Gotta agree with this as much as I would like to see delivery numbers north of 7K. Our only Tesla data points pointed out by DaveT and others refers to production rates of 600+/week to start Q1 and 700/week leaving Q1. TM has a history of beating guidance numbers. They did so in Q3 2013. However, the whisper number picked up on TMC by several publications/analysts based on VIN assignments was priced into the stock pre ER and despite beating TM guidance the share price went down and cost many TMC members a few $$.
For Q1, I do agree that the best data points are as follows:
1. Q1 production started at 600 cars/week (from Q4 shareholder letter).
2. Q1 production ended at slightly below 700 cars/week (Tesla IR confirmed via email on 4/10/14, "If one tours our factory - production boards indicate a production level approaching 700/wk”)
Assuming 12 weeks in Q1 at roughly 650/week, we get 7,800 cars produced.
I talked with several store employees at the end of March about inventory cars and none of them mentioned a strong push by Tesla to sell lots of inventory cars before quarter end (this is in contrast to Q4 where Tesla was pushing hard to sell as many inventory cars as possible).
Tesla also had to replenish their inventory stock (showroom and loaners) that got depleted by the Q4 inventory “mad rush” sale. And on top of this, they said in the Q4 ER call that they didn’t want to play games any more and would put 1000 cars in transit to Europe/Asia.
Putting this altogether, I’m expecting something around 6,600 cars and 7,000 cars sold in Q1.
I don't think they will update guidance on this report as they are ultra conservative in updating guidance historically based on the past 5-6 earnings reports and I think they will wait for Q2 to play out and update it in the Q2 earnings call.
I agree that I don’t think Tesla will come out with a big guidance update for 2014 and I don’t think Q2 guidance will be blowout either.
It appears from the job fair that Tesla is in the hiring process right now and probably most of the new hires will be fully acclimated on the production line beginning of Q3.
Seems like Q3 will be the blowout quarter.
But news leaks and people project forward, so speculation of a Q3 ramp up might be brought up in the Q2 earnings call and Elon might reveal some juicy numbers but it would be for later on in the year and not for Q2.
For Q2 guidance, if Tesla expects to produce 750 cars/week (for 12 weeks in Q3), then that’s 9000 cars. But they might have more cars in transit and they might replenish their loaner fleet with more cars as well. So, guidance would be lower than 9000 cars, maybe 8500 cars delivered.
I do not believe that the current stock price reflects 5 years of perfect execution, launch of giga factory and model E. Here is exercise to show it:
1. TM has two assembly lines for the production of MS/MX. Each production line has maximum capacity of 56,500 cars/year (Building out a real high volume next generation production line for the Model S and X)
2. Based on current worldwide demand for Model S and Model X reservations backlog, it is absolutely reasonable to expect that both lines will be maxed out in 2016.
3. During the last ER Elon indicated that net margins are expected to be in the mid-teen range. Let's conservatively assume 15% and do the math based on 113K yearly production of MX/MS at ASP of $110K: EBIT = 113K x $110K x 0.15 = $1.86B. Assuming effective tax rate of 20% earnings after income taxes will be $1.49B
4. TSLA has current market capitalization of $26.16B. So today's capitalization represent 2016 earnings with a very reasonable P/E of 26.16 / 1.49 = 17.56.
So current stock price reflects at most 3 years of successful execution of Model S/X ramp-up. If you would like to price in GF and Model E you would need to apply a MUCH higher P/E to this 2016 earnings. I would say at least 40 to 50. The corresponding stock price today (to price in all of what you think is already priced in) would be 2.2 - 2.8 times HIGHER than it is now.
I agree with vgrinshpun’s thoughts here, and it’s a big reason why I’m bullish on TSLA (currently valued at $25 billion).
Elon said in the last ER call that they’re looking to build at least 1000 Model S cars/week by the end of the year. That’s a 50,000 Model S annual run rate. And he’s mentioned several times that he thinks the Model X will sell better than the Model S. In 2015, they’ll be ramping up Model X so they won’t realize a full year of Model X sales. But in 2016, they’ll be able to sell at least 100,000 Model S/X cars. This is $10 billion revenue (100k cars x $100k asp) and they’ll likely achieve a 30%+ gross margin, leaving room for healthy profits.