Artful Dodger
"Neko no me"
Apparently Elon guided for a loss during the Feb 28 Conf Call. So that's not coy or gaming.
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Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable
- Thread starter AudubonB
- Start date
Apparently Elon guided for a loss during the Feb 28 Conf Call. So that's not coy or gaming.
Yep, for the prestige of it. Which I suspect is part of the reason for the custom 19" wheels on the Chinese Model 3P.
About early adopters running out...We had ~200K high trim deliveries of Model 3 before SR was announced. Assuming it is 50% of Q1 = 25K, do you believe this is all there is to SR demand? Do you think the high trim demand exceeds low trim demand? Do people buy more of Porches or Camrys?
At one point they were sending emails to employees with daily production numbers. Those numbers ended up being online and so, the emails stopped. @Fact Checking here came up with 85% of VINs formula, so that obvious hole had to be patched.
Agree. I can guess that there's some delay between them seeing today's demand numbers(per trim) and planning future levers accordingly - they have to announce that they would open up deliveries to Europe/China or send lower trims some months later, so there's a delay between them saying they'll deliver to Australia and making necessary production line changes / logistics planning to start using that additional demand, prob. 3-6 months of planning, they can't make it happen overnight. Meanwhile there can be some variation between their projections and the current numbers.
However, it seems there were other factors in play in Q1, such as down time for retooling, conserving cash, or SR lines/battery lines still being ramped up and not operating at full capacity. If we assume that this was a max international demand, there's no way I can believe that there was no more demand for SRs in N.A.
Well, guiding for 360k per year total means 6k/week of M3s average. There was a lot of speculation including by FC and Elon that Tesla will reach 500k, but that is most likely the EOY running rate including GF3, i.e. up to 7k GF1 + 3k GF3. This will be likely just one quarter though and the other quarters have to have lower numbers to average out to 6-7k of M3s per year. There was Q4 guidance for the year, but most here decided to ignore it assuming it was too conservative.
I'm thinking they might be able to run at 7k/week today at Freemont, but for whatever reasons it is not a sustainable approach due to other unknown bottlenecks.
Demand = all trims, not just Ps and AWDs. When I see that they deliver 55% SRs in the quarter in both N.A. and EU and the total deliveries is 50k, and the wait time on the order page is 1 week, then I'll agree there's a demand problem.
Remember that Tesla's goal is to reduce the number of tail pipes asap, not just expensive pipes. Given the same profit, they would rather deliver 2 SRs than 1 P.
To be clear, overseas pipeline is not filled and Tesla is still operating based on the bust(start of Q) and boom(end of Q) model, which makes them scale all resources for the peak levels and these resources are under-used during the most of Q.
I agree that we already had 380->250 SP drop based on Q1 tiny profit + SEC. This SP is lower than what we had prior to M3 production starting when all the issues and drama was about to start. Now most issues are resolved, costs are brought down A LOT and volumes that Tesla operates at are at overall profitable level. Is this a reason to go to the levels prior to M3 existence? We have Y coming out in about the same time it took us to see a significant M3 production. That's like M3 was never there, except it is profitable now.
I think we might see 250-270, but it is not very reasonable.
Just one small data point - took me 6 months to get my solar panels off the roof for replacement due to the hail damage and Tesla scheduled me for July (another 6 months) to put them back on. They recently called me and offered a sooner appointment, so it is now done >3 months ahead of schedule. I think this means they ramped up hiring in CO.
How did you come to the conclusion that demand for SR/SR+ “Was never as strong as Long-Range versions”. I know many people who are waiting for the SR to be available, a lot of whom will have them as their first ever new car purchase.
I would be very interested to see data indicating otherwise, but I would assume the common wisdom that a $35k car will sell in higher volumes than ~$45k+ models is probably true.
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Fact Checking
Well-Known Member
Nice Q1 estimates, congrats!
But let me push back gently against this awful NUMMI comparison you are trying to make, are you really trying to compare:
- $15k-$20k ASP simple to assemble Toyota Corollas assembled in the NUMMI plant in the 90s (which was what much of the NUMMI's output consisted of), where over 40% of the add-on value of the car (the drive train, etc.) was made elsewhere,
- and compare it to Tesla's $40k-$140k ASP units made in Fremont, which have not only much higher ASPs but much higher value-add and expected quality levels as well? With the S/X almost everything that isn't a commodity part is made at Fremont.
Looking at the labor force size should have told you already that the unit based comparison is invalid: NUMMI had only around 4,800 employees at its peak - while Tesla has well over 10,000 employees at Fremont, despite massive automation that utilizes more than 1,000 industrial robots...
A more fair comparison would be average (added-) revenue generated by employee. By that metric Tesla is already way ahead of peak-NUMMI, today.
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Artful Dodger
"Neko no me"
My estimate for total production was 75,800. See my tweet here on 31st March. The actual number was 77,100. I was 1,300 units off. In other words, I was 1300/77100= 1.7% off from the actual number.
So which is it feet hot/head cold? Or feet cold/hot head?
Errors of estimate do not cancel eachother out. You made two separate estimates. Add up the absolute value of each, and even weight them by sample size if you want.
Your total error is not 1.7% when you were off by 6% with one estimate and 18% with the other. Sheesh.
Down 7% on Frankfurt exchange. Normally mirrors closing of Nasdaq, but not today...
sundaymorning
Active Member
FUD works on certain people. So Elon has to be really careful about what he says. I can’t emphasize this enough. The best thing for him to do is don’t say anything negative, don’t troll, or stoop down to “their” level. It only gives Fudsters ammunition. Despite being bullish I’ve been quite disappointed with Elon consistently shooting himself, then us in both feet. I still believe in the mission, but I have to say Elon is no longer my hero. I’ll back him to a certain degree, but my faith in him certainly isn’t as strong as before. I hope he recognizes that his behavior needs to change. The best thing for him now is to stop 90% of his interviews, the media isn’t going to be his friend until he starts to advetises.
⚡️ELECTROMAN⚡️
Village Idiot
So it doesn't mean TSLA is down to 281 already? That's just what it's trading for in Germany?
There was a survey about it a long time ago. See the first two lines here.
Fine, we don't have to compare S/X to NUMMI. We can compare it to Model 3. Model S/X production is only 44% as efficient as Model 3 in terms of cars produced per employee per year. Therefore Tesla needs to do something about it.
Well at least if we hit 10% down in NY trading on Thursday then short Sellers won’t be able to intentionally drag the price down any further until next week.
So not the news I wanted to wake up to this morning and my personal guesstimates were completely out for M3, although not too far away for SX.
Yes, I expect SP pain today, which can be amplified by the SEC debacle. The bad news is that a positive outcome from the SEC debacle maybe won't give the pop on the SP we might otherwise have expected. I guess my options play is dead in the water
So what to, IMO, do to fix this, just for the auto side:
Yes, I expect SP pain today, which can be amplified by the SEC debacle. The bad news is that a positive outcome from the SEC debacle maybe won't give the pop on the SP we might otherwise have expected. I guess my options play is dead in the water
So what to, IMO, do to fix this, just for the auto side:
- Stop with this quarter-end madness and start shipping continually to overseas:
- Creates a very poor impression of panic every quarter
- Stresses out the staff
- Poor use of delivery infrastructure, requiring sizing for per demand which is unused for long periods
- Low QA on delivered vehicles, leading to customer dissatisfaction and costs for remedy
- Get FG4 started ASAP
- Refresh SX:
- Possible that recent price-drops stimulate demand going forwards, but only Tesla know this
- Interior of car looks dated next to M3
- Range should be a greater differentiator compared to M3
- Charging speed is inferior to M3
- Concentrate on MY over SX for internal resource allocation
- Get Semi into production, or at least reveal concrete planning
- Roadster II news?
Doggydogworld
Active Member
Wow.
I see a 400m GAAP loss. Auto Sales Revenue down 2.2b from Q4 to 3.9b. At constant margin that's -500m gross profit, but S/X margins will degrade due to discounting and poor fixed cost absorption. So figure a 600m+ hit to Q4's 210 net income line.
Adjustments
+500m depreciation, amortization, impairment
+200m stock comp.
-600m inventory (12k Model 3s @ 40k + 2k S/X @ 70k)
-600m Accounts Payable (mostly 40%+ reduction in S/X production rate)
-200m Accounts Receivable (last week deliveries were higher in Q1 than Q4, plus quarter ended on Sunday)
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-700m (Assumes Model Y orders offset decline in Customer Deposits, steady state leasing, etc.)
-1100m OCF
-200m Capex (excl China, which self-finances)
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-1300m FCF
Financing
-920m Convertible Bonds
+520m ABL expansion (assuming they max it out)
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-400m
3600m Starting cash
-1700m cash burn
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1900m Ending cash
Fact Checking
Well-Known Member
I noticed that too - I believe technically it means that net income will be below Q4 levels.
Technically that still allows tiny profits, but not $265m+ profits for Q1 S&P 500 inclusion.
Completed and in-transit total deliveries dropped from ~91,700 to ~73,600 (20% drop), but the increase in in-transit deliveries in Q1 is significant, which adds to the GAAP space loss and also drains some cash.
Tesla has implemented cost cutting measures, and about 10.6k vehicles in transit on 73,600 in-progress deliveries (63,000+10,600) means that about 20% plus 14.4% of the gross profit is missing - i.e. there's a -20% drop over Q4 and only 85.6% of the pending gross profit was realized by the end of the quarter due to in-transit.
If we crudely take Q4 gross profits of $1,440m then that gets reduced to $1,232m, $288+$207m is "missing", so the Q4 profit of $139m gets turned into -$356m. That first level approximation doesn't allow for 'tiny profits'.
(With that we assume that the ASP and margin increase from European and Chinese Model 3 sales is roughly equal to the missing GHG credits of about $70m.)
This assumes that there's no efficiency improvements and that overhead costs stayed constant.
There are several potential GAAP upsides:
- deferred revenue recognition,
- efficiency improvements both on the labor cost and the parts cost levels,
- higher take rates for options that are not measured in the P&D report, such as AutoPilot and FSD
- the FSD upgrades that the fleet of hundreds of thousands of customers got. For every 10,000 existing owners who bought FSD for $3k it's an extra +$30m of pure income.
- Tesla hasn't sold significant amounts of ZEV credits in a long time (only $100m for the last ~1.5 years), and they have a lot of credits saved up. It's unclear whether the market dried up due to ZEV uncertainty or Tesla is saving up a piggy bank. Any ZEV sales in Q1 would also be a 100% pure profit improvement.
- GF1 probably had more cells for Tesla Energy in Q1, which should improve revenue and generate some income. Energy only generated +$43m income, and Q1 is a seasonal low, but maybe Storage will generate some income. It probably won't be a huge contribution, yet.
- The ~6% price cuts reduced gross profits by up to an additional ~$100m - but only if take-rate of software and color options stayed constant - while we saw it than in the EU those take-rates improved.
- It's unclear whether opex stayed flat as guided, or there was maybe a spike due to service expansion or other factors.
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My first take on the numbers:
M3 as expected although missing the surprise we were hoping for. Q2 will be more telling on SR/+ uptake in US and sustained EU demand.
MS/MX - unfortunately the data we've been seeing and crowing about coming in from Europe proved to be accurate. Part of the story is that refresh that we've been waiting for. But another reading is that for Europe S/X has never been an optimal car. Tesla wasntvselling ~30k of those last year over here because people enjoy parking with an aircraft carrier in our narrow old city streets. Simply, Tesla made the best EVs and the were big. Now that Model 3 is available many may have shifted their orders to that. That may also mean lots of top end 3s which may actually have better margins than S/X75 so on the long run not a major concern. But they do need to accelerate that refresh.
M3 as expected although missing the surprise we were hoping for. Q2 will be more telling on SR/+ uptake in US and sustained EU demand.
MS/MX - unfortunately the data we've been seeing and crowing about coming in from Europe proved to be accurate. Part of the story is that refresh that we've been waiting for. But another reading is that for Europe S/X has never been an optimal car. Tesla wasntvselling ~30k of those last year over here because people enjoy parking with an aircraft carrier in our narrow old city streets. Simply, Tesla made the best EVs and the were big. Now that Model 3 is available many may have shifted their orders to that. That may also mean lots of top end 3s which may actually have better margins than S/X75 so on the long run not a major concern. But they do need to accelerate that refresh.
Chartered321
Member
So is this past 1Q19 the last loss making quarter?
Are we ready for a decade of consecutive profits?
I am, certainly I'm not selling my shares now. Are you?
Are we ready for a decade of consecutive profits?
I am, certainly I'm not selling my shares now. Are you?
Fact Checking
Well-Known Member
That's the worst-case I think (which might as well happen), but it's missing these factors:
- That assumes constant ASP, which I don't think was the case: average S/X prices actually went up, due to the elimination of the 75D and the increase of the base price during much of the quarter.
- We also don't know the new 18,650 cell cost base.
- Nor do we know how the Autopilot and FSD take rates changed: in the Europe order flow (user-submitted) there was a significant shift within the quarter.
- We don't know how much deferred revenue Tesla will recognize - significant milestones were reached.
- There might be efficiency improvements, layoff effects.
- You estimate -200m accounts receivables outflow, which is pessimistic I believe:
- end of Q4 accounts receivable was already at elevated levels of $1.2b,
- China owners are required to pre-pay I believe, also many European customers did that I believe,
- so delivery taken on a Sunday there would recognize the cash flow as well.
This would imply the average “lost” sale vs. Q4 at ~$81,500...
Causalien
Prime 8 ball Oracle
This scenario will probably play out. Safe to assume that margin is the same or worst than last quarter due to the firing. And the rrue efficiency isn't realized yet this quarter.
This feels like that model X quarter where the falcon wings had to be remade.
Fact Checking
Well-Known Member
If we do that comparison on a Fremont building basis then that's an apples to oranges comparison too: for S/X the battery packs and drive train is made at Fremont, while for the Model 3 battery packs and drive train is assembled at the Gigafactory.
Otherwise you are right that the Model S/X is less suited for mass production, is fundamentally more labor intensive and has a 100k annual limit - and this is reflected in 2x-3x the price. That was the point of the Model 3 after all: many more robots, much higher unit count to scale away fixed costs.
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