edatoakrun
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Re: TSLA corporate outlook

Thu Feb 08, 2018 1:14 pm

Rundown of coverage of the 2017 TSLA 4Q report and conference call. which might be properly summarized as better luck next year...

First, Elon promised a 2018 transformation:


Elon Musk predicts profit at Tesla in 2018, and much more



After reporting largest quarterly loss in a long history of losses, Tesla CEO lays out expectations for ‘transformative year’


...“2018’s likely to be a very big year for us,” Musk said in a conference call, after describing 2018 as a “transformative year” in a letter to shareholders. “At some point in 2018, we expect to begin generating positive quarterly income on a sustained basis, operating 5,000 per week of Model 3 production and I’m optimistic that we will be GAAP profitable.”...

https://www.marketwatch.com/story/elon- ... 2018-02-07

But many TSLAists seem not to have noticed the continued erosion in model 3 production forecasts, which used the same numbers as those when the last delay was reported last month, but now using more "squishy" language:


A First Look At Tesla's Dreadful Q4 Results


...Squishy Model 3 Guidance: Most ominous was this paragraph from the update letter (which I have broken into its three component sentences):

"We continue to target weekly Model 3 production rates of 2,500 by the end of Q1 and 5,000 by the end of Q2.

It is important to note that while these are the levels we are focused on hitting and we have plans in place to achieve them, our prior experience on the Model 3 ramp has demonstrated the difficulty of accurately forecasting specific production rates at specific points in time.

What we can say with confidence is that we are taking many actions to systematically address bottlenecks and add capacity in places like the battery module line where we have experienced constraints, and these actions should result in our production rate significantly increasing during the rest of Q1 and through Q2."

What does it mean to “target”? Is that the same as guidance? I don’t think so...

https://seekingalpha.com/article/414448 ... q4-results

IMO, the big surprises in the 4Q report were the reduction in capex and the raid on the ZEV Credit piggybank, both of which artificially inflated the financial results, which were actually weaker than consensus expectations, but for this artful makeup-job-on-the-TSL-4Q-pig.

Tesla Put a Car in Space But How About in Showrooms?

If it can't ramp up Model 3 production soon, it's going to need to raise more cash.


A day after deserved jubilation in Cape Canaveral, it was back to the relatively mundane task of reporting Tesla's quarterly results. The big question was whether Tesla would shift its production target for the Model 3 back (again). It didn't, thankfully. However, as is often the case with this company, there are caveats:

"It is important to note that while these are the levels we are focused on hitting and we have plans in place to achieve them, our prior experience on the Model 3 ramp has demonstrated the difficulty of accurately forecasting specific production rates at specific points in time."

In other words, Tesla's ambitions for the Model 3 remain intact, but please bear in mind that such ambitions have proved, on prior occasions, somewhat overambitious. There was no update on the current production rate, despite repeated questions on Wednesday evening's call, which is troubling.

Recall that, a month ago, Tesla claimed it had hit a pace that "extrapolates" to more than 1,000 vehicles per week. Whatever that meant exactly, it doesn't appear to have been sustained, at least according to sales estimates by InsideEVs: They put January Model 3 deliveries at a little less than 1,900 overall.

Getting the Model 3 production line fixed is critical...

Selling zero-emission vehicle credits masked a very weak underlying gross profit margin in Tesla's core automotive business in the fourth quarter...

And Tesla now expects capex in 2018 to exceed last year's level of $3.4 billion, which happens to equal the amount of cash Tesla has in the bank. This, more than anything, is why Tesla must hit its stride on the Model 3. Otherwise, raising more capital could be unavoidable in the second half of the year...

Liam Denning

https://www.bloomberg.com/gadfly/articl ... -showrooms

And of course, this begs the never-ending question of TSLA's cash burn.

What happens if it offers more equity or debt to support its massive continuing losses, and no one is willing to buy it?
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hyperionmark
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Re: TSLA corporate outlook

Thu Feb 08, 2018 1:57 pm

Down 9% Ed! Cash in on those shorts!

lorenfb
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Re: TSLA corporate outlook

Thu Feb 08, 2018 2:30 pm

WetEV wrote:
lorenfb wrote:You forgot one of the the most important data metrics, i.e. GAAP loss per share of $11.83 (total loss ~ $2B).
That amounts to about a $20K per vehicle delivered in 2017 of shareholder wealth “given away”.


That sounds like some funny accounting. No, not the GAPP, but the added cost per car. Tesla makes money on producing Model S cars. Tesla is spending a lot of money on expanding the business, not on production of current cars.

To produce the first car costs a lot of money. The second copy of that car is cheaper, but still no where close to profitable. Tooling, engineering, training, programming... Don't get this money back unless you make enough copies of the car.

This is why most car startups have failed, and smaller car companies have gone out of business or merged with larger companies over US history. Huge capital costs, and many risks. Tesla might fail as well. They are at the third "Bet The Company on Growth" or BTOG point. There likely are more of these on the path of Tesla becoming a major car company.

Tesla might also realize that the next BTOG will not be possible, due to market factors, falling stock price, rising interest rates, or other reason(s), and convert to a slower or no growth company. As such, Tesla would become a boring and much cheaper stock, and a takeover target.


"Funny Accounting", don't think so! You have access to the same 2017 Tesla Annual Report where my data came from:

2017 annual GAAP loss - $2B ($2 X 10^9), 2017 vehicle deliveries - 101K (10^5)

Tesla loss per vehicle delivered in 2017 = $2 X 10^9 / 10^5 = $2 X 10^4 = $20,000

Sounds like your subjective rationalization for losses, as some consistently do, is the "funny accounting".
Yes, economy of scale and amortization of CAPEX over time should yield profitability for a product,
but not for Tesla as we have consistently seen over the years!
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WetEV
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Re: TSLA corporate outlook

Thu Feb 08, 2018 3:47 pm

lorenfb wrote:Tesla loss per vehicle delivered in 2017


Oranges divided by oranges plus apples is still mostly fruity.

Take a knife, and cut Tesla into two. Tesla_ModelS and Tesla_Model3.

Tesla_ModelS is selling most of the cars. Tesla_Model3 is paying the startup costs.

Tesla_ModelS has a profit for each Model S delivered. Tesla_Model3 loss per car for 2017 is huge. Averaging the two is pointless.

This doesn't mean I'm a Tesla bull. I'm not. Tesla is a very high risk stock with little upside and a huge downside.
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lorenfb
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Re: TSLA corporate outlook

Thu Feb 08, 2018 8:17 pm

WetEV wrote:
lorenfb wrote:Tesla loss per vehicle delivered in 2017


Oranges divided by oranges plus apples is still mostly fruity.

Take a knife, and cut Tesla into two. Tesla_ModelS and Tesla_Model3.

Tesla_ModelS is selling most of the cars. Tesla_Model3 is paying the startup costs.

Tesla_ModelS has a profit for each Model S delivered. Tesla_Model3 loss per car for 2017 is huge. Averaging the two is pointless.

This doesn't mean I'm a Tesla bull. I'm not. Tesla is a very high risk stock with little upside and a huge downside.


Per all the posted data, even before the M3, Tesla has never been profitable. Sorry for your total business and related accounting naivete!
But please continue, though, with your telescope to update us on Starman.
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hyperionmark
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Re: TSLA corporate outlook

Fri Feb 16, 2018 1:44 pm

Up over 8% this week. No wonder ed and loren have been silent.

GRA
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Re: TSLA corporate outlook

Wed Feb 21, 2018 8:38 pm

Via IEVS:
Tesla Says Demand Is Causing Model S, X Delay – Tax Credit Instead?
https://insideevs.com/tesla-demand-model-s-x-delay-tax-credit/

. . . Tesla has streamlined Model S and X production to the point that some buyers could order one of these vehicles in the U.S. and get it in a matter of a month or so. However, just recently, Model X estimations were pushed out to four or five months. Now, the automaker is providing the same timeline for new Model S orders.

So, if you ordered a Model S or X in the U.S. today, you might get it in June, however, more than likely it would come in July. According to Electrek, a spokesperson from the automaker explained that such delays are the result of a huge backlog of orders.

Some speculate that the company is working on refreshed designs, new battery chemistry, or some other “secret” that has yet to be announced. Others believe that this can all be blamed on the Model 3. However, Tesla has shared that orders for the Model S and X in Q4 of 2017 were very high. In fact, they were almost as high as the previous quarter’s record S and X orders. This is not to say that Model 3 production isn’t making an impact, however, it’s additionally challenging with a multitude of S and X orders streaming in.

Is this the whole story? We think not and we’re not alone.

Interestingly, this delay pushes back deliveries toward July, which marks the beginning of the third quarter. There’s been a ton of talk lately about Tesla’s supposed attempt to manage the impact of the U.S. federal EV tax credit. Hitting the magic number at the beginning of Q3 would be highly advantageous. . . .

As expected by many, it looks like Tesla is managing deliveries to extend the credits as long as possible.
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hyperionmark
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Re: TSLA corporate outlook

Thu Feb 22, 2018 5:40 am

That move to game the system is very savvy. Great for customers and likely good for their bottom line as well.

GRA
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Re: TSLA corporate outlook

Thu Feb 22, 2018 4:07 pm

hyperionmark wrote:That move to game the system is very savvy. Great for customers and likely good for their bottom line as well.

Yeah, it may help stave off defections to Bolts or other longer range BEVs, although it will undoubtedly piss some people off. But they really need to get as many of the SR variants out to customers while the full credit applies, so I expect this will largely be seen as favorable by the majority.
Guy [I have lots of experience designing/selling off-grid AE systems, some using EVs but don't own one. Local trips are by foot, bike and/or rapid transit].

The 'best' is the enemy of 'good enough'. Copper shot, not Silver bullets.

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jlv
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Re: TSLA corporate outlook

Fri Feb 23, 2018 10:25 am

On TMC I saw talk that apparently delivery times to Europe have also increased, so it may not be [just] for the 200K tax credit milestone.
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