Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable

[Carl Raymond]

Is this a joke? That's just one of a number of pictures from last night, and there's drone video footage of GF3 from today.

Really impressive CG, eh?

OK, thanks. I slept last night (we are 3 hrs ahead of China).

Genuinely exciting news then.

 

[Doggydogworld]

is that double counting leased vehicle revenue?

Yes, but his S/X ASP are too low which partially compensates. It's a bad model and should be ignored.

Model 3 sales were flat and S/X were down 1k in Q3 vs. Q2, so even if ASP held steady revs would be down almost 100m. But ASPs probably fell a few percent overall (lots of moving parts). Barring massive emissions credits or deferred EAP/FSD recognition I expect revenue to drop 150-200m vs. Q2.

 

[Papafox]

True. I think the TSLA chart is developing a very nice shape going into earnings.

The market manipulators will try to take the luster off any goodness in the report by trying to slam the price down. But I think it's an uphill battle at this point - their efforts will likely only succeed temporarily (or, in a more bullish scenario, only dampen what might have been a bigger rally). Of course, it depends upon what Tesla discloses. I think the market manipulators actually have a stabilizing effect on TSLA shares (and not in a good way). Their actions help prevent more explosive moves to the upside, instead, they play out over days or weeks.

Keep in mind, too, that the past three dips were neutralized in 2-4 days. This is a big change from August, when hedge funds which sold calls expiring that Friday could engineer dips on steroids (dips enhanced with short-selling) from otherwise-small macro of FUD-related dips. The stock price would be recovering but before it was fully recovered the next dip on steroids happened. This allowed the hedge funds to make out like bandits every Friday. Tesla's trading environment is one where bounce-backs are more common in September and October. The hedge funds have overall lost money in their manipulations the past two weeks and would like to reestablish their control, but may not be able to, due to improving outlook for Tesla's future.

 

[KarenRei]

Model 3 sales were flat and S/X were down 1k in Q3 vs. Q2

In what world? Model 3 deliveries were up 2,05k. And S/X were only down 250.

Model S/X: 17650 -> 17400
Model 3: 77550 -> 79600

How exactly were you picturing that we got a record quarter if Model 3 sales were flat and S/X sales were down?

But ASPs probably fell a few percent overall (lots of moving parts)

Hard to say. I'm going for mostly flat ASPs. Which is BTW guidance. I'm sure some extra FSD sales in the last couple days of the quarter from the existing fleet didn't hurt.

. Barring massive emissions credits

Credits in Q2 were unimpressive. Not hard to beat.

or deferred EAP/FSD recognition

You mean like unveiling smart summon?

I expect revenue to drop 150-200m vs. Q2.

I cannot picture that at all.

Also omitted by you:

* Energy (I expect up, probably a pretty solid step-up)
* Services

It seems quite unlikely to me that revenue is flat or drops. Unless ASPs are really disappointing.

 

[Chickenlittle]

In what world? Model 3 deliveries were up 1,9k. And S/X were only down 250.

How exactly were you picturing that we got a record quarter if Model 3 sales were flat and S/X sales were down?



Hard to say. I'm going for mostly flat ASPs. Which is BTW guidance. I'm sure some extra FSD sales at the end of the quarter from the existing fleet didn't hurt.



Credits in Q2 were unimpressive. Not hard to beat.



You mean like unveiling smart summon?



I cannot picture that at all.

Also omitted by you:

* Energy (I expect up, probably a pretty solid step-up)
* Services

There is more to revenue than car deliveries
-cutting costs
-batteries/Powerwalls/substations/credit sales etc

 

[TradingInvest]

You think so?

James Stephenson on Twitter

I think I'd lower the 3's ASP, but that'd only lower automotive revenue about $0,2B (I make no adjustment to the expected margins despite this). I'm happy with significant growth in energy generation / storage; I've been expecting that (a renewed solar push, lots of random storage projects popping up, seasonal patterns, etc). I don't have a good sense for leasing or services. To me, $6,4B doesn't look ambitious at all. Seriously, revenue basically flat from Q2 is ambitious?

Stephenson predicts 1.23 million vehicles sold in 2021. That number is much higher than my prediction. If Tesla starts building GF4 in EU in June 2020, first production might start in Jan 2022. Full scale probably by 2023. So I can not count EU production for 2021.

I think Tesla will first check the global demand, then expend GF3 by late 2020, production rate rises to 250k by end of 2021.

That means we need 1 million vehicles from US in 2021 to reach total 1.2 million. We need another full scale factory and battery supply fully ramped by early 2021. Seems unlikely.

 

[AlexS]

Stephenson predicts 1.23 million vehicles sold in 2021. That number is much higher than my prediction. If Tesla starts building GF4 in EU in June 2020, first production might start in Jan 2022. Full scale probably by 2023. So I can not count EU production for 2021.

unless they buy abandoned car factory in Germany ready for re-tooling

 

[Zaxxon]

Stephenson predicts 1.23 million vehicles sold in 2021.

That number is laughable.

 

[KarenRei]

That number is laughable.

So is the concept of turning a muddy field into a car factory in 8 months. Yet here we are.

Earlier this year, Musk estimated up to 1,5M in 2021.

 

[KarenRei]

There is more to revenue than car deliveries
-cutting costs
-batteries/Powerwalls/substations/credit sales etc

Cutting costs isn't revenue. Batteries / powerwall is energy, and as I wrote, I expect that to be up. I expect credit sales to be level or up.

 

[Doggydogworld]

In what world? Model 3 deliveries were up 2,05k. And S/X were only down 250.

In the real world, where sales don't equal deliveries.

Model S/X: 17650 -> 17400
Model 3: 77550 -> 79600

Model S/X: 17,400 - 15% leased = 14,790 sold vs. 15,902 sold in Q2
Model 3: 79,600 - 8% leased = 73,232 sold vs. 73,312 sold in Q2

I expect the final Q3 numbers to be slightly higher, that's why I said flat Model 3 and -1k S/X.

You mean like unveiling smart summon?

It was US-only beta. I don't expect a big chunk of revenue from it, but we'll see.

Also omitted by you:

* Energy (I expect up, probably a pretty solid step-up)
* Services

It seems quite unlikely to me that revenue is flat or drops. Unless ASPs are really disappointing.

I see energy flat as the new solar panel rental program further cuts solar sales revenue. Service tends to track trade-ins, so maybe +50m.

 

[KarenRei]

In the real world, where sales don't equal deliveries.

Model S/X: 17,400 - 15% leased = 14,790 sold vs. 15,902 sold in Q2
Model 3: 79,600 - 8% leased = 73,232 sold vs. 73,312 sold in Q2

I expect the final Q3 numbers to be slightly higher, that's why I said flat Model 3 and -1k S/X.

It was US-only beta. I don't expect a big chunk of revenue from it, but we'll see.

I see energy flat as the new solar panel rental program further cuts solar sales revenue. Service tends to track trade-ins, so maybe +50m.

* Most of Tesla's FSD fleet is in the US, where total vehicle sales have been greatest and the FSD uptake rate has been highest
* Tesla moved Smart Summon into the completed category on their website, so regardless of whether it's "beta", they consider it delivered.
* Energy is not simply solar. There've been a number of announcements of completed powerpack projects in Q3 - and this is a market where significant growth is to be expected in general.

 

[Zaxxon]

So is the concept of turning a muddy field into a car factory in 8 months. Yet here we are.

Earlier this year, Musk estimated up to 1,5M in 2021.

We shall see. I'd be ecstatic with 600k in 2020 and 1.0M in 2021. And I expect more like 550k and 850k.

 

[kengchang]

I see energy flat as the new solar panel rental program further cuts solar sales revenue. Service tends to track trade-ins, so maybe +50m.

Solar price drop was announced on 4/30 and solar panel rental was announced on mid August. Not a lot of time to book solar rental in a month and half. I am expecting meaningful uptick on solar install due to the price cut

 

[KSilver2000]

So is the concept of turning a muddy field into a car factory in 8 months. Yet here we are.

Amazing really.
Largely due to how things are done in China.
Would not have been completed anywhere close to that time frame if done in America with the (sub)contractors and government here.

 

[AlexS]

* Most of Tesla's FSD fleet is in the US, where total vehicle sales have been greatest and the FSD uptake rate has been highest
* Tesla moved Smart Summon into the completed category on their website, so regardless of whether it's "beta", they consider it delivered.
* Energy is not simply solar. There've been a number of announcements of completed powerpack projects in Q3 - and this is a market where significant growth is to be expected in general.

If you put numbers on the paper it is really hard to get revenue over 6,4B without some surprise. Maybe storage, insurance and credits can bring this surprise. But I will be happy if we beat Q2 revenue.

 

[KarenRei]

In an unrelated topic: thank you, PG&E, for advertising for Tesla Energy.

Elon Musk on Twitter

 

[M3Rider]

Hard to say. I'm going for mostly flat ASPs. Which is BTW guidance. I'm sure some extra FSD sales in the last couple days of the quarter from the existing fleet didn't hurt.

Price cuts of $1k/$2k/$5k on M3 trims on 7/15 are not flat. Not everything was better QoQ for revenue/margins. Will see.

 

[KarenRei]

If you put numbers on the paper it is really hard to get revenue over 6,4B without some surprise. Maybe storage, insurance and credits can bring this surprise. But I will be happy if we beat Q2 revenue.

-$90M sales (thanks to leasing)
+$50M service
+$100M energy
+- $0 due to ASP changes (ASP-neutral)
+More credits than Q2

Not seeing what's hard about it.

 

[KarenRei]

Price cuts of $1k/$2k/$5k on M3 trims on 7/15 are not flat. Not everything was better QoQ for revenue/margins. Will see.

Guidance was for flat including the price cuts, due to upsell.
(Although I'd need to check the exact wording, as to whether it was to be revenue-neutral or margin-neutral)

ED: "Elon Musk: Yeah, essentially that we expect average selling price to be the same within a few percentage points." So if you want to call for a couple percent reduction, then that's -~$70M to the above. Still positive. And that would be a pessimistic reading of guidance.

Also: FSD got more expensive. $5k -> $6k on 1 May (not effecting deliveries already in the pipe - e.g., it hit Q3, not Q2). And there's FSD sales potential from the existing fleet, particularly in the last few days after Smart Summon was finally delivered. Even if its just a couple percent of existing owners pulling the trigger, it's meaningful.

Q: I forget, were there EU and China price cuts as well in Q3, or not? I don't recall.