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Shall TSLA be added to S&P500? (out of main)
- Thread starter Fact Checking
- Start date
Should gave GAAP profit over previous 4 quarters.
Q1 -702
Q2 -389
Q3 150
Q4 needs profit of 941 million, not super likely.
However, Q1 2020 + Q4 only needs to be 239 million combined. The Q3 '19, Q3 '18 (311) and Q4 (139) '18 profit levels are all sufficient to achieve that. Any improvement (or tie) in sales over last quarter should be sufficient.
Only way it could happen is if Tesla recognized a huge lump payment from FCA for EU emission fleet pooling all in single quarter. And that won’t happen.
Singer3000
Member
Or the stored up p&l from FSD. For which time has also by now run out this quarter for a mass release.
EVNow
Well-Known Member
Singer3000
Member
I imagine they could recognise it progressively, as each vehicle with the option has the BBC capability. Don’t all units sold since April already have HW3?
Some simplified math that is not the complete picture but just to illustrate that a deeper look might be warrented.
Required profit increase Q3->Q4= +791
Production went from:
Q2->Q3: 87k->96k=+9k
Profit went from
Q2->Q3 = +539
I think Q3->Q4 production will increase more than 9k, more like 20k.
I also think solar will increase more in Q3->Q4 than in Q2->Q3. Are there new other efficiencies. Is there a chance that Model S/X production increased much more in Q3->Q4 than in Q2->Q3?
Just saying that just extrapolating from Q2->Q3 we are already pretty close and Tesla has surprised us before. Nobody is expecting this, and maybe for good reasons. But are we really sure there won’t be a big surprise at the ER?
Sure, but we can't attribute 539 million in profit increase purely to 9k cars. That would require 60k per car net.
EVNow
Well-Known Member
Profit didn't go up because of just production increase. It was because of margin improvement + 115M in one time profits.
BTW, From Q3 '18 to Q4 '18 - production went up by 9k. Profit went down by $180M.
EVNow
Well-Known Member
Yes. But the chances of rollout of City NOA in next 3 weeks is near zero. Ofcourse, FSD revenue from HW3 cars can be recognized instantly when City NOA rolls out (but would be only NA in the beginning).
Currently they are upgrading to HW3 just a few cars - as and when they service them for some other reason. I expect them to take up actual HW3 upgrade program in Q1.
Singer3000
Member
Too short, no need to go TSLAQ on us
SageBrush
REJECT Fascism
That would satisfy the 'GAAP positive over 4 quarters' guideline but the 'latest quarter be profitable' guideline may yet be violated. It will be interesting to see if Tesla decides to play the S&P inclusion game.
Mathematically, yes that is possible. However, in my opinion, it would take a massive black swam event to make Q1 2020 negative. The oft quoted Elon statement regarding Q1 being tough was in reference to QoQ delivery increases, not profitability. GF3 + increasing backlog + $500 increase in TM3 price + FSD feature increases + Fiat Credit pool bode well for positive earnings.
SageBrush
REJECT Fascism
Thanks Mongo.
I was paraphrasing your comments from the other thread. Sorry about the late attribution.
Does Tesla have any large loan payments to make in Q1 ?
No loans that I know of, but those would impact cash flow, not GAAP profit (as I understand things).
I think he was also meaning the ramp-up of MIC and MY Freemont in 2020 Q1. This could potentially affect margins.
Buckminster
Well-Known Member
Dave T talks a lot about MY here which I hope won't have a positive impact on S&P inclusion because the expectation here (most people I think) is that the Q1 earnings will be sufficient. GF3 will help a little.
Does anyone think Tesla will drop prices a little, early in Q1 to guarantee seasonality does not impact demand? If they wait until later in the quarter they have to drop prices by more which will affect future quarters (assuming they have to drop prices at all).
Artful Dodger
"Neko no me"
Tesla will likely drop prices again for US customers to compensate for the loss of the final increment in the great US-EV-tax-credit ziggurat.
Seasonality may not be an issue, there are some clues via anticipated delivery dates on Tesla's website that Q1 may already be sold out (ie: April 2020 deliveries)
Cheers!
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