So based on your tour the factory is currently running at 800 cars a week. This confirms my expectation that I posted about a week ago (
Short-Term TSLA Price Movements - 2014 - Page 484). It would be wrong, however, to calculate total production in Q2 by multiplying 12x800=9,600 because the factory did not run at 800 during the first several weeks of the quarter.
The data points:
- From the Q1, 2014 shareholder letter: "Production is now at almost 700 vehicles per week, up 15% from our weekly production rate at the end of Q4." It is reasonable to assume that this was production rate during the full week preceding the May 7th - the date of the shareholder's letter i.e. week ending May 2nd. Further assuming that factory was shut down first week of April, in the first four weeks of Q2 factory produced 4 x 700 = 2800.
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- On 06/03 Ben Kallo, analyst from Baird indicated that he had meeting with the TM management at the factory "2.5 weeks ago". This means that the meeting was held during the week ending on 05/16. In the video that I linked back at that time Ben Kallo indicated that TM was running "ahead" of their production goals and "we have a quarter lined up very nicely for a solid beat", further saying "I think that deliveries will be very strong for the quarter".
Based on the above I concluded that TM ramped up production to 800 cars/week starting the week ending May 9, i.e. total production for the last 8 weeks of the quarter will be 8 x 800 = 6400 (Tesla top stock pick for 2014: Analyst)
This puts total projection for the quarter at 2800 + 6400 = 9200, or 200 cars ahead of the 9,000 upper production goal set in the shareholder's letter.
Since per the shareholder's letter the deliveries were guided to 7,500 cars, while upper production goal was set to 9,000 cars, there were total of maximum 1,500 cars slated for filling up the "pipe". Based on this we can expect about
7,700 deliveries in Q2, or at least 200 cars more than guidance. If TM decides for some reason reduce the 1,500 cars slated for the "pipe" the deliveries could be accordingly higher than 7,700 cars.
It should be noted that 400 cars/shift/week seem to be the maximum production rate of the current final assembly line, so the production rate of higher than 800 cars/week is not likely, unless factory is running during the weekends.
Based on the above we can take a swag at projected EPS. According to the shareholder's letter: " Despite the start of leasing vehicles, investments in R&D and geographic expansion, we expect to be marginally profitable in Q2 on a non- GAAP basis. Based on our current stock price, the diluted shares outstanding are projected to be about 142 to 144 million in Q2." Assuming that delivering projected 7,500 yields break-even point, the revenue from extra 200 delivered cars will constitute profit. Further assuming ASP of $100K, and 25.5% margin (slightly higher than 25.4 reported in Q1): 200 x 100,000 x 0.255 = $5.1M. Dividing by the projected outstanding shares:
EPS = 5.1 / 144 = $.035