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

[defc0n]

Yep. Which is why quarterly reports tend to be much bigger SP movers than deliveries.

Yes but now the market has a better idea of what the margin is, and a general ballpark can be derived better from deliveries.

 

[Heimdallr]

To be clear----doubling is 100%, not 200%.

I never said anything about doubling...Please make your own estimates and then come back to me. I am calling for a tripling here as most of the data seems to suggest. A mere doubling would be ridiculously low at this point.

 

[Fact Checking]

Yes but now the market has a better idea of what the margin is, and a general ballpark can be derived better from deliveries.

Exactly: if deliveries are good then calculating a robust lower bound for cash flow and profits is going to be literally 4th grade math.

This wasn't possible during any earlier stage of Tesla's history.

@KarenRei should be safe in any case, as Feb 15 options should react well to a stock price increase as well. If deliveries are not convincing enough then Feb 15 should still give time for the ER to fix the stock price.

All of that is assuming efficient markets with rational actors though ...

 

[ReflexFunds]

Below I have estimated Tesla's Q4 average US Revenue, gross profit and cash flow (in $000) for each base car option available. Revenue is on an accounting basis (so ASP + delivery fee + GHG credit sales - Deferred revenue). For each model base I have included an average take rate of options such as paint, wheels, seats etc, but included 0 take rate for EAP and FSD. Cars with EAP purchased would add c.$5k to revenue, GP and cash flow. Cars with FSD also purchased would only add c.$3k to cash flow. Obviously all model 3 options include a 100% take rate for the currently compulsory $5k premium interior. SR & LR model 3 were not available, but I have included the numbers I think they would have achieved had they been available.

These estimates use reconciliation to Tesla's 9M18 deliveries and accounts, Troy's take rate survey data, and common sense estimates for the costs of each option.

View attachment 365198

Based on this, here are my Q418 delivery and revenue forecasts. I will obviously update after Tesla's delivery report this week.

 

[ReflexFunds]

Based on this, here are my Q418 delivery and revenue forecasts. I will obviously update after Tesla's delivery report this week.

View attachment 365247

And also my profit forecasts:

 

[tsunamiofhurt]

Are Canadian deliveries included in their model? IIRC Canada is about 5% of sales, which at 60-65k would amount to an additional ~3k deliveries.

Canadian deliveries are, but home deliveries are not. There could be material upside here.

 

[Hock1]

I never said anything about doubling...Please make your own estimates and then come back to me. I am calling for a tripling here as most of the data seems to suggest. A mere doubling would be ridiculously low at this point.

We are not connecting on this. But, I'll repeat my delivery estimates for Q4:

Model 3: 71,000
Models S and X: 29,000

I'm thinking that that congratulatory photo of Elon and his team, was a celebration of building a total of 100,000 vehicles in Q4.

GLTY.

 

[tsunamiofhurt]

Note that Electrek reported about unsold inventory of 3,300 Model 3's.

This is a new inventory condition that rarely happened before: due to build-to-order Tesla used to have close to zero unsold inventory.

Also note that "unsold inventory" != "vehicles in transit":

total_inventory cars = unsold + in-transit + loaners + service + test-drive cars​

True. But I don't think they'll make the unsold/in-transit distinction in the report, so I guess we'll never know?

 

[Intl Professor]

OT

No cats nor dogs on site. New year, new image. Drawn from memory by six year old of great grandpa for Christmas card 2018. Obviously she is influenced by Picasso in all his phases. Or was he influenced by all six year olds?

A colleague once told a story about Picasso. His dealer asked if a work was genuine, "No, it's a fake." Later he shared a picture he knew to be genuine. "No it's a fake." "But Maestro, I know this is yours." "I paint many fakes."

With that story in mind I was privileged to see at least 400 of Picasso's paintings on exhibit in the Palace of the Popes at Avignon. All but three or four were fakes.

If Picasso can make mistakes, what about Elon?

 

[Heimdallr]

We are not connecting on this. But, I'll repeat my delivery estimates for Q4:

Model 3: 71,000
Models S and X: 29,000

I'm thinking that that congratulatory photo of Elon and his team, was a celebration of building a total of 100,000 vehicles in Q4.

GLTY.

OK, and how much Y/Y growth for deliveries do you get with your numbers? Certainly not "100%" or a "doubling"...

 

[Right_Said_Fred]

Based on this, here are my Q418 delivery and revenue forecasts. I will obviously update after Tesla's delivery report this week.

View attachment 365247

We’ve heard from a reliable source (Carsonight) that during the course of Q4 GF1 has gone from one to two battery lines dedicated to energy products. It doesn’t look like that is reflected in your revenue forecast for Energy (from 97 to 100). Or is it?

 

[Fact Checking]

Based on this, here are my Q418 delivery and revenue forecasts. I will obviously update after Tesla's delivery report this week.

View attachment 365247

Nice.

I think there are numerous potential upsides:

• S/X could surprise - Q4'17 had 29k deliveries.
• Energy is probably growing again, now that they got their second cell manufacturing line back.
• ZEV could surprise - Tesla has up to half a billion worth of credits and might want to use them for the March bonds, giving an ICE carmaker an irresistible deal. Even with ZEV uncertainties due to Trump EPA sabotage, end of 2020 and a probable Democratic president is not that far away.
• Tesla body shops and other service revenues are probably growing.
• EAP and FSD take rates might have increased after v9 - even with FSD off-menu.
• Tesla has almost a billion buffered up in deferred revenue and would be more than justified to recognize $100m-300m of it with v9 EAP delivered.

So I'd not be surprised to see 7b+ in total Q4 revenue.

 

[Hock1]

OK, and how much Y/Y growth for deliveries do you get with your numbers? Certainly not "100%" or a "doubling"...

I see where you're coming from. I had my reasons, but not worth rehashing. Obviously, I hope you're right. Sorry for the confusion.

 

[ReflexFunds]

We’ve heard from a reliable source (Carsonight) that during the course of Q4 GF1 has gone from one to two battery lines dedicated to energy products. It doesn’t look like that is reflected in your revenue forecast for Energy (from 97 to 100). Or is it?

Yes I see a good chance of a beat in Energy, I'm currently assuming ramped storage production is not delivered and installed until Q1, with some possible negative seasonality slowing down Q4.

 

[Zaxxon]

• S/X could surprise - Q4'17 had 29k deliveries.

InsideEVs has S/X at 16k just in the US. If past trends continue, that would imply > 30k worldwide. They need just over 28k to hit their 2018 guidance of 100k, if all my math is correct. So yes, pretty decent chance of beating S/X guidance for the year by a couple thousand units.

 

[Fact Checking]

Yes I see a good chance of a beat in Energy, I'm currently assuming ramped storage production is not delivered and installed until Q1, with some possible negative seasonality slowing down Q4.

Yes, solar sales and installations are the slowest in the winter, for obvious reasons.

Yet I think there was a real Powerwall and Powerpack order backlog of beyond 6 months (!), which they might have reduced in Q4.

There were plausible reports of 9+ months order backlog for industrial installations - and as long as construction preparations were already done it doesn't take much to install a Powerpack. Computing center UPS solutions are ridiculously expensive and are in high demand.

So Tesla Storage is one of the Q4 wildcards I believe. They took one for the team in Q2-Q3, Q4 could be a growth quarter again.

 

[ReflexFunds]

Nice.

I think there are numerous potential upsides:

• S/X could surprise - Q4'17 had 29k deliveries.
• Energy is probably growing again, now that they got their second cell manufacturing line back.
• ZEV could surprise - Tesla has up to half a billion worth of credits and might want to use them for the March bonds, giving an ICE carmaker an irresistible deal.
• Tesla body shops and other service revenues are probably growing.
• EAP and FSD take rates might have increased after v9 - even with FSD off-menu.
• Tesla has almost a billion buffered up in deferred revenue and would be more than justified to recognize $100m-300m of it with v9 EAP delivered.

So I'd not be surprised to see 7b+ in total Q4 revenue.

I agree with all of these possible upsides.

A few counterpoints;

With the China tariff cut effective today, Tesla was incentivised to slow down S/X imports to China into the new year, so I think they may have chosen to keep a higher than previously planned number of cars intransit on the Ocean. My forecast for S/X deliveries has them missing 2018 guidance for 100k, but I still think my numbers would be a great achievement given they have operated with a massive tariff handicap for the last 6 months in China, which previously accounted for c.20% of volume.

ZEV is a wildcard, but some risk the market for ZEV sales slowed since August with Trump's EPA trying to end California's ZEV program and render stockipiled credits worthless. (I think California will win in court, but still could cause Toyota/FCA pause ZEV purchases for now).

 

[EinSV]

Yes I see a good chance of a beat in Energy, I'm currently assuming ramped storage production is not delivered and installed until Q1, with some possible negative seasonality slowing down Q4.

Thanks for sharing your numbers. I also think there is some upside on your Model 3 sales estimates. If we assume 1500-2000 M3 deliveries to Canada, insideEVs preliminary estimates would give a range of 62,400-63,900 (and they hint that their preliminary numbers may be low due to the flurry of last minutes sales). Given the tax credit deadline Tesla likely has very few M3s in-transit so deliveries could significantly exceed production even with a couple thousand cars in inventory.

In any case, we'll find out soon enough!

 

[Fact Checking]

My forecast for S/X deliveries has them missing 2018 guidance for 100k, but I still think my numbers would be a great achievement given they have operated with a massive tariff handicap for the last 6 months in China, which previously accounted for c.20% of volume.

Counter-counter point: the Netherlands had EV incentives end in 2018 as well, with reportedly high Tesla sales in December. European EV markets are also growing 10-20% QoQ, which could be 1-3k additional sales.

Plus the $7.5k U.S. incentives decreased in 2018 as well, which were easier for high earners (i.e. prospective S/X buyers) to take advantage of.

I.e. those might have absorbed the China drop completely, and then some.

Also note that there were zero last minute S/X leasing levers used - which suggests the whole S/X inventory was sold.

Record S/X deliveries are in the cards I think: 30% chance I'd say. We'll know more soon.

 

[Fact Checking]

ZEV is a wildcard, but some risk the market for ZEV sales slowed since August with Trump's EPA trying to end California's ZEV program and render stockipiled credits worthless. (I think California will win in court, but still could cause Toyota/FCA pause ZEV purchases for now)

They could get a deal of a lifetime from Tesla now though:

• In 2019 Tesla could start refusing to sell ZEV credits: "ICE makers should either pay the full price or make more EVs".
• Right now Tesla is only selling them because they need the cash. That is going to change in the next two quarters.
• California might win in court and a Democratic EPA would restore them in two years anyway. ZEV credits can be stockpiled indefinitely.

I.e. there is a real cost and risk of not buying them as well.