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Near-future quarterly financial projections

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(BTW., a really stupid question, you are posting such nice tables, but I'm unable to find the markup syntax for that, and the editor doesn't seem to support it. What kind of syntax are you using to post tables? I used the CODE markup as a poor substitute.)

i posted a public service announcement on how to post nice tables out of excel today.

see here: psa: how to post nice tables from excel
 
Very interesting... thanks for doing the research. Historically, as i recall, there were some quarters when they didn`t sell any ZEV as they didn`t like the price or demand was low. But I imagine they would want to pull out all the stops this quarter (and next) to achieve profitability, so they will not leave anything on the table.

Yes, that's my assumption as well for Q3: the Q2 numbers took one for the team, Q3 will be the real deal.

Q4 will be 'easy' due to the much higher unit count planned, as the new battery production lines are coming on-line at the Gigafactory, on the Panasonic and on the Tesla side as well.

Fremont seems ready for 6k/week as-is, and 8k-10k appears to be possible with 'a few ten million dollars of incremental capex', at least on the body line which seems to be their primary bottleneck at the moment, according to independent automotive experts from Evercore ISI, who reviewed the Model 3 production lines in Fremont:

Tesla Model 3 Production Has 25–33% The Number Of Steps "Found In Traditional Auto" | CleanTechnica

“For Body, our understanding is that incremental capex is required (our impression is in the tens and not hundreds of millions) in order to get to both 8k units and eventually 10k units. While certain parts of the line are able to handle these volumes today, other sections will require improved design to achieve faster run rates while, in a handful of instances, it may be necessary to have a second line running in tandem.”​

So in Q3 they can use all the ZEV credits they have. They might even apply end-of-quarter measures that would hurt Q4 numbers slightly but help Q3.

Shorts, of course, will claim they are only profitable due to ZEV, so it would be nice if they were in the black even without this, but whatever. In the words of our great poet Taylor Swift, "haters gonna hate".

I'm not worried about shorts either, the vocal ones will remain the lying parasites they are, there's little I can do about that. If rational shorts make valid counter arguments I'll incorporate that into my thinking.

The first half of 2018 had ZEV credits sold, and Q3 will feature as more units as the first two quarters combined, so obviously ZEV credits sold could be higher.

They can complain about ZEV credits as much as they want, but ZEV credits are part of the economic environment Tesla operates in - just as tariffs and other regulatory costs/advantages are part of it.
 
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first, thanks for doing all this work. i went back and checked vs my data. your error here is not distinguishing between zev and non-zev credits. but, the good news is your totals for zev + non-zev credits are within 1m of my own for each of the years you posted.

for whatever reason, tesla lumps non-zev credits into regular revenue but separates out zev credits. zev credits are disclosed directly in the letters. non-zev requires a lot of manipulation to uncover, as you notel.

from a modeling perspective i followed tesla. zev credits i show should be lower than what you estimated, which is zev + non-zev. zev credits over the past few years seem to average out at 2.4k per vehicle sold. however we do know there is a limited market for them, so i think as volumes increase we should expect that average of 2.4k per vehicle to drop. for the past 4 quarters we currently stand at 1.8k per vehicle. in my modeling selling 150m of zev credits next quarter could bump the ttm zev credits per vehicle to 2.1k per vehicle. one analyst i talked to mentioned that tesla ir emphasized to him that credits would be a meaningful event in 2h18, so certainly 100-200m in quite possible for zev credits.

on non-zev credits, the trend has been steadily lower. at the end of 2013 these were around 2.5k per vehicle.
by the end of 2015 1.1k per vehicle. and in recent history only $750 per vehicle. these credits have just been merged into the revenue figures. i only started modeling the importance of this quarter. the impact is shift asp's higher by the amount of the non-zev credits. so where the true model 3 asp might be 55k, it should be modeled in my sheet as 55.75k. reported gross margins will automatically lift by 0.75% (for s/x) to 1.5% (for model 3).

to get my-apples-to-your-apples, take my 150m in zev credits for q3, then add 0.75k for 77k vehicles sold. works out to around 208m in total zev+non-zev credits estimated for q3.

i hope all that made sense. will try to follow with a full update shortly.

BTW., one additional piece of feedback regarding your latest projections: AFAICS you are using +$100m for Q3 and Q4 ZEV credits.

That looks unreasonably pessimistic to me. Here's Tesla's track record with ZEV credits, what I've been able to decode from their past financial statements:

Code:
year   | deliveries | ZEV sold | ZEV per quarter | ZEV per car
--------------------------------------------------------------
2016   | 76,230     | $302.3m  | $75.5m          | $3,965
2017   | 81,824     | $360.3m  | $90.0m          | $4,403
2018H1 | 70,720     | $134.3m  | ......          | ......

Notes and assumptions:
  • I didn't find such decomposition of their ZEV cost structure anywhere, I deducted it from a series of disclosures and back-calculated it all - it might not be correct. Can post the original disclosures and the rules if there's interest or doubt about the accuracy of these figures.
  • There's no per unit estimate for 2018 yet, because we don't know how many credits they sold, we only know the value. If I am reading their disclosures correctly then Tesla is only 'flushing' their ZEV credits down to zero at the end of year, so the intra-year buffering of ZEV credits can only be known if Tesla discloses it, and they rarely do.
  • I assumed similar count of credits for the Model S/X and the Model 3, they have comparable average range.
  • Obviously not all deliveries go to ZEV states, but I think we can safely assume that Model 3 delivery ZEV mix is at least as good as the historic Model S/X mix. Model 3 is heavily present in California and Tesla had the option to first serve Model 3 customers from ZEV states. With the Model S/X they didn't have that option, and those also have significant international deliveries.
From the table we can see that:
  • Per unit effective ZEV credit market price remained stable around $4.0k, in fact there was a small increasing trend - which surprised me, I expected a drop due to the higher unit count.
  • In 2018 Tesla has sold only $134.3m worth of ZEV credits so far, and probably accumulated around $148m in ZEV credits already from Q1 and Q2, using the historic ~$4k/unit rate.
  • With 50k-55k deliveries in Q3 Tesla would earn an incremental +$220m in Q3 under those assumptions just from the Model 3 - with 75k total units delivered that contribution could be up to $300m.
  • Even if we conservatively assume a drop in the market price for ZEV credits from $4k to $3k, that's 3*112k units, i.e. +$336m total
So that's an approximate $336m-$448m in possible ZEV credits in Q3, assuming $3k-$4k/unit market price and 55k deliveries plus the credits left over from Q1/Q2.

Note that even if we ignore buffering of Q1+Q2 of ZEV credits, the increased unit count of the Model 3 in Q3 should increase the ZEV income by significantly more than $100m: 75k units would map to $225m-$300m depending on the market price. Even if the per unit ZEV market price drops in half to $2k/unit, that would still be $150m, not $100m.

I.e. 3x-4x of the value you seem to be using if we go by the historic trend and 1.5x if we get very pessimistic.

Am I missing anything important there? (I haven't double checked the numbers in this post so any trivial math mistakes you see are likely mine.)

(BTW., a really stupid question, you are posting such nice tables, but I'm unable to find the markup syntax for that, and the editor doesn't seem to support it. What kind of syntax are you using to post tables? I used the CODE markup as a poor substitute.)
 
sorry it took so long to post an update. i had some reservations about assuming 150m in zev credits in q3, mainly because that would make the ttm zev credit total $380m, and i'm not sure the market is that large. the prior high for a 12 month window was $330m. some changes have been made to my historical estimates of various things. for example, asp for model 3 i took higher (and s/x lower) as i realized non-zev credits rolled into revenue would have to be modeled through higher asp's than what are calculated from public surveys.

my gaap estimates dropped a bit but stock comp is a meaningful factor there, so non-gaap earnings didn't change so much. cash generation also seems like it can be quite good.

i don't know about you guys, but i am getting a bit worn out always taking numbers and nudging them lower or extending them out. if these estimates turn out correct it's likely that any possible s&p 500 addition would get pushed out another 3-6 months (after 19q3 or 19q4 reports). at some point the bull market we are in will end and tesla will have to weather sales in a weaker economy and they definitely don't have enough profit cushion to do that now.
s deliveries
x deliveries
s+x deliveries
lease s/x % veh
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
1 time costs
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 q4-18e [/TD2][TD2] luv q3-18e [/TD2][TD2] Jun-18 [/TD2][TD2] Mar-18 [/TD2] [TD2]15,000[/TD2][TD2]15,000[/TD2][TD2]10,939[/TD2][TD2]11,738[/TD2] [TD2]13,000[/TD2][TD2]12,000[/TD2][TD2]11,380[/TD2][TD2]10,077[/TD2] [TD2] 28,000 [/TD2][TD2] 27,000 [/TD2][TD2] 22,319 [/TD2][TD2] 21,815 [/TD2] [TD2] 0.07 [/TD2][TD2] 0.07 [/TD2][TD2] 0.11 [/TD2][TD2] 0.11 [/TD2] [TD2] 103.00 [/TD2][TD2] 104.00 [/TD2][TD2] 105.14 [/TD2][TD2] 105.42 [/TD2] [TD2] 58.00 [/TD2][TD2] 60.00 [/TD2][TD2] 55.80 [/TD2][TD2] 56.80 [/TD2] [TD2]2,682,120[/TD2][TD2]2,611,440[/TD2][TD2]2,088,411[/TD2][TD2]2,046,829[/TD2] [TD2]3,480,000[/TD2][TD2]3,000,000[/TD2][TD2]1,029,454[/TD2][TD2]464,738[/TD2] [TD2]197,493[/TD2][TD2]201,052[/TD2][TD2]239,816[/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] 6,459,613 [/TD2][TD2] 5,912,492 [/TD2][TD2] 3,357,681 [/TD2][TD2] 2,735,317 [/TD2] [TD2]185,500[/TD2][TD2]140,450[/TD2][TD2]111,651[/TD2][TD2]185,022[/TD2] [TD2]237,600[/TD2][TD2]231,000[/TD2][TD2]262,757[/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]270,142[/TD2][TD2]263,412[/TD2] [TD2] 7,182,713 [/TD2][TD2] 6,583,942 [/TD2][TD2] 4,002,231 [/TD2][TD2] 3,408,751 [/TD2] [TD2]1,979,672[/TD2][TD2]1,928,467[/TD2][TD2]1,546,610[/TD2][TD2]1,517,446[/TD2] [TD2]2,714,400[/TD2][TD2]2,520,000[/TD2][TD2]983,129[/TD2][TD2]573,951[/TD2] [TD2]122,445[/TD2][TD2]124,652[/TD2][TD2]136,915[/TD2][TD2]104,496[/TD2] [TD2] 4,816,517 [/TD2][TD2] 4,573,119 [/TD2][TD2] 2,666,654 [/TD2][TD2] 2,195,893 [/TD2] [TD2]185,500[/TD2][TD2]147,473[/TD2][TD2]146,343[/TD2][TD2]217,863[/TD2] [TD2]166,320[/TD2][TD2]161,700[/TD2][TD2]183,930[/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]375,374[/TD2][TD2]369,969[/TD2] [TD2] 5,554,336 [/TD2][TD2] 5,277,291 [/TD2][TD2] 3,383,301 [/TD2][TD2] 2,952,225 [/TD2] [TD2] 1,628,376 [/TD2][TD2] 1,306,651 [/TD2][TD2] 618,930 [/TD2][TD2] 456,526 [/TD2] [TD2]29.4%[/TD2][TD2]29.5%[/TD2][TD2]27.7%[/TD2][TD2]28.6%[/TD2] [TD2]27.0%[/TD2][TD2]27.0%[/TD2][TD2]27.7%[/TD2][TD2]26.9%[/TD2] [TD2]22.0%[/TD2][TD2]16.0%[/TD2][TD2]4.5%[/TD2][TD2]-23.5%[/TD2] [TD2]24.3%[/TD2][TD2]21.3%[/TD2][TD2]20.6%[/TD2][TD2]18.2%[/TD2] [TD2]0.0%[/TD2][TD2]-5.0%[/TD2][TD2]-31.1%[/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]-39.0%[/TD2][TD2]-40.5%[/TD2] [TD2]360,000[/TD2][TD2]350,000[/TD2][TD2]341,129[/TD2][TD2]322,096[/TD2] [TD2]630,000[/TD2][TD2]620,000[/TD2][TD2]610,759[/TD2][TD2]551,404[/TD2] [TD2]0[/TD2][TD2]0[/TD2][TD2]103,434[/TD2][TD2]0[/TD2] [TD2]50,000[/TD2][TD2]45,000[/TD2][TD2]45,000[/TD2][TD2]45,000[/TD2] [TD2]145,000[/TD2][TD2]140,000[/TD2][TD2]140,000[/TD2][TD2]135,000[/TD2] [TD2] 1,185,000 [/TD2][TD2] 1,155,000 [/TD2][TD2] 1,240,322 [/TD2][TD2] 1,053,500 [/TD2] [TD2] 443,376 [/TD2][TD2] 151,651 [/TD2][TD2] -621,392 [/TD2][TD2] -596,974 [/TD2] [TD2]6,000[/TD2][TD2]6,000[/TD2][TD2]5,064[/TD2][TD2]5,214[/TD2] [TD2]-107,000[/TD2][TD2]-107,000[/TD2][TD2]-110,582[/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]50,911[/TD2][TD2]-37,716[/TD2] [TD2]0[/TD2][TD2]0[/TD2][TD2]0[/TD2][TD2]0[/TD2] [TD2] 277,376 [/TD2][TD2] -14,349 [/TD2][TD2] -728,999 [/TD2][TD2] -779,022 [/TD2] [TD2]19,999[/TD2][TD2]19,999[/TD2][TD2]13,707[/TD2][TD2]5,605[/TD2] [TD2] 257,377 [/TD2][TD2] -34,348 [/TD2][TD2] -742,706 [/TD2][TD2] -784,627 [/TD2] [TD2]-50,001[/TD2][TD2]-50,001[/TD2][TD2]-25,167[/TD2][TD2]-75,076[/TD2] [TD2] 307,378 [/TD2][TD2] 15,653 [/TD2][TD2] -717,539 [/TD2][TD2] -709,551 [/TD2] [TD2]172,000[/TD2][TD2]170,900[/TD2][TD2]169,997[/TD2][TD2]169,146[/TD2] [TD2]183,000[/TD2][TD2]181,900[/TD2][TD2]169,997[/TD2][TD2]169,146[/TD2] [TD2] 1.68 [/TD2][TD2] 0.09 [/TD2][TD2] -4.22 [/TD2][TD2] -4.19 [/TD2] [TD2]307,378[/TD2][TD2]15,653[/TD2][TD2]-717,539[/TD2][TD2]-709,551[/TD2] [TD2]208,000[/TD2][TD2]200,000[/TD2][TD2]197,344[/TD2][TD2]141,639[/TD2] [TD2]0[/TD2][TD2]0[/TD2][TD2]0[/TD2][TD2]0[/TD2] [TD2]515,378[/TD2][TD2]215,653[/TD2][TD2]-520,195[/TD2][TD2]-567,912[/TD2] [TD2] 2.82 [/TD2][TD2] 1.19 [/TD2][TD2] -3.06 [/TD2][TD2] -3.36 [/TD2] [TD2]3,476,567[/TD2][TD2]2,933,186[/TD2][TD2]2,236,424[/TD2][TD2]2,665,673[/TD2] [TD2]150,000[/TD2][TD2]130,000[/TD2][TD2]146,822[/TD2][TD2]120,194[/TD2] [TD2]1,180,720[/TD2][TD2]1,082,292[/TD2][TD2]569,874[/TD2][TD2]652,848[/TD2] [TD2]4,382,600[/TD2][TD2]4,626,666[/TD2][TD2]3,324,643[/TD2][TD2]2,565,826[/TD2] [TD2]374,443[/TD2][TD2]364,418[/TD2][TD2]422,034[/TD2][TD2]379,379[/TD2] [TD2] 9,564,329 [/TD2][TD2] 9,136,562 [/TD2][TD2] 6,699,797 [/TD2][TD2] 6,383,920 [/TD2] [TD2]2,209,363[/TD2][TD2]2,248,911[/TD2][TD2]2,282,047[/TD2][TD2]2,315,124[/TD2] [TD2]6,333,264[/TD2][TD2]6,336,631[/TD2][TD2]6,340,031[/TD2][TD2]6,346,374[/TD2] [TD2]11,933,736[/TD2][TD2]11,404,808[/TD2][TD2]10,969,348[/TD2][TD2]10,519,226[/TD2] [TD2]361,502[/TD2][TD2]361,502[/TD2][TD2]300,406[/TD2][TD2]346,428[/TD2] [TD2]60,237[/TD2][TD2]60,237[/TD2][TD2]64,284[/TD2][TD2]61,284[/TD2] [TD2]420,841[/TD2][TD2]427,841[/TD2][TD2]434,841[/TD2][TD2]449,754[/TD2] [TD2]440,000[/TD2][TD2]440,000[/TD2][TD2]399,992[/TD2][TD2]433,841[/TD2] [TD2]273,123[/TD2][TD2]273,123[/TD2][TD2]419,254[/TD2][TD2]415,478[/TD2] [TD2] 31,596,394 [/TD2][TD2] 30,689,614 [/TD2][TD2] 27,910,000 [/TD2][TD2] 27,271,429 [/TD2] [TD2]4,686,947[/TD2][TD2]4,684,499[/TD2][TD2]3,030,493[/TD2][TD2]2,603,498[/TD2] [TD2]2,370,000[/TD2][TD2]2,252,250[/TD2][TD2]1,814,979[/TD2][TD2]1,898,431[/TD2] [TD2]530,247[/TD2][TD2]539,739[/TD2][TD2]576,321[/TD2][TD2]536,465[/TD2] [TD2]600,000[/TD2][TD2]600,000[/TD2][TD2]674,255[/TD2][TD2]629,112[/TD2] [TD2]965,000[/TD2][TD2]965,000[/TD2][TD2]942,129[/TD2][TD2]984,823[/TD2] [TD2]1,500,000[/TD2][TD2]1,500,000[/TD2][TD2]2,020,685[/TD2][TD2]1,915,530[/TD2] [TD2]100,000[/TD2][TD2]100,000[/TD2][TD2]82,500[/TD2][TD2]82,500[/TD2] [TD2] 10,752,194 [/TD2][TD2] 10,641,488 [/TD2][TD2] 9,141,362 [/TD2][TD2] 8,650,359 [/TD2] [TD2]9,000,000[/TD2][TD2]9,200,000[/TD2][TD2]9,510,696[/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]2,594[/TD2][TD2]2,556[/TD2] [TD2]773,277[/TD2][TD2]787,119[/TD2][TD2]795,820[/TD2][TD2]818,250[/TD2] [TD2]650,000[/TD2][TD2]670,000[/TD2][TD2]584,857[/TD2][TD2]756,800[/TD2] [TD2]3,258,750[/TD2][TD2]3,118,500[/TD2][TD2]2,607,458[/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] 24,436,840 [/TD2][TD2] 24,419,725 [/TD2][TD2] 22,642,887 [/TD2][TD2] 21,551,021 [/TD2] [TD2]402,943[/TD2][TD2]402,943[/TD2][TD2]539,536[/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]821,156[/TD2][TD2]863,876[/TD2] [TD2] 5,856,612 [/TD2][TD2] 4,966,946 [/TD2][TD2] 3,906,421 [/TD2][TD2] 4,450,695 [/TD2] [TD2]257,377[/TD2][TD2]-34,348[/TD2][TD2]-742,706[/TD2][TD2]-784,627[/TD2] [TD2]465,416[/TD2][TD2]444,788[/TD2][TD2]485,255[/TD2][TD2]416,233[/TD2] [TD2]208,000[/TD2][TD2]200,000[/TD2][TD2]197,344[/TD2][TD2]141,639[/TD2] [TD2]35,000[/TD2][TD2]35,000[/TD2][TD2]35,074[/TD2][TD2]39,345[/TD2] [TD2]46,267[/TD2][TD2]33,246[/TD2][TD2]27,552[/TD2][TD2]18,546[/TD2] [TD2]45,000[/TD2][TD2]45,000[/TD2][TD2]66,613[/TD2][TD2]52,237[/TD2] [TD2]25,000[/TD2][TD2]25,000[/TD2][TD2]-41,476[/TD2][TD2]47,661[/TD2] [TD2]0[/TD2][TD2]0[/TD2][TD2]0[/TD2][TD2]0[/TD2] [TD2]0[/TD2][TD2]0[/TD2][TD2]9,669[/TD2][TD2]-3,984[/TD2] [TD2]-98,428[/TD2][TD2]-512,418[/TD2][TD2]70,633[/TD2][TD2]-169,142[/TD2] [TD2]283,614[/TD2][TD2]-1,268,887[/TD2][TD2]-822,487[/TD2][TD2]-419,277[/TD2] [TD2]0[/TD2][TD2]0[/TD2][TD2]-45,193[/TD2][TD2]-50,001[/TD2] [TD2]-15,000[/TD2][TD2]-15,000[/TD2][TD2]-1,863[/TD2][TD2]-57,583[/TD2] [TD2]70,198[/TD2][TD2]2,041,277[/TD2][TD2]591,737[/TD2][TD2]317,983[/TD2] [TD2]75,000[/TD2][TD2]65,000[/TD2][TD2]61,702[/TD2][TD2]45,795[/TD2] [TD2]0[/TD2][TD2]22,871[/TD2][TD2]-24,439[/TD2][TD2]67,359[/TD2] [TD2]0[/TD2][TD2]0[/TD2][TD2]42,484[/TD2][TD2]-60,560[/TD2] [TD2] 1,397,444 [/TD2][TD2] 1,081,530 [/TD2][TD2] -129,664 [/TD2][TD2] -398,376 [/TD2] [TD2]-700,000[/TD2][TD2]-600,000[/TD2][TD2]-609,813[/TD2][TD2]-655,662[/TD2] [TD2]-60,000[/TD2][TD2]-60,000[/TD2][TD2]-67,400[/TD2][TD2]-72,975[/TD2] [TD2] -760,000 [/TD2][TD2] -660,000 [/TD2][TD2] -682,817 [/TD2][TD2] -728,637 [/TD2] [TD2]0[/TD2][TD2]0[/TD2][TD2]0[/TD2][TD2]0[/TD2] [TD2]100,000[/TD2][TD2]100,000[/TD2][TD2]1,267,746[/TD2][TD2]1,775,481[/TD2] [TD2]-400,000[/TD2][TD2]0[/TD2][TD2]-879,328[/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]-113,426[/TD2][TD2]-87,092[/TD2] [TD2]75,000[/TD2][TD2]75,000[/TD2][TD2]31,053[/TD2][TD2]94,018[/TD2] [TD2]-30,000[/TD2][TD2]-30,000[/TD2][TD2]-29,395[/TD2][TD2]-18,787[/TD2] [TD2]-12,000[/TD2][TD2]-12,000[/TD2][TD2]-758[/TD2][TD2]-2,913[/TD2] [TD2]75,000[/TD2][TD2]75,000[/TD2][TD2]179,333[/TD2][TD2]73,704[/TD2] [TD2]-50,000[/TD2][TD2]-50,000[/TD2][TD2]-56,603[/TD2][TD2]-52,942[/TD2] [TD2]0[/TD2][TD2]0[/TD2][TD2]0[/TD2][TD2]-2,921[/TD2] [TD2] -142,000 [/TD2][TD2] 258,000 [/TD2][TD2] 398,622 [/TD2][TD2] 371,660 [/TD2] [TD2]47,937[/TD2][TD2]17,232[/TD2][TD2]-22,611[/TD2][TD2]10,102[/TD2] [TD2] 543,381 [/TD2][TD2] 696,762 [/TD2][TD2] -436,470 [/TD2][TD2] -745,251 [/TD2] [TD2] 2,933,186 [/TD2][TD2] 2,236,424 [/TD2][TD2] 2,665,673 [/TD2][TD2] 3,367,914 [/TD2] [TD2] 3,476,567 [/TD2][TD2] 2,933,186 [/TD2][TD2] 2,236,424 [/TD2][TD2] 2,665,673 [/TD2]
 
@luvb2b ,
Great work! Thanks! Good to see that, even after downward updates, your model predicts both GAAP and non-GAAP profits, and QOQ increase in cash flow and net cash balance. What is the current street estimate on these metrics?

Your model is showing a decent non-GAAP eps. Even if Tesla can’t make what you predict, but at least reach break-even, it will still be hugely positive and perceived as such by the market.
 
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Thanks for the new version, luvb2b. If you're getting a bit burnt out, take a break.

I think you've got the production/delivery counts lowballed. When I adjust them to match my expected delivery numbers (which aren't crazy high, 52000 instead of 50000 Model 3s in Q3), it makes a large difference to the bottom line. I also believe they will make it to 8000 Model 3/ week in Q1 or Q2 of 2019.

It looks to me like the sum of the last four quarters might be positive at the end of Q1 2019, but will definitely be positive at the end of Q2 2019 (as Q2 2018 is no longer on the rolling four-quarter sum). The report comes out circa August 4th. The S&P seems to issue rebalances on different days each month, but often around the 19th. Expect the S&P addition to happen in August or September. (Though earlier if the sum is better at the end of Q1, obviously.)
 
First post - long time lurker. Thank you to majority of you posters - I have learnt a lot over the past few years. An idea I had that I thought was worth sharing:

Countering FUD by Twitter is a good move but seems a little negative. Tesla don’t have a PR department of note. Elon’s tweets are all very discrete in as much as you have to piece together all the great things in your head to make TSLA a investment must have. Nobody is putting out a succinct story of all the products and features that Tesla will be coming out in the next few years. Dave T used to do this a bit in the good old days but I haven’t seen anything since. Is this something that we could collectively put together and then get published by Fred or Papafox now that he is a journo? Not sure I have the mad skillz to do it justice.

An extreme example of what could be included is car karaoke. Barely mentioned on here. Could we generate a bull case of 10,000 extra cars per year bought by fathers being asked for karaoke in 5 years from now? Valued at p/s of 2 would value it as 1 Bn USD market cap! Sounds crazy but how many iPhones are getting bought off the back of the Fortnite craze?

Individually, all these add up. Factchecking also made a great point that food and beverage companies will buy the semi so that hey can load up in their chilled warehouses and use the semi as a chilled warehouse indefinitely.
 
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@luvb2b Great work!

2 questions:
  1. you are showing 50k model 3 deliveries. Tesla was guiding for 50-55k production with deliveries exceeding this number (at the expense of fewer cars being "in transit"). I think they want to decrease the number of cars "in the channel". So even if the come in at the lower end for production, sales could still be a few thousands higher. Or are you projecting a bigger miss in production? Say 45-50k?
  2. for SGA you are showing flat to slightly up. Don`t you think the ~10% FTE they cut in Q2 has some impact here? Especially for Solar City SGA.
 
first, thanks for doing all this work. i went back and checked vs my data. your error here is not distinguishing between zev and non-zev credits. but, the good news is your totals for zev + non-zev credits are within 1m of my own for each of the years you posted.

for whatever reason, tesla lumps non-zev credits into regular revenue but separates out zev credits. zev credits are disclosed directly in the letters. non-zev requires a lot of manipulation to uncover, as you notel.

from a modeling perspective i followed tesla. zev credits i show should be lower than what you estimated, which is zev + non-zev. zev credits over the past few years seem to average out at 2.4k per vehicle sold. however we do know there is a limited market for them, so i think as volumes increase we should expect that average of 2.4k per vehicle to drop. for the past 4 quarters we currently stand at 1.8k per vehicle. in my modeling selling 150m of zev credits next quarter could bump the ttm zev credits per vehicle to 2.1k per vehicle. one analyst i talked to mentioned that tesla ir emphasized to him that credits would be a meaningful event in 2h18, so certainly 100-200m in quite possible for zev credits.

on non-zev credits, the trend has been steadily lower. at the end of 2013 these were around 2.5k per vehicle.
by the end of 2015 1.1k per vehicle. and in recent history only $750 per vehicle. these credits have just been merged into the revenue figures. i only started modeling the importance of this quarter. the impact is shift asp's higher by the amount of the non-zev credits. so where the true model 3 asp might be 55k, it should be modeled in my sheet as 55.75k. reported gross margins will automatically lift by 0.75% (for s/x) to 1.5% (for model 3).

to get my-apples-to-your-apples, take my 150m in zev credits for q3, then add 0.75k for 77k vehicles sold. works out to around 208m in total zev+non-zev credits estimated for q3.

i hope all that made sense. will try to follow with a full update shortly.

Useful site:
Zero Emission Vehicle Credits

Change the year in the URL to see prior fiscal years' annual reports. CARB changed the reporting period from Oct. to Sept. to Sept. to Aug. a year ago or so. The next report should be available in first part of October --before the next SH Letter. IIRC, ZEV credits garnered ~$2,300+/credit transferred in FY2016. The calculation is approximate because the SEC filings report all ZEV revenue, but the divisor is only credits transferred in California (about 12 other states have adopted California's regulations.)

Tesla reports regulatory credit income inconsistently. In general ZEV credit revenue is reported in SH letters and Total Regulatory Credit revenue (including CAFE/GHG credit sales) is reported in the MD&A section of 10Qs/10Ks (sometimes it's reported as a change from prior periods rather than as absolute numbers so you have to back into some quarters' reg credit details.

Tesla sold $30,3 million in CAFE/GHG credits in 1Q18 and $54 million in 2Q18. Regulatory credit revenue (and both gross & net profits) will increase in absolute terms but their contribution is unlikely to scale on a per car delivered basis with increasing volumes.
 
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this post expresses some personal frustration. mostly i'm frustrated because i knew the opex estimates had to be taken up, but somehow didn't get around to making the adjustments since the report & call. so it clouded my view of how good q3 could be. thankfully someone had the sense to ask why i was so different vs the street and i had some sense to go look.

Thanks for the new version, luvb2b. If you're getting a bit burnt out, take a break.

I think you've got the production/delivery counts lowballed. When I adjust them to match my expected delivery numbers (which aren't crazy high, 52000 instead of 50000 Model 3s in Q3), it makes a large difference to the bottom line. ...

It looks to me like the sum of the last four quarters might be positive at the end of Q1 2019, but will definitely be positive at the end of Q2 2019 (as Q2 2018 is no longer on the rolling four-quarter sum).

we'll get some more data after the insideev's august estimates. but i think they are having problems with deliveries. for example, july estimated 2 different ways was around 14k. 11k were in transit, and assuming those got delivered they were only able to deliver about a week of july production, meaning probably no change yet to the in-transit numbers.

at the end of august, maybe they got to 16-17k deliveries? that would be a substantial 20% month over month improvement. electrek noted yesterday they are trying to build out a delivery department (oh hello more opex).

2k model 3's should not make so much difference, right? 2k x 60k = 120m revenue x 16% gross margin = approx 20m in additional gross profit or around 10c/diluted share. diluted share counts should jump due to profits to 180m.

<rant>
i didn't mean the work is burning me out, i meant that the constant need to revise numbers lower one quarter after another is what's burning me out. there's another thing which bugs me, which is the readiness with which shortsellers are blamed for various problems. in the past when i have seen this by a company it almost always means there's not enough self-reflection going on: rather than finding problems internally the problems are all cast as caused by dark outside forces. i try to recall a case in 20 years of investing where this has been a good thing, but struggle to do so.

most professional shorts don't put on adequately large individual positions to matter. oft-cited villain chanos maybe has a 2-4% short allocation to tesla, at best. touting their best shorts is to raise visibility to attract more capital, if they get the call right. in fact, in some cases they don't even have to get the direction right to get paid, as long as the stock underperforms the index they still get paid. i guess what i'm saying is that on a $2b short book, the total bet might be $80m. if the stock drops 50% and the manager adds to the position, the profit might be $80m. at 1/20 hedge fund fees, the incremental profit contribution to the firm is like $16m. and while that may seem like a lot of money, it's really not in the grand scheme of things. i bet i know 4 individuals who put together have more at risk on the long side than $16m.

that's not to say there haven't been short villains (sac capital comes to mind). but the vast majority of professional shorts simply don't have bets large enough to bother, many are not dirty players either. so when a saboteur comes around, why aren't labor unions, other automakers, oil proxies, or foreign governments suspected? all of those actors have much more to gain than probably 99% of shorts.

i guess this especially bugs me in the context of opex, which i still don't understand. i mentioned it before: we scraped the barnacles. we scrutinized all the expense items. we laid of 9% of the workforce. we took out one-time charges due to layoffs. and we even excluded the stock-based comp jump from the calculations. and after all that, expenses went up about 3% for the quarter. there's definitely more upside opex pressure than i had expected.
</rant>

Thanks for the hard work.
2 more quarters and we can all take a break. Then maybe 1 year before the recession hit and we'll have to come back :)

recession has been on my mind a lot lately. weakness is developing in emerging markets due to currency issues. european equities have not made new highs since may. and mega caps in the usa have been on a monster run which is somewhat typical of the action near the end of a bull market. related to tesla, they are in a situation where they need to get the pedal to the floor and keep it there. payables expansion is great for cash flow but when there's a slow down it bites the other way, and luxury car sales tend to be sensitive to slowdowns. last thing, at present 2/3 of our models are cars. and the existing trend for car sales is:
IUSASAM_chart.png
can you imagine how this looks in a slowdown?

An extreme example of what could be included is car karaoke. Barely mentioned on here. Could we generate a bull case of 10,000 extra cars per year bought by fathers being asked for karaoke in 5 years from now? Valued at p/s of 2 would value it as 1 Bn USD market cap! Sounds crazy but how many iPhones are getting bought off the back of the Fortnite craze?

it's great fun to muse about all the possibilities. the business reality is the company has to get to sustainable profits and put itself in a condition where it can survive a downturn. once that has been accomplished, these blue-sky upside chances will be assigned greater value.

@luvb2b Great work!
2 questions:
  1. you are showing 50k model 3 deliveries. Tesla was guiding for 50-55k production with deliveries exceeding this number (at the expense of fewer cars being "in transit"). I think they want to decrease the number of cars "in the channel". So even if the come in at the lower end for production, sales could still be a few thousands higher. Or are you projecting a bigger miss in production? Say 45-50k?
  2. for SGA you are showing flat to slightly up. Don`t you think the ~10% FTE they cut in Q2 has some impact here? Especially for Solar City SGA.
1. electrek recently said 30k 3's built through august 25th or so. we should be able to build 20-25k or so for 8/25-9/30, but the highest production levels will probably come later in the quarter. that would get us to 50-55k production, but keeping 2-2.5 weeks of high production in the in-transit queue i think would limit deliveries. i view over 50k as a blessing, i think every other forecast i've had for 3 deliveries has been hopelessly optimistic. i'm not totally convinced the delivery infrastructure can handle 50-55k of flow either.

2. see above rant which includes opex comment. we should have seen some flattening or dip in q2 i thought, but not how it played out in reality.
 
sorry it took so long to post an update. i had some reservations about assuming 150m in zev credits in q3, mainly because that would make the ttm zev credit total $380m, and i'm not sure the market is that large. the prior high for a 12 month window was $330m. some changes have been made to my historical estimates of various things. for example, asp for model 3 i took higher (and s/x lower) as i realized non-zev credits rolled into revenue would have to be modeled through higher asp's than what are calculated from public surveys.

my gaap estimates dropped a bit but stock comp is a meaningful factor there, so non-gaap earnings didn't change so much. cash generation also seems like it can be quite good.

i don't know about you guys, but i am getting a bit worn out always taking numbers and nudging them lower or extending them out. if these estimates turn out correct it's likely that any possible s&p 500 addition would get pushed out another 3-6 months (after 19q3 or 19q4 reports). at some point the bull market we are in will end and tesla will have to weather sales in a weaker economy and they definitely don't have enough profit cushion to do that now.
s deliveries
x deliveries
s+x deliveries
lease s/x % veh
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
1 time costs
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 q4-18e [/TD2][TD2] luv q3-18e [/TD2][TD2] Jun-18 [/TD2][TD2] Mar-18 [/TD2] [TD2]15,000[/TD2][TD2]15,000[/TD2][TD2]10,939[/TD2][TD2]11,738[/TD2] [TD2]13,000[/TD2][TD2]12,000[/TD2][TD2]11,380[/TD2][TD2]10,077[/TD2] [TD2] 28,000 [/TD2][TD2] 27,000 [/TD2][TD2] 22,319 [/TD2][TD2] 21,815 [/TD2] [TD2] 0.07 [/TD2][TD2] 0.07 [/TD2][TD2] 0.11 [/TD2][TD2] 0.11 [/TD2] [TD2] 103.00 [/TD2][TD2] 104.00 [/TD2][TD2] 105.14 [/TD2][TD2] 105.42 [/TD2] [TD2] 58.00 [/TD2][TD2] 60.00 [/TD2][TD2] 55.80 [/TD2][TD2] 56.80 [/TD2] [TD2]2,682,120[/TD2][TD2]2,611,440[/TD2][TD2]2,088,411[/TD2][TD2]2,046,829[/TD2] [TD2]3,480,000[/TD2][TD2]3,000,000[/TD2][TD2]1,029,454[/TD2][TD2]464,738[/TD2] [TD2]197,493[/TD2][TD2]201,052[/TD2][TD2]239,816[/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] 6,459,613 [/TD2][TD2] 5,912,492 [/TD2][TD2] 3,357,681 [/TD2][TD2] 2,735,317 [/TD2] [TD2]185,500[/TD2][TD2]140,450[/TD2][TD2]111,651[/TD2][TD2]185,022[/TD2] [TD2]237,600[/TD2][TD2]231,000[/TD2][TD2]262,757[/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]270,142[/TD2][TD2]263,412[/TD2] [TD2] 7,182,713 [/TD2][TD2] 6,583,942 [/TD2][TD2] 4,002,231 [/TD2][TD2] 3,408,751 [/TD2] [TD2]1,979,672[/TD2][TD2]1,928,467[/TD2][TD2]1,546,610[/TD2][TD2]1,517,446[/TD2] [TD2]2,714,400[/TD2][TD2]2,520,000[/TD2][TD2]983,129[/TD2][TD2]573,951[/TD2] [TD2]122,445[/TD2][TD2]124,652[/TD2][TD2]136,915[/TD2][TD2]104,496[/TD2] [TD2] 4,816,517 [/TD2][TD2] 4,573,119 [/TD2][TD2] 2,666,654 [/TD2][TD2] 2,195,893 [/TD2] [TD2]185,500[/TD2][TD2]147,473[/TD2][TD2]146,343[/TD2][TD2]217,863[/TD2] [TD2]166,320[/TD2][TD2]161,700[/TD2][TD2]183,930[/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]375,374[/TD2][TD2]369,969[/TD2] [TD2] 5,554,336 [/TD2][TD2] 5,277,291 [/TD2][TD2] 3,383,301 [/TD2][TD2] 2,952,225 [/TD2] [TD2] 1,628,376 [/TD2][TD2] 1,306,651 [/TD2][TD2] 618,930 [/TD2][TD2] 456,526 [/TD2] [TD2]29.4%[/TD2][TD2]29.5%[/TD2][TD2]27.7%[/TD2][TD2]28.6%[/TD2] [TD2]27.0%[/TD2][TD2]27.0%[/TD2][TD2]27.7%[/TD2][TD2]26.9%[/TD2] [TD2]22.0%[/TD2][TD2]16.0%[/TD2][TD2]4.5%[/TD2][TD2]-23.5%[/TD2] [TD2]24.3%[/TD2][TD2]21.3%[/TD2][TD2]20.6%[/TD2][TD2]18.2%[/TD2] [TD2]0.0%[/TD2][TD2]-5.0%[/TD2][TD2]-31.1%[/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]-39.0%[/TD2][TD2]-40.5%[/TD2] [TD2]360,000[/TD2][TD2]350,000[/TD2][TD2]341,129[/TD2][TD2]322,096[/TD2] [TD2]630,000[/TD2][TD2]620,000[/TD2][TD2]610,759[/TD2][TD2]551,404[/TD2] [TD2]0[/TD2][TD2]0[/TD2][TD2]103,434[/TD2][TD2]0[/TD2] [TD2]50,000[/TD2][TD2]45,000[/TD2][TD2]45,000[/TD2][TD2]45,000[/TD2] [TD2]145,000[/TD2][TD2]140,000[/TD2][TD2]140,000[/TD2][TD2]135,000[/TD2] [TD2] 1,185,000 [/TD2][TD2] 1,155,000 [/TD2][TD2] 1,240,322 [/TD2][TD2] 1,053,500 [/TD2] [TD2] 443,376 [/TD2][TD2] 151,651 [/TD2][TD2] -621,392 [/TD2][TD2] -596,974 [/TD2] [TD2]6,000[/TD2][TD2]6,000[/TD2][TD2]5,064[/TD2][TD2]5,214[/TD2] [TD2]-107,000[/TD2][TD2]-107,000[/TD2][TD2]-110,582[/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]50,911[/TD2][TD2]-37,716[/TD2] [TD2]0[/TD2][TD2]0[/TD2][TD2]0[/TD2][TD2]0[/TD2] [TD2] 277,376 [/TD2][TD2] -14,349 [/TD2][TD2] -728,999 [/TD2][TD2] -779,022 [/TD2] [TD2]19,999[/TD2][TD2]19,999[/TD2][TD2]13,707[/TD2][TD2]5,605[/TD2] [TD2] 257,377 [/TD2][TD2] -34,348 [/TD2][TD2] -742,706 [/TD2][TD2] -784,627 [/TD2] [TD2]-50,001[/TD2][TD2]-50,001[/TD2][TD2]-25,167[/TD2][TD2]-75,076[/TD2] [TD2] 307,378 [/TD2][TD2] 15,653 [/TD2][TD2] -717,539 [/TD2][TD2] -709,551 [/TD2] [TD2]172,000[/TD2][TD2]170,900[/TD2][TD2]169,997[/TD2][TD2]169,146[/TD2] [TD2]183,000[/TD2][TD2]181,900[/TD2][TD2]169,997[/TD2][TD2]169,146[/TD2] [TD2] 1.68 [/TD2][TD2] 0.09 [/TD2][TD2] -4.22 [/TD2][TD2] -4.19 [/TD2] [TD2]307,378[/TD2][TD2]15,653[/TD2][TD2]-717,539[/TD2][TD2]-709,551[/TD2] [TD2]208,000[/TD2][TD2]200,000[/TD2][TD2]197,344[/TD2][TD2]141,639[/TD2] [TD2]0[/TD2][TD2]0[/TD2][TD2]0[/TD2][TD2]0[/TD2] [TD2]515,378[/TD2][TD2]215,653[/TD2][TD2]-520,195[/TD2][TD2]-567,912[/TD2] [TD2] 2.82 [/TD2][TD2] 1.19 [/TD2][TD2] -3.06 [/TD2][TD2] -3.36 [/TD2] [TD2]3,476,567[/TD2][TD2]2,933,186[/TD2][TD2]2,236,424[/TD2][TD2]2,665,673[/TD2] [TD2]150,000[/TD2][TD2]130,000[/TD2][TD2]146,822[/TD2][TD2]120,194[/TD2] [TD2]1,180,720[/TD2][TD2]1,082,292[/TD2][TD2]569,874[/TD2][TD2]652,848[/TD2] [TD2]4,382,600[/TD2][TD2]4,626,666[/TD2][TD2]3,324,643[/TD2][TD2]2,565,826[/TD2] [TD2]374,443[/TD2][TD2]364,418[/TD2][TD2]422,034[/TD2][TD2]379,379[/TD2] [TD2] 9,564,329 [/TD2][TD2] 9,136,562 [/TD2][TD2] 6,699,797 [/TD2][TD2] 6,383,920 [/TD2] [TD2]2,209,363[/TD2][TD2]2,248,911[/TD2][TD2]2,282,047[/TD2][TD2]2,315,124[/TD2] [TD2]6,333,264[/TD2][TD2]6,336,631[/TD2][TD2]6,340,031[/TD2][TD2]6,346,374[/TD2] [TD2]11,933,736[/TD2][TD2]11,404,808[/TD2][TD2]10,969,348[/TD2][TD2]10,519,226[/TD2] [TD2]361,502[/TD2][TD2]361,502[/TD2][TD2]300,406[/TD2][TD2]346,428[/TD2] [TD2]60,237[/TD2][TD2]60,237[/TD2][TD2]64,284[/TD2][TD2]61,284[/TD2] [TD2]420,841[/TD2][TD2]427,841[/TD2][TD2]434,841[/TD2][TD2]449,754[/TD2] [TD2]440,000[/TD2][TD2]440,000[/TD2][TD2]399,992[/TD2][TD2]433,841[/TD2] [TD2]273,123[/TD2][TD2]273,123[/TD2][TD2]419,254[/TD2][TD2]415,478[/TD2] [TD2] 31,596,394 [/TD2][TD2] 30,689,614 [/TD2][TD2] 27,910,000 [/TD2][TD2] 27,271,429 [/TD2] [TD2]4,686,947[/TD2][TD2]4,684,499[/TD2][TD2]3,030,493[/TD2][TD2]2,603,498[/TD2] [TD2]2,370,000[/TD2][TD2]2,252,250[/TD2][TD2]1,814,979[/TD2][TD2]1,898,431[/TD2] [TD2]530,247[/TD2][TD2]539,739[/TD2][TD2]576,321[/TD2][TD2]536,465[/TD2] [TD2]600,000[/TD2][TD2]600,000[/TD2][TD2]674,255[/TD2][TD2]629,112[/TD2] [TD2]965,000[/TD2][TD2]965,000[/TD2][TD2]942,129[/TD2][TD2]984,823[/TD2] [TD2]1,500,000[/TD2][TD2]1,500,000[/TD2][TD2]2,020,685[/TD2][TD2]1,915,530[/TD2] [TD2]100,000[/TD2][TD2]100,000[/TD2][TD2]82,500[/TD2][TD2]82,500[/TD2] [TD2] 10,752,194 [/TD2][TD2] 10,641,488 [/TD2][TD2] 9,141,362 [/TD2][TD2] 8,650,359 [/TD2] [TD2]9,000,000[/TD2][TD2]9,200,000[/TD2][TD2]9,510,696[/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]2,594[/TD2][TD2]2,556[/TD2] [TD2]773,277[/TD2][TD2]787,119[/TD2][TD2]795,820[/TD2][TD2]818,250[/TD2] [TD2]650,000[/TD2][TD2]670,000[/TD2][TD2]584,857[/TD2][TD2]756,800[/TD2] [TD2]3,258,750[/TD2][TD2]3,118,500[/TD2][TD2]2,607,458[/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] 24,436,840 [/TD2][TD2] 24,419,725 [/TD2][TD2] 22,642,887 [/TD2][TD2] 21,551,021 [/TD2] [TD2]402,943[/TD2][TD2]402,943[/TD2][TD2]539,536[/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]821,156[/TD2][TD2]863,876[/TD2] [TD2] 5,856,612 [/TD2][TD2] 4,966,946 [/TD2][TD2] 3,906,421 [/TD2][TD2] 4,450,695 [/TD2] [TD2]257,377[/TD2][TD2]-34,348[/TD2][TD2]-742,706[/TD2][TD2]-784,627[/TD2] [TD2]465,416[/TD2][TD2]444,788[/TD2][TD2]485,255[/TD2][TD2]416,233[/TD2] [TD2]208,000[/TD2][TD2]200,000[/TD2][TD2]197,344[/TD2][TD2]141,639[/TD2] [TD2]35,000[/TD2][TD2]35,000[/TD2][TD2]35,074[/TD2][TD2]39,345[/TD2] [TD2]46,267[/TD2][TD2]33,246[/TD2][TD2]27,552[/TD2][TD2]18,546[/TD2] [TD2]45,000[/TD2][TD2]45,000[/TD2][TD2]66,613[/TD2][TD2]52,237[/TD2] [TD2]25,000[/TD2][TD2]25,000[/TD2][TD2]-41,476[/TD2][TD2]47,661[/TD2] [TD2]0[/TD2][TD2]0[/TD2][TD2]0[/TD2][TD2]0[/TD2] [TD2]0[/TD2][TD2]0[/TD2][TD2]9,669[/TD2][TD2]-3,984[/TD2] [TD2]-98,428[/TD2][TD2]-512,418[/TD2][TD2]70,633[/TD2][TD2]-169,142[/TD2] [TD2]283,614[/TD2][TD2]-1,268,887[/TD2][TD2]-822,487[/TD2][TD2]-419,277[/TD2] [TD2]0[/TD2][TD2]0[/TD2][TD2]-45,193[/TD2][TD2]-50,001[/TD2] [TD2]-15,000[/TD2][TD2]-15,000[/TD2][TD2]-1,863[/TD2][TD2]-57,583[/TD2] [TD2]70,198[/TD2][TD2]2,041,277[/TD2][TD2]591,737[/TD2][TD2]317,983[/TD2] [TD2]75,000[/TD2][TD2]65,000[/TD2][TD2]61,702[/TD2][TD2]45,795[/TD2] [TD2]0[/TD2][TD2]22,871[/TD2][TD2]-24,439[/TD2][TD2]67,359[/TD2] [TD2]0[/TD2][TD2]0[/TD2][TD2]42,484[/TD2][TD2]-60,560[/TD2] [TD2] 1,397,444 [/TD2][TD2] 1,081,530 [/TD2][TD2] -129,664 [/TD2][TD2] -398,376 [/TD2] [TD2]-700,000[/TD2][TD2]-600,000[/TD2][TD2]-609,813[/TD2][TD2]-655,662[/TD2] [TD2]-60,000[/TD2][TD2]-60,000[/TD2][TD2]-67,400[/TD2][TD2]-72,975[/TD2] [TD2] -760,000 [/TD2][TD2] -660,000 [/TD2][TD2] -682,817 [/TD2][TD2] -728,637 [/TD2] [TD2]0[/TD2][TD2]0[/TD2][TD2]0[/TD2][TD2]0[/TD2] [TD2]100,000[/TD2][TD2]100,000[/TD2][TD2]1,267,746[/TD2][TD2]1,775,481[/TD2] [TD2]-400,000[/TD2][TD2]0[/TD2][TD2]-879,328[/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]-113,426[/TD2][TD2]-87,092[/TD2] [TD2]75,000[/TD2][TD2]75,000[/TD2][TD2]31,053[/TD2][TD2]94,018[/TD2] [TD2]-30,000[/TD2][TD2]-30,000[/TD2][TD2]-29,395[/TD2][TD2]-18,787[/TD2] [TD2]-12,000[/TD2][TD2]-12,000[/TD2][TD2]-758[/TD2][TD2]-2,913[/TD2] [TD2]75,000[/TD2][TD2]75,000[/TD2][TD2]179,333[/TD2][TD2]73,704[/TD2] [TD2]-50,000[/TD2][TD2]-50,000[/TD2][TD2]-56,603[/TD2][TD2]-52,942[/TD2] [TD2]0[/TD2][TD2]0[/TD2][TD2]0[/TD2][TD2]-2,921[/TD2] [TD2] -142,000 [/TD2][TD2] 258,000 [/TD2][TD2] 398,622 [/TD2][TD2] 371,660 [/TD2] [TD2]47,937[/TD2][TD2]17,232[/TD2][TD2]-22,611[/TD2][TD2]10,102[/TD2] [TD2] 543,381 [/TD2][TD2] 696,762 [/TD2][TD2] -436,470 [/TD2][TD2] -745,251 [/TD2] [TD2] 2,933,186 [/TD2][TD2] 2,236,424 [/TD2][TD2] 2,665,673 [/TD2][TD2] 3,367,914 [/TD2] [TD2] 3,476,567 [/TD2][TD2] 2,933,186 [/TD2][TD2] 2,236,424 [/TD2][TD2] 2,665,673 [/TD2]
Thanks

Is tesla energy and solarcity revenue accreted based on kwh and kw, repectively, or some other factors?

What are the reasons for the improvement in Services & Other gross margin ?
 
this post expresses some personal frustration. mostly i'm frustrated because i knew the opex estimates had to be taken up, but somehow didn't get around to making the adjustments since the report & call. so it clouded my view of how good q3 could be. thankfully someone had the sense to ask why i was so different vs the street and i had some sense to go look.



we'll get some more data after the insideev's august estimates. but i think they are having problems with deliveries. for example, july estimated 2 different ways was around 14k. 11k were in transit, and assuming those got delivered they were only able to deliver about a week of july production, meaning probably no change yet to the in-transit numbers.

at the end of august, maybe they got to 16-17k deliveries? that would be a substantial 20% month over month improvement. electrek noted yesterday they are trying to build out a delivery department (oh hello more opex).

2k model 3's should not make so much difference, right? 2k x 60k = 120m revenue x 16% gross margin = approx 20m in additional gross profit or around 10c/diluted share. diluted share counts should jump due to profits to 180m.

<rant>
i didn't mean the work is burning me out, i meant that the constant need to revise numbers lower one quarter after another is what's burning me out. there's another thing which bugs me, which is the readiness with which shortsellers are blamed for various problems. in the past when i have seen this by a company it almost always means there's not enough self-reflection going on: rather than finding problems internally the problems are all cast as caused by dark outside forces. i try to recall a case in 20 years of investing where this has been a good thing, but struggle to do so.

most professional shorts don't put on adequately large individual positions to matter. oft-cited villain chanos maybe has a 2-4% short allocation to tesla, at best. touting their best shorts is to raise visibility to attract more capital, if they get the call right. in fact, in some cases they don't even have to get the direction right to get paid, as long as the stock underperforms the index they still get paid. i guess what i'm saying is that on a $2b short book, the total bet might be $80m. if the stock drops 50% and the manager adds to the position, the profit might be $80m. at 1/20 hedge fund fees, the incremental profit contribution to the firm is like $16m. and while that may seem like a lot of money, it's really not in the grand scheme of things. i bet i know 4 individuals who put together have more at risk on the long side than $16m.

that's not to say there haven't been short villains (sac capital comes to mind). but the vast majority of professional shorts simply don't have bets large enough to bother, many are not dirty players either. so when a saboteur comes around, why aren't labor unions, other automakers, oil proxies, or foreign governments suspected? all of those actors have much more to gain than probably 99% of shorts.

i guess this especially bugs me in the context of opex, which i still don't understand. i mentioned it before: we scraped the barnacles. we scrutinized all the expense items. we laid of 9% of the workforce. we took out one-time charges due to layoffs. and we even excluded the stock-based comp jump from the calculations. and after all that, expenses went up about 3% for the quarter. there's definitely more upside opex pressure than i had expected.
</rant>



recession has been on my mind a lot lately. weakness is developing in emerging markets due to currency issues. european equities have not made new highs since may. and mega caps in the usa have been on a monster run which is somewhat typical of the action near the end of a bull market. related to tesla, they are in a situation where they need to get the pedal to the floor and keep it there. payables expansion is great for cash flow but when there's a slow down it bites the other way, and luxury car sales tend to be sensitive to slowdowns. last thing, at present 2/3 of our models are cars. and the existing trend for car sales is:
View attachment 330629
can you imagine how this looks in a slowdown?



it's great fun to muse about all the possibilities. the business reality is the company has to get to sustainable profits and put itself in a condition where it can survive a downturn. once that has been accomplished, these blue-sky upside chances will be assigned greater value.


1. electrek recently said 30k 3's built through august 25th or so. we should be able to build 20-25k or so for 8/25-9/30, but the highest production levels will probably come later in the quarter. that would get us to 50-55k production, but keeping 2-2.5 weeks of high production in the in-transit queue i think would limit deliveries. i view over 50k as a blessing, i think every other forecast i've had for 3 deliveries has been hopelessly optimistic. i'm not totally convinced the delivery infrastructure can handle 50-55k of flow either.

2. see above rant which includes opex comment. we should have seen some flattening or dip in q2 i thought, but not how it played out in reality.
The problem with being a quant is maybe all the quals are too focused on what could be.
 
Thanks

Is tesla energy and solarcity revenue accreted based on kwh and kw, repectively, or some other factors?

What are the reasons for the improvement in Services & Other gross margin ?

correct, for te i am assumiing 265 mwh deployed in q3 and 350 mwh deployed in q4.
for solar, 75mw of solar deployments each of the quarters. revenue climbs due to increase in non-lease sales.

services & other i am hopeful that better utilization of service infrastructure results in some improvement. but it's mostly a wag. potential 30m error on the gross profit if i'm wrong, so -18c/sh swing to bottom line could come from there.
 
correct, for te i am assumiing 265 mwh deployed in q3 and 350 mwh deployed in q4.
for solar, 75mw of solar deployments each of the quarters. revenue climbs due to increase in non-lease sales.

services & other i am hopeful that better utilization of service infrastructure results in some improvement. but it's mostly a wag. potential 30m error on the gross profit if i'm wrong, so -18c/sh swing to bottom line could come from there.

Services & Other is a crap shoot; and, IMO, likely driven by resales of off-lease and RVG returns--IIRC many 2 year leases from the "pie" quarter mature during 3Q18-OTOH phase-out of EV credit should juice resale values.
 
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2. see above rant which includes opex comment. we should have seen some flattening or dip in q2 i thought, but not how it played out in reality.

So I certainly understand why you are cautious with deliveries... just wanted to understand the reasons.

As for your "rant" about SGA.... I translated the timing of cutting workforce for myself as being carefully engineered: It happened so late in the quarter there would be almost no positive impact in Q2, but all the negatives (severance) would hit that Q. As in, it`s gonna be our last quarter in red anyway, let`s throw in everything negative to make sure Q3 starts with less of a burden.

So i expect all positive impacts of that move to start hitting the books in Q3. How much will it actually mean? No idea. They made it sound like mostly white collar executive jobs, so probably relatively good pay/high impact. Could be 15-20 million per month if we go with 3500 jobs and avg 5k+ per month.