Fact Checking
Well-Known Member
I wonder if there is a non-accounting reason for waiting.
May be they still need to get some permission from local authorities / crash testing etc ?
The other possibility is they get more credits if they sell in '20 ?
Finally, they may be waiting for some software update before releasing.
IIRC, with X (and 3 too ?) they were waiting on some part for finally selling the cars.
I'm with @ReflexFunds on this one: I think non-GF3 deliveries will be just fine in Q4 even without GF3, and Tesla is probably already highly confident in this outcome with 20 days still left in the quarter.
This means that by delivering say 1k or 2k units from GF3 in Q4 has little added Q4 value, but might as well make the difference to soundly beat Q1'2019 results - which "Q1 shock" must still be a vivid memory for Tesla higher ups. Why make Q4, an already record quarter with half a dozen of major records already, a bit better at the expense of Q1'2020 which is still somewhat of a question mark with a couple of headwinds such as the expected drop in the Netherlands and a smaller post-tax-credit drop in the U.S.?
Plus if GF3 overhead costs (fixed staff costs, running expenses plus depreciation and amortization) are say $40m per quarter and there are 1k GF3 deliveries generating $50m of revenue and $10m of gross profits, then this would materially hurt Q4 gross margins: Model 3 gross margins would drop by about 0.7%.
OTOH if they delay it to Q1 they might either recognize those expenses in Q1, where it will be absorbed by well over 10,000 GF3 deliveries if everything goes to plan, or declare it trial production costs and stick it into capex?
So I think there's multiple good reasons to delay GF3 deliveries to Q1'2020, and that this is basically a tactical call for Tesla. Also note that Tesla is apparently filling Chinese delivery centers with the new Model 3's - if there's any weakness in the end of quarter EU or U.S. deliveries push they could easily deliver 1k-2k units in the final week of Q4, on a moment's notice. We can call it a 'strategic reserve'.