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"$528 million in six month" sounds a lot worse than what the report itself says, namely Cash outflow from operating activities in Q2 2018 was $130 million, whi

"$528 million in six month" sounds a lot worse than what the report itself says, namely Cash outflow from operating activities in Q2 2018 was $130 million, which was significantly better than outflows of $398 million in Q1. This improvement occurred despite a substantial increase in finished goods vehicle inventory of $579 million as a result of the timing of deliveries.

secabeen 8y ago
> finished goods vehicle inventory of $579 million as a result of the timing of deliveries. AKA, we delayed delivering a lot of cars to not trigger the tax credit expiration in Q2.
- _Microft 8y ago
  I interpret it like that as well, yes.
- rconti 8y ago
  Exactly. And this is a 'problem' they'll never again face, because now the clock is ticking. Of course, it's been replaced with the 'problem' of selling incremental Model 3s as the effective price goes up quarter by quarter in the near term, but the issue has ALWAYS been whether they'll be able to sustain demand and sales as the vehicle goes through pent-up demand and then has to rely on incremental sales, year after year after year (or until they start dumping huge amounts of cash into ramping the NEXT car). That said, I'm VERY impressed with our new 3; more so than I expected, and I suspect others will be similarly delighted and new sales will follow. Their next challenge will be ramping maintenance/service of the rapidly expanding installed base.
  - radicalbyte 8y ago
    There's a massive amount of demand here in Europe: the car is the right size, the right price qualifies for all of the tax benefits. They also have 0 competition. I expect there to be a waiting list for the next couple of years unless they keep boosting production..
    - rconti 8y ago
      Good point, I was totally ignoring Europe with this car -- and I shouldn't be, because I need to buy your left driver's side convex mirror mirror (so I can actually see what's in the lane to my left, unlike in the "flat" US mirrors) and your proper taillights with amber turn signals (please be plug-and-play).
  - marvin 8y ago
    > Their next challenge will be ramping maintenance/service of the rapidly expanding installed base. I agree that this will be the next obvious challenge. "Thankfully", they're already seeing how this plays out in Norway, where they're really struggling to service the Model S fleet as it ages and repairs are required more frequently. I consider this a good thing, because certainly there's someone in the service department thinking about what will happen in 3 years when the amount of Model 3s requiring service starts increasing further. Norway is the canary in the coal mine, which should be completely obvious to someone who does this full-time.
  - sunstone 8y ago
    I am also much more impressed than I expected to be with the Model3's I see on the street lately. It looks a lot better in real life than in the photos.
JumpCrisscross 8y ago
I was reading their GAAP metrics for six months, as presented on their Condensed Consolidated Statement of Cash Flows. (For the three months ending 30 June 2018, operations burned $129 million and CAPEX was $609 million.) I saw the numbers in the narrative and am curious what costs they're including (or revenue items they're bringing forward) for these non-GAAP measures. Generally speaking, absent explanation, I default to GAAP.
- _Microft 8y ago
  The $398 million can be found in the same table in the adjacent column for Q1 (3 month ending in 31 march)? CAPEX has decreased in Q2 by about $45 million compared to Q1 btw.

secabeen 8y ago

> finished goods vehicle inventory of $579 million as a result of the timing of deliveries. AKA, we delayed delivering a lot of cars to not trigger the tax credit expiration in Q2.

_Microft 8y ago
I interpret it like that as well, yes.
rconti 8y ago
Exactly. And this is a 'problem' they'll never again face, because now the clock is ticking. Of course, it's been replaced with the 'problem' of selling incremental Model 3s as the effective price goes up quarter by quarter in the near term, but the issue has ALWAYS been whether they'll be able to sustain demand and sales as the vehicle goes through pent-up demand and then has to rely on incremental sales, year after year after year (or until they start dumping huge amounts of cash into ramping the NEXT car). That said, I'm VERY impressed with our new 3; more so than I expected, and I suspect others will be similarly delighted and new sales will follow. Their next challenge will be ramping maintenance/service of the rapidly expanding installed base.
- radicalbyte 8y ago
  There's a massive amount of demand here in Europe: the car is the right size, the right price qualifies for all of the tax benefits. They also have 0 competition. I expect there to be a waiting list for the next couple of years unless they keep boosting production..
  - rconti 8y ago
    Good point, I was totally ignoring Europe with this car -- and I shouldn't be, because I need to buy your left driver's side convex mirror mirror (so I can actually see what's in the lane to my left, unlike in the "flat" US mirrors) and your proper taillights with amber turn signals (please be plug-and-play).
- marvin 8y ago
  > Their next challenge will be ramping maintenance/service of the rapidly expanding installed base. I agree that this will be the next obvious challenge. "Thankfully", they're already seeing how this plays out in Norway, where they're really struggling to service the Model S fleet as it ages and repairs are required more frequently. I consider this a good thing, because certainly there's someone in the service department thinking about what will happen in 3 years when the amount of Model 3s requiring service starts increasing further. Norway is the canary in the coal mine, which should be completely obvious to someone who does this full-time.
- sunstone 8y ago
  I am also much more impressed than I expected to be with the Model3's I see on the street lately. It looks a lot better in real life than in the photos.

JumpCrisscross 8y ago

I was reading their GAAP metrics for six months, as presented on their Condensed Consolidated Statement of Cash Flows. (For the three months ending 30 June 2018, operations burned $129 million and CAPEX was $609 million.) I saw the numbers in the narrative and am curious what costs they're including (or revenue items they're bringing forward) for these non-GAAP measures. Generally speaking, absent explanation, I default to GAAP.

_Microft 8y ago
The $398 million can be found in the same table in the adjacent column for Q1 (3 month ending in 31 march)? CAPEX has decreased in Q2 by about $45 million compared to Q1 btw.