TSLA Market Action: 2018 Investor Roundtable

[Fact Checking]

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[CuriousSunbird]

In September Tesla had 19% marketshare in Norway with just the X & S? Am I reading that right?

Of EVs.

I think this is the best site to track for that.

Registreringer av nye elbiler i Norge

 

[Sudre]

I have a feeling the shorts believe the statement that the China GF is being push up is going to be Tesla’s excuse for not profiting this quarter.... at least there will be an article coming soon.

Still this days action hit all the drop points I expected so I got all the Calls I put buys in for. Now here’s hoping we rally back up.

 

[ZachF]

That's false, your calculation makes a series of basic accounting mistakes in (under-)estimating Q3 cash flow improvements:

• Not only did the margin increase to 15%, but it increased for all Model 3's delivered due to economies of scale, not just the 'incremental' ones. I.e. the 15% margin applies to all 55,840 Model 3's delivered, which is +$502m of cash flow instead of Q2's break-even.
• But it gets better: compared to Q2 Tesla delivered 5,360 more Model S+X vehicles, which at an average ASP of $104k and a profit margin of 28% adds another +$156m cash flow.
  
• But it gets better: inventory levels got lower, Tesla added 517 Model 3's to inventory, and delivered 4,533 Model S+X vehicles from inventory. This added approximately +$340m of cash flow.

All of these factors add +998 million dollars of free cash flow in Q3 alone, compared to the Q2 baseline. (These are quick estimates: see luvb2b's model updated with today's delivery numbers for the details.)

Tesla will likely be able to pay back much of the 2019/March convertibles of $920m from its Q3 free cash flow alone... (!)

But there's Q4 free cash flow and much of Q1/2019 free cash flow as well - which will be useful to finance the Chinese Gigafactory capex, Model Y capex and a lot of other nice Tesla growth projects that will make the (remaining) shorts squirm.

FLAWLESS VICTORY...

FATALITY.

 

[Fact Checking]

Yes. ZEVs are consistently a wildcard. I think they're offset by the committed CapEx, however.

luvb2b's estimates are assuming an absolute minimum contribution from ZEV credits ($100m), and include committed capex cash outflows as well, of course.

With all that included and today's Q3 delivery report plugged in, the results become:

…

s deliveries

x deliveries

s+x deliveries

3 deliveries

3 production

revenue

zev credits

total auto

services/other

total revenue

gross profit

[capex outflow]

net change in cash

cash & eq end

[TD2] luv q4-18e [/TD2][TD2] luv q3-18e [/TD2][TD2] Jun-18 [/TD2][TD2] Mar-18 [/TD2] [TD2]15,000[/TD2][TD2]14,470[/TD2][TD2]10,939[/TD2][TD2]11,738[/TD2] [TD2]13,000[/TD2][TD2]13,190[/TD2][TD2]11,380[/TD2][TD2]10,077[/TD2] [TD2] 28,000 [/TD2][TD2] 27,660 [/TD2][TD2] 22,319 [/TD2][TD2] 21,815 [/TD2] [TD2] 62,000 [/TD2][TD2] 55,840 [/TD2][TD2] 18,449 [/TD2][TD2] 8,182 [/TD2] [TD2] 60,000 [/TD2][TD2] 53,239 [/TD2][TD2] 28,578 [/TD2][TD2] 9,766 [/TD2] [TD2]100,000[/TD2][TD2]100,000[/TD2][TD2]0[/TD2][TD2]50,314[/TD2] [TD2] 6,575,927 [/TD2][TD2] 6,271,233 [/TD2][TD2] 3,357,681 [/TD2][TD2] 2,735,317 [/TD2] [TD2]300,000[/TD2][TD2]300,000[/TD2][TD2]270,142[/TD2][TD2]263,412[/TD2] [TD2] 7,299,027 [/TD2][TD2] 6,942,683 [/TD2][TD2] 4,002,231 [/TD2][TD2] 3,408,751 [/TD2] [TD2] 1,653,981 [/TD2][TD2] 1,371,110 [/TD2][TD2] 618,930 [/TD2][TD2] 456,526 [/TD2] [TD2]-700,000[/TD2][TD2]-600,000[/TD2][TD2]-609,813[/TD2][TD2]-655,662[/TD2] [TD2] 573,978 [/TD2][TD2] 721,161 [/TD2][TD2] -436,470 [/TD2][TD2] -745,251 [/TD2] [TD2] 3,531,562 [/TD2][TD2] 2,957,585 [/TD2][TD2] 2,236,424 [/TD2][TD2] 2,665,673 [/TD2]

See the massive improvement in cash equivalents in Q3, which continues in Q4 and onward? Tesla's free cash flow pays for the March 2019 convertibles and for much more. And ZEV is just a minuscule part of this estimate.

Also note that the Model 3 related capex outflows were massive in 2018: in Q3 committed capex outflow was around -$600m, which masks the true extent of the cash generation ability of Tesla, which is well over 1 billion dollars per quarter even at the current ~5k/week Model 3 production rate.

Tesla just had its 'Amazon moment' - and it was Q3 of 2018.

 

[dqd88]

Today was a good day. Fact figures are good and in the centre of focus.
SP? Fine for the high shorted price. Do you expected that there will be no dips/ups any more?
I get used to it.

We are already 2nd day in Q4. Shorters, clock is ticking.

Is there a way to see the short action in real time?

 

[Big Earl]

I want to thank the shorts for fulfilling my sub-300 limit orders today. I've added quite a few shares in the past 7 days, bringing me within reach of my 100 share goal by the end of the year.

 

[Chop110]

luvb2b's estimates are calculating an absolute minimum baseline for ZEV credits ($100m), and include committed capex cash outflows as well, of course.

With all that included and today's Q3 delivery report plugged in, the results become:

…

s deliveries

x deliveries

s+x deliveries

3 deliveries

3 production

revenue

zev credits

total auto

services/other

total revenue

gross profit

net change in cash

cash & eq start

cash & eq end

[TD2] luv q4-18e [/TD2][TD2] luv q3-18e [/TD2][TD2] Jun-18 [/TD2][TD2] Mar-18 [/TD2] [TD2]15,000[/TD2][TD2]14,470[/TD2][TD2]10,939[/TD2][TD2]11,738[/TD2] [TD2]13,000[/TD2][TD2]13,190[/TD2][TD2]11,380[/TD2][TD2]10,077[/TD2] [TD2] 28,000 [/TD2][TD2] 27,660 [/TD2][TD2] 22,319 [/TD2][TD2] 21,815 [/TD2] [TD2] 62,000 [/TD2][TD2] 55,840 [/TD2][TD2] 18,449 [/TD2][TD2] 8,182 [/TD2] [TD2] 60,000 [/TD2][TD2] 53,239 [/TD2][TD2] 28,578 [/TD2][TD2] 9,766 [/TD2] [TD2]100,000[/TD2][TD2]100,000[/TD2][TD2]0[/TD2][TD2]50,314[/TD2] [TD2] 6,575,927 [/TD2][TD2] 6,271,233 [/TD2][TD2] 3,357,681 [/TD2][TD2] 2,735,317 [/TD2] [TD2]300,000[/TD2][TD2]300,000[/TD2][TD2]270,142[/TD2][TD2]263,412[/TD2] [TD2] 7,299,027 [/TD2][TD2] 6,942,683 [/TD2][TD2] 4,002,231 [/TD2][TD2] 3,408,751 [/TD2] [TD2] 1,653,981 [/TD2][TD2] 1,371,110 [/TD2][TD2] 618,930 [/TD2][TD2] 456,526 [/TD2] [TD2] 573,978 [/TD2][TD2] 721,161 [/TD2][TD2] -436,470 [/TD2][TD2] -745,251 [/TD2] [TD2] 2,957,585 [/TD2][TD2] 2,236,424 [/TD2][TD2] 2,665,673 [/TD2][TD2] 3,367,914 [/TD2] [TD2] 3,531,562 [/TD2][TD2] 2,957,585 [/TD2][TD2] 2,236,424 [/TD2][TD2] 2,665,673 [/TD2]

See the massive improvement in cash in Q3, which continues in Q4 and onward? Tesla's free cash flow pays for the March 2019 convertibles and for much more. And ZEV is just a minuscule part of this estimate.

Tesla just had its 'Amazon moment' - and it was Q3 of 2018.

Ah numbers... hard to argue against them. I see numbers like this and I can't help but laugh at all the money shorties burned today. After today's indisputable news, the upward trend to profitability will eventually become obvious to all. The clock is winding down for the bear thesis.

 

[adaptabl]

Why is the stock price down so much on a positive report?

Looks like the positive cash flow quarter will not happen for Q3.

 

[adaptabl]

Big NYT articke on Trump, not good.

Fake news.

 

[Krugerrand]

My point is how will they make a profit in Q3? Will it be purely ZEV/GHG, or will it be something more sustainable?

Everybody here already knows they’ll use pixie dust. Duh!

 

[Fact Checking]

Looks like the positive cash flow quarter will not happen for Q3.

The exact opposite is the case, with today's delivery numbers cash flow is estimated to be +$721m, a sharp reversal from Q2's -436m.

 

[Johan]

Big NYT articke on Trump, not good.

Beginning of the end?

Will be interesting to see if TSLA can decouple from macros during the rest of this week, should the market as a whole get dragged down. It's interesting that Q3 could turn out to be Tesla's show-me-the-money moment and that it could coincide with the beginning of the end for Trump and the whole Republican party. Interesting times we live in indeed.

I read most of the Times article. Great journalistic work, nothing that would surprise anyone who has watched the man over the last few years...

 

[MXWing]

“If Tesla isn’t profitable or cash flow positive in Q3, it’s over.”

IT IS OVER! Over what, I am not sure, but it's OVER.

(For Q3 anyways)

 

[MP3Mike]

Of EVs.

I think this is the best site to track for that.

Registreringer av nye elbiler i Norge

I think you need to take another look at the data, as it was all cars, not just EVs:

That is unless a lot of manufacturers suddenly started making EV versions of their cars specially for Norway.

 

[EVNow]

Bob Lutz reminds me of a senile old man who can't cope with progress of the modern world.

His famous quote - climate change is "total crock of *sugar*". Infact he said he likes Trump, because Trump thinks the same way.

You don't need to know anything else about Lutz.

 

[SpudLime]

IT IS OVER! Over what, I am not sure, but it's OVER.

(For Q3 anyways)

Hey hows it going? Whats your Name?
Bend Over..
Nice to meet you Ben.

 

[dqd88]

That's false, your calculation makes a series of basic accounting mistakes in (under-)estimating Q3 cash flow improvements:

• Not only did the margin increase to 15%, but it increased for all Model 3's delivered due to economies of scale, not just the 'incremental' ones. I.e. the 15% margin applies to all 55,840 Model 3's delivered, which is +$502m of cash flow instead of Q2's break-even.
• But it gets better: compared to Q2 Tesla delivered 5,360 more Model S+X vehicles, which at an average ASP of $104k and a profit margin of 28% adds another +$156m cash flow.
  
• But it gets better: inventory levels got lower, Tesla added 517 Model 3's to inventory, and delivered 4,533 Model S+X vehicles from inventory. This added approximately +$340m of cash flow.

All of these factors add +998 million dollars of free cash flow in Q3 alone, compared to the Q2 baseline. (These are quick estimates: see luvb2b's model updated with today's delivery numbers for the details.)

Tesla will likely be able to pay back much of the 2019/March convertibles of $920m from its Q3 free cash flow alone... (!)

But there's Q4 free cash flow and much of Q1/2019 free cash flow as well - which will be useful to finance the Chinese Gigafactory capex, Model Y capex and a lot of other nice Tesla growth projects that will make the (remaining) shorts squirm.

@FirebirdAlpha do you have a rebuttal?

 

[Todd Burch]

Wonder where they got the idea for this ?

​

This sounds interesting. Does 3 AP get you out of tight parking spaces ?

​

Sounds like they're trying to change the game to game that Tesla is already playing.

Game-changer indeed.

 

[The Blue Owl]

FactChecker is on my ignore list, but I hit that "Show Ignored Content" button just for you.

Thanks for reminding me of that Ignore button!