Quarterly Auto Production, Delivery, & Revenue Forecast

[bdy0627]

I wanted to generate some discussion about expectations of quarterly auto production, delivery, and revenue over the next year or so. Here is my current forecast. I am personally trying to set reasonable production and delivery expectations based upon current execution. With this model, I am seeing model 3 inventory increase mildly to about 26,000 from the current 22,000. That may not be the plan at all. In fact, I could see Tesla decrease inventory a bit, but I don't know what they plan to do. Given over 20,000 current model 3 inventory, it may be preferable to sell off some inventory rather than maximize production, particularly given the fairly tight cash situation. With the new markets Tesla is selling model 3 into, it would make sense that inventory would increase. I'm interested in opinions about all of this. I am not modeling substantial input from Shanghai until Q1 2020. I think it is optimistic to expect earlier production there. Obviously, this forecast requires speculation about production, deliveries, and ASP. Thanks for any input.

 

[schonelucht]

At this point, I really having a hard time to see a path to a 22k/23k bounce back in S/X deliveries by Q3 combined with an ASP that's basically unchanged from last year. My feel is that one or the other will have to give. Did you model a drop to 17k in 2020 as a consequence of the Model Y introduction?

 

[bdy0627]

At this point, I really having a hard time to see a path to a 22k/23k bounce back in S/X deliveries by Q3 combined with an ASP that's basically unchanged from last year. My feel is that one or the other will have to give. Did you model a drop to 17k in 2020 as a consequence of the Model Y introduction?

Thanks for the good points. Yeah, it seems like a big jump back up to 22k for S/X. Keep in mind that's still down about 20% from Q3/4 2018. I think you're right that my S/X numbers may be a little optimistic. I do think we are seeing an unusually large drop right now primarily due to the tax credit being cut in half. I'll lower the S/X numbers.

As for the 17k S/X in 2020, that's from an expected drop due to Q1 seasonality, complete loss of the tax credit, and the looming model Y. That quarter could be less, probably not higher. The imminent launch of the Y could definitely impact that number substantially. To be conservative, I'll lower it a bit further.

Regarding the ASP for S/X, that's another good point. Margins may be higher since we no longer have the shorter range trims available. However, prices are still lower than last year. If I configure an X in standard range, white exterior, black interior, standard wheels, 7 seats, with autopilot, it comes to $97k. Performance brings that up to $112k. FSD and white interior trim would bring that up as well. $99k ASP for the X is probably close. For the S with similar options, it comes to $90k. Performance brings it up to $104k. Again higher with FSD and white interior. $92k is probably close for the S. The mix has been roughly 50/50. That may be shifting toward the X right now but it will likely shift back toward the S once the Y is released. I think it's pretty reasonable to lower the ASP of S/X combined to $96k. I'll adjust that in the model.

Any thoughts on how reasonable the production/delivery forecast numbers are?

 

[bdy0627]

Here's the updated model that includes more conservative deliveries of S/X and more accurate ASP. I did not change the model 3 data at all. The result of the lower deliveries of the S/X is that total 2019 deliveries drop to 337,500. Also note that total auto revenue does not equal Q4 2018 until Q2 2020 now. I sure hope this is overly conservative.

 

[bdy0627]

Here's more detail, including inventory for 3 and S/X as well as specific in transit numbers. Total auto revenue definitely does not get exciting until Q2 2020 based upon these production/delivery forecasts, but there is certainly more to the story than auto revenue.

 

[neroden]

I believe that Tesla is currently suffering production bottlenecks at Fremont; certainly downtime due to switching variants, possibly a shortage of Euro-spec parts, possibly something else.

Given that we have no color on these bottlenecks and Tesla is being very tight-lipped, I cannot and will not make production predictions. It all depends on how well Tesla solves the unknown bottlenecks. We don't really know, in engineering detail, what they are, so I can't predict how long it will take them to solve them.

 

[gnuarm]

Tesla is showing numerous signs of stress, serious stress. The financial picture is not looking good at all. They had two good quarters based on government subsidies and the initial pent up demand. Now they are in a mode where they have to sell cars based on price and the numbers don't look like they are going to work. Every week something new comes out to show just how serious their situation is.

Rather than focus on what numbers people expect for production and sales, more important is to look at what Tesla is doing to make the company work with these lower numbers. From my personal experience, it looks like they are cutting back on service, not being willing to make repairs. That alone is a pretty significant indicator the company is in trouble. If they don't find a way to operate as a proper auto maker and still make money, they won't be around long.