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

[The Accountant]

I have not provided the detailed Income Statement yet in the quarterly financials thread as I am waiting to get a better grasp on deliveries.
My estimates of $2.01 GAAP and $2.36 Non-GAAP include 255k deliveries and have nothing for the Bitcoin impairment or FSD revenue recognition.

My model has been sitting for a month with 255,000 deliveries, so it's off by 305 cars
I am adjusting the model for improved selling prices (based on some good comments from @Gigapress) and increasing production costs as the Elon "furnace burning cash" comment has me taking a closer look at Austin costs. And I need to add the Bitcoin impairment and Severance costs.
I will have my numbers out shortly.

EDIT: I will publish Q3 & Q4 at the same time so we can marvel at 2H of the year !

 

[scaesare]

Some hints that the Model Y SR 4680 pack might be software limited in energy capacity.

Tesla Giga Texas-Made Model Y with 4680 Battery Cells Shows Signs of Range Limitation by Software

Model Y with 4680 battery cells shows signs of artificial range limitation. Considering that the performance of the new battery cells is higher compared to 2170, this could be a real case.

www.tesmanian.com

1. The car did not enter economy mode when the SOC hit 0% like normal

2. The acceleration was not limited at 0%

3. Immediate jump to 250 kW charging at 0% instead of a rise over a few minutes.

On top of that, I heard somewhere that regen was still fully working at 100% SOC, although someone noted that they might be mixing in the brakes.

SoylentBrown also provides some potential insight

https://twitter.com/x/status/1543114875790102530

https://twitter.com/x/status/1543115860470124545

It's hard to put much faith in what the tweets say when they contain glaring inaccuracies.

He claims that bottom "plate cooling" may play a part in in the battery performance, when all the pack cutaways Tesla has shown and independent teardowns have clearly shown side ribbon cooling.

 

[UnknownSoldier]

There's a silver lining to the Q2 shutdown that will have ripple effects on ASPs and Gross Margins:

• because of the reduced number of Teslas available for sale, it was mainly higher spec versions that were sold
• these higher spec version come with higer average selling prices, and much higher gross margins
• because of reduced new cars available, used cars also sold for higher prices
• Tesla began getting back all leased Models 3 from April 2019 for resale at a profit going forward
• Tesla is able to preferentially sell cars (both new and used) with high-margin FSD software
• ASPs in general increased due to list price increases going back a full year

With a VA claim if needed to offset the GAAP non-sense, I expect Tesla's profits to be higher than might otherwise be the case. Now if substantial costs from Berlin and Austin can be claimed as capital expense, we could do okay.

We're going to have like a $300M to $400M BTC impairment this quarter though. I'm not counting any chickens before they are hatched in Q2.

 

[betstarship]

Updated 2 charts I'm tracking by applying the Q2 2022 P&D report in terms of deliveries:

Here's up to Q1/2022 for the % change in share price from P&D report to Day-after Earnings Call.

 

[betstarship]

Just one thought from those charts:

Giga Texas! Austin to build Tesla's new Cybertruck and Tesla Semi

Tesla says next US Gigafactory will be in Austin, Texas, where work has already begun on an "ecological paradise" that will produce the Cybertruck and Semi.

thedriven.io

July 23rd, 2020 (or Q3 2020) was when Tesla announced Austin would be the site of the next gigafactory. I'm not sure if there's a correlation, but the high-flying (positive) nature of the share price between P&D and Earnings Call in the late 2019 -> mid-2020 range significantly dropped after they announced it.

For example, if you sum all of the share price percentile changes from those quarters (between P&D report and Day-after Earnings Call), you get the following:

Before announcement - Q3/2019 -> Q2/2020: +165.15
After announcement - Q3/2020 -> Q2/2021: +14.01
After building completion - Q3/2021 -> Q1/2022: -28.44

Food for thought.

 

[Tachyon]

We're going to have like a $300M to $400M BTC impairment this quarter though. I'm not counting any chickens before they are hatched in Q2.

The eternal optimist in me wishes and hopes Tesla sold Some of its BTC holdings .

 

[Ohmster]

Ah, there it is.

Tesla Just Had Its Best Production Month

Tesla reported second quarter delivery numbers Saturday. The company delivered TK vehicles, compared with 310,048 delivered in the first quarter of 2022.

www.barrons.com

 

[SOULPEDL]

Ah, there it is.

Tesla Just Had Its Best Production Month

Tesla reported second quarter delivery numbers Saturday. The company delivered TK vehicles, compared with 310,048 delivered in the first quarter of 2022.

www.barrons.com

No mention of record month though on CNBC, a narrow miss.

Tesla delivered 254,695 electric vehicles in the second quarter of 2022

Tesla just posted its second-quarter vehicle production and delivery numbers for 2022.

www.cnbc.com

 

[TN Mtn Man]

Exactly. While no one likes a recession, it may be a gift in disguise for Tesla and stockholders. The strong get stronger, and if anything this has hastened the transition to EVs. Being the largest volume producer of EVs, Tesla stands to emerge stronger from the recession than everyone else.

A recession will imply a reduction in demand-across the board. Which should hit legacy/ICE harder than Tesla. That cut in demand will cut cash flow and hence spending, especially from legacy companies that are already deeply in debt. The increased interest rate/higher borrowing costs puts similar pressure on legacy. All of which means that Tesla, with a ton of free cash and little debt, is in a position of power. Equipment manufacturers will be willing to make deals to book orders and keep some work in their shops. Same with long-term orders for raw materials, as well as components, meaning Tesla may be able to lock in at lower costs. And with their margins, Tesla has a lot of room to cut prices to spur demand, which I think is inevitable anyway. The real death-knell for legacy would be for Tesla to sell MYLRs at $50k-which I think they might be able to do and still turn a profit. But, Elon doesn't seem that bloodthirsty and wants other companies to survive-building EVs of course.

The real question is how long will this recession last (I'm assuming we're already in one-we'll know for sure when we see GDP numbers in a couple weeks) and how deep will it be? Bad part is it might be a long one-this feels like the late 70s in so many ways. Other question-what legacy will survive (say by 2030, with deaths hastened by the recession). I wouldn't put money on much beyond Hyundai/Kia and perhaps VW at the moment.

 

[SOULPEDL]

What the heck are they trying to say? Like they wrote it too soon.

"At 254,695 global deliveries of the Model Y, Model 3, Model S and Model X combined, Tesla beat expectations, which was at around 257,000 to 270,000 units."

Tesla Delivers 254,695 Cars In Q2 2022

Tesla has just released its Q2 2022 production and delivery report, so the numbers are now in. See how Tesla fared this quarter right here.

insideevs.com

 

[Knightshade]

Not surprised at all. Saddened? Yes. Surprised, no.

Elon has on multiple occasions stated how inefficient the layout, paint shop, logistics, etc. etc. are at Fremont.

But they were putting out 25k S/X a quarter pre-refresh.

We're now 18+ months since they stopped making the old ones and still not really close to those levels-- It's pretty clear there's been major issues with the S/X refresh and I'm not sure you can blame them on where they're being built given the gap between how many they make today and how many they made of the old version in the same place.

 

[petit_bateau]

Indeed.

However, although CCS had become a European standard in 2012, it was not yet widely adopted/installed in 2014 when Tesla opened it's patents, which included the vehicle connector design. Unfortunately, the much clunkier CCS was already in being legally mandated in overseas...

After the European GMS standard blew up the US mobile phone manufacturers way back when, you'd have thought that US-peoples would have learnt to get with the programme from the beginning.

Eventually Tesla will adopt CCS in in USA. That delay will set back adoption of BEVs and renewable energy by a significant amount.

 

[SmokyPeat]

But they were putting out 25k S/X a quarter pre-refresh.

We're now 18+ months since they stopped making the old ones and still not really close to those levels-- It's pretty clear there's been major issues with the S/X refresh and I'm not sure you can blame them on where they're being built given the gap between how many they make today and how many they made of the old version in the same place.

The S/X were probably limited by supply chain difficulties more than any problem at Fremont. I wouldn't be surprised if Fremont is back to pre-refresh production levels in Q3.

 

[Singuy]

But they were putting out 25k S/X a quarter pre-refresh.

We're now 18+ months since they stopped making the old ones and still not really close to those levels-- It's pretty clear there's been major issues with the S/X refresh and I'm not sure you can blame them on where they're being built given the gap between how many they make today and how many they made of the old version in the same place.

Remember how they took out a shift for S/X in 2019 and the numbers dropped big time? After they took out that shift the max S/X Tesla have ever produced q4 2020 was 16097 before the refresh stopped production. Currently we are back to those numbers and I remember Elon said "due to demand we are adding that shift back" but no idea if that ever happened.

 

[Englishman]

Lol - another buying opportunity. In the very short period (compared to most here) that I've been an active investor, I've learned that there are many buying opportunities, and they seem to continue to occur. I bought some more this week and if that "buying opportunity" you describe presents itself, I'll probably buy some more. We are currently under water, but each of these buying opportunities is decreasing our average cost/share. If I had only known I'd have all these buying opportunities when I first bought in a little over a year ago in the mid-600s, we'd have 25% more shares or so. No sour grapes here - just continuing to learn.

I'm in a similar situation to you, albeit a little earlier buying in at $370, and all the way up to $1,100!! Damn, however I'm just thinking myself lucky that I've got the chance to buy again at these levels. (Although would have loved to have saved that $1,100 powder for now!). Fast approaching my average cost/share now. Perhaps I'll get a "buying opportunity" to reduce my average, however I can't see us going much lower (although, I've been saying that at every "buying opportunity" on the way back down from $1,100!!

The rise back up will be glorious!

 

[traxila]

But they were putting out 25k S/X a quarter pre-refresh.

We're now 18+ months since they stopped making the old ones and still not really close to those levels-- It's pretty clear there's been major issues with the S/X refresh and I'm not sure you can blame them on where they're being built given the gap between how many they make today and how many they made of the old version in the same place.

There is no doubt that Tesla screwed this up. I though they would be down a month tops to retool.

Almost as if Elon didn’t think there would be much demand, or if it was worth it. He is on record that the S and X are not needed for Tesla’s mission.

Regardless, I think they are proceeding in a deliberate and slow ramp while emphasizing cost efficient production at this point. They figure whoever really wants these cars can wait for them.

I am still promised Dec 2022 to March 2023 for long range X. Ordered last year…. Waiting.

Maybe I should order another one and flip this for 30K profit when it arrives! Same config I ordered is 20K more now.

Nah. What would my SO drive then? She misses her Sig X.

 

[Gigapress]

For the slow S&X ramp my hypothesis is that they are disproportionately impacted by the shortage of chips and other parts compared to the 3&Y.

Tesla has been doing a bunch of work every quarter changing vehicle designs and rewriting firmware to dodge one chip problem after another. Because the 3/Y platform has like 15x more volume than S or X, a given amount of engineering change work is much more valuable for 3/Y, so they’re probably prioritizing that.

Also, S&X are fancy high luxury models that use more chips per vehicle than 3&Y, which makes it more likely one chip type is in short supply at any given time.

I do believe we can confidently rule out low demand as the cause of the low volumes for S&X because the selling prices are $16-25k higher than in Jan ‘21.

Overall I’m agnostic about the question of whether Tesla has botched the refreshed S&X ramp in the last few quarters, because I think we lack sufficient information to determine the answer right now.

 

[TheTalkingMule]

Fair warning, grumpy post incoming.........and this time it's directed at Tesla.

But before I get a ton of disagrees, read the entire post. My grumpiness isn't directed towards all of Tesla.

Shanghai - Q2's production completely out of their control. Shanghai did best they could
Austin - When ramping a brand new cell/pack, totally understandable that it's going slow. And the Shanghai shutdown stalled them on starting 2170 production equipment to Austin.
Berlin - Tad slow but with as much beau acracy as there is over there, it's impossible to tell how much Tesla is being slowed down by outside forces.


But Fremont.......oh Fremont. What a disappointment you've become.

It's been over a year and a half now since the S/X refresh and they still can't get production up to pre-refresh levels and they're not even close. The other disappointment is that it's clear Tesla wasn't nimble enough to reallocate resources to Fremont in Q2 to increase production closer to the max production capacity that Tesla themselves lists. It wasn't battery supply that limited Fremont. Tesla said on the last earnings call that they had a stockpile of batteries. And Tesla had plenty of time/notice to divert chip supplies to Fremont instead of Shanghai. So that tells me it wasn't even in the timeframe of the next year to increase actual production at Fremont to be closer to the capacity that Tesla lists.

At this point, Tesla should just lower that "max capacity" for Fremont and I have a hard time believing a expansion of Fremont is coming anytime soon, definitely not in the next year.........even though 2-3 quarters ago, Tesla themselves were saying Tesla would be expanding Fremont by 50% in the next year.

Overall this of course has no real impact on Tesla going forward. Fremont wasn't going to be a significant part of them reaching 50% growth next year or the year after. But I'm throwing in the towel when it comes to placing any expectations of Fremont going forward. If they can't get S/X production up to even 20k/quarter right now, I don't think they're ever getting S/X back to pre-refresh levels.

The only reason to care about all that stuff is if 2Q earnings are a massive priority. For Elon, they certainly are not.

All will be well!

 

[The Accountant]

Amazing that Tesla can deliver $2.4B in Non-GAAP earnings despite the Shanghai shutdown, the ramping of 2 new sites and with Bitcoin and Severance charges.

I am estimating:

• GAAP EPS at $1,67 ($1.99 excluding Bitcoin charge)

• Non-GAAP EPS at $2.01 (2.34 excluding Bitcoin charge)

My Q2 Forecast Here: Q2 2022
My Full Year Forecast Here: Full Year Forecast

 

[Singuy]

Fair warning, grumpy post incoming.........and this time it's directed at Tesla.

But before I get a ton of disagrees, read the entire post. My grumpiness isn't directed towards all of Tesla.

Shanghai - Q2's production completely out of their control. Shanghai did best they could
Austin - When ramping a brand new cell/pack, totally understandable that it's going slow. And the Shanghai shutdown stalled them on starting 2170 production equipment to Austin.
Berlin - Tad slow but with as much beau acracy as there is over there, it's impossible to tell how much Tesla is being slowed down by outside forces.


But Fremont.......oh Fremont. What a disappointment you've become.

It's been over a year and a half now since the S/X refresh and they still can't get production up to pre-refresh levels and they're not even close. The other disappointment is that it's clear Tesla wasn't nimble enough to reallocate resources to Fremont in Q2 to increase production closer to the max production capacity that Tesla themselves lists. It wasn't battery supply that limited Fremont. Tesla said on the last earnings call that they had a stockpile of batteries. And Tesla had plenty of time/notice to divert chip supplies to Fremont instead of Shanghai. So that tells me it wasn't even in the timeframe of the next year to increase actual production at Fremont to be closer to the capacity that Tesla lists.

At this point, Tesla should just lower that "max capacity" for Fremont and I have a hard time believing a expansion of Fremont is coming anytime soon, definitely not in the next year.........even though 2-3 quarters ago, Tesla themselves were saying Tesla would be expanding Fremont by 50% in the next year.

Overall this of course has no real impact on Tesla going forward. Fremont wasn't going to be a significant part of them reaching 50% growth next year or the year after. But I'm throwing in the towel when it comes to placing any expectations of Fremont going forward. If they can't get S/X production up to even 20k/quarter right now, I don't think they're ever getting S/X back to pre-refresh levels.

Read my post, S/X are exactly at pre-refresh levels after Tesla shut down the overnight shift in 2019.