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Q3 2013 results - projections and expectations

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CapitalistOppressor

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Jun 18, 2012
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I really hope this ends up being excellent for us...

Maybe not for the stock. I am hedged against a move down though, so my primary concern was that they would demonstrate continued strength in the North American market, which they did, with ~4,500 deliveries despite stretching to fulfill ~1,000 European orders and filling that distribution pipeline.

- - - Updated - - -

VIN method completely discredited.

I'm shocked that it was still debated at this late date. It was discredited starting after around the first week of June when they went to a different system for VIN assignment. Everyone should have been clear that they were skipping VIN's and randomly assigning into vertical production bins.
 
My sense is that they decided to stop pumping quarterly results, and rather do what's best for the long term. Fill the in-transit pipeline, invest in stores, R&D, loaners, etc. etc. As a long term investor, I appreciate that. They take a hit this quarter, and with a low-balled guidance for next quarter they set up a good comeback then. They also save the 2014 guidance for then.

Watch also how the stock will climb during the call - listening to Elon explain the progress is always so reassuring. :)
 

CapitalistOppressor

Active Member
Jun 18, 2012
1,622
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My sense is that they decided to stop pumping quarterly results, and rather do what's best for the long term. Fill the in-transit pipeline, invest in stores, R&D, loaners, etc. etc. As a long term investor, I appreciate that. They take a hit this quarter, and with a low-balled guidance for next quarter they set up a good comeback then. They also save the 2014 guidance for then.

Watch also how the stock will climb during the call - listening to Elon explain the progress is always so reassuring. :)

Yes, my expectation is that they have a substantial number of vehicles in transit. There should be something like 300-500 in North America and a similar number in transit to Europe based on known weekly production rates in Q3 (I endorse DaveT's well thought out estimates, so somewhere ~6,300 total produced) and the number of vehicles that were likely in transit at the end of Q2.
 
Yes, my expectation is that they have a substantial number of vehicles in transit. There should be something like 300-500 in North America and a similar number in transit to Europe based on known weekly production rates in Q3 (I endorse DaveT's well thought out estimates, so somewhere ~6,300 total produced) and the number of vehicles that were likely in transit at the end of Q2.

Albeit the North American pipeline would be pretty similar in Q2 and Q3 (maybe 40-50 less in Q3). I believe they produced 6,050 cars. Say that 150 went to loaners and show rooms, and that 100 were in transit to Europe at the start of Q3. That makes the EU transit pipeline ~550. That is the figure I will use for Q4 projections.
 

Mario Kadastik

Active Member
Sep 5, 2013
2,189
1,405
Rae, Harjumaa, Estonia
Interesting for me is that the Customer deposits number has slightly increased in comparison to end of year 2012. This means that even though they've delivered 15.5k cars including almost all signatures the deposits are at the same amount. So the Model X reservations as well as deposits for Model S are at least on par in the pipeline and considering that the mean deposit for MS is far lower now the Model X can be the only thing offsetting it. We have $140M deposits. Can someone estimate from the Model X tally how many Model S are around in that deposit queue...
 

Mario Kadastik

Active Member
Sep 5, 2013
2,189
1,405
Rae, Harjumaa, Estonia
There are things that mean issues in short term like MX now mentioned volume in Q2 2015, not pulled forward. The battery constraint STILL there etc. So short term (Q4, Q1) I think we'll have issues with stock movements. But long term there are huge good news like the gigaplant and demand and cash flow with growth etc.

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Ok, my webcast went silent just as the G&S question was finalized and I head "Alright, thank you...". Did anything else continue there or did they just slap on the formalities and stop?
 

CapitalistOppressor

Active Member
Jun 18, 2012
1,622
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Yeah, probably that. I need to be in the former group 100%, not have one foot in the other camp. ;-)

Boom! Higher North American demand in Q3 than Q2. They are just piling it on.

Yes, the higher NA demand wasn't obvious just from the letter. Continued strong demand was though IMHO. I don't see what the market is doing right now as being justified, but then again the stock is based on psychology so who am I to complain?
 
There are things that mean issues in short term like MX now mentioned volume in Q2 2015, not pulled forward. The battery constraint STILL there etc. So short term (Q4, Q1) I think we'll have issues with stock movements. But long term there are huge good news like the gigaplant and demand and cash flow with growth etc.

Well, if they moved Model X forward that would create suspicion that Model S demand is soft... ;-)

Ok, my webcast went silent just as the G&S question was finalized and I head "Alright, thank you...". Did anything else continue there or did they just slap on the formalities and stop?

Formalities and stop. The exact wording: "You may now disconnect and have a great day." I found that a bit funny. ;-)
 
Q3 Conference call

Share your thoughts on the Q3 conference call - Tesla - Events Presentations


I'll start...

Batteries touched almost every aspect of everything significant during the quarter and their expectations going forward.

My notes:

1. Battery constraints - Elon's comment about starving North America to feed Europe was very telling. Battery supply is still a huge, unresolved issue. Even though Panasonic is stepping up, it's not enough to meet demand.

2. Production constrained, not demand constrained - Elon and team emphasized and reiterated several times during the call. I almost sensed disappointment and frustration at their realization that battery supply is holding them back for MS and MX. This could have been a massive blowout quarter if there were more batteries.

3. They're expecting 60% of their sales overseas - Plan on having more cars in transit in future quarters, further muting the near term delivery numbers, but also understanding their true growth. Boy, I wish they'd release monthly production numbers. Lacking that, VIN counting is the best we've got.

4. 2014 will be year of aggressive global expansion, even if they're supply constrained. Building a global sales and distribution platform, and doing it while maintaining cash flow positive (big deal!).

5. China coming, but will be supply constrained - Sounds like they'll ship cars to China around the July/August timeframe, just because they need to, but wait times there will increase dramatically as US, Europe, South Africa and the rest of the world compete for limited supply of cars. They've done a "soft launch," meaning they're there but they haven't made effort to promote their presence.

6. Giga factory - Elon all but confirmed that a giga factory is going to be built in North America, likely in partnership or a joint venture with someone (my guess: Panasonic). Will aim to produce as much capacity as sum total of what's produced today worldwide. It'll be a green factory, solar powered, with integrated cell pack recycling. They're investigating sites now. My guess: Probably west coast for the sake of logistics and solar radiation - http://www.nrel.gov/gis/images/eere_csp/national_concentrating_solar_2012-01.jpg

5. The mood seemed muted.

6. The next couple quarters will be all about laying the infrastructure for what comes next.

7. The questions were yielding great information in the answers. I wanted to hear more Q&A. Why'd they cut the call short to about 50 minutes? Why not go to 90 minutes? It annoyed me that one of the analysts said he'd take his question offline, while small investors don't have that access. TSLA should do a town hall with TM investors to answer questions at Questions For Q3 Conference Call

For long term longs, there's a lot here to bolster the long term story, with battery supply being the #1 execution risk.
 
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