Q3 2013 results - projections and expectations

[Clprenz]

the 500/200 idea seems to be right. The increase in production could be from the new European assembly plant. I would suspect that they can produce the parts and such here and then assemble it all over their easier. Then they don't have to hire more assembly workers here. We also have to realize that this could mean that they have figured out some of the battery supplier problems. Either way, more production means generally higher margin and of course more revenue.

 

[Norse]

the 500/200 idea seems to be right. The increase in production could be from the new European assembly plant. I would suspect that they can produce the parts and such here and then assemble it all over their easier. Then they don't have to hire more assembly workers here. We also have to realize that this could mean that they have figured out some of the battery supplier problems. Either way, more production means generally higher margin and of course more revenue.

According to the guy at Tesla in Bergen, Norway, Tesla produces 250 cars for Europe each week.

 

[Yuri_G]

185 Modes S's registered in Norway last month. I think 1000 deliveries in Europe may be what we hit this quarter.

http://www.elbil.no/elbiler/1079-tesla-bidrar-sterkt-til-ny-elbilrekord

 

[Buran]

the 500/200 idea seems to be right. The increase in production could be from the new European assembly plant. I would suspect that they can produce the parts and such here and then assemble it all over their easier. Then they don't have to hire more assembly workers here. We also have to realize that this could mean that they have figured out some of the battery supplier problems. Either way, more production means generally higher margin and of course more revenue.

As far as i understand (there have been plenty of info on this else were at the forum) they completely assemble cars for both EU and US in the factory, then they remove the battery, and some other stuff to be able to export a "not complete" car. They then reassemble them in Tilburg. It is all for import tax reasons, and it doesn't increase production rates, on the contrary, since they get some extra work in the US removing parts.

 

[cfOH]

Do we really think Model-S will be at a 800/wk demand through the end of 2014?

I do. Given all the talk about China and Europe, plus all the ridiculously awesome press the Model S is getting in North America, the only thing that will dampen demand is running out of rich folks.

 

[woof]

the only thing that will dampen demand is running out of rich folks.

Not a problem. Owning TSLA stock makes the perfect positive feedback loop. Buy TSLA, get rich, buy Tesla, TSLA goes up, repeat!

 

[EnergyMax]

Not a problem. Owning TSLA stock makes the perfect positive feedback loop. Buy TSLA, get rich, buy Tesla, TSLA goes up, repeat!

That and the rich folks will need to buy the MS refresh in 2016, and sell their used cars to people like me ;-)

 

[vgrinshpun]

According to my analysis VINs are produced in sequence, but are not released into production in sequence due to the fact that European cars were assigned VINs in large blocks, but are released into production gradually, to blend in with the production of cars for NA deliveries. There is also a certain disturbance to the sequence of VINs that are coming through the production due to batching as I explained earlier (2Q 2013 Model S Deliveries Potential Surprise - Page 7).

I used this explanation to correctly predict the cars delivered in Q2. My prediction was 5200 vs. 5150 delivered actually, so I am quite confident that this theory was validated. (Short-Term TSLA Price Movements - Page 341)

Here is another bit that validates my theory explaining how (generally) sequential VINs assigned when order is released to factory get shuffled due to production batching.

Posted by Lawsteve Model S Delivery Update - Page 563
Just heard from tesla: "Model S production is done in batches with similar configurations traveling through at the same time, not sequential VIN order. So a VIN number close to yours may roll out sooner or later than your VIN."

And later confirmed by another member: Model S Delivery Update - Page 563

 

[30seconds]

Since VINs aren't being delivered way out of sequence I don't think the batches are large enough to throw off estimates that 2013 production will be at least 23,000. Otherwise I would expect that we would see ViNs like 16,Xxx being delivered along with something in the 19,xxx

 

[Bgarret]

Since VINs aren't being delivered way out of sequence I don't think the batches are large enough to throw off estimates that 2013 production will be at least 23,000. Otherwise I would expect that we would see ViNs like 16,Xxx being delivered along with something in the 19,xxx

Some data points to chew on....The highest VIN assigned on the EU delivery spreadsheet is 22266 for delivery in "mid-Nov" with all VINs assigned for delivery in the EU before mid-Nov. The highest N. American VIN assigned as reported in the "Finalize your Order" is texex91 at 218xx for delivery in September. Some ideas based on the 500/200 = 700 theory:

1. About 60% of the reservations on the European delivery spreadsheet (about 250) have been assigned a VIN, all with scheduled deliveries between now and mid-Nov (1-2 outliers)...leaving 173 without VINs assigned. If European production is 200/wk, and deliveries continue between mid-Nov and Dec 31 at about 200/wk then and additional 1000 cars should be delivered over the 22266 VIN in the last 5-6 weeks of 2013.

2. If N. American production and deliveries stay on pace for 500/wk (and if the factory shuts down the first week of October) then with 13 weeks after September 30 (12 with a 1 week shutdown) there is the potential for another 6000 N. American deliveries by year-end.

3. If you take the lower of the 2 latest assigned VIN(s) (21862) and subtract 2012 deliveries (2750?) and add 7000 additional deliveries in Q4 you get ~ 25,000 delivered in 2013.

4. With 25k delivered in 2013 and the following assumptions: $90k/car ex-ZEV, $155m ZEV, average of 17% GMargin for all of 2013 and $400million expense = $1.16 in EPS for 2013 (or + $.84 combined for Q3 & Q4)

5. With a projected 36,000 delivered in 2014 (750/wk x 48wks) and: $85k/car ex-ZEV, $155m ZEV, average of 23% GMargin and $500million expenses = ~ $3.00 in EPS for 2014.

Please let me know what you think....

 

[wishing_for_S]

1. About 60% of the reservations on the European delivery spreadsheet (about 250) have been assigned a VIN, all with scheduled deliveries between now and mid-Nov (1-2 outliers)...leaving 173 without VINs assigned. If European production is 200/wk, and deliveries continue between mid-Nov and Dec 31 at about 200/wk then and additional 1000 cars should be delivered over the 22266 VIN in the last 5-6 weeks of 2013.

2. If N. American production and deliveries stay on pace for 500/wk (and if the factory shuts down the first week of October) then with 13 weeks after September 30 (12 with a 1 week shutdown) there is the potential for another 6000 N. American deliveries by year-end.

3. If you take the lower of the 2 latest assigned VIN(s) (21862) and subtract 2012 deliveries (2750?) and add 7000 additional deliveries in Q4 you get ~ 25,000 delivered in 2013.

4. With 25k delivered in 2013 and the following assumptions: $90k/car ex-ZEV, $155m ZEV, average of 17% GMargin for all of 2013 and $400million expense = $1.16 in EPS for 2013 (or + $.84 combined for Q3 & Q4)

5. With a projected 36,000 delivered in 2014 (750/wk x 48wks) and: $85k/car ex-ZEV, $155m ZEV, average of 23% GMargin and $500million expenses = ~ $3.00 in EPS for 2014.

Please let me know what you think....

Sounds good, but you have to take into account cancellations, out of sequence VIN numbers, production of floor models, and most importantly increases in costs for R&D for the Model X. I estimated that deliveries will be ~ 23500 this year, taking those factors into account. As for EPS. I think you are also being optimistic, but I don't really have an estimate of the increased costs of R&D. Maybe we could base that on Q4 R&D costs in 2012.

 

[Sunnyday]

Tesla is delivering VINs this week in the 21,100s. Some cars being delivered a week ahead of schedule. http://www.teslamotorsclub.com/showthread.php/9489-Model-S-Delivery-Update/page573

Anyone care to update their estimates on the number of cars Tesla will deliver in Q3? Still nine more business days left in the quarter. How do these estimates compare with current analysis consensus estimates?

 

[brianstorms]

Tesla is delivering VINs this week in the 21,100s. Some cars being delivered a week ahead of schedule. http://www.teslamotorsclub.com/showthread.php/9489-Model-S-Delivery-Update/page573

Anyone care to update their estimates on the number of cars Tesla will deliver in Q3? Still nine more business days left in the quarter. How do these estimates compare with current analysis consensus estimates?

I'm seeing customers reporting VINs in the 23140's -- not scheduled for delivery until some time in October, but it's still very exciting to see such high VINs. Who knows, we might even pass VIN#30000 by end of year.

As for Q3 estimates, I think it'll be noticeably higher than guidance given at Q2's call, and I think in the Q3 conference call they'll revise full-year guidance to 23500 deliveries, which has been my full-year number as well for a good while, but I actually now think they'll blow past that too and finish the year between 24000 and 25000 deliveries.

 

[sleepyhead]

Some EU customers have VIN numbers assigned in the 18000s and 19000s that are not scheduled for delivery until the end of the year, i.e. Q4.

Unfortunately we cannot use VIN numbers to deduct how many cars will be delivered in Q3.

 

[brianstorms]

Some EU customers have VIN numbers assigned in the 18000s and 19000s that are not scheduled for delivery until the end of the year, i.e. Q4.

Unfortunately we cannot use VIN numbers to deduct how many cars will be delivered in Q3.

Completely understand. But I still believe we'll see final 2013 deliveries between 23500 and 25000 regardless of VIN.

 

[AlMc]

Some EU customers have VIN numbers assigned in the 18000s and 19000s that are not scheduled for delivery until the end of the year, i.e. Q4.

Unfortunately we cannot use VIN numbers to deduct how many cars will be delivered in Q3.

Sleepy: I agree you can not use the VINs as absolute due to European deliveries, loaner cars, etc. I know you watch Craig's graph of VINs. What do you think is a fair number for Q3 deliveries? My VIN was 10843 on May 29th. My best guess is 7000 deliveries in Q3 with close to 21% gross.

 

[sleepyhead]

Sleepy: I agree you can not use the VINs as absolute due to European deliveries, loaner cars, etc. I know you watch Craig's graph of VINs. What do you think is a fair number for Q3 deliveries? My VIN was 10843 on May 29th. My best guess is 7000 deliveries in Q3 with close to 21% gross.

I watch that graph, but I don't know what triggers a VIN assignment, and can't tell how much the EU deliveries have skewed this VIN assignment number (if at all).

At the end of Q1 there was ~7800 cars delivered (including 2012), but the last VIN delivered was in the high 8000s. At the end of Q2 there was about 13,000 cars delivered and the last VIN delivered was around 14500.

We might see the last VIN delivered to be around 22,000 at the end of Q3, which would point to 20,000 cars delivered or 7,000 in Q3. But I believe that the number will be skewed by at least 500 due to EU cars in transit. Also there is a lot more service centers now that need loaners, as well as showroom that need demo cars.

Therefore, I am conservative in my estimate to be around 6,000 deliveries. The good news is that even with these numbers we will get revenue at or above the highest estimate of all analysts following this company (assuming at least some ZEV revenue).

Gross margin is also a big unknown, but I think that 21% excl. ZEV is the minimum that we will see in Q3. Either way the analyst numbers for revenue and profit are still too low and TSLA has to go up in value as these analyst estimates are increased (which requires a new research report), or simply via another blowout ER.

Either way, I see the odds greatly favoring TSLA for another run. And I am betting that it comes a lot sooner than expected, since we are sitting at the bottom of the "channel". Just need some kind of catalyst. The bulls are ready to pile into TSLA (as long as Helicopter Ben doesn't screw us over tomorrow), so I hope Elon throws us a bone soon.

If we don't get a catalyst soon and the market starts to correct, then we might see TSLA chart break down and go down from here. I would give this a 20% probability today, but every day that TSLA doesn't break through $170 the probability goes up by a few percentage points.

That's why I like the odds and am willing to take the risk; make no mistake, there is a lot of risk with TSLA. Time will tell.

 

[tslafan123]

Therefore, I am conservative in my estimate to be around 6,000 deliveries. The good news is that even with these numbers we will get revenue at or above the highest estimate of all analysts following this company (assuming at least some ZEV revenue).

Gross margin is also a big unknown, but I think that 21% excl. ZEV is the minimum that we will see in Q3. Either way the analyst numbers for revenue and profit are still too low and TSLA has to go up in value as these analyst estimates are increased (which requires a new research report), or simply via another blowout ER.

sleepyhead, Appreciate your input. What is your estimate on the revenue front? Can you break it down for us please?

 

[DaveT]

I agree w/Sleepy that VINs aren't a reliable data point. I was talking to someone offline pre-Q2 ER who was basing their estimates off of VINs and he was convinced TSLA had sold 5600-5900 cars in Q2. I was trying to tell him that VINs aren't reliable but he wouldn't listen.

To me the best "first data" point is probably the weekly production rate out of the factory (ie., from factory tours). And if someone visits post Q3 and can see/hear how many cars they produced in Q3. We can then work backward and deduct a certain # cars in transit (Europe, US), service loaners, and showroom cars.

In Q3, we only have 12 weeks since they took the first week of July off. If hypothetically:
July - 550 cars/week x 4 weeks = 2200 cars produced
August - 600 cars/week x 4 weeks = 2400 cars produced
September - 650 cars/week x 4 weeks = 2600 cars produced

Then we would have 7200 cars produced in Q2. Let's minus 700 cars in transit to Europe. And also minus 200 extra service loaner cars and 100 extra showroom cars. So, that would leave us with 6200 cars delivered in Q2.

However, this would be fairly optimistic I'd say considering the optimistic weekly production rates.

Let's lower the weekly production rate estimates a bit.
July - 550 cars/week x 4 weeks = 2200 cars produced
August - 575 cars/week x 4 weeks = 2300 cars produced
September - 600 cars/week x 4 weeks = 2400 cars producted

Then we'd have 6900 cars produced, minus 1000 for Europe transit, service loaners and extra showroom cars. Then we'd have 5900 cars delivered in Q3. (Note: this is close to sleepy's 6000 cars delivered in Q3 estimate.)

I'd say that's a decent "guess" for now until we have more solid numbers from people coming out of factory tours.

Does anybody have any links to posts from people on factory tours who have seen weekly production numbers in July, August or September?

 

[brianstorms]

What I am hearing is that the factory is up to, and has been up to for weeks now, 700+ a week.