Remember that Tesla has a factory, stamping presses and now a paint facility capable of producing 500k cars. They also built out the BIW line 2 to produce the X that will transition to both X and S. So all of the BIW line 1 will be available to be configured into the new model 3 line. So a good chunk of the CapEx for model 3 production is already on the books. I'm not saying it won't take a whole lot more, but it might not be as much as some are predicting.
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Remember that Tesla has a factory, stamping presses and now a paint facility capable of producing 500k cars. They also built out the BIW line 2 to produce the X that will transition to both X and S. So all of the BIW line 1 will be available to be configured into the new model 3 line. So a good chunk of the CapEx for model 3 production is already on the books. I'm not saying it won't take a whole lot more, but it might not be as much as some are predicting.
Johan
Ex got M3 in the divorce, waiting for EU Model Y!
Now that we're discussing the upcoming ER and CC and how it relates to short term stock price let's be honest: There is a credibility problem brewing when it comes to "forward looking statements" and guidance. "The market" will, especially in its current negative/paranoid state, therefore discount any promises about production outlook, cash flow, even Model 3 (timeline, unveiling date, price, etc).
FredTMC
Model S VIN #4925
Good point Greg. Yep, the old #1 BIW line and robots may be repurposed for Model 3. This old line can produce ~1300 MS BIW cars per week. That being said, this isn't enough for 2019 M3 production rate but may be just fine for initial Model 3 production.
However, tesla may buy NextGen robots too and just repurpose these old robots
another big CapEx expense will be for the whole new Model 3 assembly line. I've heard nothing about how they do this or the expense.
Bottomline, I think the large CapEx for model 3 is in 2017
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yep. True. It's most important that Near-Term Q1 guidance is strong. Fortunately Tesla will guide to a production number that is similar to Q4 (IMO). This will be a believable number because it's not a HUGE ramp over prior quarter.
Full year guidance can have more ramp in it Qtr over Qtr. For example: 17k in Q1, 19k in Q2, 21k in Q3 and 24k in Q4
BTW: max capacity of assembly line is 2,000/week. That's 24k for a qtr assuming 1 week off
jesselivenomore
Member
On the other hand what we absolutely do not want to see is:
"Cutting 2016 capex due to "current market conditions" to focus on FCF positive."
The market would not react well to that. You want to see FCF positive from production growth and deliveries growth - NOT from cut backs.
That is exactly what SCTY is doing, cutting back on growth to focus on profitability - and the market is absolutely punishing it because growth is how these stocks got their multiples in the first place. Unfortunately, there isn't many better alternatives since the capital markets are freezing up. If Tesla can produce the cashflow to fund the Gigafactory and Model 3, then this decline will snap back quickly. If they need to raise capital, it would confirm why the stock is getting hit. If they need to raise capital, can not, and thus need to scale back growth to achieve their goals, their multiples will really get hit.
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FredTMC
Model S VIN #4925
Agreed. CapEx was guided to be less this year v last year on their Q3 ER outlook text. Therefore, no one can say they've cut CapEx in order to make Q1 FCF+. This was always the plan because less CapEx required now that MX tooling is done and GF phase 1 is done.
i agree it would be super bad to say they are cutting CapEx as a result of macro Env. Fortunately, I don't think Elon OR Deepak are stupid enough to stumble into that quagmire
Liquidation now would be locking in a major loss unless you are referring to shares held since prices were much lower, so no, definitely don't do that unless you think the price will go to 0.
I bought some Monday and would like to buy more after the ER if it drops. If we go green, then I'll just sit and wonder if it's enough to trigger a squeeze. I'd probably sell half of my holdings if we broke 300 before model 3 is in production on the assumption that I'll be able to buy them back cheaper when big negative cash flow numbers show up for model 3 ramp.
exactly, this the reason why high flyer stock with no FCF hit hard in economy downturn. Because the credit market frozen, they need either raise capital (hurt SP) or dial down growth (hurt SP).
jesselivenomore
Member
Yes, being less than 2015 is not a cut back, just from being done with Model X ramp, so part of the plan. That's fine.
But if it is actually cutting back to "target higher FCF to maintain a higher cash balance in this difficult environment", or something like that, it would not be greeted well.
MartinAustin
Active Member
TSLA has a tendency to pull back after rallies. If there is a huge jump up tomorrow, I might sell a little bit of my holding, but not much... so I could buy it back at a lower price.
If there is a huge drop tomorrow... I'm just going to ride it out. No sales.
If there is a huge drop tomorrow... I'm just going to ride it out. No sales.
In think TM produced 15K in Q4. Remember there is one week off in Q1 and Q1 is short 1 week than Q4. If we count 13 weeks for Q4, the weekly rate is about 1150/week. So Q1 production is about 1150*11= 12700 round up to 13K. Given model X hiccups, so 14K model S production is reasonable guess, but does TM need to refill the transition pipeline? Remember Q4 borrowed 2K cars from pipeline, assume 1K will go for pipeline, then Q1 model S delivery would be only 13K
. I think the key is the model X, with 283/week rate by end of Q4 and exponential ramp up, we should had expected minimum 3K model X delivered in Q1. But how about reality, I might guess 1.5K (1K signature + 0.5K production). So total delivery number for Q1 might be just around 15K. It's really hard to exceed or match the Q4 number IMO.
. I think the key is the model X, with 283/week rate by end of Q4 and exponential ramp up, we should had expected minimum 3K model X delivered in Q1. But how about reality, I might guess 1.5K (1K signature + 0.5K production). So total delivery number for Q1 might be just around 15K. It's really hard to exceed or match the Q4 number IMO.I'm all-in, with my last buy around $170. I was expecting a run up pre-ER, but TSLA is down even with the slight market rally today.
Sentiment around TSLA and on these forums have turned very negative. A month ago, folks were betting we wouldn't see sub-$200 again, but of course that was before all the macro stuff. But now folks are talking about protective puts and hedging all over, which seems extreme since we are already at 2-year lows. At worst, I'll hold through Model 3 launch.
My wild guess - this super negative sentiment signals we're close to bottom. With expectations low, TSLA guiding 75000 deliveries, affirm Q2 FCF, steady state Model X production in Q2, on track with Model 3 unveil and delivery, and Tesla Energy revenues should be enough for 10% gain tomorrow.
Sentiment around TSLA and on these forums have turned very negative. A month ago, folks were betting we wouldn't see sub-$200 again, but of course that was before all the macro stuff. But now folks are talking about protective puts and hedging all over, which seems extreme since we are already at 2-year lows. At worst, I'll hold through Model 3 launch.
My wild guess - this super negative sentiment signals we're close to bottom. With expectations low, TSLA guiding 75000 deliveries, affirm Q2 FCF, steady state Model X production in Q2, on track with Model 3 unveil and delivery, and Tesla Energy revenues should be enough for 10% gain tomorrow.
ludicrousspeed
Member
In think TM produced 15K in Q4. Remember there is one week off in Q1 and Q1 is short 1 week than Q4. If we count 13 weeks for Q4, the weekly rate is about 1150/week. So Q1 production is about 1150*11= 12700 round up to 13K. Given model X hiccups, so 14K model S production is reasonable guess, but does TM need to refill the transition pipeline? Remember Q4 borrowed 2K cars from pipeline, assume 1K will go for pipeline, then Q1 model S delivery would be only 13K
There is only 1 more day in Q4 2015 than Q1 2016. Also, I don't think Tesla needs to refill their pipeline and are going to deliver almost all of the MS they can produce this quarter. Other than that, I agree your post and think the market has already factored that in. Anybody truly following the company knows that the second half of 2016 can see double the deliveries from the first half, and it's mainly production constrained anyways, so it's not a huge issue what they deliver Q1.
larmor
Active Member
Just for arguments sake, does it really matter what they report for MX? TM has 25k reservations, and said they will make and deliver by 2016. If ASP is $100k, then that is revenue of 2.5 bln... What is the cost? This is without advertising etc...
Accurate Global Read
I can't speak to markets, but this is clearly a good read for the global picture. See my comments on the macro environment thread for longer run changes due to the collapse of Saudi Arabia. They have serious problems internally, not just because of the failure to diversify their economy, but the Shia areas of the kingdom are where the oil is produced! In effect they are also in the early stages of at least an economic if partial shooting war (Yemen), but that should be a longer term effect on us. Already we are seeing European and U.S. distancing ourselves from the Saudi regime, but they are needed in Syria. Now I digress; old professors never die, they just blather away.
I can't speak to markets, but this is clearly a good read for the global picture. See my comments on the macro environment thread for longer run changes due to the collapse of Saudi Arabia. They have serious problems internally, not just because of the failure to diversify their economy, but the Shia areas of the kingdom are where the oil is produced! In effect they are also in the early stages of at least an economic if partial shooting war (Yemen), but that should be a longer term effect on us. Already we are seeing European and U.S. distancing ourselves from the Saudi regime, but they are needed in Syria. Now I digress; old professors never die, they just blather away.
tinm
2020 Model S LR+ Owner
I'm long and I know nothing and make no predictions. I look forward to hearing official info straight from horse's mouth this afternoon. Unclear on why anyone would sell even if not stellar guidance. Buy low, sell high.
FredTMC
Model S VIN #4925
It's nice that the overall market and growth stocks are having a good "risk on" kind of day. Would be nasty for TSLA if today was a huge negative day. Particularly nice about the bounce in growth stocks and that the narrative seems to be these are oversold
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