CitizenKane
Member
Yes you can, at least in Sweden. But very long waiting times.You still can't order S & X in Europe.
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Yes you can, at least in Sweden. But very long waiting times.You still can't order S & X in Europe.
Thanks for reminding us of just how important it is to have analytic discipline. The best thing about that is that it is quite easy to understand when something goes wrong. IMHO anyway.At an 11% discount rate, I get a share price of $1,865 at Dec 2022. This is the NPV of Cash Flow 2023 - 2042.
It's important to go out 20 years and then add a terminal value in year 21 ( I use 3 times year 20).
This is a lot of work and I short cut it a bit by doing a detailed 10 year forecast and then growing cash flow in years 11-20 by 10% tapering down to 5% as I get to year 20.
Used car sales show up in Service Revenue, right? This part may be a welcome, but only temporary boost.
Well, they don't tell you price or when it will be delivered. So you can order it the same way as Cybertruck.Yes you can, at least in Sweden. But very long waiting times.
Perhaps the refreshed S & X are already designed to easily replace a big pile-o'-currently stamped parts with a casting or two as soon as another IDRA machine or two become available; seems like a logical engineering plan to have followed.While that is certainly possible to switch Model S/X to 4680s, it doesn't necessarily mean a structural pack and front and rear castings.
I would like to see Model Y built at Fremont with a 4680 structural pack, and I would love to see a Model 3 with a 4680 structural pack at some stage.
If 4680 cells save money, they save more money in the higher volume models, that may face more price competition.
IMO regular LR Model S/X could remain as 18650s or even move to 2170s, if 4680s delivered a real advantage moving Plaid to Plaid+ would be the priority.
If Plaid+ required front and rear castings, that means the whole exercise requires a lot more engineering resources.
Going the lazy way carrying the pack as cargo means Model S/X can't tap the same weight reductions. But it does mean a slower more incremental evolution, with less downtime, at least no long stretches of downtime or line duplication.
But there are other ways of reducing weight, higher strength steel and aluminium, multi-piece castings. carbon fibre, higher voltage. A top of the range higher priced model can incorporate some new ways of reducing weight, even if the raw materials are a bit more expensive.
I do remember a Twitter post from Soylent Brown along the lines of "Tesla is making 4680s, but not making the bigger size at this time". I can't link it, we will need to trust my memory, or pass it off as my imagination. At the time I wondered if the Roadster and the Plaid+ were intended to use this bigger cell size.
So overall I recon seeing the Plaid+ is a coin toss. But if we see it, it will arrive with the Roadster.
There is a pretty logical and quite rational reason to think Energy has either turned the corner or is about to turn the corner where it comes to sustained growth and especially margin growth.Using your table one can see service has only been positive in one previous quarter, so that is welcome. But the energy business shows very inconsistent results in your table. I wouldn't bank on energy staying positive from this trend, but agree it would be nice. I expect it will happen, I'm just not sure when...
Not really. If it’s used car sales, it’s likely all of the model 3’s that are just starting to come off their 3 year lease. This dynamic will actually increase, and be sustainable for not just a couple quarters but at least a couple years, since this was just the start of the model 3 ramp. In fact this “benefit” won’t level out until Tesla stops ramping current production and flatlines for at least 1-2 yearsUsed car sales show up in Service Revenue, right? This part may be a welcome, but only temporary boost.
lol, they just showin' off!
Crank up the volume.
Yes, the model 3 leasing started just over 3 years ago and the timing is very fortunate, because used car prices are at absurd levels. Profitability on this line item may end when used car prices return to normal.Not really. If it’s used car sales, it’s likely all of the model 3’s that are just starting to come off their 3 year lease. This dynamic will actually increase, and be sustainable for not just a couple quarters but at least a couple years, since this was just the start of the model 3 ramp. In fact this “benefit” won’t level out until Tesla stops ramping current production and flatlines for at least 1-2 years
Tesla determined the residual value of these 3’s and soon to be Y’s 2-3 years ago. Since then the value of used 3/Y’s skyrocketed and are much higher than the residual value Tesla estimated 3 years ago. We’re talking double the residual estimated value
Used cars prices……or more specifically Tesla used car prices, would have to drop over 60% for this to stop being a benefit to earnings. That’s not going to happen.Yes, the model 3 leasing started just over 3 years ago and the timing is very fortunate, because used car prices are at absurd levels. Profitability on this line item may end when used car prices return to normal.
As @insaneoctane pointed out, Energy margins have been at 11% in a quarter in 2020 per your data here and the variance in the quarterly numbers are high so this result from Q2 isn’t statistically significant by itself.Margins on both the Energy and Service segments were record breaking this quarter.
This is not getting enough attention by the media (surprise, surprise).
Look at those numbers ! 11.2% margin for Energy . . . .3.8% margins for Service. This is a big deal if it's sustainable.
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FSD prices continue to rise. All they have to do is force FSD on every used car and the prices will continue to increase (or at least the profits will).Yes, the model 3 leasing started just over 3 years ago and the timing is very fortunate, because used car prices are at absurd levels. Profitability on this line item may end when used car prices return to normal.
What’s really crazy is that Giga Berlin and Austin are ramping while Elon also seems to have hit the intermediate part of the Gaga Musk ramp S-curve, although there’s always a lot of uncertainty around that section of the graphI'd cringe at 3 new factories breaking ground at the exact same time right now with Berlin and Austin not fully ramped (Done with the initial ramp period)**.
Here is my working hypothesis:As @insaneoctane pointed out, Energy margins have been at 11% in a quarter in 2020 per your data here and the variance in the quarterly numbers are high so this result from Q2 isn’t statistically significant by itself.
Do we know why margins were temporarily at 11% last time and why it went right back down after that?
Also do we know why energy margins jumped up this quarter? One hypothesis is that Lathrop is starting to scale production with a better factory line than what’s at Giga Nevada but I’m not sure.
Crank up the volume.
At an 11% discount rate, I get a share price of $1,865 at Dec 2022. This is the NPV of Cash Flow 2023 - 2042.
It's important to go out 20 years and then add a terminal value in year 21 ( I use 3 times year 20).
This is a lot of work and I short cut it a bit by doing a detailed 10 year forecast and then growing cash flow in years 11-20 by 10% tapering down to 5% as I get to year 20.
Strong disagree.This service profit thing is actually a really good example of Elon changing his mind on something over time:
Elon July 2021 said:We will try. Preferable for Tesla too, as they last so long. Unlike other makers of cars, our goal is *not* to profit from service. Best service is not needing service in the first place.
Q3 2018 Earnings call said:James Albertine -- Consumer Edge -- Analyst
Understood, and I appreciate that clarification, sort of just trying to get at even running a negative gross margin in services and other for several quarters now and wanted to get a sense for when that could maybe drop and start to turn a corner and to generate some profit for you, I understand there's a lot of building out going on for sales, service and charging infrastructure. But if you could give us some kind of clarification there that would be I think helpful. And if you're willing maybe to provide an update on where you stand today in terms of battery costs. I know your goal sort of parity with ice vehicles, but maybe an update if you're willing to provide and where you stand in that trajectory? Thanks.
Deepak Ahuja -- Chief Financial Officer
I think over time every quarter impressively we will see an improvement in the service and other business, as our revenue continues to grow. And as the size for fleet grows is as simple as that.
Elon R. Musk -- Co-Founder, Chairman, Chief Executive Officer & Product Architect
Yeah, long-term I'd expect service to be a significant revenue item and to be a positive margin contributor. And it's going to be a function of our fleet size and (multiple speakers), yeah exactly we're under warranty, it is like a lot of surplus on warranty. But as the warranty expires, so there is like non-warranty items then we expect service to positive gross margin.
Deepak Ahuja -- Chief Financial Officer
Yeah, and that also includes our used car sales. And our used car sales has been hitting to go and they have a healthy margin. And so that overall business for matured companies is in some cases more profitable than new products, I'm not just having brought OEMS, auto OEMs. And we are at the early stage of our growth and as our fleet size grows there are just so many opportunities in that business that -- actual time as simply say.
2021 10-K said:Services and other revenue consists of non-warranty after-sales vehicle services, sales of used vehicles, retail merchandise, sales by our acquired subsidiaries to third party customers and vehicle insurance revenue.
Used cars prices……or more specifically Tesla used car prices, would have to drop over 60% for this to stop being a benefit to earnings. That’s not going to happen.
You have to remember it’s the residual value that Tesla estimated for the end date of the lease.