I do not think Tesla would guide to less than 40,000 cars in 2014 because it will contradict the information available from Panasonic. I have a feeling that few thoughtful and diligent analysts that do ask the questions during the ER calls would likely challenge Tesla during the call if their official guidance will be lower. In fact I might ask this question if none of the analysts will be up to it. :smile:
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I do not think Tesla would guide to less than 40,000 cars in 2014 because it will contradict the information available from Panasonic. I have a feeling that few thoughtful and diligent analysts that do ask the questions during the ER calls would likely challenge Tesla during the call if their official guidance will be lower. In fact I might ask this question if none of the analysts will be up to it. :smile:
Benz
Active Member
Maybe it's yet a bit too early (because up to now we only have figures of 4 quarterly earnings reports) but we could start a graph that shows the rise of the number of deliveries of the Tesla Model S per quarter that already has been realised/reported. And besides of that line we could also add a line (of a different colour) in the same graph that shows a certain "to be expected" prediction of the number of deliveries of the Tesla Model S per quarter that still have to be realised/reported.
Realised/Reported:
Q3 2012: 250
Q4 2012: 2,400
Q1 2013: 4,950
Q2 2013: 5,150
Yet to be realised/reported:
Q3 2013: 6,500?
Q4 2013: 8,500?
Q1 2014: 10,000?
Q2 2014: 12,000?
This graph could then be updated after every earnings report.
I wonder if there is a demand for such a graph anyway. It's just an idea.
Realised/Reported:
Q3 2012: 250
Q4 2012: 2,400
Q1 2013: 4,950
Q2 2013: 5,150
Yet to be realised/reported:
Q3 2013: 6,500?
Q4 2013: 8,500?
Q1 2014: 10,000?
Q2 2014: 12,000?
This graph could then be updated after every earnings report.
I wonder if there is a demand for such a graph anyway. It's just an idea.
Great post DonPedro. Now that you made a couple of "edits", I am inclined to agree with you completely.
I just wanted to point out that when I said 7,000 max, I was referring to number of cars produced. I agree with you that you have to subtract -150 and -500 (give or take), which means that in my opinion there is less than a 1% we exceed 6,350 delivered. Some people are talking like 6,500 is a done deal and I would be careful using that number when deciding which options to purchase (if you are into that stuff, and a lot of people are on this forum).
I have not had the time to run the numbers, so that 6,350 is likely to go down from here and end up closer to my original estimate from September (that DonPedro pointed out) of 6,000 delivered.
If Tesla did deliver 6,500 cars then it would be a 30% beat vs. guidance and imo they would have to preannounce earnings. I actually bought some options to play this potential preannouncement, but have sold them since it didn't materialize. If they were to do a preannouncement, it would have been done by last week. I think that we are getting too close to earnings to do it now.
Even at 6,000 delivered, that is still a 20% beat and on the border of preannouncement territory.
One data point that we do have is the Deutsche Bank expectations that Tesla will hit a 600/week production run rate by the end of the year. I quickly dismissed this, since DB also said that deliveries in Q3 will be similar to Q2; and we all know that they will be at least 10% higher.
But from my experience working as an analyst, I know that these analysts have access to management and inside information (this is inevitable and as much as the SEC wants to level the playing field, simply talking to Elon gives you some kind of edge and inside information; that is why these analysts can't trade the stocks they cover). Therefore, maybe this analyst knows something that we don't. Since DB is the most bullish analyst (sorry Wedbush, nobody cares...), companies tend to give these guys the best information. Not saying that is what Elon does, but it is just human nature to supply the most bullish analyst with the best info.
On a different note, I passed along info that I have heard from multiple sources that Tesla is aiming for 800/week production by end of 2013. I first heard this 3 or 4 months ago and these are just unsubstantiated rumors that could have come from the same source. I am just passing along this information since people always ask for things like this and that is the whole benefit of having this community - to share any and all information.
It is up to each individual to weed out the bad information from the good.
As I pointed out already, I am about 98% in solar right now and only have a couple minor TSLA bull call spreads, as well as 1 share of TSLA. My main focus right now is on solar, because I personally like that risk/reward (a lot) better. I still think that TSLA is a great long term investment and that the stock will double again by the end of next year, but I am not heavily invested as some people here so please do your due diligence before making investment decisions based on rumors.
I think that we are getting close to a period where buying shares and LEAPS is the best way to play TSLA. Short-term options to "play" the earnings are going to be hit or miss. I still think that we will have a great Q3 and the stock will pop 10%, but that is not enough to make good gains on options vs. the amount of risk you are taking. That said, I will probably buy a couple of Nov calls before earnings, but I will do it more for the adrenaline rush this time than to make a lot of money. It is not as easy anymore as it was during Q1.
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I totally agree, Sleepyhead, although I think Q3 will be strong enough for a short term adventure.
Here is my projection (non-GAAP):
About the assumptions:
- 6000 cars delivered: See previous post
- $105k ASP: I am going to go for a very strong number here, due to EU sigs and high specced cars. Q1 was $98.4k and Q2 was $97.3k (dropped due to S60s coming into production big time)
- ZEV credits: Was $68M in Q1 and $51M in Q2. Has been guided to zero in Q4. Lacking other data I assume $25M. The bottom line is highly sensitive to this assumption
- Dev't services: Were $6.6M in Q1 and $3.6M in Q2. $1M feels right based on that trend.
- 20% gross margin excl. ZEV credits. Development in recent quarters is -3% ---> 6% ---> 14%. Guided to 25% in Q4. Seems reasonable that they would improve 6% in Q3 and 5% in Q4.
- R&D expenses: Recent quarters: $68M ---> $47M ---> $44M. $41M sounds right.
- Selling and G&A: Recent quarters: $31M ---> $41M ---> $50M. Given continued rapid expansion of stores, service centers and superchargers, $60M sounds right.
PS: Note how sensitive the Net Income is to ZEV credits. If you set them to zero, then almost half the projected earnings are gone. If you set them to Q2 levels, you increase projected earnings almost by half.
Here is my projection (non-GAAP):
| Cars and CARB credits | 6000 cars x $105k ASP | 630 000 |
| ZEV credits | Guesstimate | 25 000 |
| Development services | Guesstimate | 1 000 |
| Total revenues | 656 000 | |
| Gross profit | 20% GM ex. ZEV | 157 510 |
| R&D expenses | 41 000 | |
| Selling, G&A expenses | 60 000 | |
| Net income | 56 510 | |
| Net income/share | 0.47 |
- 6000 cars delivered: See previous post
- $105k ASP: I am going to go for a very strong number here, due to EU sigs and high specced cars. Q1 was $98.4k and Q2 was $97.3k (dropped due to S60s coming into production big time)
- ZEV credits: Was $68M in Q1 and $51M in Q2. Has been guided to zero in Q4. Lacking other data I assume $25M. The bottom line is highly sensitive to this assumption
- Dev't services: Were $6.6M in Q1 and $3.6M in Q2. $1M feels right based on that trend.
- 20% gross margin excl. ZEV credits. Development in recent quarters is -3% ---> 6% ---> 14%. Guided to 25% in Q4. Seems reasonable that they would improve 6% in Q3 and 5% in Q4.
- R&D expenses: Recent quarters: $68M ---> $47M ---> $44M. $41M sounds right.
- Selling and G&A: Recent quarters: $31M ---> $41M ---> $50M. Given continued rapid expansion of stores, service centers and superchargers, $60M sounds right.
PS: Note how sensitive the Net Income is to ZEV credits. If you set them to zero, then almost half the projected earnings are gone. If you set them to Q2 levels, you increase projected earnings almost by half.
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JRP3
Hyperactive Member
I don't think there is a requirement. Companies do it because they want the stock price to have a chance to catch up to fundamentals.
When the preannouncement is because of bad earnings, the companies tend to spill all the beans up front. When the preannouncement is good, the companies only tend to give half of the information, such as TSLA during Q1 or SOL during Q2, so that leaves them more ammo for the actual earnings call.
Companies preannounce for transparency reasons and are not required to do so. At least this is my understanding.
FYI DonPetrol, I am "brianstorms" not "briansman"
LOL, sorry. I will update to ensure further errors.
Well, the relation of Tesla's stock price and classic stock fundamentals is pretty tenuous anyway
, so I'm not sure that'd be a motivation to pre-announce at this point in Tesla's history.Don I just want to point out the train wreck. If Cars were written off due to the wreck Tesla would still get the money for those cars via insurance. Now of course we have no way of knowing when Tesla would receive the insurance check, but you cant say those cars disappear, they will be realized when the Insurance check clears.
The torn in my side is the level of EU cars from Q2 realized in Q3 and the number for cars in transit at the end of Q3. I am real curious to know these numbers. We can get a good idea on the out going of Q2. With 800 just in Norway we could assume Tesla batched roughly 1000 cars for the EU. Its hard to figure out timing but lets just make it 600 for rounding reasons. 600 + the 5150 = 5750 cars for Q2. 5750* your 12.8% would be 6486 produced for Q3. Assuming the outgoing to EU in Q2 to be realized in Q3 vs the outgoing in Q3 to be in Q4 to be the same amount of cars. So your increase of 12.8% nearly directly matches my 6500 number for the quarter, if i am correct and we had 600 in transit to the EU at end of Q2. Anyone have a more accurate number for in transit Q2?
I think your 105k ASP is a bit high. S60s are still being sold here in the US so it would drag on the high ASP cars in the EU. But we also have the price increases for options. I would venture a guess the ASP at just at or under 100k.
The torn in my side is the level of EU cars from Q2 realized in Q3 and the number for cars in transit at the end of Q3. I am real curious to know these numbers. We can get a good idea on the out going of Q2. With 800 just in Norway we could assume Tesla batched roughly 1000 cars for the EU. Its hard to figure out timing but lets just make it 600 for rounding reasons. 600 + the 5150 = 5750 cars for Q2. 5750* your 12.8% would be 6486 produced for Q3. Assuming the outgoing to EU in Q2 to be realized in Q3 vs the outgoing in Q3 to be in Q4 to be the same amount of cars. So your increase of 12.8% nearly directly matches my 6500 number for the quarter, if i am correct and we had 600 in transit to the EU at end of Q2. Anyone have a more accurate number for in transit Q2?
I think your 105k ASP is a bit high. S60s are still being sold here in the US so it would drag on the high ASP cars in the EU. But we also have the price increases for options. I would venture a guess the ASP at just at or under 100k.
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I had my VIN assigned in Q2 (June 09) and was following various threads on this Forum pretty closely at that time. My long standing conclusion based on information gleaned from various posts was that there were indeed large blocks of European VINs assigned during the Q2. I think that your main premise for dismissing VIN assignment=Production during Q3 is not accurate. Since there were large number of VINs for European deliveries assigned prior to Q3, this pipe was already primed, so to speak.
I need to do little more research to provide exhaustive data confirming my conclusion, but here is quick link to your own post indicating assignment of european VINs in Q2: :smile:
http://www.teslamotorsclub.com/show...ntial-Surprise?p=361116&viewfull=1#post361116
Could clarify why you think that there were no European VINs assigned in Q2?
You are right of course, except it is unclear whether the insurance would cover the sales price (which would give Tesla a margin on the cars), or whether it would cover the production cost (which wouldn't). However, I think we can assume that the number of cars was very limited (a few dozen at most), so this is not really important anyway.
I believe you are way out in the woods on this one. It takes about 45-50 days from the end of production and until a car is delivered in Europe. This means that the carry-over would be delivered in July and the first half of August. The first Model S was delivered in Norway on August 7 and in the Netherlands on August 22. This shows clearly how late in June they started production for the EU, and how few cars that really meant. By the end of August, 186 had been registered in Norway, 6 in the Netherlands and 45 in Switzerland, for a grand total of 237. That is the absolute maximum possible figure for the carry-over. Most of these deliveries were made in the last week of August, and I think those cars were produced in early July. Furthermore, some of these cars would be showroom cars and loaners. Therefore I have assumed that the carry-over was 100 cars. If I am wrong, it could be 150, 200 or even 250. But certainly not more than that.
There is a factory visit report that refers to a sign celebrating 5,454 cars produced in Q2. That is quite consistent with what I wrote above.
Quite possible. The ASP feels like the most bullish of my assumptions. However, there was a surge of S60s in Q2, since that is when they started production. Now it should be more "averaged out". And I can sure tell you that Norwegian cars are very high specced - maybe 50% P80s and many of those P80+, and most people taking a significant portion of the upgrades. To some extent this is likely to be the same in the rest of Europe. I am very confident that we will be above the $98k from Q1. In my initial analysis I put $103k - maybe that is a good assumption.
Good point on the carry over. Thanks for clearing that up for me. That is the one thing I had not taken the time to investigate closely.
It will be interesting to see what kind of carry over from Q3 to Q4 there will be. If they plan on keeping it love to keep ER numbers up.
As citizen t pointed out guidance is going to be key. Since we have reports of 700 a week production, no factual eveidence though, if it turns out those production constraints have been cleared up and Tesla can guide for 700 a week in Q4, this would be awesome.
It will be interesting to see what kind of carry over from Q3 to Q4 there will be. If they plan on keeping it love to keep ER numbers up.
As citizen t pointed out guidance is going to be key. Since we have reports of 700 a week production, no factual eveidence though, if it turns out those production constraints have been cleared up and Tesla can guide for 700 a week in Q4, this would be awesome.
I didn't say "no European VINs", i said "not many". But I didn't state my point clearly, so I will restate it: When we are looking at production rates for a quarter, we want to get to a number that is a few hundred cars away from what the actual production is. That means that, for VINs to be a useful metric, the number of pre-assigned VINs at the start of each quarter would have to vary by at most a few hundred. There is no reason to believe it is that stable. Between any two quarters, the number of pre-assigned VINs could for instance increase by 1000 or decrease by 1000 - we would not be able to tell. That means there could be a 2000 cars margin of error to a prediction based on VINs.
In fact, I think it is a reasonable assumption that Tesla started the practice of pre-allocating VINs with the exact purpose of obscuring this information. (Why else would they assign VINs more or less at random - some people get them assigned a few weeks in advance, others many months, some cars get produced together for which VINs were allocated at wildly different times, and nobody has been able to find any system or logic to the assignments). As long as it is likely that Tesla is intentionally obscuring the VIN count, there is every reason to believe that the metric has little information value.
UPDATE: Just for the fun of it I read the first posts of the thread that emerged when the first batch of VINs was assigned in the EU (June 12). One of the first guys who posted his VIN then has not yet got his car. On the other hand, many sigs who were expecting to be first in line did not get VINs assigned for a long time. One of them wrote to Tesla to ask why, and got the following response (my translation and emphasis):
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I updated my numbers (car registrations for Q 3 per country). Some explanations:
EDIT: Some show cars and loaners probably should be subtracted since they are registered but not sold/delivered.
- US numbers for august and september are supposedly registration data from Polk (although i am not 100% sure).
- Sweden and France are missing direct data sources and i think these numbers might be a bit on the low side
- these are car registrations and therefore these should be deliveries in Tesla's books (non-GAAP), but maybe there are reasons for Tesla to discount some of these deliveries (although i cant think of one)
EDIT: Some show cars and loaners probably should be subtracted since they are registered but not sold/delivered.
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This is a quote from Deutsche Bank report released on 18 Sep 2013.
"Finally, we believe that the production rate continues to rise, as Tesla breaks supply chain bottlenecks. We expect that Tesla will achieve its 600/week 2013YE target sometime in Q4. Despite the production increase, we believe that deliveries will be similar to Q2 (as Tesla guided to) because vehicles in-transit to Europe will be substantially higher at the end of Q3 than the end of Q2."
"Finally, we believe that the production rate continues to rise, as Tesla breaks supply chain bottlenecks. We expect that Tesla will achieve its 600/week 2013YE target sometime in Q4. Despite the production increase, we believe that deliveries will be similar to Q2 (as Tesla guided to) because vehicles in-transit to Europe will be substantially higher at the end of Q3 than the end of Q2."
If I recall correctly, you were very accurate in using this methodology last quarter. Do I remember correctly? Has anything changed in the reliability of your info/method? If not, this (~6600 deliveries) is pretty bullish for Q3.
Last time i used the VIN-based method. This time its car registrations. I would think this method is a more accurate one but to be honest 6600 deliveries seems pretty bullish to me as well.
I think i found the flaw: Show cars and loaners are registered as well but they dont count as deliveries. On the other hand: Most loaners have been sold at the end of the quarter according to the rumor mill.
Oh well...back to work. I have to come up with a number for these.
Thanks for the clarification. A couple comments: looks like your numbers for July and August for US vary slightly from the sources. Also, cant find your source for US September in the link. Thanks!
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