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Third quarter deliveries 2017
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I am in the 30k camp this time around. A bit of a stretch goal because everything has to go right to hit it : 1) unloading of inventory by 3k 2) flawless Model 3 deliveries 3) No S/X production hickups 4) Sold out (ie, production constrained is back) None of them is a guarantee of course so it may very well be that we fall short of 30k and that's ok too. Anything under 26.5k however would be a disappointment. Cash management in a dramatic ramp up is definitely one of my concerns. Tesla Energy for sure is not going to be big cash generator and of course, neither will be the initial 3 deliveries. That leaves the S/X. Historically, we need +25k S/X deliveries to have a shot at positive cash generation on those cars. Since S/X production is fairly stable I don't see how that number would be materially different this quarter. If we don't hit 26.5k overall, then beating 25k S/X by a good margin is really difficult.
Tiger
Active Member
I personally think Tesla has made a bad mistake with their reward/bonus systems, they reward/count delivered vehicles, instead of flawlessly delivered vehicles. This is why the deliveries are rushed and a huge backlog of bugfixes mount. The cars should not be allowed leave the production line if any faults, and it should be possible to identify the employee of each mistake/omission made and necessary steps to fix taken on occurrence. The only way to get to 100% manufacturing efficiency and 100% customer satisfaction is to have a 100% flawless product, or at least put processes in place to try to achieve that. This clearly is not yet the case because of so many recurring problems, as if they have no problem/delivery checklist at the factory. Heck, there is a checklist online, could start there.
OhLookItsRandy
Member
After taking delivery of my MS a week ago, and having 4 issues that need to be corrected, I spoke with the local service manager who gave me a bit of insight. They've hired a new supervisor for QA, and the M3 has QA throughout the process to identify mistakes early on. MS and MX, however, have 1 QA process at the end, and by his admission, it's terrible. He was previously at Lexus and Ferrari, and while he would have the occasional correction to make, he said Tesla is way off the mark on flawless deliveries.
ValueAnalyst
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dc_h
Active Member
I sure hope you are right. I think TE could be close to 500 million, assuming Australia isn't free. Powerwall's seem to be picking up the pace. If they get 500 Model 3's, revenue would be close to 3.5 billon. I think that would surprise the market and if followed by timely Model 3's in Q4 in the 20-30,000 range and 25,000 S/X they are again over 3.5 billion.
Rather than powerwall I think the Australian project has a much better shot at improving TE numbers. But there will also be a drop due to halting of residential door-to-door sales. Personally (and I think the broader market too) will be watching cash generation/consumption more closely than revenue. That's also why it is important to keep gross margin decent.
dc_h
Active Member
Odds of 30% gross margins for S/X are pretty good if they deliver 28,000 to 30,000.
Agree on TE overall(solar down and not recovering until Q2/2018). Sales of PW are picking up though. 20,000 PW is only 100 million, but it creates a measurable base.
dhanson865
Well-Known Member
We're talking Jul, Aug, Sep right? The same period where last year the totals were 9,156 S and 5,783 X (14,939 total).<===Mod edit: poster was considering only US sales
Assuming that is the time period I would expect similar, less than 20,000 total as I don't think Model 3 production will be high enough to offset any slowdown in S/X until Q4 and I'd expect Q3 numbers this year to be similar to Q3 numbers from last year on S/X if not lower.
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Dude, what's the matter? Only looking at US or something?
dhanson865
Well-Known Member
Yes, that was my mistake, sorry I have a toothache and my brain was on autopilot but took a wrong turn.
too late to edit my post. I'll save trying to figure out what I'd really think for after my dentist fixes my brain.
Mod-corrected
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erthquake
Active Member
FWIW, the store here in Santa Barbara only has eight new cars on the main lot. At the beginning of, and for much of this quarter, the main lot was nearly full with 20-25 new cars. Before this quarter, there were rarely more than 10 new cars on the main lot. The smaller side lot has been mostly full with 15-20 CPOs all quarter. Previously, the smaller side lot had few, if any, Teslas.
The drawdown on the new cars in the main lot has occurred over the last two weeks or so. This is only one data point. I'd love to know if anyone has observed this at other stores. If this is part of a company-wide trend, it would suggest that 1) sales are healthy and 2) a refresh is imminent. This quarter, Tesla made it a point to have a lot of new cars on the lot. I don't see a reason for them to change course on this. Thus, the only reason I can come with for the decreasing inventory is that factory production is slowing in preparation for the refresh.
The drawdown on the new cars in the main lot has occurred over the last two weeks or so. This is only one data point. I'd love to know if anyone has observed this at other stores. If this is part of a company-wide trend, it would suggest that 1) sales are healthy and 2) a refresh is imminent. This quarter, Tesla made it a point to have a lot of new cars on the lot. I don't see a reason for them to change course on this. Thus, the only reason I can come with for the decreasing inventory is that factory production is slowing in preparation for the refresh.
I think ValueAnalyst's delivery numbers are going to be very close.
Regarding automotive gross margin, I expect it to be down significantly from last quarter's 22.4% due to price reductions, model mix, and Model 3 startup. It could be helped by ZEV credit sales.
Regarding automotive gross margin, I expect it to be down significantly from last quarter's 22.4% due to price reductions, model mix, and Model 3 startup. It could be helped by ZEV credit sales.
dc_h
Active Member
At the risk of diverging from the thread topic, yes I do. One would think that it should not be hard to improve on a negative 25% GM. But Services and Other is now dominated by the used car business. For many reasons, it's going to be difficult to make it profitable until the used car the business model has stabilized. I'm not expecting any improvement in Q3.
Well the way European deliveries are going and having seen how strong the quarter is in the US so far, it feels like Tesla is selling everything that's not nailed or welded down.
So my scientific guesstimate is 28,600 deliveries and close to 30k production.
M3 ramp progress may be more important though for the share price.
So my scientific guesstimate is 28,600 deliveries and close to 30k production.
M3 ramp progress may be more important though for the share price.
Johann Koeber
Happy Owner
I am seeing delivery reports all over the place. Here in Germany there seem to be A LOT. Sorry, I can't quantify that, it is just the gut feeling, but the gut is right, most of the time.
And, I am getting my MX in September (originally Sept/Oct time frame).
And, I am getting my MX in September (originally Sept/Oct time frame).
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