Q4 2013 results - data points, projections and expectations

[Johann Koeber]

Exactly. And those who do buy Model S will have a backup ICE.

Ok, a German here.

I slowed down my average speed a lot since I have the roadster. I select the travel speed depending on the range available. I have 30 mi one way to one of my offices, 255 mi to the other. I used the roadster for both, the long trip in only in the summer. Using an HPC for an hour or so half way it is easy. Not in the winter. The 30 mi trip to my other office poses no range problem. I seldom take the roadster to 110 mph, mostly cruising at 80-90. I have installed charging sockets at both my offices (3 phase 220 V 32 A).

I did the long trip in the model S without charging on the way. Superchargers were not yet available, otherwise I would have used one to top off. Average speed on the Autobahn was 68 mph (110 km/h). I look forward to going faster in the future with a 10 min top off at a SC.

The key in Germany is the SC network. It is being built quite nicely. Let Tesla add 10 more SCs and Germany will be pretty much covered. This and a few more deliveries will eventually get the Model S to the critical mass. I spend a lot of time on the Autobahn, but have not seen a Model S there yet (save my own).

I will be selling my backup ICE as soon as my new Model S arrives (expected in February). When I had the Model S in October 2013 I drove it for 2,500 mi; the ICE was just moved once during that month to keep the wheels from flattening. Driving a Tesla is just so much advanced and so much more fun. The kick isn't in the top speed. The MS does not handle well over 100 mph. I tried top speed once for about 15 minutes. Yes, it does use more electrons. It does get noisier. Tesla will improve the handling, as Elon promised in Munich. But the Tesla is not about driving high speed. For me it is the effortless way it drives. The responsiveness, the smoothness, the quiet, the horizontal dynamics etc. I enjoy every minute of it, so why go fast.

That reminds me of the Eurotunnel train. The operator spent Billions to speed up the travel time it takes from Paris to London. For a fraction of the sum they could have hired a bunch of go go girls that dance in the train - and the passengers would be asking the train too slow down to enjoy the show.

I understand that for some folks that have to drive a lot more than me, with a tight shedule, the MS is not the right car. But these are a small minority. For the others the Tesla is a revolution. So much better in so many ways. Not yet quite economical - but that will change in 2017.

 

[pwillemse78]

How many 530d's did you see cruising 110? For the moment many people will like it, me too, but I already notice hat when my range allows me, I go 150/160 to make it sooner...

 

[JRP3]

Breakdown is not too relevant. You are averaging all cars, in stead of the potential s buyers. The people that would drive a ms are the people driving a 5 series, a6 or e-class merc, or more.

That's a valid point.

They are used to drive longer distances at very high speeds.

That's an assumption, which may also be valid, but without data to support it. How often do they actually take trips that would be out of Model S range, and what percentage of those drivers take those trips frequently enough to make the Model S unsuitable? I doubt we'll get that data anywhere.

 

[Lessmog]

That's a valid point.
That's an assumption, which may also be valid, but without data to support it. How often do they actually take trips that would be out of Model S range, and what percentage of those drivers take those trips frequently enough to make the Model S unsuitable? I doubt we'll get that data anywhere.

You would probably be right. So? If they don't have bread, let them eat cake. Make do with anecdata, aka experience. These guys seem to have some to contribute. Take it.

(I'm a bit grumpy today.)

 

[JRP3]

Problem is I heard many of the same claims about US driving patterns, which turned out not to be true. I'm not rejecting what's been said, just looking for solid numbers to back it up if they are available.

 

[mrdoubleb]

Problem is I heard many of the same claims about US driving patterns, which turned out not to be true. I'm not rejecting what's been said, just looking for solid numbers to back it up if they are available.

And, at the risk of sounding like a broken record, my only issue with that approach is that you are looking at this way too rationally. It will take lots of "education" (marketing, reviews, awards, winning over gearhead journalists, etc.) before people's first reaction to range is "ok, but what about my vacation to Greece where I need to drive 1000km??").

Nevertheless, I think the SC network and new battery packs based on 4ah Pana cells will solve this issue sooner than we think.

 

[JRP3]

I'm not expecting 4ah cells any sooner than 2 years from now, but I hope you're right.

 

[pwillemse78]

Problem is I heard many of the same claims about US driving patterns, which turned out not to be true. I'm not rejecting what's been said, just looking for solid numbers to back it up if they are available.

Plus, minor detail, you have maximum speed limits, at a for our reference very low high. On the major route to the south in Germany, there is no speed limit.... As said, just try max speed for 15 minutes and look at your range. That is what they will do. Go figure what that does to emotions.... You can being up any rational explanation like sir, you only do that 5 times a year according to averages... Guess we all know what will happen

 

[SebastianR]

Plus, minor detail, you have maximum speed limits, at a for our reference very low high. On the major route to the south in Germany, there is no speed limit.... As said, just try max speed for 15 minutes and look at your range. That is what they will do. Go figure what that does to emotions.... You can being up any rational explanation like sir, you only do that 5 times a year according to averages... Guess we all know what will happen

Well - it depends... I don't have a Diesel, granted but my ICE drops range considerably if I go beyond 130km/h.

I think they key lies in the following: If you are a guy who routinely drives more than 400km per day, don't buy the Model S (at least not now). If you drive less, and only occasionally go beyond the 400km, consider if the convenience of never having to visit a gas station ever again outweighs the inconvenience, to manage range occasionally.

Most people like big gas tanks and long range since it means long time between stopping at a gas station. If you never need to stop at a gas station ever again, you don't care about the size of your gas tank.

It's just like on my computer: I cared about battery life when batteries wouldn't last my working day. Now that they last all the time I need them, I couldn't care less how big they actually are.

 

[pwillemse78]

I agree, with one comment. In Germany, with the average higher speed and height differences, that limit is not 400 but 250 km's....

 

[hobbes]

I found the official number for Austria for Q4 on the German Tesla forums, it's 31, but Germany doesn't look so good. The latest numbers are from November, and Tesla is in the 700+ "other" category. Chatter in the forums shows the uptake is pretty slow in Germany - think low double digits per month. [...]

After searching a bit, I found this article: http://www.green-motors.de/news/131...sungen-okt-2013-bmw-fuehrt-vor-tela-und-smart It´s stating that there were an estimated 180 Model S registrations in Germany in October, just below the BMW i3 at 197. I think it is safe to say there were at least the same number in Nov and Dec, so I´d estimate 540 for Q4. (As Germany has somewhat less than 10 times the number of citizens as Austria, the per capita Model S registrations is actually better .

One thing to consider when judging Tesla´s progress in Germany is also that there are quite a few established German car brands, which makes comparison to Norway or the Netherlands hard. Also I think those countries have much better financial incentives than we do.

 

[mrdoubleb]

After searching a bit, I found this article: http://www.green-motors.de/news/131...sungen-okt-2013-bmw-fuehrt-vor-tela-und-smart It´s stating that there were an estimated 180 Model S registrations in Germany in October, just below the BMW i3 at 197. I think it is safe to say there were at least the same number in Nov and Dec, so I´d estimate 540 for Q4. (As Germany has somewhat less than 10 times the number of citizens as Austria, the per capita Model S registrations is actually better .

One thing to consider when judging Tesla´s progress in Germany is also that there are quite a few established German car brands, which makes comparison to Norway or the Netherlands hard. Also I think those countries have much better financial incentives than we do.

Thanks for the October numbers. My info was from the German Tesla Freunde forum, so it was more anecdotal and probably based on September. Unfortunatley I'm not sure we can make the assumption that November and December had similar numbers as that depends on a lot. Was October just a spike due to 3 years of pre-orders? What was Tesla's schedule on deliveries to Germany over other countries? Etc. We will need more datapoints before assuming a 200 car per month steady delivery to Germany. But I do hope you are right.

I also agree on the need for EV incentives and would add that bulding those Superchargers in Europe as fast as they can will help too.

Back to the numbers... considering the Tesla costs 2-3x the i3 and is probably the most expensive EV on that list the No. 2 spot is pretty impressive. That's actually 25% of the German EV market. The fact that the Citoren C-Zero sold well, zero in both September and October is pretty sad for EVs in general but well deserved for the lame attempts traditional car companies make.

 

[Clprenz]

Non GAAP EPS: $.43 calling it
I'll figure out the GAAP tonight, most likely still negative

 

[Out4aDuck]

Non GAAP EPS: $.43 calling it
I'll figure out the GAAP tonight, most likely still negative

Just off the cuff, that seems a little high to me. Looking at the changes from last quarter, deliveries are up 25% and operating expenses were guided to be up 22%. Assuming ZEV credit sales are similar and no other wild cards pop up (like foreign exchange), then I would expect earnings to improve by about $10M. Any thoughts?

 

[bonaire]

Germany was mentioned above. With public electric prices there at .39-.40 per kWh, the use of free supercharging may be preferred by buyers. At home charging is about 2.5 miles per dollar (quite a bit less if driven on the Autobahn at high speed). I know it matters less for the wealthy but will matter more for ME buyers eventually.

 

[Bgarret]

Why would ZEV credit sales be more like Q3 of 2013 than Q4 of 2012 or more likely Q1 of 2013. That's how ZEV works, the program runs on an October cycle and Q4 is a new year for ZEV, but with higher requirements for ICE manufacturers to meet based on more auto sales in California. With Tesla possessing the only gold-standard ZEV credits and carrying a number forward from last fiscal year, I would be very surprised if ZEV was lower than $70 million and non-GAAP less than $.70/share conservatively.

It it seems like everyone has forgotten about ZEV, it hasn't gone away.....where is Capitalist Oppressor when you need him? Someone light up the bat signal.

 

[uselesslogin]

Why would ZEV credit sales be more like Q3 of 2013 than Q4 of 2012 or more likely Q1 of 2013. That's how ZEV works, the program runs on an October cycle and Q4 is a new year for ZEV, but with higher requirements for ICE manufacturers to meet based on more auto sales in California. With Tesla possessing the only gold-standard ZEV credits and carrying a number forward from last fiscal year, I would be very surprised if ZEV was lower than $70 million and non-GAAP less than $.70/share conservatively.

It it seems like everyone has forgotten about ZEV, it hasn't gone away.....where is Capitalist Oppressor when you need him? Someone light up the bat signal.

Do we even know what ZEV credits were back in Q4 2012? It seems like Tesla didn't want to say at the time from the earnings transcript but one would think that it was higher in Q4 than Q1. Anyway I think that would be very good for the stock. On the other hand, isn't it possible that more manufacturers have enough compliance cars now?

 

[Bgarret]

Tesla received $160 million last year for credits produced from Oct 2012 to Sept 2013. They produced a total of 1311 credits during that timeframe, but only sold 1035 of them. That would equate to about $154,000.00 per credit sold. There are no other manufacturers with new ZEV credits, there are some that sell PZEV credits, but there is a hard requirement for ZEV credits that is increasing every year. Some manufacturers are hoarding the credits they have and Tesla is the only real seller in the market. If you don't meet your pure ZEV requirement, you can't sell cars in California. A couple of good articles:

Zero Emission Vehicle Credits

Tesla sells most ZEV green car credits, GM tops buyer list

By subtracting the 3 published quarters from $160 million, Tesla realized just over $40 million in ZEV revenue in Q4 2012.

The 276 credits they carried over from last ZEV year should have a rough street value of $42 million.

I am assuming they produced and delivered as many, if not more Model S's in California in Q4 2013 as in Q4 2012.....the question is: Did they sell all the credits? My guess is yes...the demand is still there, if not greater, and a big auto company would not want to wait for the last minute and pay an inflated price in September of 2014. Additionally, while we only have 1 year to go on, Tesla sold over $100 million in ZEV credits in Q4 2012 + Q1 2013.

These are the reasons I say $70 million is conservative.....$100 Million possible. Add that pure profit to the Revenue and you get a non-GAAP EPS north of $.75/share and an easily positive GAAP EPS.

those are my thoughts on ZEV and Q4 2013....cheers!

 

[uselesslogin]

Zero Emission Vehicle Credits

When I look at this I see GM, Chrysler, and Honda at the top of the buyers. I just did a search and GM and Chrysler seem to have just started selling their compliance cars last June and Honda recently lowered the price of their FIT EV. To me that says they got their act together and won't be needing to buy ZEV credits anymore. Am I missing something here?

It is far cheaper to sell a car at a $20,000 loss than buy a $154,000 credit so they can basically lower the price as far as they need to in order to sell enough cars. Also, they have until the end of next September to do it. In all fairness it seems like Jaguar Land Rover, Subaru, and Volkswagen don't have their act together but they required <100 credits last year. It seems to me like that puts ZEV revenue for the entire new cycle at less than $15 million.

On the other hand we could have a surprise left over from September of last year if it was transferred at the last minute and didn't hit the books for Q3. Please prove me wrong as I'd love to see solidly positive GAAP earnings to give the bears one less thing to harp on.

 

[sleepyhead]

Germany was mentioned above. With public electric prices there at .39-.40 per kWh, the use of free supercharging may be preferred by buyers. At home charging is about 2.5 miles per dollar (quite a bit less if driven on the Autobahn at high speed). I know it matters less for the wealthy but will matter more for ME buyers eventually.

Yep, $100 per charge sounds about right . If you are going to constantly troll negatives about Tesla then at least put in a better effort to get simple math correct (not to mention that avg. price of electricity in Germany is lower than you claim, and those that have solar panels pay a lot less; and many do have panels on their roofs).

You are not adding any value or fooling anyone here with your constantly negative (or as you claim "realistic") posts on Tesla.

It is good to hear the negative side of the story, but when someone constantly looks for negatives in every Tesla related topic then that person's opinion becomes meaningless.