Artful Dodger
"Neko no me"
10K drive units per week. Model 3 car production was ~50/50 RWD/AWD, so that's enough drive units for about 6600 Model 3s per week. I'll take that, and the $5K premium that goes with each AWD too. Cheers!
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Not all the 10000/week go to US market
The Blue Owl
Endangerous Herbivore
Btw, not an accounting expert, so can anyone clarify this? Investopedia says gross profit does not include fixed costs, but then in the same paragraph says GAAP requires absorption costing, which includes the fixed costs. I highlighted the two contradictory statements (from Gross Profit):Hey, I'm supposed to be on your ignore list - or was that a lie too?
Apropos lies, you wrote another big one here:
Huh? Gross margin very much does not include fixed costs.
The link you googled doesn't explain it properly, but this one does:
Reasons Why Gross and Contribution Margins Are Different
[...]
"Excluded from both ratios are a company's fixed costs -- among them costs associated with salaried employees and executives and other costs associated with its physical plant."
Another piece of incontrovertible evidence that you are just bullshitting in this thread.
As generally defined, gross profit does not include fixed costs, or costs that must be paid regardless of the level of output. Fixed costs include rent, advertising, insurance, salaries for employees not directly involved in production, and office supplies. However, it should be noted that a portion of the fixed cost is assigned to each unit of production under absorption costing, which is required for external reporting under the Generally Accepted Accounting Principles (GAAP). For example, if a factory produces 10,000 widgets in a given period, and the company pays $30,000 in rent for the building, a cost of $3 would be attributed to each widget under absorption costing.
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Where are you getting that the split was ~50/50? From what they just released: "In the last week of the quarter, we produced over 5,300 Model 3 vehicles, almost all of which were dual motor"
They are making almost no RWD cars anymore, as people appear to want AWD Model 3s almost exclusively. (At least until they release the SR and/or non-PUP version.)
We’re all about to convert to shorts. Please enlighten us with your better calculations and where FC is wrong each item so we can all learn and turn. Ignoring him only makes you appear wrong and weak.
Fact Checking
Well-Known Member
You really have no clue whatsoever ...
So:
- Those non-cash items Tesla excluded from the "slightly positive" Model 3 gross margin in Q2 were mainly stock compensation costs (stock options, RSU, ESPP, etc.), which don't consume cash and which are overall fixed and don't scale up with manufacturing output, plus:
- Cost of automotive revenue includes other non-cash items as well:
- depreciation for tooling, on a units of production basis, but it's a very small amount: their Model 3 per unit tooling depreciation is maybe ~$900, or around ~1.5% of the ASP.
- amortization/depreciation of machinery, which is in CoG as well - but these are straight-line amortized that fade out increasingly as the unit count increases. A quick estimate: if ~$2b in Model 3 machinery is a/d-ed over an average of 5 years, then that's a fixed straight line a/d cost of around $100m/quarter only.
- But again, while it matters to income analysis it doesn't consume cash and is immaterial to cash analysis so why are you even raising it?
- You refuse to face the consequences of performing a correct cash flow analysis with the Q3 deliveries, because they inevitably result in massive improvements for Q3 cash flow.
Overall, you clearly don't know what you are talking about - I suspect you are just copy-pasting talking points you saw on Seeking Alpha without being able to argue your point and without being able to defend your argument...
ZachF
Active Member
Note I said Manufacturing, not sales.
Artful Dodger
"Neko no me"
Yes, its so hard because, you know, a gal of gas only weighs 6 lbs, and a gallon of electrons weighs like 400 lbs. What a looney tune.
dqd88
Member
You're my hero Fact Checking!
ZachF
Active Member
I wonder when Nikola Tesla will get his revenge from beyond the grave as Tesla could soon pass GE in market cap?
Artful Dodger
"Neko no me"
In Fact Checking We Trust. Amen!
Accounting doesn't work that granularly. It takes time to sift through and input all the data and moving parts. Hence why companies generally take a month to report quarterly results. I think that Elon couldn't know exactly how close they were, but knew it was prudent and perhaps necessary for a big weekend push. If no cars were delivered the last day of the quarter maybe that could push profit to zero, obviously Elon didn't want to risk it either way.
My money is on Elon huddled with Deepak and tracking expenses by the hour. This push to deliver 83,500 units was not cheap. Lots of hiring, overtime pay, enclosed carriers at whatever price they wanted... it is going to add up.
The problem is if it indeed came down to the wire, it is not going to be enough to push the SP much higher with big debt payments looming. This was the quarter that needed to be HUGE. I think today's price action is indicative of this general opinion.
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