Thứ Bảy, 31 tháng 12, 2016

2012 Q4 Earnings Report thread part 1

  • Feb 19, 2013
    carrerascott
    Thought maybe we should create a separate thread for this?
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  • Feb 19, 2013
    Doug_G
    We're about to make a TSLA Discussions subforum, instead of having one massive thread. So go for it.
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  • Feb 19, 2013
    dave
    Is there an actual call that Joe Schmoe like me can call into and listen in? I am a stock holder...
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  • Feb 19, 2013
    gregincal
    Yes, there is a live webcast at Tesla - Investors Overview
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  • Feb 19, 2013
    Doug_G
  • Feb 19, 2013
    dave
    Thanks guys!
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  • Feb 19, 2013
    agelston
    Good Idea

    I'm actually not holding my position into earnings. May be an awful decision but I sold out at the end of today.

    Tomorrow could be the start of an absurd run. But we just had an absurd run. Given how much the stock has risen in the last month, I'd say we're set up for the final shakeout after earnings posts tomorrow.

    Be aware that in market capitalization terms, Tesla is at all time highs. Much higher then the last time the stock hit near 40, due to more shares outstanding from their 2ndaries.

    Going to have to post absurd numbers to live up to expectations (gross margin +20%, production 20k/year, outlook is key)
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  • Feb 20, 2013
    sp4rk
    Like everyone here, I await the call with more anticipation anxiety than any other call ever!
    From a 100% irrational perspective ... I find it a little hard to believe that Elon would appear on Kimmel if he'd just delivered very bad news.
    Then again, (I'm going to catch some odd replies for this comment), Heinrick Fisker (sp?) did appear for a talk at the Chicago Auto Show and he's hardly smiling.
    7 hours to go ...
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  • Feb 20, 2013
    Robert.Boston
    [mod note: discussion on Reservation Cancellation Rate was moved to a separate thread, as I'm sure this will be a topic of conversation long after the Q4 call.]
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  • Feb 20, 2013
    CarbonTax
    Appreciate your perspective sp4rk re: the Kimmel appearance. Elon's personality is forthright and usually quite prescient!?!
    I got burned unloading CREE pre-earnings last month. So I am conversely entrenched in TSLA to pay off my S and/or reserve my Gen III soon!
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  • Feb 20, 2013
    DrJohnM
    Just as a FYI... Elon Musk will be interviewed on CNBC tomorrow "Model S Outlook & First Reaction to Q4 Earnings". Throughout the day (no specific time stated).

    Announced just now on CNBC
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  • Feb 20, 2013
    Citizen-T
  • Feb 20, 2013
    Norbert
  • Feb 20, 2013
    Citizen-T
    First profit in Q1 2013 rather than late 2013, that is unexpected for me at least.
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  • Feb 20, 2013
    agelston
    Not bad. Gross margin 8% is disappointing but they are sticking to the 25% outlook
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  • Feb 20, 2013
    carrerascott
    Aftermarket selloff... Down 5% into the $36s...
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  • Feb 20, 2013
    onlinespending
    Stock taking a big hit after hours.
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  • Feb 20, 2013
    Citizen-T
    Market's reaction is exactly what I was hoping for. Score.
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  • Feb 20, 2013
    avatar
    This is huge. The shorts are going to burn like crazy.

    - - - Updated - - -

    Something is wrong. The after hours page is fluctuating wildly between down 8% to now back up to where it was at close...this should be interesting.
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  • Feb 20, 2013
    ckessel
    The report is good, why would the market be selling off? The market never makes any sense to me.
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  • Feb 20, 2013
    Fr23shjive

    +1. I was hoping for a small sell off too. Hopefully shorts take this opportunity to get out of their position.

    On another note, why did they lock the investor discussion thread. It was a great thread to just go into and talk about random topics.
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  • Feb 20, 2013
    agelston
    This isn't the real reaction yet wait for the conference call.

    I only skimmed the report but nothing is a huge red flag.

    problems
    "Q1 cancellations are likely to remain elevated"

    To get the cancelation rate
    "As a result, we added more than 6,000 new reservations in Q4, up from almost 2,900 in Q3."
    "After deliveries and cancellations, our net reservations at year end, were over 15,000, up from about 13,000 at the end of Q3"
    "we delivered pproximately 2,400 Model S vehicles during the quarter"

    So, with a 0% cancelation rate, net reservations should have increased (6000-2400)=3,600. Since net reservations only increased 2,000, that means that 1,600 cancellations occurred in Q4. A significant amount. Probably about 1/2 to 1/3 of reservation holders asked to convert to non refundable configs.

    Dealbreaker? Not really IMO. It's an expensive car, of course some people have second thoughts.


    However this is scary:

    In Q4 2012, our negative free cash flow (cash from operations plus capital expenditures) was $102 million.

    That's a long ways away from "cash flow positive"
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  • Feb 20, 2013
    jvonbokel
    I agree with both of these posts. :)
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  • Feb 20, 2013
    avatar

    yea - the report is actually quite positive. The note about being profitable in Q1 was a positive surprise. Everything else was in line with expectations. There is a TON of volatility in after hours trading.
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  • Feb 20, 2013
    onlinespending
    Good relative to what? Your own expectations? It matters what investors were expecting (and often times there are unpublicized whisper numbers that they look for). And even then forward guidance is a big deal too. And let's not forget that the stock has gone up a huge % over the past couple months largely in anticipation of Q4 being a good quarter. A good quarter may have already been baked into the price of the stock.
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  • Feb 20, 2013
    Eric from NE
    The report is good if you're in TSLA for your retirement. It's not so good if you're trying to fund this summer's vacation.
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  • Feb 20, 2013
    NigelM
    Discussions specifically about cancellation rate are over here.
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  • Feb 20, 2013
    Citizen-T
    Buy the rumor sell the news. There wasn't enough here to reach "escape velocity". Gravity is pulling us down and there isn't enough here to escape it. We'll see if there is any more in the conference call. I have to admit though, I hope not, I'm still waiting to pick up more shares around $36
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  • Feb 20, 2013
    agelston
    "We ended the year with more than $221 million in total cash, after having made the first quarterly principal payment
    of $12.7 million to repay the loan to the U.S. Department of Energy (DoE) on schedule"


    "In Q4 2012, our negative free cash flow (cash from operations plus capital expenditures) was $102 million"

    Two quarters of cash remaining is not a good report. They still don't have a cushion for any surprises. Fear of another offering of shares.


    I want to see the numbers from the month of December. Hopefully an analyst asks in the call.
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  • Feb 20, 2013
    gg_got_a_tesla
    Now, going profitable in Q1, 2013 will have to be baked into the stock price in the next 3 months. So, nothing to worry about in that timeframe :)
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  • Feb 20, 2013
    ckessel
    Good relative to the whispers that you mentioned. For example, Tesla said possible profitability in Q1, expectations going in seemed to generally be Q3 or later. Tesla basically said it met all the expectations it had set.

    Again, the markets baffle me. What sort of report would have generated a good market reaction?
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  • Feb 20, 2013
    archibaldcrane
    The street was looking for a loss of 53 cents per share for Q4 - that's what was baked in. Since they lost 65 cents per share, that's what is the driver for the after-market price dip.
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  • Feb 20, 2013
    fluxemag
    Now's your chance...I had 36.15x36.20 a few seconds ago.
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  • Feb 20, 2013
    nygiants242
    Anyone have the dial-in number for the call? Thanks!
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  • Feb 20, 2013
    Norbert
    "In the month of December we generated positive free cash flow, through growing sales and careful working capital management."

    [Emphasis mine]

    Cash flow was already positive in December, so I suppose this is a good basis for predicting "slight profit" in Q1, given that they already know about the first half of Q1.

    Who cares about the time before that, if it is already going upwards now?
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  • Feb 20, 2013
    ChrisC
    I was surprised by this:

    "Delivery of cars with the 40 kWh battery pack is expected to begin later this summer."

    I was expecting it to start a lot sooner than that.
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  • Feb 20, 2013
    Citizen-T
    Tempting...
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  • Feb 20, 2013
    dave
    How do you buy stock after hours??
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  • Feb 20, 2013
    smorgasbord
    35.52 and still dropping...


    So, what's the play here and now? Buy Tesla just before Elon spins how great everything is (at 2:30PM PST)?

    And, I do see things as going well. Profitable in Q1 instead of Q4 seems like a big deal. I'll guess the concern is their cash balance. Even reservations don't seem bad.
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  • Feb 20, 2013
    ChrisC
    Go here and follow the steps for registering for the webcast:

    http://ir.teslamotors.com/eventdetail.cfm?eventid=125428

    In case you literally meant phone call, I don't know if they are offering that. I just checked -- there's no mention of phone access in this thread.
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  • Feb 20, 2013
    agelston
    Anyone know how many stores they had in Q3?

    Their SG&A is actually a pretty big factor. 8 million increase from Q3 to Q4 due to the opening of 8 service centers and ? stores (32-Q3 stores at year end)

    If the 8 million comes mostly from the service centers, then their plans to double the amount of service centers in 2013 is going to be material.
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  • Feb 20, 2013
    fluxemag
    You just have to check the box "fill outside of regular trading hours". Please don't use a market order. The volume is so thin that things can move very quickly. I saw it hit 35.50 at the bottom, down 9.5%. Right now it's 40 cents wide.
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  • Feb 20, 2013
    CapitalistOppressor
    Now we're getting into the range I was waiting for. But I am going to monitor the trajectory. I see no fundamental reason for it not to go to $30.
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  • Feb 20, 2013
    NigelM
    Headline paragraph from www.streetinsider.com

    After hours price doesn't surprise me.
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  • Feb 20, 2013
    agelston

    "In the first quarter of 2013, we expect to generate slightly positive net income, on a non-GAAP basis. We also expect to be near breakeven on cash flow from operations"

    NON-GAAP net income. Not meaningless, but not real profits.

    Near breakeven is not breakeven, and is a much less confident statement then previously.

    Worked my way through the report. The biggest concern I have right now is the 8mm increase in SG&A on a increase of only 8 service centers. It doesn't matter if their gross margins are 25% if they achieve it just by moving 'service' expenses to SG&A.

    Still love tesla and am probably going to add during the pullbacks. Very happy i sold out before earnings though. Stock is in need of a pullback
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  • Feb 20, 2013
    NigelM
    I don't really have technicals to back it up, but I feel that there would be some bottoming out around $32-33 and it'll only go that low if the conf call is not good.
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  • Feb 20, 2013
    Norbert
    I'm hoping they are just looking at the EPS so far, and not seeing the turnaround at the end of the quarter.
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  • Feb 20, 2013
    Citizen-T
    Grabbed some in the 35s. No reason not to, I'm well prepared for this one. Wouldn't mind seeing even lower prices in the next few days.
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  • Feb 20, 2013
    derekt75
    $115m in operating expenses. R&D expense going down, Selling expenses going up, so maybe somewhere around $110m next quarter. They hope to achieve 25% gross margin by the end of the year. To break even at 25% margin they'd need to sell $440m in automobiles in a quarter. $440m in cars on 4500 cars is about $98k per car. How do they expect to average $98k per car in Q1? How do they expect to get up to 25% GM in Q1?

    I'm not saying that they're going under or that they're doing anything foolish. I'm just saying that I don't see how their numbers support their conclusion that they'll be profitable in Q1.


    Where does warranty repair fall on the income statement? I suspect that's going to be noticeably higher in Q1. What about selling us our service contracts: is that automotive sales? Will the revenue from service contracts cancel warranty repair expenses in Q1? Does GAAP require that service contract sales get amortized out over the life of the service contract or will Q1 see revenue from 3 quarters worth of car owners buying 4 year contracts?
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  • Feb 20, 2013
    NigelM
    Unfortunately is bite size pieces that make the news these days.
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  • Feb 20, 2013
    DaveT
    Smart move. I think adding some position in the 35s right now is a good move. Thinking of doing the same for me.
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  • Feb 20, 2013
    smorgasbord
    I think this is after-hours knee-jerk reaction to a larger than expected loss for Q4. And, I still think some people even thought the quarter was going to be profitable - there was an article on that recently I can dig up if somebody's interested.

    I think as the conference call proceeds, the stock will come back. But, I've been wrong more often than right, so don't pay attention to my predictions.
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  • Feb 20, 2013
    Norbert
    This will certainly be discussed in the conference call.
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  • Feb 20, 2013
    aznt1217
    anddddddddddddddd there goes all my gains lol
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  • Feb 20, 2013
    smorgasbord
    There is R&D revenue, such as from Mercedes, for instance.
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  • Feb 20, 2013
    ckessel
    Yea, wish I'd sold a bunch earlier (or hell, everything given the market shift is one of the largest in a long time), then again the market reaction is the complete opposite of my reaction. Having a stake in Tesla aside, I read that they've beat their revenue estimate and expect profitability early than expected, I'd think the desire would be to jump on the stock rather than bail out of it.
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  • Feb 20, 2013
    DaveT
    Personally I was hoping for a better year-end report and a spike up in the stock price. But the report is realistic and a bit sobering. Tesla has got it's work cut out for them. But overall, I think everything points to a good 2013 as long as demand keeps up for the Model S and Model X, which I think it will. I see the stock dipping some and recovering... hopefully.
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  • Feb 20, 2013
    Citizen-T
  • Feb 20, 2013
    CapitalistOppressor
    Still reading through letter. Wonder how much they made from regulatory credits. I forgot about those. Last time I checked they might have been worth ~$7,500/car
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  • Feb 20, 2013
    agelston
    k finished going through the report.

    Key things I got out of it.

    A cancelation rate of about 30% from rolling reservations to nonrefundables
    This puts the 6000 reservations/quarter closer to 4200, less then their 20k/year production rate but within reach. Still no demand problem

    SG&A is going up alot this year. 29 service centers costing about 700k/quarter each, doubling them to 58 by years end. Will cost about 16M more a year. Unknown cost of the new stores

    Can extrapolate CapEX
    "In 2013, we plan to spend significantly less on capital expenditures than we did in 2012, as we have concluded the majority of our investment in the Tesla Factory and Model S tooling. This reduction will be partially offset by
    expenditures related to expanding our service and store network, investing in new capital equipment and tooling to
    reduce variable costs and new product development." (funny they said we're cutting capex and offsetting it with capex).

    Cutting capex back to 2011 levels is about a 18Million decrease, similar to the amount SG&A is likely to increase.

    Their going to have a hard time hitting net margins of 10% by end of year even with gross margins of 25% with this SG&A, going to need close to 800M in sales. Which is actually less then their annualized revenue rate right now, so its quite possible, just not there yet.
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  • Feb 20, 2013
    Citizen-T
    For sure. It's just a reason to take profits, that's all. We've been flying too high for too long, we'll be back.
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  • Feb 20, 2013
    CapitalistOppressor
    I feel like it was a huge net positive. It's only sorta true that all publicity is good publicity, but in this case it educated the public and Tesla came off looking good. At a minimum media elites will see it that way, and that will drive future coverage.

    - - - Updated - - -

    Finished the letter. Deliveries a tad lower than I expected for the quarter (2,400, vs 2,500) and revenue quite a bit higher at $306m. I am guessing that the clean air credits amounted to a ton of revenue. I remember arguing that when some Peterson blog somewhere, but I had totally forgotten.

    At one point last year the credits were worth ~$7,500 for the 85kWh battery, which is a lot of juicy, juicy cash ($18m if they got that price for them).

    - - - Updated - - -

    Hmm.. still bouncing around @$35.50, so the bleeding is stopped. Might as well pick some up since that was my plan in the first place.
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  • Feb 20, 2013
    sp4rk
    Sorry, what do you mean by clean air credits - for Tesla?
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  • Feb 20, 2013
    joefee
    Good points�the main concern is still cash burn! The miss on -.53 is what is killing the stock IMHO.
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  • Feb 20, 2013
    CapitalistOppressor
    California Clean Air Mandate requires manufacturers to produce zero emission vehicles, or else purchase credits from a manufacturer who does. Tesla only produces EV's so they get hella credits, and they are quite valuable.

    - - - Updated - - -

    Cancellations sound good. Yaaaay!!! Edit: well a bit of dancing now.
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  • Feb 20, 2013
    Norbert
    Conference call started... "Confident to achieve a demand level in excess of 20,000 per year"

    - - - Updated - - -

    *Very* high confidence to be profitable/break-even in Q1 "very proud of that" ...even without a lot of time to optimize after reaching target production rate, so far.
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  • Feb 20, 2013
    joefee
    profitable in Q1, wait time 6wks (P85) to 5 months �.still sold out for 2013.
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  • Feb 20, 2013
    Norbert
    Demand not in question for 2013, even without stores.

    - - - Updated - - -

    "If we wanted to" could raise production to 500/week, but want to improve efficiency first.

    - - - Updated - - -

    400/week in December required a lot of average of 60-70 hour/week work. Not anymore in Jan/Feb (now 50/week), going to mid-40s in March.
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  • Feb 20, 2013
    inottawa
    stupid czech tires..
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  • Feb 20, 2013
    joefee
    lot�s of opportunities for gross margin improvement > 25%
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  • Feb 20, 2013
    K Hall
    Stock moving up now, picked up a few shares in mid 35's $36.22
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  • Feb 20, 2013
    Norbert
    Costs of battery cells from Panasonic (and parts from other suppliers) goes down as target volume is realized.

    - - - Updated - - -

    "Ideal density of Superchargers is about every 120 - 150 miles"

    - - - Updated - - -

    Software planned, in the next few months, to automatically route a trip to some destination along available Superchargers.
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  • Feb 20, 2013
    K Hall
    New Supercharger Technology announced SOON!
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  • Feb 20, 2013
    Right_Said_Fred
    I believe he said 'later this year'.
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  • Feb 20, 2013
    joefee
    Full charge in 30min?????
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  • Feb 20, 2013
    CapitalistOppressor
    Yes. We really did need the number of parts we ordered. Priceless.
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  • Feb 20, 2013
    Norbert
    Less than 10% 40 kWh, more than 50% are ordering 85 kWh.
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  • Feb 20, 2013
    Vger
    Supercharger upgrade: He hinted at 120 kW at the introduction. That is still not going to get you full in 30 minutes. But it could get you close to a rate of 400 mph if nearly empty.
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  • Feb 20, 2013
    kenliles
    having trouble getting my flash to work so you guys that rare on the cal keep posting here- thanks!!

    you guys are the best - thanks so much!
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  • Feb 20, 2013
    K Hall
    Largest reason for order deferal is customers waiting on the new Red color. The next is suspension. Elon says the air suspension is worth it by the way.

    Model X interest expected to be 70% of the Model S and will exceed Model S sales in some countries.

    North American share is less than 30% of total category sales.
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  • Feb 20, 2013
    NigelM
    Elon: "Model X buying interest likely to be around 70% of Model S and in some countries will exceed demand for Model S"
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  • Feb 20, 2013
    sp4rk
    Something does not add up for me. Close all stores and they'll be still delivering 20,000.

    My res nr back in April 2012 was in the 8000. Today we're hearing res nr of almost 20,000. They delivered mine (8???) this month. So if you subtract 8000 from 20000, I get 12,000.

    So how can 12000 equal 20,000 ... total production of the year?
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  • Feb 20, 2013
    joefee
    call is over :biggrin:
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  • Feb 20, 2013
    JRP3
    That really surprised me.
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  • Feb 20, 2013
    Vger
    A bit of a slow start, but a more enthusiastic finish. I think that is reflected in a slow drifting recovery in the stock price after hours. Now $36.22.
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  • Feb 20, 2013
    CapitalistOppressor
    The implication is that the features not being produced yet (Red, std suspension, 40kWh) battery make up the balance.
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  • Feb 20, 2013
    K Hall
    He said with 10,000 coming from US market. We are only < 30% of category guys.
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  • Feb 20, 2013
    joefee
    Yes, that is correct!
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  • Feb 20, 2013
    Vger
    Actually does not surprise me. Americans are totally in love with large SUV's. Finally one that is energy efficient. If gas prices go over $5 this summer, look out!
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  • Feb 20, 2013
    Enadler
    Highly unsatisfying call.

    No mention of progress on supercharger build out. No talk of X r&d costs or reaffirmation of x launch date. How much work is going into gen 3?
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  • Feb 20, 2013
    CapitalistOppressor

    Plus, technically speaking orders are placed online :biggrin:
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  • Feb 20, 2013
    Vger
    Another thing I loved: Finally the nav system will auto-route you through the Supercharger network! They can design-out Brodering with software! Yay!
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  • Feb 20, 2013
    Norbert
    More notes:

    Compelling leasing for US second half of year (preparing deals), already have a good deal in Europe.

    Word of mouth works well, stores more important for future (2014 and later), but good to start now to get people to become familiar.

    Subsequent quarters after Q1 also expected to be profitable, while not yet as sure about those as about Q1.
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  • Feb 20, 2013
    K Hall
    Total company focus is the get 17% + improvement in efficiencies. Sounds right to me. Walk before you run. He did say they can run 500 + cars aweek now but want to get efficient first.
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  • Feb 20, 2013
    joefee
    Well, we may be back to the 34-36 trading range until Q1 report �. congrats to all who took profits near $40 (I missed it�holding out to 44) :cursing:
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  • Feb 20, 2013
    Volker.Berlin
    I, too, missed any mention of Gen III. It's actually the first conference call, at least in my memory, that doesn't mention Gen III at all.
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  • Feb 20, 2013
    Vger
    I agree. I was at first shocked that there was NO mention of Model X or Gen III in the letter, but then I realized this is the maturing of the company. They have to make money NOW, pay down the loan NOW, then they can play Flash Gordon again.
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  • Feb 20, 2013
    Right_Said_Fred
    That puzzled me too. But it was clarified later on: if they close all stores and fire all sales people they would still be selling enough cars this year to build 20,000 on - and here it comes - momentum alone. So they still need to receive orders to get the 23,000 total they need (3,000 in 2012 and 20,000 in 2013), but they are convinced those orders would simply come in through the internet.

    But with the expanding store network, the sales people and marketing they expect to get many more orders than that, also in Europe and Asia. Elon said that 70% of the market for cars in this price class is outside of the United States.
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  • Feb 20, 2013
    CapitalistOppressor
    It was unsatisfying to me mainly because it didn't really put to bed (for me) the notion that there has been some kind of shrinkage of the reservation list that is fairly dramatic. I need to go back to listen to the call again and see if there are any facts that I could subject to analysis. Off the top of my head though it seems like you'd need something like 50% of the reservation holders wanting to purchase options that aren't under construction yet.
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  • Feb 20, 2013
    Norbert
  • Feb 20, 2013
    K Hall
    They are confirming quickly and "weeding out" reservation holders who are not serious about buying the car. I took that they have over 10,000 confirmed reservations from the US today.
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  • Feb 20, 2013
    Zzzz...
    All I could say is WOW!!!

    But I betted that share price would go down... Now I feel pain cuz:::

    1) Elon expect Q1 to be profitable! What da f!!! All analysts expected no early then Q3 '13 to get that... Problem is, I do believe Elon and expect market to believe...They half way plus over Q1!
    2) He(Elon) expect more then 25% profit margins before Q4 '13? And not only before Q4, but as early as Q2???????? Correct me if I got wrong impression.
    3) They got no problem to increase production rate beyond 5k units a quarter but now they are (TM) concentrates about efficiency! Only that explain below 500 units a week plus the fuct they are about to get rid of most part time workers...
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  • Feb 20, 2013
    drinkerofkoolaid
    Same here. I took this as meaning they have a backlog of 12k finalized orders that have not been delivered yet.
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  • Feb 20, 2013
    Norbert
    I didn't quite get the bit about improved SuperCharger technology.

    Did Elon say faster? Through software, or changes in the Superchargers?
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  • Feb 20, 2013
    CapitalistOppressor
    If I am a temp at Tesla, this call was pretty grim.

    A profit in Q1 looks very doable to me because of the increased efficiencies they have already obtained, and because of the heavy weighting of high dollar purchases compared to the future. Plus the ZEV credits are absolute gravy.

    The key takeaway from this call I think is that Tesla is extremely reliant on sales growth in the global market. They clearly do not expect the U.S. to sustain them, with their estimate of ~10k U.S. sales. The current reservation rate is just short of that, so instead of being a pullback that is what they expect to be the norm moving forward.
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  • Feb 20, 2013
    slyastro
    Ok, 2400 MS sold during Q4. Anyone knows how much from that are Canadian sales? Should be about 100 right?
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  • Feb 20, 2013
    wstuff
    I heard that over the next few months, perhaps two or three, the network would allow travel just about anywhere with no worry. he mentioned that now in Cal and Nev the rest of the system will be available and they are targeting 120 to 150 miles apart, if I understand that correctly they are way ahead on SC than I thought. I'm listening to the replay right now to clarify a few points.
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  • Feb 20, 2013
    CapitalistOppressor
    Oh, jeeze, I forgot they were that many, and that the price was per credit. I remember researching the issue after the last conference call and thinking it was a large source of free cash. The price is actually set in a market, so the individual price for each credit will decrease as supply increases. At one point they were going for ~$7,500 each, but I would expect the price to fall because Tesla will have so many credits. They will have even more than Nissan because I believe the Leaf gets just 1 credit per car, while it scales up from there for Tesla based on battery size.

    Edit: Actually, the price shouldn't fall endlessly. There is an actual quota, which means Tesla has no ability to sell all of its credits unless California is nice and increases the quota.
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  • Feb 20, 2013
    Norbert
    I think at one point he indicated even without the stores they could get 20,000/year (in 2013), then with the stores they could get in excess of 20,000/year (2014 and beyond).

    Between the lines it sounded to me like they now have bigger plans than before, but are not yet ready to officially commit to them.
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  • Feb 20, 2013
    drinkerofkoolaid
    To quote from the conference call.

    "We're continuing to improve the rate at which the supercharger can put energy into the car. We've deployed some of the solar panels that cuts costs of electricity. We've got a fairly meaningful announcement about a step change in supercharge technology for later this year. I think people are going to be pretty interested in that announcement when it comes out"

    I also found it meaningful that he stated "less than 10% of people are ordering the 40KWH battery pack. The majority of people are ordering the big battery pack (I think he said more than 50%?)."
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  • Feb 20, 2013
    CapitalistOppressor
    I assume he is going to announce it is going to 120kWh which was discussed previously in the last conference call. The existing chargers use a 120kWh head so it shouldn't be hard to switch over.
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  • Feb 20, 2013
    Norbert
    Thanks!

    Yes, more than 50% for the 85 kWh pack.
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  • Feb 20, 2013
    drinkerofkoolaid
    Isn't Tesla is exempt from the Quota due to the volume of cars being sold? I thought it only applied to automakers that were selling 60k cars annually?
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  • Feb 20, 2013
    K Hall
    His main emphasis was that for 2013 filling demand by delivering 20,000 units is done!

    The marketing efforts from this point on are to build sales for 2014, 2015 and beyond at the same rate or better. With 14,000 Model X's projected to sell in 2014 you could estimate sales to double over 2013.
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  • Feb 20, 2013
    CapitalistOppressor
    They don't have a quota at all because they don't sell gasoline powered vehicles. The quota is that you have to sell a certain percentage of ZEV's for each ICE you sell. Any manufacturer who builds ZEV's gets a number of credits based on how many kWh they build, and they can use those credits to offset their quota. Nissan has a positive number of credits because they sell more ZEV's than is required based on how many ICE they sell. They then can sell their extra credits to other manufacturers.

    Tesla has a huge number of credits though, because of their sales volume in California (and participating states), and the relative hugeness of their batteries, and the fact they don't sell any ICE, so they don't have a quota to fill. So they can sell credits to GM, Honda, etc who don't have sell enough EV compliance cars to make their quota. Tesla alone probably is selling enough kWh to satisfy the current quota, but some manufacturers are selling compliance cars, which would reduce the number of credits they need to buy from Tesla.

    - - - Updated - - -

    What California needs to do is increase the ZEV quota to make sure it is higher than the number of credits that Tesla (and Nissan) is generating to keep the pressure on the other automakers to produce ZEV's and to reward Tesla, Nissan and other ZEV manufacturers.
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  • Feb 20, 2013
    drinkerofkoolaid
    You are indeed correct. It will be interesting when the Gen 3 comes out. I suspect a 30k Tesla will capture a lot of EV sales that would have otherwise gone to major manufacturers for a variety of reasons. The supercharge network standard could affirm this. Nissan could be a different story for a variety of reasons.

    When this happens, it might be easier and cheaper for major companies to buy ZEV credits/ power powertrains from Tesla, rather than compete with their own technology.

    On an aside, World Green Car of the Year goes to The Model S in 2 weeks :)
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  • Feb 20, 2013
    anticitizen13.7
    I was happy overall with this report. The factory is meeting its production goals. With all the good press in the past 2 weeks, I'm betting that there will be a steady flow of sales:smile:

    I get the sense that some of us were expecting more, but I think it is worth remembering that company growth is often an uneven process. Volatility ahead!
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  • Feb 20, 2013
    SteveG3
    I agree with the comments that the selloff has been an initial reaction to higher eps loss last quarter, as well as reservation cancel rate issue still something of a question (this last one Elon somewhat addressed, but not a head on confident statement that cancel rate is as previously guided).

    that being said I think it was a positive earnings release due to positive eps coming in this Q1 we're in middle of and reasonably confident will continue subsequent quarters.

    I would expect analyst reports out tomorrow to highlight that while eps Q4 might have missed by $.10-15, what's far more important is Q1 '13 will be better than analyst expectations by about the same margin (which Elon gave good detail on supporting these numbers... both the past miss, and the big improvement in Q1).

    outside of some overall market selloff, I think such analyst comments will get stock about halfway back up to 39, though it may well slip back down near these lows. Elon on CNBC won't hurt either.
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  • Feb 20, 2013
    drinkerofkoolaid
    Any dip tomorrow is likely buyable. Nothing was revealed today that signifies any trouble ahead, and ultimately, the 20k number and 25% margins are what matters. Analysts do not "take Elon's gross margin or unit sales claims seriously", and are only pricing in 15-18% Gross Margins and 13K cars into their bullish targets.

    I don't think Analysts are accounting for the profit from the sale of EV credits. Maybe this was the reason Elon repeated multiple times, the part about "profit from EV credits not being part of the 25% Margins." Tomorrow should be interesting.

    It's possible they will come to Tesla's defense and upgrade the stock. Likewise it's also possible they will interpret the cancelation rate to be a problem, and will ignore the profit from EV credits or statements until they can see it, resulting in downgrades. Thoughts?
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  • Feb 20, 2013
    NigelM
    And in the process effectively milking Detroit to support a California company. Nice politics.
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