Thứ Tư, 23 tháng 11, 2016

Q3 2013 results - projections and expectations part 8

  • Nov 5, 2013
    GenIIIBuyer
    I think the balance sheet pretty much confirms that 1000 cars were produced, but in-transit on their way to delivery in Europe at quarter end.

    Inventory went from $254.89M
    at end of Q2 to $347.54M?
    at end of Q3. That is $93M inventory build quarter to quarter.

    During Q2, which involved production ramp-up, Inventory only increased from $237.62M
    at Q1 end. Assuming Q3 non-finished goods inventory build rate of about $20M. That leaves $70M in finished inventory build for Q3. Which translates into slightly less than 1,000 cars. (Finished goods are kept on the balance sheet Inventory section at Cost of Goods Sold value)
    Assuming Cost of Goods Sold of $75K per Model S.
    70M/75K = 933 cars

    ?
    :smile:



    ?
    �
  • Nov 5, 2013
    JRP3
  • Nov 5, 2013
    FredTMC
    Yes, TM should've said his many cars PRODUCED in Q3. It was higher than 5500. Not sure why they didn't.
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  • Nov 5, 2013
    GenIIIBuyer
    Sorry about the spacing, reposting after fixing in NotePad:

    I think the balance sheet pretty much confirms that about 1000 cars were produced, but in-transit on their way to delivery in Europe at quarter end.


    Inventory went from $254.89M at end of Q2 to $347.54M at end of Q3. That is $93M inventory build quarter to quarter.


    During Q2, which involved production ramp-up, Inventory only increased from $237.62M at Q1 end. Assuming Q3 non-finished goods inventory build rate of about $20M. That leaves $70M in finished inventory build for Q3. Which translates into slightly less than 1,000 cars. (Finished goods are kept on the balance sheet Inventory section at Cost of Goods Sold value)


    Assuming Cost of Goods Sold of $75K per Model S.
    70M/75K = 933 cars
    �
  • Nov 5, 2013
    Discoducky
    Sorry for cross posting, but thought notes were important in both the Battery cost thread and this one...Mod's slap me if you don't agree

    Q3 earnings call

    1. Update for Q4
      1. 25% excluding ZEV credits
        1. Pretty secure as TM is nearly � way through
      2. Production constrained and NOT demand constrained
        1. Alleviate these next year
    2. Current assembly line capacity
      1. Main constraint is the cells
        1. Addressing this constraint as it is critical
        2. Announced a deal with Panasonic that alleviates most of the contention next year
    3. Pricing of the GenIII vehicle at parity or discount versus ICE
      1. Price around 35K and consider the savings versus ICE car priced at $28 or in the EU priced at $22
      2. See�s leasing as the way to go for EV�s since the savings are essentially viewed as immediate (month to month)
    4. Priorities and breadth of investments in 2014
      1. 2014 expanding Model S into Asia and more broadly into Europe and also other parts of the world
      2. X development and fine brush strokes
      3. Styling of the �generation� vehicle
        1. Will take a while to build out capacity for this vehicle
    5. Panasonic agreement � Shape the agreement
      1. We�ll make a lot more cars than the current agreement and we�ll need more agreements with possibly other companies
      2. Clear we�ll need more production capacity and we are in the process of figuring that out
        1. Gigafactory!!!
    6. Current level of demand � Quantify please
      1. US/NA demand has continued to increase and TM has starved NA to feed Europe
      2. Could sustain 20K/year in NA and maybe more than that
      3. Currently Europe is like NA back in January and it�s like 10K/year demand
        1. But TM is not trying to drive demand as they can�t fulfill it as they are production constrained
    7. Production/week #�s � Comment on produced vs sold
      1. Lots of cars in transit
      2. Not a capital issue since the cars are already directed at paid customers
    8. China � Allowing for importing percentages
      1. TM would qualify for the % of EV�s that China allows to be imported
      2. February launch
      3. Homologation is finished and have all approvals necessary to ship the car
      4. Put first cars on a boat in January
      5. Seeing good initial demand and TM isn�t doing any marketing
    9. Cell supply issue � Building you own battery cell plant
      1. We are not quite ready to make a big announcement on the Gigafactory, but are exploring options
        1. But if Elon were to guess he would guess that a Gigafactory would be the best option and it would be in NA
    10. How does the cell issue rank in terms of challenges
      1. Biggest single constraint and that is the critical path item
      2. TM can ensure that everything else is less important
    11. Are raw materials an issue?
      1. No, main constituents other than lithium are not an issue either
    12. Panasonic supply agreement � What needs to happen on their side?
      1. They are covered for 2014
      2. TM has high confidence they can deliver
    13. Model X
      1. Few units in 2014 and high volume production is Q2 2015 (normal ramp)
    14. Daimler
      1. B-class is going to be a great car and most compelling electric car on the market
    15. Shipping logistics � Risks?
      1. We�ve got it ironed out and shipped partially built cars to Netherlands and ramping up investment there to add more capabilities.
      2. Every countries electrical grid has its own challenges and nuances
      3. 0 cars in Q2 and >1000 cars starting in August
    16. Balancing shipments to different countries
      1. TM is aware of the tax credits and sympathetic to customers to achieve satisfaction their
      2. Currently in a normal delivery mode
    17. Battery capacity for GenIII
      1. Not the right time to talk about the Gigafactory
      2. Green factory, with a lot of solar panels and recycling with no harmful emissions or toxins
      3. TM is trying to figure out what way to do �Version 1� of the Gigafactory which is comparable to all Li-Ion production in the world
    18. Q3 or outlook benefits from tru-ups
      1. No such luck and no one time benefits as it was a clean quarter
    19. Comment on wait time in Europe and China
      1. 6 to 7 weeks for Europe is best
        1. Subassembly ships to Netherlands
        2. And there is a backlog so about 3 to 4 months currently
      2. Ordering in China now would receive in mid to late Q2
    20. Update on X-country trip
      1. Might do that trip during spring break due to schedules and weather
    21. Mexico crash
      1. Car actually went through several structures
    22. Is demand leveling?
      1. Huge amount of untapped demand in NA
      2. Saw a huge amount of reservation increase
      3. Less delivered cars was due to starting deliveries in other countries
    23. Free cash flow � Update high level guidance
      1. Prefer to give 2014 guidance in the next call
      2. Depends on lots of capex details to be discussed in next call
      3. Balancing growth with cash flow
        1. Infrastructure investment is high
    24. GHG and capex
      1. Effects continue to decline in every quarter and slightly over 1%
    25. Improvement in tac-time and overtime
      1. Production efficiency is continuing to improve
        1. Room to improve in labor costs
        2. Head count per car should get better
    26. Relations with battery suppliers and how they are contributing to IP of the cell
      1. Internals of the cells are evolving quite a lot
      2. TM is being helpful to Panasonic and has a lot of exciting things in the pipeline
    27. Cycle time for improvements
      1. General goal is make a material improvement every 4 years and we started this cell step 1.5 years ago, so you�d assume to see another step change in 2 years
    28. For GenIII � Is 18650 still the right form factor
      1. No reason to go away from this form factor, but it would be odd that it was perfect for long term
      2. Most likely if change, it would be bigger, but not hugely bigger
      3. Large format cells are not cheaper
    29. Configuration of production � S�s and X�s
      1. TM has a game plan and if demand eclipses 100K for both, then they would reconfigure production lines
        1. Not a limiting factor and TM has a handle on how to get there
    �
  • Nov 5, 2013
    kenliles
    I know what you mean regarding the short term reaction; but honestly I believe prices above $140 or so are rooted in a mis-belief that Tesla is next Apple (or similar exuberance) - I think the market catching up to the realization that Tesla scaling doesn't even approach consumer electronics and as such bears absolutely no relation - my 2c
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  • Nov 5, 2013
    Cattledog
    In very broad terms, there are about 1,000 Model X signature reservations in US, Canada, and Europe @ $40K each, and about 7,000 general production reservations @ $5K each (not sure how many at 9/30/13). That's $40M for signature deposits and $35M for general production deposits with Model X. That leaves $65M for Model S deposits (unless I'm missing something), so that's 26,000 Model S deposits at $2,500 each. Is that right? Perhaps there were still some European signatures on the books at 9/30? They are taking deposits for rides up in the SpaceX Dragon capsule? Other?

    �
  • Nov 5, 2013
    Paul Carter
    Approx 22-23k via this quick back of the napkin...
    Model X USA Canada North USD Deposit Europe EUR Deposit Exchange USD Deposit Total USD Deposit
    Signature 904 34 93837,520,0001474,410,0001.32195,829,72343,349,723
    Production 6,563 271 6,83434,170,0001,0214,084,0001.32195,398,77339,568,773
    Totals 7,467 305 7,77271,690,0001,1688,494,000
    		11,228,49682,918,496









    		--------------








    		 Dep. On Balance Sheet140,000,000








    		 Est. Model S Total $57,081,504








    		 Estimated Count 22,833
    Assumes: 1.3219 average 2013 EUR to USD, Model S @ 2.5k / deposit, no cancel/doubles
    �
  • Nov 5, 2013
    c041v
    If those numbers are legitimate, it makes sense why they "aren't really even trying" in China. Any sort of marketing campaign would fill out the next year's worth of production, assuming TM is confident they can even build 40K units. I guess that's a whole new set of problems where they can't service all the markets fast enough and you have people cancelling reservations, biting off more than they can chew as it were.

    Do the deposits carry over Quarter to Quarter, or are they all new?
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  • Nov 5, 2013
    gene
    Maybe you are all , already thinking the same thing but if they are supply constrained as it is, and here in the USA. Then why go international at all? Unless....unless..... Tesla has some big plans we don't have even a clue of yet....?
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  • Nov 5, 2013
    Cattledog
    Way more detail than I, but same conclusion - 20K+ Model S cars reserved? How are they delivering them in a 4-6 weeks then if they are making at best 2,500/month?

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  • Nov 5, 2013
    Gtoffo
    Good point.... 6 [email�protected] cars a week produced = 3300 cars preordered. Either Elon was reducing the lead time so as to not discourage new buyers or there must be more Model X preocrders we don't know about..... also the deposit can be significantly higher in some parts of the world. I've read that in china for example it is around 40k$.
    �
  • Nov 5, 2013
    austinEV
    Diversification of customer base. If they ever do start to creep up on NA saturation they have Europe and China to seamlessly take up the cars. Plus its a self-financing buildout of the sales, service, charging network in anticipation of the launch of the high-volume Model E in a few years, which is Elon's goal.
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  • Nov 5, 2013
    bonnie
    This +1000. I'm looking at what they said and the report and figuring out how much more I can buy.
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  • Nov 5, 2013
    CapitalistOppressor
    We've had a mismatch between actual observable reservations (ie, reservations that are converted into sales as shown by short wait times) since January. My favorite hypothesis was that there were a large number of reservations which never confirmed and who are waiting for an opportune time (for whatever individual reasons) to purchase the car.

    That explains at least 15k+ missing reservations that we used to track here on TMC and which seemed to be rendered defunct when Tesla sent everyone with a reservation a letter asking them to confirm back in December.

    When you add folks who are in a similar situation in Europe with the untested reservations in Asia you can get somewhere close to 20k.

    The only reason that I am not comfortable with that explanation is just the fact that we are pushing up on a year now since the bulk of those folks got sidelined. Still, there just isn't anything else that fits the data.

    Here is the (no longer maintained) reservation tally that shows the kinds of numbers I am talking about. Note the ~18k net reservations as of March 3. By that point the production waiting list was essentially down to what it is now, which essentially means most of those sales were never closed (on a net basis anyways) -

    - - - Updated - - -

    I think there are just a lot of people who reserved, and who really really want the car but aren't in a position to purchase it right now. Tesla took numerous actions that seemed designed to shake them loose (like changing the requirement to purchase a service agreement, or defusing any of a number of other "controversies" from late 2012 by changing their policies), but finally gave up because underlying demand accelerated enough that they didn't need to close the sale with old reservation holders.

    - - - Updated - - -

    I suppose that another possibility is that a substantial number of those people intend to roll their reservation over into a Model X or Model E, but just haven't done so yet, either because they are lazy (after all its 18 months before Model X is available) or because they can't reserve a Model E yet.
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  • Nov 5, 2013
    kenliles
    Likely a combination of those along with rolling to lease.
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  • Nov 6, 2013
    DonPedro
    They are supply constrained at the moment, but that situation will not persist. Especially not since they are ramping the production up so fast. International expansion takes time, so they start now to lay the ground work for sufficient demand in 2014 and beyond.
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  • Nov 6, 2013
    Jackl1956
    Jim Sinegal of Costco, was famous for saying: "We are building a company to be here one hundred years from now, not to meet the quarter to quarter expectations of Wall Street."

    Maybe, we should rethink this thread.
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  • Nov 6, 2013
    Paul Carter
    Yes, just like Cash. :)

    Good point. I think the 2.5k division is wrong then. I now have a feeling their way more 5k reservations in there. So my napkin has ran out of space and facts to come up with a reasonable guesstimate at this point.
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  • Nov 6, 2013
    brian45011
    Any possiblility that the Customer Deposits line on the Balance Sheet also includes Extended Service Plans? If so, there would be a gradual accretion as more cars with Extended Service Plans are sold.
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  • Nov 6, 2013
    Curt Renz
    Tesla Motors may not advertise through the traditional media, but today I received an offer through email to test drive a Model S this weekend in Chicagoland. Tesla emailed to me similar ads on July 31 and October 9. I assume I�m on their mailing list as a shareholder without a Tesla car. So as Gene wonders about international expansion, I might wonder about this type of domestic advertising. The implication is that either demand is slowing, or that supply constraints are expected to alleviate.

    I really wouldn�t worry about demand, since the company could implement a wider form of advertising. It may be hard for TMC members or Californians to believe, but a great many Americans are still unaware of Tesla Motors and its cars. I was unaware until receiving a tip in January and performing research which resulted in my share purchase. Monday I received a photo from a high school 1963 classmate and car enthusiast in Delaware seated in a replica 1927 Ford Roadster he had made (see image below.) I mentioned Tesla, and he responded, �I�ve seen some info on them, but not much.�

    During the eighties I lived in Palo Alto and friends tell me there is a Model S on nearly every block. That certainly is not the case in the rest of the country. Not even close. Word of mouth can take a while to traverse a continent. I see much untapped demand. If Tesla is sending email ads to people like me, my suspicion is that supply constraints are expected to alleviate, but that Elon did not have sufficient proof to give analysts during yesterday�s conference call.

    Non-Attend 15.jpg
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  • Nov 6, 2013
    gene
    I have a very good feeling about Q4! Only hunch but a hunch with good reasons.
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  • Nov 8, 2013
    smorgasbord
    It's worse than that - they're clogging up the carpool lanes! The other day I was the lead car in a 3-Tesla carpool lane parade. As usual, they don't waive back at me, though.
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  • Nov 8, 2013
    brianman
    They're waiving the wave protocol.
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