neroden
Model S Owner and Frustrated Tesla Fan
I think it would be too painful to cashflow. Going up from 3K (2907) to 10K (10600) inventory-in-transit cost them $809 million dollars in cashflow.I don't know what the S/X inventory number is. There has been speculation that they probably won't do the full unwind in 1 quarter, so probably more realistic to expect about 20k-25k vehicles in transit or inventory at the end of Q2. Doing the entire unwind in 1 quarter might be too much.
(I'll be honest, I can't quite reconcile that with the value of the cars. I think maybe almost half of it is parts inventory buildup?)
Think about how much it's going to cost in cash to move inventory up to 30K.
Much of the inventory cash drain can be covered by warehouse line increases, but I believe they only loan 85% of value (this is from memory, Brian could probably correct me), so it's still pulling a lot in cash, plus of course the interest payments.
I expect and hope to see inventory increases again at the end of Q2, but don't be surprised if they only go up to 18000 inventory-in-transit during Q2. They may not even get to 25K in transit at the end of Q3. Hopefully they'll be in steady state by the end of Q4, though.