Todd Burch
14-Year Member
I want to make sure I understand you. Are you saying that you think Elon just confirmed to the world that Tesla won’t make money on the Model 3 at 10,000 units a week?
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I want to make sure I understand you. Are you saying that you think Elon just confirmed to the world that Tesla won’t make money on the Model 3 at 10,000 units a week?
Does anyone remember if Tesla discloses big announcements at the annual share holder meeting that could make the SP climb before Q2 ER? I'm thinking specifically about China factory news and possible Chinese funding.
jhm
Well-Known Member
Let's see. The Model 3 LR costs say $28000, and battery pack cost is at $100/kWh. So back out about $2500 for the battery differential, and the cost of the Model 3 SR is at $25,500. So the is $9500 gross profit on the base configuration at $35,000, a margin of 27%.
This seems right on target. Execution is the key.
This seems right on target. Execution is the key.
He, for the record. And it might be a recapitalization rather than a bankruptcy.
But the point I was trying to make is that my objection is not to Tesla or to Musk in principle but rather (principally) to the valuation.
sundaymorning
Active Member
Go short for 2 more quarters, please?
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Causalien
Prime 8 ball Oracle
There were quite a few times where this board hyped the annual shareholder meeting up and thought that there would be some kind of reveal.
Sadly, all Tesla annual shareholder meetings so far had been boring in terms of its effects on the stock price.
Your numbers seem to be substantially confirmed by this section:
For one of those differences, the difference in battery capacity, the changes are straightforward. The battery is nearly the same except the larger one will have more/larger battery modules, nearly all of whose cost is in the additional battery cells contained within. We can thus ballpark the additional margin here with good accuracy. For instance, if we think Tesla gets the battery cells at $120/kWh, then the additional 25kWh will carry an additional $3,000 in cost, and yield an additional $6,000 in gross margin. The truth won’t be far from this. 10%-20% above or below at most (on cost), so $5,400-$6,600 in additional gross margin, if we want to use a range.
of this article:
Elon Musk Told Us Where He Expects Model 3 Margins To Come From - Tesla, Inc. (NASDAQ:TSLA) | Seeking Alpha
I think production numbers will be a better proxy, as depending on how they manage the tax credits limit, it might distort the picture regarding deliveries.
bambam4171
Member
The report from Wirtschaftswoche appeared in more than 10 media in Germany including large ones like Handelsblatt and Manager Managzin. So, there is a strong coverage here about the Model 3 tear down, costs analysis and profitability. All of this news are usually very negative about Tesla but this time the tone is clearly different.
Beside Electrec and Teslarati reporting yesterday I found some other smaller ones picking it up in NA. Still waiting for Bloomberg and CNBC.
I vision them sitting all in a conference room arguing today how they can spin the message in a negative way..... ;-)
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Dan Detweiler
Active Member
stef
Member
Or just go for plan B : ignore like they did for the safety demonstration of model 3 earlier this week ...
Still crickets on the US financial press except thestreet.com. Google search shows German publications, EV publications, BGR, Medium and a few other outlets re-running the BGR story. That's it.
Given the non-stop "cash burn" hype how can this not be news? Amazing.
Sensationalize negative news
Spin negative when possible
Ignore positive news
#pravduh
ValueAnalyst
Closed
Make no mistake: this is the most important data point to come out in recent years for TSLA valuation.
ValueAnalyst on Twitter
ValueAnalyst on Twitter
I am not sure whether the German teardown analysis includes depreciation or not, but in any case according to Deepak on the last conference call, depreciation per vehicle is "well below" $2K at 5K/week (and will be even less at 10K/week).
Rod Avraham Lache, Deutsche Bank AG, Research Division - MD and Senior Analyst [21]
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Just wanted to follow along that line of question. So to the extent that you're adding humans in certain automated processes, can you just help us interpret the extent to which these changes affect the economics on Model 3? And to the extent that you've done some competitive analysis, all of these efforts in the Tesla production system, how do you stack up competitively against other OEMs in terms of labor hours per vehicle or depreciation per vehicle?
[Elon's response omitted]
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Deepak Ahuja, Tesla, Inc. - CFO [23]
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We are very CapEx efficient. Let me just start from that point. And if we look at depreciation costs on a per unit basis at steady run rate of 5,000 or so cars per week, we are, in my mind, well below a lot of our -- I mean, most of our competitors, well below $2,000 per unit depreciation cost. And then overall, clearly, there is some impact, as we have indicated in the letter, from the additional labor we've added but it's temporary, and our expectation fully is a lot of this labor will come out once we stabilize production and then (inaudible) smart ways of automating where it makes sense.
Edited Transcript of TSLA earnings conference call or presentation 2-May-18 9:30pm GMT
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Just wanted to follow along that line of question. So to the extent that you're adding humans in certain automated processes, can you just help us interpret the extent to which these changes affect the economics on Model 3? And to the extent that you've done some competitive analysis, all of these efforts in the Tesla production system, how do you stack up competitively against other OEMs in terms of labor hours per vehicle or depreciation per vehicle?
[Elon's response omitted]
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Deepak Ahuja, Tesla, Inc. - CFO [23]
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We are very CapEx efficient. Let me just start from that point. And if we look at depreciation costs on a per unit basis at steady run rate of 5,000 or so cars per week, we are, in my mind, well below a lot of our -- I mean, most of our competitors, well below $2,000 per unit depreciation cost. And then overall, clearly, there is some impact, as we have indicated in the letter, from the additional labor we've added but it's temporary, and our expectation fully is a lot of this labor will come out once we stabilize production and then (inaudible) smart ways of automating where it makes sense.
Edited Transcript of TSLA earnings conference call or presentation 2-May-18 9:30pm GMT
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copyhacker
Member
As always, the hedge for “GM too low! Losing money on every car sold!” is “ASP too high! Toys for the rich! Bait & switch!”
ValueAnalyst
Closed
I thought about this as well, and I believe depreciation of machinery and tools used directly in Model 3 production have got to be included in the $28,000 figure (specifically in the $10,000 production cost part), while depreciation of indirect real estate not related to Model 3 production (sales, service, delivery centers, corporate office buildings etc) are likely excluded. I suspect Deepak's "well below $2,000 per unit depreciation cost" also includes the former and excludes the latter.
More importantly, however, note that Deepak's $2,000 figure is at the 5,000/wk level, and since we already know that moving production rate to 7,000 to 8,000/wk will not require much additional CapEx, I would estimate it at an even lower $1,200 per unit at full line capacity.
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