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the margin guidance they gave included credits as far as i know. so your 16% gross margin would apply to the $491 million in revenue.
Not sure what is 2 shifts based on. I am pretty sure that design output capacity is 500 cars/day/shift. It looks that the 2 shifts remark is based on the fact that Tesla was running partial second shift during March. If true, it is not an indication of the design output capacity, just an indication that they are not at the design output yet. Once they are able to completely tune their production and achieve 25% margin (without the regulatory credits), they will be at 500 cars/day/shift. According to their projections it will happen by the end of this year.
Zzzz...
Member
The assembly line was designed to output 100 units a day, one shift, 8 hours, or 500 cars a week, in 5 working days/40 hours.
It is based on Elon's remarks and even on Tesla Factory video one station team was trying to archive around 4 minutes work time on a unit, that almost perfectly place daily output to 100 units, with one shift. Video was shot before actual production started.
It is known that in Q4 '12 TM was using two shifts. It also known that Tesla let go temporarily workers recently. I do wonder what is the source of 2 shifts info, DrDave talking about.
Thought the question was if the 500 produced in a single week was done at one or two shifts, so I answered. Tesla ran full 2 shifts all of Q1 (not partial in March, not sure where that notion came from). They did run 2 shifts on a couple Saturdays in March as well, but not every Saturday like at the end of Q4.
If the question was intent or design, then yes 100/8-hr day would have been the answer.
Updated Q1 Model Income Statement
i guess tesla i.r. just doesn't reply to emails. that plus their voice messages apparently aren't checked. ok, first the initial guidance. i changed a couple assumptions: raised sg&a 5%, increased margins to 18%. i believe this is how you take the initial q1 guidance and come to a set of numbers consistent with what we were told on the last earnings call.
next i have their recently upped q1 guidance compared to the initial. i am going to assume the big-boy analysts are right and the warrant liability should be reversed. since they kept saying that they wouldn't bump up production unless they got more efficient, i think we should assume margins are going to be better than expected too. it's amazing that the average analyst's revenue/eps estimate is $489m / -1c. seem too low to me. what i did below is just take the assumptions that made the q1 guidance work and update to the revised 4750 estimate with slightly higher margins.
and finally: 4,750 cars? not for me. a variety of data sources point to higher numbers. i had been using 5,100 but after some conversations with others i think it's probably just under 5,000. production i'm pretty sure was around 5,400. i think there is some real upside to margins as the consistent drumbeat on the call was that production wouldn't be increased unless margins increased.
5400 cars made would put their end-of-quarter delivery pipeline at 900 cars. that's a big number & would give them a big jump on q2. for q1 i just have a hard time using $20k per car in credits, which is what i assumed above. so i'll go with last quarter and use $16k per car in credits, a $90k average sell, 20% gross margins. the latest version of what i believe below: $535 million in revenue, 12c non-gaap eps. if that warrant liability didn't change it will probably be over 20c non-gaap. even if the warrant liability doesn't get flipped, they're pretty close to positive gaap eps on this model.
i got some new data on the reservations and just working on my reservations model now.
i guess tesla i.r. just doesn't reply to emails. that plus their voice messages apparently aren't checked. ok, first the initial guidance. i changed a couple assumptions: raised sg&a 5%, increased margins to 18%. i believe this is how you take the initial q1 guidance and come to a set of numbers consistent with what we were told on the last earnings call.
| Revenues | 2012Q4 | initial q1 guide | 2013Q1 | |
| A | Auto Sales | 294,377 | 4500 x 110k? | 495,000 |
| B | Dev Services | 11,955 | guess $10m | 10,000 |
| C=A+B | Total | 306,332 | 505,000 | |
| Cost of Sales | ||||
| D | Auto Sales | 278,710 | ||
| E | Dev Services | 3,765 | ||
| F=D+E | Total | 282,475 | 414,100 | |
| G=F-C | Gross Profit (loss) | 23,857 | 18% of sales | 90,900 |
| Operating Exp/Income | ||||
| H | R&D | 68,832 | down 15% | 58,507 |
| I | SG&A | 45,908 | up 5% | 48,203 |
| J=H+I | Total | 114,740 | 106,711 | |
| K=G-J | Operating Income | (90,883) | (15,811) | |
| L | Interest Income | 85 | - | |
| M | Interest Expense | (27) | (100) | |
| N | Other Income | 746 | 500 | |
| P=K+L+M+N | Income before Tax | (90,079) | (15,411) | |
| Q | Provision for Taxes | (147) | (150) | |
| T=P-Q | Net Income | (89,932) | no guidance | (15,261) |
| Reconcile to Non-GAAP | ||||
| T | Net Income | (89,932) | (15,261) | |
| U | Stock-based Comp | 14,416 | 15,000 | |
| V | Warrant Liability Chg | 958 | 1,000 | |
| W=T+U+V | Non-GAAP Income | (74,558) | slightly positive | 739 |
| Revenues | initial q1 guide | 2013Q1 | updated q1 guide | 2013Q1 | |
| A | Auto Sales | 4500 x 110k? | 495,000 | 4750 x 110k? | 522,500 |
| B | Dev Services | guess $10m | 10,000 | guess $10 million | 10,000 |
| C=A+B | Total | 505,000 | 532,500 | ||
| Cost of Sales | |||||
| D | Auto Sales | ||||
| E | Dev Services | ||||
| F=D+E | Total | 414,100 | 431,325 | ||
| G=F-C | Gross Profit (loss) | 18% of sales | 90,900 | 19% of sales | 101,175 |
| Operating Exp/Income | |||||
| H | R&D | down 15% | 58,507 | down 15% | 58,507 |
| I | SG&A | up 5% | 48,203 | up 8% | 49,581 |
| J=H+I | Total | 106,711 | 108,088 | ||
| K=G-J | Operating Income | (15,811) | (6,913) | ||
| L | Interest Income | - | - | ||
| M | Interest Expense | (100) | (100) | ||
| N | Other Income | 500 | rev. warr. Liab | 10,690 | |
| P=K+L+M+N | Income before Tax | (15,411) | 3,677 | ||
| Q | Provision for Taxes | (150) | (150) | ||
| T=P-Q | Net Income | no guidance | (15,261) | positive | 3,827 |
| Reconcile to Non-GAAP | |||||
| T | Net Income | (15,261) | 3,827 | ||
| U | Stock-based Comp | 15,000 | 15,000 | ||
| V | Warrant Liability Chg | 1,000 | reversed liability | (10,690) | |
| W=T+U+V | Non-GAAP Income | slightly positive | 739 | positive | 8,137 |
5400 cars made would put their end-of-quarter delivery pipeline at 900 cars. that's a big number & would give them a big jump on q2. for q1 i just have a hard time using $20k per car in credits, which is what i assumed above. so i'll go with last quarter and use $16k per car in credits, a $90k average sell, 20% gross margins. the latest version of what i believe below: $535 million in revenue, 12c non-gaap eps. if that warrant liability didn't change it will probably be over 20c non-gaap. even if the warrant liability doesn't get flipped, they're pretty close to positive gaap eps on this model.
| Revenues | updated q1 guide | 2013Q1 | luv's guesstimate | 2013Q1 | |
| A | Auto Sales | 4750 x 110k? | 522,500 | 4950x106k | 524,700 |
| B | Dev Services | guess $10 million | 10,000 | guess $10 million | 10,000 |
| C=A+B | Total | 532,500 | 534,700 | ||
| Cost of Sales | |||||
| D | Auto Sales | ||||
| E | Dev Services | ||||
| F=D+E | Total | 431,325 | 427,760 | ||
| G=F-C | Gross Profit (loss) | 19% of sales | 101,175 | 20% of sales | 106,940 |
| Operating Exp/Income | |||||
| H | R&D | down 15% | 58,507 | down 15% | 58,507 |
| I | SG&A | up 8% | 49,581 | up 8% | 49,581 |
| J=H+I | Total | 108,088 | 108,088 | ||
| K=G-J | Operating Income | (6,913) | (1,148) | ||
| L | Interest Income | - | - | ||
| M | Interest Expense | (100) | (100) | ||
| N | Other Income | rev. warr. Liab | 10,690 | rev. warr. Liab | 10,690 |
| P=K+L+M+N | Income before Tax | 3,677 | 9,442 | ||
| Q | Provision for Taxes | (150) | (150) | ||
| T=P-Q | Net Income | positive | 3,827 | positive | 9,592 |
| Reconcile to Non-GAAP | |||||
| T | Net Income | 3,827 | 9,592 | ||
| U | Stock-based Comp | 15,000 | 15,000 | ||
| V | Warrant Liability Chg | reversed liability | (10,690) | reversed liability | (10,690) |
| W=T+U+V | Non-GAAP Income | positive | 8,137 | positive | 13,902 |
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Zzzz...
Member
Ohh, I thought with all the talks about efficiency and profitability guidance that Tesla already got to about a level line was designed for... BTW, I looked up video, station team was targeting 4m40s time, and such time imply 102 cars produced a day + few seconds unit switch almost perfect 100 units a day.
luvb2b: that 2012Q4 string at the caption of columns is quite confusing, but I figured it
I have re-run my calculations with an increased Gross Margin of 18.5 vs. originally assumed 15. Although Tesla's guidance was "mid-teens" which could be interpreted as 17.5%, this margin lead to improbably high Development Services income. I ended up using 18.5% because it leads to a more reasonable $17,446K in Development Services. Although this entails rather large 45.4% increase as compared with Q4 2012, this does not seem totally unreasonable, given that MB B-Series EV supposed to go in production in 2014.
The big conclusions from my calculations:
1. Gross Margin for original Tesla Q1 projection was about 18.5%.
2. Based on the revised Tesla Q1 projection (profitable GAAP and non-GAAP), the gross margin is 20.5%, 2% higher that Tesla's original projection.
3. The Model S margin for original Tesla Q1 projection is 3.65%. This positive margin for Model S is very significant, as there are some (most notably Corey Johnson of Bloomberg) that question whether Tesla is actually selling cars for more than it took to build them... Looks like Tesla's original projections indeed were based on positive Model S margin.
4. The Model S margin for the revised Q1 projection (profitable GAAP and non-GAAP) is 6.2%, more than 2.5% higher than the original projection (#3 above) and 15.8% (!) higher that -9.6% Model S margin that was achieved in 2012 Q4. This indicates that only after one quarter Tesla improved Model S margin almost half way from where there were at the end of 2012 to where they plan to be at the end of 2013. There is a good possibility that they will get to the stated goal of 25% before Q4 2013.
The big conclusions from my calculations:
1. Gross Margin for original Tesla Q1 projection was about 18.5%.
2. Based on the revised Tesla Q1 projection (profitable GAAP and non-GAAP), the gross margin is 20.5%, 2% higher that Tesla's original projection.
3. The Model S margin for original Tesla Q1 projection is 3.65%. This positive margin for Model S is very significant, as there are some (most notably Corey Johnson of Bloomberg) that question whether Tesla is actually selling cars for more than it took to build them... Looks like Tesla's original projections indeed were based on positive Model S margin.
4. The Model S margin for the revised Q1 projection (profitable GAAP and non-GAAP) is 6.2%, more than 2.5% higher than the original projection (#3 above) and 15.8% (!) higher that -9.6% Model S margin that was achieved in 2012 Q4. This indicates that only after one quarter Tesla improved Model S margin almost half way from where there were at the end of 2012 to where they plan to be at the end of 2013. There is a good possibility that they will get to the stated goal of 25% before Q4 2013.
Avg Selling Price, Margin, & Gross Profit Table
apologies in advance as there is a lot of text & information here.
the table i was playing with below is interesting. using the most recent management guidance of $4,750 units and the assumptions matching the middle income statement model i presented above, i developed a table which shows the relationship of average revenue per car (including credits) and gross margin to non-gaap profit. the numbers in dark green bold are the combinations of revenue/car & margin that result in positive non-gaap earnings. i estimated the difference between gaap and non-gaap to be near $4 million, meaning you need at least $4 million of non-gaap to get to gaap profitability. the combinations that give you gaap and non-gaap profitability are in bright green.
there are a few interesting implications here. the gross margin for the quarter is almost certainly 18% or higher. it's most likely at least 19%. you need $115k average revenue per car at 17% margins to show non-gaap profits, that's not likely. at $110k average revenue per car and 18% margin, the non-gaap profit is $2.8m. i think that's too low to get you a gaap profit, which is what they said.
way i see it, margins had to be 19%+. that's important because even at $105k average revenue/car it means that tesla actually made gross profits on making cars, and not just on credits. this is a major criticism of the shorts. it's not a lot of profit yet, but trending in the right direction gives them credibility about their 25% goal. $105,000 x 19% = $19,950. even if credits were $16k per car with the retail price at $89k, that still implies a pure manufacturing gross profit of almost $4k per car. that's a 4.4% margin on the $89k avg retail price.
now consider that 4.4% is the average gross margin for the quarter. i'm pretty sure they started the quarter with automotive gross margins (again, excluding credits) near zero or negative. probably it means the current automotive gross margin is 9-10%. that's better than general motors and closing quickly on ford which runs 11-12% gross margins on autos. and we're still not done optimizing yet. wow. it'll be nice to see the final numbers but it's pretty damn impressive so far.
i added a couple other notes, find the [SUP]1,2,3[/SUP] numbers in the chart below, they are:
[SUP]1[/SUP] these are the closest to where the street estimates currently are.
[SUP]2[/SUP] this is where i think tesla will actually end up for the quarter.
[SUP]3[/SUP] this is tesla's longer term target: 25% gross margin on model s without any credit revenue.
i think based on this table and my estimates above, i'm pretty comfortable that the earnings report is going to be fantastic. please feel free to put forth your opinions... especially any negative ones. :wink:
i'm sure the smart money on the street already knows this, or is in the process of figuring it out. the real key now is trying to understand what the q2 and rest of year guidance might look like.
apologies in advance as there is a lot of text & information here.
the table i was playing with below is interesting. using the most recent management guidance of $4,750 units and the assumptions matching the middle income statement model i presented above, i developed a table which shows the relationship of average revenue per car (including credits) and gross margin to non-gaap profit. the numbers in dark green bold are the combinations of revenue/car & margin that result in positive non-gaap earnings. i estimated the difference between gaap and non-gaap to be near $4 million, meaning you need at least $4 million of non-gaap to get to gaap profitability. the combinations that give you gaap and non-gaap profitability are in bright green.
there are a few interesting implications here. the gross margin for the quarter is almost certainly 18% or higher. it's most likely at least 19%. you need $115k average revenue per car at 17% margins to show non-gaap profits, that's not likely. at $110k average revenue per car and 18% margin, the non-gaap profit is $2.8m. i think that's too low to get you a gaap profit, which is what they said.
way i see it, margins had to be 19%+. that's important because even at $105k average revenue/car it means that tesla actually made gross profits on making cars, and not just on credits. this is a major criticism of the shorts. it's not a lot of profit yet, but trending in the right direction gives them credibility about their 25% goal. $105,000 x 19% = $19,950. even if credits were $16k per car with the retail price at $89k, that still implies a pure manufacturing gross profit of almost $4k per car. that's a 4.4% margin on the $89k avg retail price.
now consider that 4.4% is the average gross margin for the quarter. i'm pretty sure they started the quarter with automotive gross margins (again, excluding credits) near zero or negative. probably it means the current automotive gross margin is 9-10%. that's better than general motors and closing quickly on ford which runs 11-12% gross margins on autos. and we're still not done optimizing yet. wow. it'll be nice to see the final numbers but it's pretty damn impressive so far.
i added a couple other notes, find the [SUP]1,2,3[/SUP] numbers in the chart below, they are:
[SUP]1[/SUP] these are the closest to where the street estimates currently are.
[SUP]2[/SUP] this is where i think tesla will actually end up for the quarter.
[SUP]3[/SUP] this is tesla's longer term target: 25% gross margin on model s without any credit revenue.
i think based on this table and my estimates above, i'm pretty comfortable that the earnings report is going to be fantastic. please feel free to put forth your opinions... especially any negative ones. :wink:
i'm sure the smart money on the street already knows this, or is in the process of figuring it out. the real key now is trying to understand what the q2 and rest of year guidance might look like.
| non-gaap profit @ 4,750 units, $10m dev. services, $58.5m r&d, $49.6m sg&a, 0.05m other, $15m stock-based comp. numbers in thousands. formula (not exactly spacex rocket science): (price x 4750 + $10000)*margin - 58,507 r&d - 49,581 sg&a + 50 other + 15,000 stock based comp. gaap profit = non gaap profit - $4 million. the table shows non-gaap earnings. | |||||||||||
| avg rev./car | |||||||||||
| margin | $ 90.0 | $92.5 | $95.0 | $97.5 | $100.0 | $102.5 | $105.0 | $107.5 | $110.0 | $112.5 | $115.0 |
| 14.0% | (31,788) | (30,126) | (28,463) | (26,801) | (25,138) | (23,476) | (21,813) | (20,151) | (18,488) | (16,826) | (15,163) |
| 15.0% | (27,413) | (25,632) | (23,851) | (22,069) | (20,288) | (18,507) | (16,726) | (14,944) | (13,163) | (11,382) | (9,601) |
| 16.0% | (23,038) | (21,138) | (19,238) | (17,338) | (15,438) | (13,538) | (11,638) | (9,738) | (7,838) | (5,938) | (4,038) |
| 17.0% | (18,663) | (16,644) | (14,626) | (12,607) | (10,588) | (8,569) | (6,551) | (4,532) | (2,513) | (494) | 1,525 |
| 18.0% | (14,288) | (12,151) | (10,013) | (7,876) | (5,738) | (3,601) | (1,463) | 675 | 2,812 | 4,950 | 7,087 |
| 19.0% | (9,913) | (7,657) | (5,401) | (3,144)[SUP]1[/SUP] | (888)[SUP]1[/SUP] | 1,368 | 3,625 | 5,881 | 8,137[SUP]2[/SUP] | 10,393 | 12,650 |
| 20.0% | (5,538) | (3,163) | (788) | 1,587 | 3,962 | 6,337 | 8,712[SUP]2[/SUP] | 11,087[SUP]2[/SUP] | 13,462[SUP]2[/SUP] | 15,837 | 18,212 |
| 21.0% | (1,163) | 1,331 | 3,825 | 6,318 | 8,812 | 11,306 | 13,800[SUP]2[/SUP] | 16,293[SUP]2[/SUP] | 18,787 | 21,281 | 23,775 |
| 22.0% | 3,212 | 5,825 | 8,437 | 11,050 | 13,662 | 16,275 | 18,887 | 21,500 | 24,112 | 26,725 | 29,337 |
| 23.0% | 7,587 | 10,318 | 13,050 | 15,781 | 18,512 | 21,243 | 23,975 | 26,706 | 29,437 | 32,168 | 34,900 |
| 24.0% | 11,962 | 14,812 | 17,662 | 20,512 | 23,362 | 26,212 | 29,062 | 31,912 | 34,762 | 37,612 | 40,462 |
| 25.0% | 16,337[SUP]3[/SUP] | 19,306[SUP]3[/SUP] | 22,275 | 25,243 | 28,212 | 31,181 | 34,150 | 37,118 | 40,087 | 43,056 | 46,025 |
| 26.0% | 20,712[SUP]3[/SUP] | 23,800[SUP]3[/SUP] | 26,887 | 29,975 | 33,062 | 36,150 | 39,237 | 42,325 | 45,412 | 48,500 | 51,587 |
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luvb2b: that 2012Q4 string at the caption of columns is quite confusing, but I figured it
thanks. corrected the error.
luvb2b, how are you getting to $105K ASP?
According to my calculations, assuming that 25% are ordering Model S Performance, I am getting around $95K. In the end my analysis yields very similar results (see my post above). The detailed Q1 2013 results will be very strong.
Thinking about Elon's strategy - teaser about profitability GAAP and non-GAAP, then the financing, service, superchargers and mystery announcement, and then final round in the form of detailed Q1 2013 results - it is brilliant indeed.
According to my calculations, assuming that 25% are ordering Model S Performance, I am getting around $95K. In the end my analysis yields very similar results (see my post above). The detailed Q1 2013 results will be very strong.
Thinking about Elon's strategy - teaser about profitability GAAP and non-GAAP, then the financing, service, superchargers and mystery announcement, and then final round in the form of detailed Q1 2013 results - it is brilliant indeed.
the selling prices i am showing above include the zev / ghg credit revenue. you had that as a separate item and i don't.
i used average retail price of $89k and then added $16k for credits = $105k total revenue per vehicle.
Thanks, I did figure the same after posting...
The reason that I included regulatory credits separately is because I was calculating Model S margin as opposed to the total gross margin. I am looking forward for Tesla to confirm that as far as Model S margin is concerned, they are indeed half way from where they started in Q4 2012 to where they were guiding investors they will be at the end of 2014.
Clprenz
Member
Just to add again, based off of surveys the cars price is most likely between 89,000 and 94,000. that it for Tesla, for the consumer it would be like 81,500 - 86,500
That is not a Variable in estimates. The only variables we are looking at is Profit margin per car, and emission credits per car. the average car price it not 110,000 sense that would be the very few performence people with everything installed. the car on average is probally about 92,000. Tax credit wise I think would be about 12,000 per car
That is not a Variable in estimates. The only variables we are looking at is Profit margin per car, and emission credits per car. the average car price it not 110,000 sense that would be the very few performence people with everything installed. the car on average is probally about 92,000. Tax credit wise I think would be about 12,000 per car
Jonathan Hewitt
Active Member
Maybe after this next earnings report stock price won't go down...assuming we don't have a huge run up right before. I wish I could put more money in but I will be job searching next summer and need to have some transition money for that time period.
i changed some of the wording in my table post. i meant to say average revenue per car, not average selling price as i had it written. hopefully it's clear now that i include credits in that average revenue per car number. i also added another color to denote the combinations i think will yield gaap profitability.
also keep in mind that the credits per car can have timing issues. that is, for every car booked as revenue in q4 2012 were the credits also booked as revenue in that quarter? or did some of the credits not get sold in time for the end of the year, and therefore the revenue will be realized from those credits this quarter? same could be asked of 2013 q1 credits - will all the credits get sold in this quarter, or are they holding on to some and selling them next quarter?
that's why i posted the table. instead of guessing price and margin and then trying to figure out profit, it gives you a chance to look at the "final answer" and deduce the answers to the initial question. from the table i can readily deduce that margins almost surely have to be at least 19%.
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Margins will be helped, too, by reduced re-works, i.e. cars where final inspection kicks the car back down the line. I've heard from reliable sources that the rework rate is below 1%, while for the earliest cars it was effectively 100%.
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