Near-future quarterly financial projections

[The Accountant]

After the upgrades, Shanghai’s new capacity is 94k a month. I don’t know why you have them not reaching that until Dec. I think they’ll hit that in Sept. If there’s no ramp up time, which there shouldn’t be since this isn’t a Covid related ramp back up (and thus suppliers aren’t an issue), then August should come in at 86k or above.

I went with an assumption that they need to recruit talent and this new talent takes time to reach peak efficiency.
Having said that, I have seen huge month to month increases (57k Nov '21 to 67k in Dec '21), so you may be correct; they may go right to 94k in Sept.

 

[StarFoxisDown!]

I went with an assumption that they need to recruit talent and this new talent takes time to reach peak efficiency.
Having said that, I have seen huge month to month increases (57k Nov '21 to 67k in Dec '21), so you may be correct; they may go right to 94k in Sept.

I could be wrong but I seem to remember them actively hiring for the expected production ramp all the way back in April

 

[JohnnyEnglish]

Thanks. I believe my disappointment with Berlin and Austin creates a bias that trumps logic. When I look at the drone videos for these sites, the activity at their logistic lots look uninspiring. But you're right, when they ramp it won't be linear. I will look to adjust.

Hopefully we will get the CPCA July production figures tomorrow which should give an initial indication of how fast Y production has ramped after the update. For Berlin and Austin it seems the best we can hope for are tweets from Elon when they pass significant levels - 1k/week, 2k/week etc.

 

[Todd Burch]

Hopefully we will get the CPCA July production figures tomorrow which should give an initial indication of how fast Y production has ramped after the update. For Berlin and Austin it seems the best we can hope for are tweets from Elon when they pass significant levels - 1k/week, 2k/week etc.

With all the shutdowns for upgrades in July, we’ll have to wait until August numbers come out.

 

[StarFoxisDown!]

With all the shutdowns for upgrades in July, we’ll have to wait until August numbers come out.

We'll still be able to get some useful information. If the number comes in higher than 35k, then that's a good sign. If it comes in above 40k, that means the Y lines hit the ground running

 

[Discoducky]

We'll still be able to get some useful information. If the number comes in higher than 35k, then that's a good sign. If it comes in above 40k, that means the Y lines hit the ground running

Agreed, hopefully we'll see the numbers in 2.7 hours

 

[StarFoxisDown!]

Since Shanghai was able to get Model Y production already up to 12,000/week after just 2 weeks which averaged 1,716/day, I think you're going to need up to update your spreadsheet @The Accountant. Your numbers are too low

It was reported in this report, Tesla's Shanghai Plant to Reach 1.2 Million Cars Per Year After Upgrades: Report - TeslaNorth.com. ,that the Model Y lines were already at 2,000/day in late July and was set to reach 2200/day by August. Seems like this report was in fact true since you figure of the 1716/day average, the first week and especially the first few days in July, production was just getting restarted and very low.

Thus, we're looking at 68k Model Y production for Aug. And probably around 23-25k of Model 3 production. So roughly 92k production for Aug out of Shanghai.

 

[Mengy]

Since Shanghai was able to get Model Y production already up to 12,000/week after just 2 weeks which averaged 1,716/day, I think you're going to need up to update your spreadsheet @The Accountant. Your numbers are too low

It was reported in this report, Tesla's Shanghai Plant to Reach 1.2 Million Cars Per Year After Upgrades: Report - TeslaNorth.com. ,that the Model Y lines were already at 2,000/day in late July and was set to reach 2200/day by August. Seems like this report was in fact true since you figure of the 1716/day average, the first week and especially the first few days in July, production was just getting restarted and very low.

Thus, we're looking at 68k Model Y production for Aug. And probably around 23-25k of Model 3 production. So roughly 92k production for Aug out of Shanghai.

I disagree. The Accountant has 96,200 per month in for Shanghai by December, that's the 1.2 million run rate. The ramp up to that rate will happen between now and then. The August rate of 80,000 MY+M3 he has also seems correct given what we know of the current rate post upgrades. So the gradual increase from 80K to 96K seems appropriate.

So, to me, it looks like The Accountant's predictions are pretty spot on?

 

[Todd Burch]

I disagree. The Accountant has 96,200 per month in for Shanghai by December, that's the 1.2 million run rate. The ramp up to that rate will happen between now and then. The August rate of 80,000 MY+M3 he has also seems correct given what we know of the current rate post upgrades. So the gradual increase from 80K to 96K seems appropriate.

So, to me, it looks like The Accountant's predictions are pretty spot on?

80k for August will be a little low.

In my opinion there will be no gradual ramp to 96k over the course of months. Sources show the rate is already over 2,000 Model Ys per day (the average was over 1,700 per day as the new lines were ramping). This is a “take a few weeks for most of the ramping” situation, since this is about multiplying existing processes vs new processes. September will be at 96k immediately, and will go up from there.

 

[Mengy]

80k for August will be a little low.

In my opinion there will be no gradual ramp to 96k over the course of months. Sources show the rate is already over 2,000 Model Ys per day (the average was over 1,700 per day as the new lines were ramping). This is a “take a few weeks for most of the ramping” situation, since this is about multiplying existing processes vs new processes. September will be at 96k immediately, and will go up from there.

That would be awesome indeed, but my hunch is it will take a bit longer to reach that rate. We'll know next month though!

 

[StarFoxisDown!]

I disagree. The Accountant has 96,200 per month in for Shanghai by December, that's the 1.2 million run rate. The ramp up to that rate will happen between now and then. The August rate of 80,000 MY+M3 he has also seems correct given what we know of the current rate post upgrades. So the gradual increase from 80K to 96K seems appropriate.

So, to me, it looks like The Accountant's predictions are pretty spot on?

I mean, I'm not sure how you come to that conclusion. Shanghai already averaged 1716/day from the upgraded Y lines. They didn't do 1716 on Day 1 of the start of the lines. Meaning the exit rate for July was already at 2,000. Which puts Aug Y production at 62,000. If they were able to get the lines up to 2,000 Y/day in just 2 weeks, why wouldn't they be able to hit 2,200/day for most of Aug? Which would then up the Y production for Aug to 68k.

Then take the 3. The goal is to get the 3 lines to 1000-1200/day. If the 3 lines follow the same ramp as the Y lines did in the first two weeks, they'll average 800/day which is 25k for Aug. Thus, Aug production in total will be 68,000 + 25,000 for a total of 93,000. Even if you discount the rates some, you'd still get a production number much higher than @The Accountant for Aug and thus, he would need to update a lot of numbers in his spreadsheet.

Maybe it's because of the Covid shutdowns and then the line retooling, but it seems you're just ignoring what the numbers are telling you and assuming the worst. Yes there could be something that comes up in Aug or Sept that reduces the production rate at any point, but before the Shanghai covid lockdowns, the Shanghai factory was incredibly consistent on production levels. So if they're hitting those production numbers already after the Y line upgrades, well then I go with them consistently hitting it.

 

[The Accountant]

I mean, I'm not sure how you come to that conclusion. Shanghai already averaged 1716/day from the upgraded Y lines. They didn't do 1716 on Day 1 of the start of the lines. Meaning the exit rate for July was already at 2,000. Which puts Aug Y production at 62,000. If they were able to get the lines up to 2,000 Y/day in just 2 weeks, why wouldn't they be able to hit 2,200/day for most of Aug? Which would then up the Y production for Aug to 68k.

Then take the 3. The goal is to get the 3 lines to 1000-1200/day. If the 3 lines follow the same ramp as the Y lines did in the first two weeks, they'll average 800/day which is 25k for Aug. Thus, Aug production in total will be 68,000 + 25,000 for a total of 93,000. Even if you discount the rates some, you'd still get a production number much higher than @The Accountant for Aug and thus, he would need to update a lot of numbers in his spreadsheet.

Maybe it's because of the Covid shutdowns and then the line retooling, but it seems you're just ignoring what the numbers are telling you and assuming the worst. Yes there could be something that comes up in Aug or Sept that reduces the production rate at any point, but before the Shanghai covid lockdowns, the Shanghai factory was incredibly consistent on production levels. So if they're hitting those production numbers already after the Y line upgrades, well then I go with them consistently hitting it.

In Rob's video, he also mention a number like 80k for August (see 5:35 time stamp) but I believe he is being conservative like I am.
However, I feel to get above 90k right away in August, everything needs to go right; I always assume some glitch.
A supplier is still ramping, a part can be out of stock, trailers are not available, ship capacity is capped, personnel is not fully ramped or trained, equipment downtime surprise, etc.
I believe you are correct that my 80k for Aug is too low. But going above 90k, although possible, is too bullish for me. The good news is that we will have August numbers before the Qtr is completed and we will be able to come up with a very good estimate for Q3 by mid-Sep.

 

[Mengy]

...it seems you're just ignoring what the numbers are telling you and assuming the worst.

No, I'm going by what the numbers are right now and assuming a realistic production ramp. Remember, "production is hard", and assuming an overly optimistic ramp is not wise IMHO.

I've worked as an engineer on production lines my whole life, and ramping up rarely goes smoothly nor as expected. I'd rather assume Elon saying they'll be at 1.2 million by years end is correct and they won't hit that goal next week.


Of course I won't be upset if I'm wrong and you are right about this!!!!

 

[StarFoxisDown!]

In Rob's video, he also mention a number like 80k for August (see 5:35 time stamp) but I believe he is being conservative like I am.
However, I feel to get above 90k right away in August, everything needs to go right; I always assume some glitch.
A supplier is still ramping, a part can be out of stock, trailers are not available, ship capacity is capped, personnel is not fully ramped or trained, equipment downtime surprise, etc.
I believe you are correct that my 80k for Aug is too low. But going above 90k, although possible, is too bullish for me. The good news is that we will have August numbers before the Qtr is completed and we will be able to come up with a very good estimate for Q3 by mid-Sep.

Yes the one discloser I should have said is my numbers are based on no hiccups, which can always happen.

I'm also equating to the numbers we got so far to that article that claimed source over in Shanghai. And so since the numbers line up in those articles, at least so far for July, then I assume the rest of the article can be taken with more than just a grain of salt

 

[XHabjab]

You have a good eye . . .not many people have noticed that Tesla has grown its financing business.
I have actually been tracking this. The financing program really jumped in Q4 2021.
It can actually be a good use of their cash. I have estimated that they are making a little bit over 3% on these loans which is better than the returns they are currently getting on their cash. I believe they can wrap up these loans and sell them to a 3rd party in the future if cash is needed at a later time.
I will continue to monitor this to see if it becomes a good revenue stream for them.

View attachment 835462

Small datapoint on these loans: when ordering a Tesla from Belgium (EU), the private loan is provided by 3rd party Alphacredit. The business loan/leasing is provided by 3rd party KBC. My point being: over here Tesla is not providing any loans as far as I can tell.

I assume Tesla will build up their financing business in a similar manner as Tesla Insurance: starting with parts of the US as that is closer to home (literally and figuratively) to tread the waters and correct possible errors in execution.

Europe and the rest of the world can then be tackled after Tesla gained more experience in the matter. The fact that they'll already be running a significant business (be it insurance or financing), will surely instill trust overseas when Tesla sets up those businesses there.

All in all great to see Tesla is adressing yet another market. (A market which many 'competitors' don't touch.)

Another data point from me. I just took delivery of a 'Made in Austin' MY and got a loan on it this time. Tesla farmed it out to a third party - US Bank if it makes any difference. I thought I'd be paying Tesla for the life of the loan.

FWIW, I bought our first Tesla for cash, which was a mistake. I'm retired, and got the cash from IRA funds. For this taxable withdrawal, I had to pay about $1.25 for every $1.00 I got to spend on the car. But wait there's more. This had the side effect of putting me in a higher tax bracket. Plus I had to pay IRMAA more on medicare, and make more withdrawals for that. Also, the next year, I had to make another taxable withdrawal to pay tax on the tax from the previous year. End result was every $1.00 I spent on the car was about $1.45 IRA withdrawal, with the pain spread over 2 years. This year I bought with a loan, will pay off the loan perhaps next year (perhaps not), for hopefully $1.25 taxable per $1.00 on the car. Still taxed, but less pain. Death and taxes and all that stuff.

 

[The Accountant]

Another data point from me. I just took delivery of a 'Made in Austin' MY and got a loan on it this time. Tesla farmed it out to a third party - US Bank if it makes any difference. I thought I'd be paying Tesla for the life of the loan.

FWIW, I bought our first Tesla for cash, which was a mistake. I'm retired, and got the cash from IRA funds. For this taxable withdrawal, I had to pay about $1.25 for every $1.00 I got to spend on the car. But wait there's more. This had the side effect of putting me in a higher tax bracket. Plus I had to pay IRMAA more on medicare, and make more withdrawals for that. Also, the next year, I had to make another taxable withdrawal to pay tax on the tax from the previous year. End result was every $1.00 I spent on the car was about $1.45 IRA withdrawal, with the pain spread over 2 years. This year I bought with a loan, will pay off the loan perhaps next year (perhaps not), for hopefully $1.25 taxable per $1.00 on the car. Still taxed, but less pain. Death and taxes and all that stuff.

Thanks for the information. I subsequently found details of where Tesla is doing it's lending directly. It appears to be in Europe and Asia at this time.

If you plan on paying off your loan via an IRA withdrawal, spread it out over 2 or 3 years to see if it can keep you out of a higher tax bracket.
For example, if you need $50k, take $25k out in Dec and $25k out in Jan the following year.
Or you could do it over 3 tax periods over 13 months: Dec 2022, Dec 2023, Jan 2024.

It all depends on how much you are earning in your IRA vs the incremental taxes the higher bracket will cost you.

 

[damonbrodie]

Ok - we're halfway through Q3. What's everyone's guesstimate for Q3 GAAP Diluted EPS for the quarter?

A year ago it was $1.44 for Q3 2021. Last Quarter it was $1.95.

Personally I'm thinking right around $3.50 or so. It's a tough one to measure though with the two factory ramp happening. Could easily swing up or down by 10%.

 

[JohnnyEnglish]

Ok - we're halfway through Q3. What's everyone's guesstimate for Q3 GAAP Diluted EPS for the quarter?

A year ago it was $1.44 for Q3 2021. Last Quarter it was $1.95.

Personally I'm thinking right around $3.50 or so. It's a tough one to measure though with the two factory ramp happening. Could easily swing up or down by 10%.

See post #4820 for @The Accountant last estimates

 

[The Accountant]

Ok - we're halfway through Q3. What's everyone's guesstimate for Q3 GAAP Diluted EPS for the quarter?

A year ago it was $1.44 for Q3 2021. Last Quarter it was $1.95.

Personally I'm thinking right around $3.50 or so. It's a tough one to measure though with the two factory ramp happening. Could easily swing up or down by 10%.

In my latest version, I have GAAP EPS $3.53 (Non-GAAP of $3.86) with 365k deliveries. I may be taking Q3 deliveries up in my next version.

My Q4 number is crazy with GAAP $5.13 and Non-GAAP $5.47 with 473k deliveries.

 

[damonbrodie]

In my latest version, I have GAAP EPS $3.53 (Non-GAAP of $3.86) with 365k deliveries. I may be taking Q3 deliveries up in my next version.

My Q4 number is crazy with GAAP $5.13 and Non-GAAP $5.47 with 473k deliveries.

I'm happy to hear that your analysis agrees with mine. Q4 could indeed be a boomer with all the upgrades out of the way and yielding results!