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Near-future quarterly financial projections
- Thread starter luvb2b
- Start date
Fact Checking
Well-Known Member
Tesla could have gotten a deal like NIO: the Shanghai government is financing and building the factory building, the roads, all utilities etc. and leases it back under very favorable terms: NIO got zero lease payments for the first two years? (Of course NIO's factory was scrapped, but not due to Shanghai.)
If this is true (which it might not be), then Tesla would only have to pay for the equipment, which they estimated to be 25%-35% of the Model 3 capex.
So if we take Model 3 capex of $2b-$3b, scale it from 500k/year to 150k/year, and apply 25%-35% we get a capex range of $150m-$315m.
So $500m total doesn't sound unreasonable, and would be covered by the first 25% of the $2b China loan. So I don't think China Q1 will draw on net cash at all - but it might reduce FCF.
I don't know how they plan to achieve 25%-35% capex compared to the Model 3. I believe the biggest Model 3 capex were the ~800 robots - a quarter of which is still 200 - so they either:
- plan to use a lot more manual labor (not unreasonable in China),
- or Grohmann starts manufacturing their own robots. (Not sure this is possible without bigger capex though.)
- or they will buy robots and save on other factors,
- or they won't be able to keep capex guidance.
Thank you for creating this model.
One number that sticks out is the Model 3 ASP, at 53500.
A significant fraction of this quarter's deliveries evidently happened in the EU, where the ASP is significantly higher.
The cheapest Model 3 in Norway+France started at around 51k Euro, in Germany at around 53k Euro, in other EU countries the starting price was closer to 57k Euro. Indications are that a significant fraction had some kind of hardware options added with more uncertainty regarding software options (AEP/FSD).
I no longer have the Q1 base price for China, I believe that the Q1 base price prior to offering the SR variant were even higher than the EU one.
Naturally, the shipping cost would also be higher for the international sales (which would also incur tariffs), but maybe not much higher than East coast deliveries.
Still I think that trying to estimate the prices, shipping costs and delivery numbers for international deliveries into account could provide a more accurate Model 3 ASP.
Not necessarily. With over half of the US cars sold, Tesla captures significant credits that it sells on, effectively artificially inflating US ASP.
Curious as to how you are coming up with a drop in Model 3 margins when the majority of Q1 units were European & China deliveries with only high end SKUs, and production increased quarter over quarter.
I don't think that's correct. They report income from credits separately, so the ASP is the ASP...
Agreed.
ASP on Euro/Chinese models are likely actually higher, but ASP on US models is significantly lower, so it's basically the percentage of US models which determines this; it might even be lower than luvb2b's guess.
I also think one-time FSD revenue is much too low: luvb2b is essentially assuming that only 12000 "old car owners" decided to "pull the trigger", which is unlikely IMO. I'd bet on more like 100,000 "old car owners" deciding that FSD now has actual features and therefore buying it. We know that the take rate when it was first offered was minimal, under 10%. Now that it's useful, I think over half of "old" car owners will buy it -- so 100000 may be an underestimate. Anyway, this would be a very large difference in income -- a positive surprise, I guess. Since we have no way of getting an accurate estimate of how many "old car owners" pulled the trigger, this is going to be a massive uncertainty in net income and cash flow. 100K cars, it could be 300 million dollars; 200K cars, it could be 600 million dollars.
My conclusion is that this one element alone -- FSD purchases by car owners who had their cars before March started and FSD started having features -- is uncertain enough that we really can't project income or cash flow. It dwarfs a lot of the other numbers.
TE numbers are ultra hard to project, but I personally expect higher revenue than luvb2b expects. No way of telling COGS though, they've carefully buried it in with the accounting mess of the solar business.
I expect a drop in S/X lease percentage. I think there was a rush on them in the fourth quarter due to the tax credit expiration. People who bought/leased S and X in the US in the first quarter are going to be people who are paying no attention to money (and therefore ignored the tax credit expiration), or people who were enticed by FSD features perhaps; that is likely to include relatively few people who lease.
TLDR: I think the variance and uncertainty in major numbers makes trying to guess the Q1 financials impossible.
I'm not going to make a prediction, other than "They have plenty of cash for working needs and will be fine going into Q2".
Q2: No tax credit hangover in the US. Instead, tax credit expiration pullforward of demand.
(There will be another US tax credit hangover in Q3, which I expect to be equally ugly to Q1.)
This affects Models S and X especially.
2virgule5
Member
The 51k Euro number you quote for example in France includes a significant Value Added Tax (about 8k), so isn’t what’s left to Tesla in that case 43k for ASP calculation purposes?
Million dollar question. This quarter looks toxic. I could be wrong, but I don’t want to touch the stock around Q1 financial reporting. It appears we are now seeing a strong push toward the self driving narrative. Q2 is looking so important now to me.
No. It's included in automotive revenue. They do split that up separately later. But everyone's model here does just revenue = ASP * # of units for automotive revenue on non-ZEV credits, therefore whatever money those credits bring in must be accounted through the ASP.
Doggydogworld
Active Member
Automotive sales and leasing revenue includes credits. They break out revenue with ZEV excluded in a separate section of the earnings reports so someone looking at trend data won't be thrown off by a big ZEV sale that happens in one quarter vs. another. They don't break out GHG credit revenue this way because they recognize it upon sale of the car vs. sale of the credit.
Quite a different falloff though: in Q4->Q1 it was $3750 reduction, whereas in Q2->Q3 it will be 50% smaller at $1875. I also wonder if many will assume Tesla will make a price adjustment again in July to partially compensate (like they did in early January). Alternatively it might be that SR doesn’t actually start shipping in volume until July (so effectively the cheapest car in July will be cheaper than the cheapest car you could get in June, even with the lower tax credit )
EVNow
Well-Known Member
I doubt there will be much of a price reduction - esp. in SR/SR+. If they do - then we know they are not getting enough orders
The main difference between Q1 & Q2 - in terms of delivery (and production) would be the initial scaling problems in EU/China have been solved. So it should go smoother. With production any problems associated with change over to SR+ or to international editions are behind us.
If b2b's $600M GAAP loss is correct, they need about $200M GAAP profit in Q2 to be able to get into S&P. This makes Q2 very important.
EVNow
Well-Known Member
I'd be very surprised if half the owners were paying attention and willing to spend $3+ in those couple of weeks. I'd be happy to see about 50k. BTW, we don't even know what % paid $5k (AP+FSD, like me) and just $2k (because they already had AP).
Will Model Y deposits show up in any way, shape, or form on Tesla's balance sheet during the quarterly report? And is there any way some of the revenue from the fleet pooling with Fiat shows up in Q1 or will that necessarily be further down the road? Fiat Chrysler pools fleet with Tesla to avoid EU emissions fines - Phoneweek
The payment from the fleet pooling with Fiat Chrysler is a complete wild card. We have no idea what the payment schedule is, we only know that the amount is a super vague "hundreds of millions".
I conclude that I have absolutely no way to project Q1 numbers and shouldn't bother. Too many unquantifiable wild cards (ZEV, Fiat Chrysler, FSD uptake, Y deposits, lease rates on S/X, TE ramp-up, etc.) I think I can safely say cash flow will be between -1 billion and +1 billion and earnings the same. Maybe.
We'll hopefully have more information going into Q2 financials.
It would be in FCA’s best financial interest to not pay a single lump sum to Tesla in one quarter no? I think it’s a matter of when the deadline is and what they could get away with as far as spreading the payments apart until then.
I don’t think I would count on Q1 having a huge impact yet but yeah hard to say at this point.
I don’t think I would count on Q1 having a huge impact yet but yeah hard to say at this point.
