ZEV credits would provide a huge boost. Last year they got $68m in Q1. I was not aware that ZEV credits are a sure thing for Q1, and you alluded that they are coming back as a fact.
I am asking a serious question, because I was using zero ZEV in my model (to leave room for a possibility of a small surprise), but if they are "back" then this could be a big thing for TSLA.
Like I said, I have not kept up with ZEV and really would like to know if anyone (CapOp?) has done any estimates for what TSLA might get in Q1 or 2014. Have the price of ZEV come down in the market?
@DaveT - Have you seen what the Wall St. analysts are modelling in for ZEV for Q1 and 2014?
Sleepy - I think the best answer you are going to get is a conditional "maybe". In 2013, Tesla sold 2408 cars in California in Q1 and booked $68 million in revenue. Q2 was 2308 California cars and $51 in ZEV revenue, Q3 was 1823 California cars, $10 million in revenue and a disclosed carryover of 276 credits into the new ZEV fiscal year starting October 1, 2013 and running to September 30, 2014. In Q4 they sold 1793 California cars and declared 0 ZEV revenue. A couple of points and opinions:
- Tesla currently has at least 276 ZEV credits to sell - if they sold these at an equivalent price to the 2013 ZEV marketplace, that would equate to about $42 million in earnings.
- Tesla likely has accumulated an additional approx. 350 - 400 in Q4 of 2013 and Q1 of 2014. Withe the 276 in the bank, that would equal a possible $100 million in ZEV, if there is a market/buyer for the credits.
- The biggest changes in the ZEV market have been the overall increase in this years' ZEV requirements by about 13% due to the increase in new car sales in California and the projected increase in ZEV requirements by roughly 300% in September of 2014 due to mandated increases in compliant cars (EV or fuel cell).
- Tesla is the only major pure EV player in the market. With this monopoly it appears to be able to recognize the ZEV revenue whenever they want...therefore, without an announcement like last year, it is difficult to predict.
- I doubt there are any ZEV projections baked into analysts models because of their unpredictability and based on the analysts (possibly set up) low expectations and consensus for little or no profit in Q1.
I think that Tesla may be hoarding their current credits with the thought that they will be worth more as we get closer to September....or, they may drop over $100 million of profit on their Q1 earnings and blow away both GAAP and non-GAAP earnings....or - is there a lady or a tiger behind curtain #3?
ZEV is still the law in California, how the market adjusts and how Tesla plays their hand is anyone's guess.