this mean there will be more S&X in transit such that in Q2 there will be a one time hit to deliveries?

 

[kbM3]

Elon announced thousands of Supercharger locations in permitting. Does this model account for that?

 

[kbM3]

Isn’t 18.5% gross margin kind of low for Model 3 in Q4 for such a high ASP?

I would hope Q4 would look better as they would have had some time to optimize.

 

[mrdoubleb]

@luvb2b Thanks for sharing your super detailed calculations! My only gripe is , that I think you are way too conservative with Q2 M3 deliveries of just 23k.

Q2 M3 production

April:
The Q1 ER tells us they produced 4,750 Model 3s in the first 2 weeks of April. Actually, they say between April 1 and the shut down, but if media reports are to be believed, the shut down was the week of April 16. So coming back online, they had 1 more week, the week of the 23rd in the month. Before they went offline they set a new record of 2,270. So assuming they can't just come back online and instantly realize all the improvements, i am going to be super pessimistic and say they did not go much higher then before on the first week back. So they did 2,250, for a 7k total in April.

May:
You have almost 5 full weeks this month, but we know they are expected to shut down fro about 5 more days, so let's go with 4 weeks. Elon just tweeted, that they have just reached 500/day, equating to 3,500 a week, which means the first 3 weeks were at a rate of 2,500-3,500. I would go with 3k as a compromise, but let's be uber-conservative and say they couldn't go higher than 2,500. Gives you 7,500 so far, plus on their week back from shut down, somewhere between 3,500 and higher. I'll go with 3,500 for a total of 11k in May.

June:
Assuming they'll just barely hit 5k run rate the last few days. Even if there is no gradual improvement between 3,500-5,000 and they are stuck at the lower end for 3 weeks, that's 10,5k in 3 weeks. For the last week, say they average 4k and just hit 4,500-5,000 run rate on the last day for bragging rights. This still totals 14,5k for June.

Total: 7+11+14,5 = 32,5.

Now how much they deliver of that is anyone's guess, but I would hope 28-30k at least. And i think my estimates for the unknown weeks were super conservative. I would expect the ramp between those jumps to be little more linear than that. So in my book, the super conservative estimate is 32k produced /29k delivered. More realistic would be up to 10% more than that with a more gradual/successful coming back online after the shut downs. The optimistic version says the last shut down moves the needle and they never look back from 4k+ per week throughout June - but I'm not going there just yet.

 

[mongo]

i am struggling with my financial models and their results for the rest of the year. i think i have done everything reasonably well but would like to hear what others think.

you may find the inventory evolution odd: it's because i am modeling tesla gaming the 200k cutoff for the us tax credit. that is, they intentionally build cars and withhold delivery to avoid crossing 200k, so inventory builds a bit in q2 and is worked off in q3.

those not familiar please understand there are massive inaccuracies trying to project cash flows and balance sheet items, getting close on the income statement is hard enough. so don't be surprised to see things that make you go "hmmmm?".

thank you in advance for any constructive feedback.

…

s deliveries

x deliveries

s+x deliveries

3 deliveries

ls veh % total

avg price s+x

avg price model 3

revenue

auto sales ex 3

auto sales mod 3

auto leasing

1 time autopilot

zev credits

total auto

energy storage

solarcity

grohmann

services/other

total revenue

cost of revenue

auto sales ex 3

auto sales mod 3

auto leasing

total auto

energy storage

solarcity

grohmann

services & other

total cost of rev

gross profit

auto gaap ex 3 gm

auto-zev ex 3 gm

model 3 gm

auto-zev incl 3 gm

storage gm

scty gm

grohmann gm

services gm

opex

tesla r&d

tesla sg&a

1time acq cost

solarcity r&d

solarcity sg&a

total opex

op income

interest inc

interest exp

scty interest

other income exp

1time scty gain

pretax income

income tax

net income

non-cont int.

net inc to common

basic shares

diluted shares

diluted gaap eps

gaap net income

- stock based comp

- one time scty

non-gaap net income

non-gaap diluted eps

balance sheet

current assets

cash & eq.

restricted cash

accts rcvbl

inventory

prepaids+other

total current assets

op lease vehicles

solar energy sys

pp&e

intangible assets

goodwill

mypower rcvbls

restricted cash

other assets

total assets

current liabiliites

accts payable

accrued liabs+other

deferred revenue

resale value guar

cust deposits

curr debt+leases

curr solar bonds

total current liabs

lt debt+leases

solar bonds

rel party conv debt

deferred revenue

resale value guar

other lt liabilities

comm stk warrants

capital lease oblg

total liabilities

commits/contings

rdmbl ncis in subs

conv senior notes

nci in subsidiaries

common equity

cash flow statement

cash flows from ops

net loss

dep/amortization

stock-based comp

am of debt discount

inv write-down

loss on disposals

forex loss (gain)

loss on acq scty

non-cash int/other

chgs in op as/lb

accts rcbl

inv / op leases

prepaids/other ca

mypower rcvbls + other

accts pybl/accr liabs

deferred revenue

customer deposits

other lt liabs

net cash from ops

cash flows from inv

pp&e purchases

purchase solar sys

net cash from inv

cash flows from fin

stock issued

debt issued

debt repayments

rel pty solar repaids

coll lease borrowing

stock option excrs

capital lease paids

stock+debt issue cost

investment by nci in subs

dist to nci in subs

buyouts of nci in subs

net cash from fin

forex effect

net change in cash

cash & eq start

cash & eq end

[TD2] luv q4-18 [/TD2][TD2] luv q3-18 [/TD2][TD2] luv q2-18 [/TD2][TD2] Mar-18 [/TD2] [TD2]15,000[/TD2][TD2]15,000[/TD2][TD2]11,500[/TD2][TD2]11,738[/TD2] [TD2]13,000[/TD2][TD2]12,000[/TD2][TD2]10,500[/TD2][TD2]10,077[/TD2] [TD2] 28,000 [/TD2][TD2] 27,000 [/TD2][TD2] 22,000 [/TD2][TD2] 21,815 [/TD2] [TD2] 60,000 [/TD2][TD2] 50,000 [/TD2][TD2] 23,000 [/TD2][TD2] 8,182 [/TD2] [TD2] 0.11 [/TD2][TD2] 0.11 [/TD2][TD2] 0.11 [/TD2][TD2] 0.11 [/TD2] [TD2] 106.00 [/TD2][TD2] 106.00 [/TD2][TD2] 106.00 [/TD2][TD2] 105.76 [/TD2] [TD2] 58.00 [/TD2][TD2] 60.00 [/TD2][TD2] 56.00 [/TD2][TD2] 56.00 [/TD2] [TD2]2,641,520[/TD2][TD2]2,547,180[/TD2][TD2]2,075,480[/TD2][TD2]2,053,375[/TD2] [TD2]3,480,000[/TD2][TD2]3,000,000[/TD2][TD2]1,288,000[/TD2][TD2]458,192[/TD2] [TD2]186,903[/TD2][TD2]180,913[/TD2][TD2]175,192[/TD2][TD2]173,436[/TD2] [TD2]0[/TD2][TD2]0[/TD2][TD2]0[/TD2][TD2]0[/TD2] [TD2]100,000[/TD2][TD2]100,000[/TD2][TD2]0[/TD2][TD2]50,314[/TD2] [TD2] 6,408,423 [/TD2][TD2] 5,828,093 [/TD2][TD2] 3,538,672 [/TD2][TD2] 2,735,317 [/TD2] [TD2]180,000[/TD2][TD2]180,000[/TD2][TD2]164,500[/TD2][TD2]185,022[/TD2] [TD2]220,000[/TD2][TD2]275,000[/TD2][TD2]275,000[/TD2][TD2]225,000[/TD2] [TD2]0[/TD2][TD2]0[/TD2][TD2]0[/TD2][TD2]0[/TD2] [TD2]300,000[/TD2][TD2]300,000[/TD2][TD2]275,000[/TD2][TD2]263,412[/TD2] [TD2] 7,108,423 [/TD2][TD2] 6,583,093 [/TD2][TD2] 4,253,172 [/TD2][TD2] 3,408,751 [/TD2] [TD2]1,973,415[/TD2][TD2]1,903,004[/TD2][TD2]1,553,374[/TD2][TD2]1,540,031[/TD2] [TD2]2,836,200[/TD2][TD2]2,490,000[/TD2][TD2]1,288,000[/TD2][TD2]551,366[/TD2] [TD2]119,618[/TD2][TD2]115,784[/TD2][TD2]112,123[/TD2][TD2]104,496[/TD2] [TD2] 4,929,233 [/TD2][TD2] 4,508,789 [/TD2][TD2] 2,953,497 [/TD2][TD2] 2,195,893 [/TD2] [TD2]180,000[/TD2][TD2]189,000[/TD2][TD2]180,950[/TD2][TD2]217,863[/TD2] [TD2]154,000[/TD2][TD2]192,500[/TD2][TD2]192,500[/TD2][TD2]157,500[/TD2] [TD2]10,999[/TD2][TD2]10,999[/TD2][TD2]11,000[/TD2][TD2]11,000[/TD2] [TD2]375,000[/TD2][TD2]384,000[/TD2][TD2]365,750[/TD2][TD2]369,969[/TD2] [TD2] 5,649,232 [/TD2][TD2] 5,285,288 [/TD2][TD2] 3,703,697 [/TD2][TD2] 2,952,225 [/TD2] [TD2] 1,459,191 [/TD2][TD2] 1,297,805 [/TD2][TD2] 549,475 [/TD2][TD2] 456,526 [/TD2] [TD2]28.5%[/TD2][TD2]28.6%[/TD2][TD2]26.0%[/TD2][TD2]27.8%[/TD2] [TD2]26.0%[/TD2][TD2]26.0%[/TD2][TD2]26.0%[/TD2][TD2]26.1%[/TD2] [TD2]18.5%[/TD2][TD2]17.0%[/TD2][TD2]0.0%[/TD2][TD2]-20.3%[/TD2] [TD2]21.9%[/TD2][TD2]21.3%[/TD2][TD2]16.5%[/TD2][TD2]18.2%[/TD2] [TD2]0.0%[/TD2][TD2]-5.0%[/TD2][TD2]-10.0%[/TD2][TD2]-17.7%[/TD2] [TD2]30.0%[/TD2][TD2]30.0%[/TD2][TD2]30.0%[/TD2][TD2]30.0%[/TD2] [TD2]-100.0%[/TD2][TD2]-100.0%[/TD2][TD2]-100.0%[/TD2][TD2]-100.0%[/TD2] [TD2]-25.0%[/TD2][TD2]-28.0%[/TD2][TD2]-33.0%[/TD2][TD2]-40.5%[/TD2] [TD2]335,000[/TD2][TD2]335,000[/TD2][TD2]335,000[/TD2][TD2]332,096[/TD2] [TD2]545,000[/TD2][TD2]545,000[/TD2][TD2]545,000[/TD2][TD2]546,404[/TD2] [TD2]0[/TD2][TD2]0[/TD2][TD2]0[/TD2][TD2]0[/TD2] [TD2]35,000[/TD2][TD2]35,000[/TD2][TD2]35,000[/TD2][TD2]35,000[/TD2] [TD2]140,000[/TD2][TD2]140,000[/TD2][TD2]140,000[/TD2][TD2]140,000[/TD2] [TD2] 1,090,000 [/TD2][TD2] 1,080,000 [/TD2][TD2] 1,070,000 [/TD2][TD2] 1,053,500 [/TD2] [TD2] 369,191 [/TD2][TD2] 217,805 [/TD2][TD2] -520,525 [/TD2][TD2] -596,974 [/TD2] [TD2]6,000[/TD2][TD2]6,000[/TD2][TD2]6,000[/TD2][TD2]5,214[/TD2] [TD2]-107,000[/TD2][TD2]-107,000[/TD2][TD2]-107,000[/TD2][TD2]-102,546[/TD2] [TD2]-53,000[/TD2][TD2]-53,000[/TD2][TD2]-53,000[/TD2][TD2]-47,000[/TD2] [TD2]-12,000[/TD2][TD2]-12,000[/TD2][TD2]-12,000[/TD2][TD2]-37,716[/TD2] [TD2]0[/TD2][TD2]0[/TD2][TD2]0[/TD2][TD2]0[/TD2] [TD2] 203,191 [/TD2][TD2] 51,805 [/TD2][TD2] -686,525 [/TD2][TD2] -779,022 [/TD2] [TD2]19,999[/TD2][TD2]19,999[/TD2][TD2]20,000[/TD2][TD2]5,605[/TD2] [TD2] 183,192 [/TD2][TD2] 31,806 [/TD2][TD2] -706,525 [/TD2][TD2] -784,627 [/TD2] [TD2]-50,001[/TD2][TD2]-50,001[/TD2][TD2]-50,000[/TD2][TD2]-75,076[/TD2] [TD2] 233,193 [/TD2][TD2] 81,807 [/TD2][TD2] -656,525 [/TD2][TD2] -709,551 [/TD2] [TD2]170,000[/TD2][TD2]170,000[/TD2][TD2]170,000[/TD2][TD2]169,146[/TD2] [TD2]170,000[/TD2][TD2]170,000[/TD2][TD2]170,000[/TD2][TD2]169,146[/TD2] [TD2] 1.37 [/TD2][TD2] 0.48 [/TD2][TD2] -3.86 [/TD2][TD2] -4.19 [/TD2] [TD2]233,193[/TD2][TD2]81,807[/TD2][TD2]-656,525[/TD2][TD2]-709,551[/TD2] [TD2]140,000[/TD2][TD2]140,000[/TD2][TD2]140,000[/TD2][TD2]141,639[/TD2] [TD2]0[/TD2][TD2]0[/TD2][TD2]0[/TD2][TD2]0[/TD2] [TD2]373,193[/TD2][TD2]221,807[/TD2][TD2]-516,525[/TD2][TD2]-567,912[/TD2] [TD2] 2.20 [/TD2][TD2] 1.30 [/TD2][TD2] -3.04 [/TD2][TD2] -3.36 [/TD2] [TD2]2,176,308[/TD2][TD2]1,688,360[/TD2][TD2]1,881,948[/TD2][TD2]2,665,673[/TD2] [TD2]150,000[/TD2][TD2]130,000[/TD2][TD2]100,000[/TD2][TD2]120,194[/TD2] [TD2]1,168,508[/TD2][TD2]1,082,152[/TD2][TD2]745,762[/TD2][TD2]652,848[/TD2] [TD2]4,457,476[/TD2][TD2]4,633,677[/TD2][TD2]3,490,608[/TD2][TD2]2,565,826[/TD2] [TD2]342,700[/TD2][TD2]339,358[/TD2][TD2]336,017[/TD2][TD2]379,379[/TD2] [TD2] 8,294,992 [/TD2][TD2] 7,873,547 [/TD2][TD2] 6,554,334 [/TD2][TD2] 6,383,920 [/TD2] [TD2]2,519,505[/TD2][TD2]2,439,234[/TD2][TD2]2,359,070[/TD2][TD2]2,315,124[/TD2] [TD2]6,345,887[/TD2][TD2]6,349,381[/TD2][TD2]6,352,910[/TD2][TD2]6,346,374[/TD2] [TD2]12,420,083[/TD2][TD2]11,695,516[/TD2][TD2]11,061,438[/TD2][TD2]10,519,226[/TD2] [TD2]361,502[/TD2][TD2]361,502[/TD2][TD2]361,502[/TD2][TD2]346,428[/TD2] [TD2]60,237[/TD2][TD2]60,237[/TD2][TD2]60,237[/TD2][TD2]61,284[/TD2] [TD2]428,754[/TD2][TD2]435,754[/TD2][TD2]442,754[/TD2][TD2]449,754[/TD2] [TD2]440,000[/TD2][TD2]440,000[/TD2][TD2]440,000[/TD2][TD2]433,841[/TD2] [TD2]273,123[/TD2][TD2]273,123[/TD2][TD2]273,123[/TD2][TD2]415,478[/TD2] [TD2] 31,144,084 [/TD2][TD2] 29,928,294 [/TD2][TD2] 27,905,368 [/TD2][TD2] 27,271,429 [/TD2] [TD2]4,767,023[/TD2][TD2]4,691,598[/TD2][TD2]3,429,725[/TD2][TD2]2,603,498[/TD2] [TD2]1,972,157[/TD2][TD2]1,900,064[/TD2][TD2]1,828,971[/TD2][TD2]1,898,431[/TD2] [TD2]604,681[/TD2][TD2]585,416[/TD2][TD2]542,586[/TD2][TD2]536,465[/TD2] [TD2]600,000[/TD2][TD2]600,000[/TD2][TD2]600,000[/TD2][TD2]629,112[/TD2] [TD2]965,000[/TD2][TD2]965,000[/TD2][TD2]965,000[/TD2][TD2]984,823[/TD2] [TD2]1,500,000[/TD2][TD2]1,500,000[/TD2][TD2]1,800,000[/TD2][TD2]1,915,530[/TD2] [TD2]100,000[/TD2][TD2]100,000[/TD2][TD2]100,000[/TD2][TD2]82,500[/TD2] [TD2] 10,508,862 [/TD2][TD2] 10,342,078 [/TD2][TD2] 9,266,282 [/TD2][TD2] 8,650,359 [/TD2] [TD2]9,415,700[/TD2][TD2]9,415,700[/TD2][TD2]9,415,700[/TD2][TD2]8,761,070[/TD2] [TD2]100[/TD2][TD2]100[/TD2][TD2]100[/TD2][TD2]100[/TD2] [TD2]2,519[/TD2][TD2]2,519[/TD2][TD2]2,519[/TD2][TD2]2,556[/TD2] [TD2]881,827[/TD2][TD2]853,732[/TD2][TD2]825,674[/TD2][TD2]818,250[/TD2] [TD2]650,000[/TD2][TD2]670,000[/TD2][TD2]700,000[/TD2][TD2]756,800[/TD2] [TD2]2,806,088[/TD2][TD2]2,726,344[/TD2][TD2]2,647,600[/TD2][TD2]2,561,886[/TD2] [TD2]0[/TD2][TD2]0[/TD2][TD2]0[/TD2][TD2]0[/TD2] [TD2]0[/TD2][TD2]0[/TD2][TD2]0[/TD2][TD2]0[/TD2] [TD2] 24,265,095 [/TD2][TD2] 24,010,473 [/TD2][TD2] 22,857,875 [/TD2][TD2] 21,551,021 [/TD2] [TD2]402,943[/TD2][TD2]402,943[/TD2][TD2]402,943[/TD2][TD2]405,835[/TD2] [TD2]0[/TD2][TD2]0[/TD2][TD2]0[/TD2][TD2]2[/TD2] [TD2]900,000[/TD2][TD2]900,000[/TD2][TD2]900,000[/TD2][TD2]863,876[/TD2] [TD2] 5,576,045 [/TD2][TD2] 4,614,878 [/TD2][TD2] 3,744,550 [/TD2][TD2] 4,450,695 [/TD2] [TD2]183,192[/TD2][TD2]31,806[/TD2][TD2]-706,525[/TD2][TD2]-784,627[/TD2] [TD2]484,383[/TD2][TD2]456,125[/TD2][TD2]442,458[/TD2][TD2]416,233[/TD2] [TD2]140,000[/TD2][TD2]140,000[/TD2][TD2]140,000[/TD2][TD2]141,639[/TD2] [TD2]35,000[/TD2][TD2]35,000[/TD2][TD2]35,000[/TD2][TD2]39,345[/TD2] [TD2]46,337[/TD2][TD2]34,906[/TD2][TD2]25,658[/TD2][TD2]18,546[/TD2] [TD2]45,000[/TD2][TD2]45,000[/TD2][TD2]45,000[/TD2][TD2]52,237[/TD2] [TD2]25,000[/TD2][TD2]25,000[/TD2][TD2]25,000[/TD2][TD2]47,661[/TD2] [TD2]0[/TD2][TD2]0[/TD2][TD2]0[/TD2][TD2]0[/TD2] [TD2]0[/TD2][TD2]0[/TD2][TD2]0[/TD2][TD2]-3,984[/TD2] [TD2]-86,356[/TD2][TD2]-336,391[/TD2][TD2]-92,914[/TD2][TD2]-169,142[/TD2] [TD2]95,930[/TD2][TD2]-1,223,234[/TD2][TD2]-968,727[/TD2][TD2]-419,277[/TD2] [TD2]0[/TD2][TD2]0[/TD2][TD2]0[/TD2][TD2]-50,001[/TD2] [TD2]-15,000[/TD2][TD2]-15,000[/TD2][TD2]-15,000[/TD2][TD2]-57,583[/TD2] [TD2]147,519[/TD2][TD2]1,332,966[/TD2][TD2]756,767[/TD2][TD2]317,983[/TD2] [TD2]75,000[/TD2][TD2]65,000[/TD2][TD2]50,000[/TD2][TD2]45,795[/TD2] [TD2]0[/TD2][TD2]0[/TD2][TD2]-19,823[/TD2][TD2]67,359[/TD2] [TD2]0[/TD2][TD2]0[/TD2][TD2]0[/TD2][TD2]-60,560[/TD2] [TD2] 1,176,005 [/TD2][TD2] 591,179 [/TD2][TD2] -283,107 [/TD2][TD2] -398,376 [/TD2] [TD2]-900,000[/TD2][TD2]-800,000[/TD2][TD2]-700,000[/TD2][TD2]-655,662[/TD2] [TD2]-60,000[/TD2][TD2]-60,000[/TD2][TD2]-70,000[/TD2][TD2]-72,975[/TD2] [TD2] -960,000 [/TD2][TD2] -860,000 [/TD2][TD2] -770,000 [/TD2][TD2] -728,637 [/TD2] [TD2]0[/TD2][TD2]0[/TD2][TD2]0[/TD2][TD2]0[/TD2] [TD2]100,000[/TD2][TD2]200,000[/TD2][TD2]100,000[/TD2][TD2]1,775,481[/TD2] [TD2]0[/TD2][TD2]-300,000[/TD2][TD2]0[/TD2][TD2]-1,389,388[/TD2] [TD2]0[/TD2][TD2]0[/TD2][TD2]0[/TD2][TD2]-17,500[/TD2] [TD2]100,000[/TD2][TD2]100,000[/TD2][TD2]100,000[/TD2][TD2]-87,092[/TD2] [TD2]75,000[/TD2][TD2]75,000[/TD2][TD2]75,000[/TD2][TD2]94,018[/TD2] [TD2]-30,000[/TD2][TD2]-30,000[/TD2][TD2]-30,000[/TD2][TD2]-18,787[/TD2] [TD2]-12,000[/TD2][TD2]-12,000[/TD2][TD2]-12,000[/TD2][TD2]-2,913[/TD2] [TD2]75,000[/TD2][TD2]75,000[/TD2][TD2]75,000[/TD2][TD2]73,704[/TD2] [TD2]-50,000[/TD2][TD2]-50,000[/TD2][TD2]-50,000[/TD2][TD2]-52,942[/TD2] [TD2]0[/TD2][TD2]0[/TD2][TD2]0[/TD2][TD2]-2,921[/TD2] [TD2] 258,000 [/TD2][TD2] 58,000 [/TD2][TD2] 258,000 [/TD2][TD2] 371,660 [/TD2] [TD2]13,944[/TD2][TD2]17,232[/TD2][TD2]11,382[/TD2][TD2]10,102[/TD2] [TD2] 487,949 [/TD2][TD2] -193,589 [/TD2][TD2] -783,725 [/TD2][TD2] -745,251 [/TD2] [TD2] 1,688,360 [/TD2][TD2] 1,881,948 [/TD2][TD2] 2,665,673 [/TD2][TD2] 3,367,914 [/TD2] [TD2] 2,176,308 [/TD2][TD2] 1,688,360 [/TD2][TD2] 1,881,948 [/TD2][TD2] 2,665,673 [/TD2]

Q3 Model 3 sales seem low. If they hit 5k/ wk in Q2, then the only diversion from 12wk*5k/wk = 60k would be the build rate two weeks before the start of Q3 (asuming 2 week delivery lag). This would be likely be covered by the 200kth car sales delay.
( and hopefully, build rate increases past 5k/wk in H2)

 

[Reality]

SGA going from ~20% of auto down to 7.5% in 3 quarters seems unreasonable. I know you just flatlined them, and given lots of departures maybe thats reasonable, but that drop would be incredible.

 

[mongo]

SGA going from ~20% of auto down to 7.5% in 3 quarters seems unreasonable. I know you just flatlined them, and given lots of departures maybe thats reasonable, but that drop would be incredible.

Volume of cars sold goes from 45k to 88k , that's s 2x on its own... 20% -> 10% for constant SGA.

 

[bonaire]

Canada will appreciate the DWD and LR. But the LR RWD might not be as interesting except for people with "multiple cars in their stable" and those wanting the earlier Model 3 before waiting on DWD configs. Since DWD doesn't seem to be destined for production until possibly late June or July, Canada deliveries rely on LR-RWD only. I think that number is relatively small (2000 max?) for Q2 to Canada.

 

[schonelucht]

Let’s keep this thread on track. Ie on which numbers Tesla can hit.

The 10% for Canada based on reservations doesn’t work because all Canadians so far got invited while not all US holders are. The better comparison is on SX cars sold in both countries. I see no reason why the 3 would have significant differently demand than the other models. That implies Canada has about 3.5% of worldwide reservations.

 

[luvb2b]

wow this discussion heated up a lot.

I didnt mean to call you looney at all, just Musk.

was not thinking that you did, and even so, wouldn't bother me.

I agree that including personal bias against Musk and Tesla should be kept to other threads.

good idea. thank you.

I assumed that the auto leasing 11% of deliveries only applied to the Model S and X in 2018. Therefore I'm puzzled by the revenues from leasing...

you've got a fundamental misunderstanding of how leasing works from an accounting standpoint. a crude explanation is that when a car is leased it gets shoved into the operating lease vehicles asset on the balance sheet. from the operating lease vehicles line, a portion of the amount is realized each period as lease revenue. i haven't hit all of the nuances, but the general idea is lease revenue should track the operating lease vehicle asset. @brian45011 can probably give you full details on how it works.

with tesla's resale value guarantee accounting change, leases shifted dramatically in 2018. years past i could estimate how much resale value guarantee release would wind up in lease revenue to get a better picture - but now that has gone away. i might get a better idea of how to model leasing later on, but for now it is taken as a fixed portion of operating lease vehicles. while reviewing your question i did find a minor error in the operating lease vehicles line item on the balance sheet so will correct that in the next revision.

One of the biggest variable is of course the model 3 GM.

i agree. i largely followed management guidance on the gross margin evolution, and gave it a modest "tesla overstatement" haircut in q4. as mentioned in a prior post i can see how it could get to 0% this quarter so am comfortable with that assumption.

If you remember Elon stated they are going away from the geographic push at the end of a quarter to maximize deliveries in the quarter as it puts too much strain on the delivery system.
Wouldn’t this mean there will be more S&X in transit such that in Q2 there will be a one time hit to deliveries?

last quarter we had a one time hit due to a huge drawdown of inventory and the in-transit pipeline. this quarter they guided for flat deliveries for s/x vs q1:

Consequently, Model S and X deliveries in Q2 will likely be similar to Q1 but should pick up considerably in Q3 to achieve our goal of 100,000 deliveries for the full year. ​

ironically i think you will see tesla do a geographic push for usa deliveries as the tax credit starts to sunset in q4. so i don't really buy this explanation of streamlining deliveries. i think it's a veiled way for them to say they are going to game the 200k deliveries number that triggers the usa tax credit sunset.

the hit to deliveries i have modeled by holding deliveries flat vs the poor q1, and yes there should be more s&x in transit which will cause a spike in inventory on the balance sheet.

Elon announced thousands of Supercharger locations in permitting. Does this model account for that?

not directly, but 2000 superchargers at 300k each would be 600m of capex. i have included 2.4b of capex in the remaining 3 quarters of the year per guidance of 3b of capex for 2018.

Isn’t 18.5% gross margin kind of low for Model 3 in Q4 for such a high ASP?
I would hope Q4 would look better as they would have had some time to optimize.

yes me too. if they got to 20% gross margin by the end of q4, then i would expect to see the whole quarter come in slightly lower.

@luvb2b Thanks for sharing your super detailed calculations! My only gripe is , that I think you are way too conservative with Q2 M3 deliveries of just 23k....
Total: 7+11+14,5 = 32,5.

Now how much they deliver of that is anyone's guess, but I would hope 28-30k at least.

typically it seems tesla is not able to deliver the last 1-2 weeks of production. assuming we get to 4-5k, you could take your production number and subtract 6-8k for cars undelivered and 2k for 3's in-transit at the end of q1. that would be 27.5k.

but! i think they will hold back usa deliveries to avoid crossing the 200k threshold this quarter. this is why all the canadian res holders (just about) have been invited to configure. better to send cars to canada and get 2 full quarters of the tax credit while running at high production levels. so i agree with you on production but have a low model 3 delivery number because i assume they will game the tax credit expiration in the usa. the rest of the model reflects that via increases in inventory and other balance sheet items.

Q3 Model 3 sales seem low. If they hit 5k/ wk in Q2, then the only diversion from 12wk*5k/wk = 60k would be the build rate two weeks before the start of Q3 (asuming 2 week delivery lag). This would be likely be covered by the 200kth car sales delay.
( and hopefully, build rate increases past 5k/wk in H2)

forecasts more than one quarter out will have substantial error bars around the outcomes. i will turn out to be conservative if they can produce 5k/week steadily for the entire quarter. i don't even think they'll get to 5k at a sustained pace at the end of this quarter. i'm hopeful for 4k sustained going to 5k during q3, and then 1-2 weeks of down time, and yes add the in-transits from q2.

SGA going from ~20% of auto down to 7.5% in 3 quarters seems unreasonable. I know you just flatlined them, and given lots of departures maybe thats reasonable, but that drop would be incredible.

this is our fundamental difference of opinion, i believe opex has already been sized to a larger enterprise and you think opex will scale with revenue. you were right last quarter as revenue and opex grew in tandem. i hope that trend stops repeating.

Canada will appreciate the DWD and LR. But the LR RWD might not be as interesting except for people with "multiple cars in their stable" and those wanting the earlier Model 3 before waiting on DWD configs. Since DWD doesn't seem to be destined for production until possibly late June or July, Canada deliveries rely on LR-RWD only. I think that number is relatively small (2000 max?) for Q2 to Canada.

there is a potential looming cancel of a $14k cad ontario ev tax credit, depending on the outcome of an election. this is driving near term demand. Tesla buyers lose access to Ontario’s generous $14,000 electric car incentive

i did a study of take rates for the rwd config in canada and cold-weather us states based on troy's spreadsheet. it was 60% in canada and 70% in cold-weather usa states. that may prove to be too high, but even at a lower take rate i think demand in canada is much higher than the "2000 max" you are assuming.

as far as supply, tesla has in the past with less infrastructure delivered as many as 600 cars in canada a month, so i think "2000 max" is way too low for tesla's ability to supply vehicles.

The 10% for Canada based on reservations doesn’t work because all Canadians so far got invited while not all US holders are. The better comparison is on SX cars sold in both countries. I see no reason why the 3 would have significant differently demand than the other models. That implies Canada has about 3.5% of worldwide reservations.

couple things, first you are confusing north america split with worldwide split. i said canada's reservation count is 10% of the usa reservation count (entering the quarter), based on troy's data sample.

if i go with your 3.5% number for canadian worldwide reservations vs. likely 50-60% for the usa, then 3.5/50 to 3.5/60 means canada reservations are ~6-7% of usa reservations. that's about where i end up after haircutting my estimates.

the model 3 will have a different demand profile than s/x, because of the $14k cad ontario ev tax credit. that credit no longer applies to model s/x. with my estimate of 70% of canadian model 3 reservations coming from ontario, i expect it model 3 to do much better in canada relative to the s/x (prior to 2017), at least until the $14k credit goes away. s/x did have the tax credit for most of 2017, it was only recently withdrawn.

Eligible Electric Vehicles
Tesla buyers lose access to Ontario’s generous $14,000 electric car incentive

 

[neroden]

So in terms of figuring out when Tesla will hit 5k/week, I think our first information will be after the end of May shutdown. This is addressing known bottlenecks. If it addresses all of them, boom, 5000/week. If not, it will take longer.

 

[mongo]

so i don't really buy this explanation of streamlining deliveries

After the trucking issue in Norway, they may indeed be smoothing delivery rates.

but 2000 superchargers at 300k each would be 600m of capex

I think the 300k number is for an 8 position SC site. 2017 ended with 1,120 locations, 8,250 stalls. Tesla had a record year of Supercharger expansion but fell short of its goal

I find $300k in relation to a solar location. Standard being cheaper.
Old estimate: Inside Tesla’s Supercharger Partner Program: The Costs And Commitments Of Electrifying Road Transport

Of course, Kettleman and Urban SC are shifting the numbers.

 

[bonaire]

luv - the "2000 max?" that I put in was for Model 3. They will also deliver S+X in Canada in Q2.
Due to 10:100 percentage, 2000 Model 3 in Canada is 20,000 USA in the quarter. I think both might be slightly high, but we'll see where they send some Model 3s in June. Perhaps starting shipments to Norway or other EU destinations that don't need Tilburg final assembly for VAT avoidance.

 

[bdy0627]

SGA going from ~20% of auto down to 7.5% in 3 quarters seems unreasonable. I know you just flatlined them, and given lots of departures maybe thats reasonable, but that drop would be incredible.
this is our fundamental difference of opinion, i believe opex has already been sized to a larger enterprise and you think opex will scale with revenue. you were right last quarter as revenue and opex grew in tandem. i hope that trend stops repeating.

This appears to be the crux of the difference of opinions regarding Tesla's financial situation. If opex continues scaling with revenue, Tesla is fundamentally unprofitable and unsustainable without constant infusions of capital. Elon and management have obviously told us to expect the company to be profitable in the very near future. Is there any viable way Tesla could achieve that with opex continuing to scale with revenue? What kind of accounting tricks would be required to show a profit for a quarter or two even though the company could actually be on a declining financial situation?