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Pre: - Will they give guidance on Model 3, Geographic breakdown(most other peers do)? - how many sales are high end cars vs low end? - TSLA down 11% on year

Pre: - Will they give guidance on Model 3, Geographic breakdown(most other peers do)? - how many sales are high end cars vs low end? - TSLA down 11% on year vs market up 5ish - convertable debt issue, we're now in the 20 day average window, option implied vols show market doesn't think they'll make it - Elon commented that they could pay bond w cash and didn't seem concerned, cash balance is up, though so are short term liabilities Car Notes: - current lowest price car sold is Model 3 $44,000 - reported to sustain 7,000 per week, a pretty big miss from the 10,000 that elon claimed they'd be at by mid 2018 but expected - Est. 2019 delivered 360,000 to 400,000 - Est. Q1 delivers expected to be down vs 2018 - Est. Q1 deliveries expected to be down in North America - still no funding secured for China plant Solar: - why even track anymore, installations fell, yawn Numbers: - cash balance is 3.7B - cash flow positive again!!, beat last quarter, though capital spending fell alot( down to $300ish million) - 4Q Adj EPS $1.93, Est. $2.14 (Big misses, what happend here?) - layoffs could cut $400M annually from budget - Customer Deposits $792.6M vs $908.5M in 3Q - Bonds unmoved, yield still 8% - Elon expects to be profitable each quarter in 2019 Misc: Lots of analysts congratualting Tesla saying they've got the supply side sovled. Shrinking sales on the high end indicate taht their next challenge will be on the demand side, especially on the high end that allowed them to survive for so long Can they be profitable with $1000 in margin per car instead of 5,000-10,000? Interesting note by Bloomberg > Services reported a loss of almost $500M "So basically, Tesla is taking a $500 million hit just to save customers from the dealership experience."

deleted 8y ago
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11thEarlOfMar 8y ago
"Services and Other" from the consolidated statement of ops shows: Q4 Services and Other Revenue: $531 MM Q4 Services and Other Cost Of Revenue: $668 MM Which would suggest a loss on services of $137 MM. Is this the same 'Services' that Bloomberg is referring to? I cannot find any other mention of Services in the letter.
- chollida1 8y ago
  Services number is YoY in the columns beside where you are probably looking $1,880,354,000 costs - $1,391,041,000 revenues is $(489,313,000) in losses
  - 11thEarlOfMar 8y ago
    Of course, thanks.
Traster 8y ago
You mention solar is a big nothing burger. I remember when the acquisition happened there was quite an outcry about Tesla basically bailing out Musk's other company. Do they have a liability here or is it just going to disappear into the ether?
- dragontamer 8y ago
  Why would it be a liability? Shareholders voted and accepted the purchase of SolarCity. I agree its sketchy, but Musk doesn't technically control the company. He has a large share of the voting pool, but the shareholders in general were willing to bail out SolarCity. Its kinda "Democracy in action". I think it was a stupid move for the shareholders to do, but its fully within their rights to do so.
  - jampekka 8y ago
    To nitpick, it's literally plutocracy, not democracy.
    - dragontamer 8y ago
      Fair enough. The Stock Market is a pay-to-play game for sure.
  - marvin 8y ago
    Didn't also Musk abstain from voting before the SolarCity acquisition? That's what I remember, anyway.
    - deleted 8y ago
      [deleted]
    - dragontamer 8y ago
      Yes. Musk abstained from voting. Musk made his opinion known, but otherwise "fairly" let the shareholders vote on the issue. At least technically fair. It was 85% in favor of merging. I say "technically", because Musk also went around trying to convince people that they should allow SCTY to be acquired by TSLA. But hey, shareholders trust Musk and were willing to follow his opinion on the matter. So I guess its fair overall. A stupid move, but fair.
fosco 8y ago
I am getting familiar with your summaries like this which I really appreciate. I am interested if you are writing these up or obtaining them through a script or other service? Thanks again!
- waterside81 8y ago
  He works for a hedge fund in Toronto (or used to?). Pretty sure these are all his own words. And you’re right they’re great. Whenever there’s earnings reports from the big tech companies - his are the first comments I look for.
threeseed 8y ago
For me the next couple of years are going to make or break Tesla. You have pretty much every car manufacturer releasing flagship electric cars in 2019/2020. And most of them are either cheaper than Tesla or offer far more value i.e. premium branding and better interiors. And whilst they have their Supercharger network I suspect that pretty soon we will governments intervening to regulate standards and build out infrastructure. So they better get ready quickly before the onslaught comes and like you said be profitable if margins drop.
- rconti 8y ago
  Electrify America has an order of magnitude more money to spend on charging than Tesla used to build their supercharger network. That said, they seem to be using it to buy charging networks but so far the experience isn't improving. Conventional EV roadtrip charging is years behind Tesla. I'm not sure "premium branding" for the competition matters vs Tesla, as I don't think the latter has a downmarket reputation. Interior/existing brand relationships I can see helping the conventional players. Range doesn't seem to be there even on the models supposedly coming out this year. It seems like we keep hearing the Tesla killer is coming Real Soon Like Now. Still, I ultimately agree they need to sustain through the onslaught, it just seems like it's taking longer than expected.
- RobLach 8y ago
  I have a feeling Tesla didn’t capitalize enough on their first mover advantage and now it’s going to be tough as proper competitors move into the market. Audi is matching the Model X with the E-Tron, but without Tesla build quality: https://www.audiusa.com/models/audi-e-tron https://www.audiusa.com/models/audi-e-tron Volvo Drive-E, Jaguar I-Pace, new Nissan Leaf; similar stories.
- btilly 8y ago
  As I most recently pointed out in https://news.ycombinator.com/item?id=18712442 https://news.ycombinator.com/item?id=18712442, there is good reason to believe that all the other car manufacturers are going to learn the hard way that their interests do not align with their dealers. Which means that consumers will learn that they shouldn't go to existing car companies to buy electric cars. Which does not bode well for the future of existing car companies. (This is a prediction that I've been aware of for around 20 years now. And the form of the problem - that existing tech manufacturer's wind up hamstrung by their existing supply and sales networks, is a common one for companies that get destroyed by disruptive innovation.)
ChuckMcM 8y ago
Nice summary! I was under the impression that the services loss was from the free electricity they gave out at superchargers to some owners. Their boosting of the prices there was a response to converting that line into a something at least revenue neutral. Also no details on how they proceed with their power swap arrangements. Personally I expect them to use the Google hack where they create a wholly owned subsidiary that is a registered power company so that they can negotiate at grid rates for power rather than with various power providing entities where the super chargers are located.
- greglindahl 8y ago
  The amount of money lost in services is way too big to be free electricity.
  - cmurphycode 8y ago
    You could estimate this in a couple different approaches, here's one. Tesla Model 3: 26 kwhr / 100 mi Model S: 33 kwhr / 100 mi Model X: 39 kwhr / 100 mi Hard to say where the balance of supercharging comes from (more expensive models more likely to have it free, but maybe less likely to use?) so let's be generous and call it 30 kwhr/100mi I pay 24 cents per kwhr but I hope their average price is more like 10 cents (not even counting the solar...) So each 100 miles charged would cost $3. So 100 million dollars spent giving out electricity would generate 3.3 billion miles charged. Back in september there were 20 million telsa miles driven per day, but a year long projection would be hard given the fast growth of model 3. let's just say 20M per day. That's about half of the year's miles driven covered with 100M. I can't imagine that even 1/2 of the total miles driven are charged by superchargers. So I am inclined to agree with you; the free-supercharging-electricity costs are probably a small piece of the total 500M.
Pharmakon 8y ago
Tesla also just lost another CFO. Deepak Ahuja announced he’s leaving. Again. https://www.cnbc.com/2019/01/30/musk-says-tesla-cfo-deepak-ahuja-is-leaving-the-company.html https://www.cnbc.com/2019/01/30/musk-says-tesla-cfo-deepak-a...
- xkjkls 8y ago
  And this much turmoil in an accounting department is never good. In the last year, they've lost 5 finance VPs, their CFO, and a CAO that they hired and left a month into his tenure. That would be shocking for any other $50 billion market cap company.
  - Pharmakon 8y ago
    Oh absolutely. That much unplanned churn in the financial sector of a Girl Guides troop would be shocking! In a $50 billion market cap company it’s downright alarming. I really don’t know exactly what to make of it, but it factored into my decision to leave the stock the hell alone.
    - ksec 8y ago
      That is if they have something to hide, but since they are public and have to go through Audit. I wonder why are al these Financial people leaving.
      - kgwgk 8y ago
        Yes, they are public and have to go through audit and that's why all these people want to spend more time with their families... Probably the departing interim CFO won't be signing the 10-K filing, and apparently they weren't able to find anyone better than Zach willing to do so.
- kgwgk 8y ago
  Elon: "And we thought long and hard about who the right person is to take over from Deepak, and that's Zach. And Zach has been with Tesla now for nine years... [...] So Zach, you had management and technology at Wharton undergrad and then worked at Tesla and then spent a couple of years at Harvard Business School, which I actually don't think was necessary, by the way."

deleted 8y ago

[deleted]

11thEarlOfMar 8y ago

"Services and Other" from the consolidated statement of ops shows: Q4 Services and Other Revenue: $531 MM Q4 Services and Other Cost Of Revenue: $668 MM Which would suggest a loss on services of $137 MM. Is this the same 'Services' that Bloomberg is referring to? I cannot find any other mention of Services in the letter.

chollida1 8y ago
Services number is YoY in the columns beside where you are probably looking $1,880,354,000 costs - $1,391,041,000 revenues is $(489,313,000) in losses
- 11thEarlOfMar 8y ago
  Of course, thanks.

Traster 8y ago

You mention solar is a big nothing burger. I remember when the acquisition happened there was quite an outcry about Tesla basically bailing out Musk's other company. Do they have a liability here or is it just going to disappear into the ether?

dragontamer 8y ago
Why would it be a liability? Shareholders voted and accepted the purchase of SolarCity. I agree its sketchy, but Musk doesn't technically control the company. He has a large share of the voting pool, but the shareholders in general were willing to bail out SolarCity. Its kinda "Democracy in action". I think it was a stupid move for the shareholders to do, but its fully within their rights to do so.
- jampekka 8y ago
  To nitpick, it's literally plutocracy, not democracy.
  - dragontamer 8y ago
    Fair enough. The Stock Market is a pay-to-play game for sure.
- marvin 8y ago
  Didn't also Musk abstain from voting before the SolarCity acquisition? That's what I remember, anyway.
  - deleted 8y ago
    [deleted]
  - dragontamer 8y ago
    Yes. Musk abstained from voting. Musk made his opinion known, but otherwise "fairly" let the shareholders vote on the issue. At least technically fair. It was 85% in favor of merging. I say "technically", because Musk also went around trying to convince people that they should allow SCTY to be acquired by TSLA. But hey, shareholders trust Musk and were willing to follow his opinion on the matter. So I guess its fair overall. A stupid move, but fair.

fosco 8y ago

I am getting familiar with your summaries like this which I really appreciate. I am interested if you are writing these up or obtaining them through a script or other service? Thanks again!

waterside81 8y ago
He works for a hedge fund in Toronto (or used to?). Pretty sure these are all his own words. And you’re right they’re great. Whenever there’s earnings reports from the big tech companies - his are the first comments I look for.

threeseed 8y ago

For me the next couple of years are going to make or break Tesla. You have pretty much every car manufacturer releasing flagship electric cars in 2019/2020. And most of them are either cheaper than Tesla or offer far more value i.e. premium branding and better interiors. And whilst they have their Supercharger network I suspect that pretty soon we will governments intervening to regulate standards and build out infrastructure. So they better get ready quickly before the onslaught comes and like you said be profitable if margins drop.

rconti 8y ago
Electrify America has an order of magnitude more money to spend on charging than Tesla used to build their supercharger network. That said, they seem to be using it to buy charging networks but so far the experience isn't improving. Conventional EV roadtrip charging is years behind Tesla. I'm not sure "premium branding" for the competition matters vs Tesla, as I don't think the latter has a downmarket reputation. Interior/existing brand relationships I can see helping the conventional players. Range doesn't seem to be there even on the models supposedly coming out this year. It seems like we keep hearing the Tesla killer is coming Real Soon Like Now. Still, I ultimately agree they need to sustain through the onslaught, it just seems like it's taking longer than expected.
RobLach 8y ago
I have a feeling Tesla didn’t capitalize enough on their first mover advantage and now it’s going to be tough as proper competitors move into the market. Audi is matching the Model X with the E-Tron, but without Tesla build quality: https://www.audiusa.com/models/audi-e-tron https://www.audiusa.com/models/audi-e-tron Volvo Drive-E, Jaguar I-Pace, new Nissan Leaf; similar stories.
btilly 8y ago
As I most recently pointed out in https://news.ycombinator.com/item?id=18712442 https://news.ycombinator.com/item?id=18712442, there is good reason to believe that all the other car manufacturers are going to learn the hard way that their interests do not align with their dealers. Which means that consumers will learn that they shouldn't go to existing car companies to buy electric cars. Which does not bode well for the future of existing car companies. (This is a prediction that I've been aware of for around 20 years now. And the form of the problem - that existing tech manufacturer's wind up hamstrung by their existing supply and sales networks, is a common one for companies that get destroyed by disruptive innovation.)

ChuckMcM 8y ago

Nice summary! I was under the impression that the services loss was from the free electricity they gave out at superchargers to some owners. Their boosting of the prices there was a response to converting that line into a something at least revenue neutral. Also no details on how they proceed with their power swap arrangements. Personally I expect them to use the Google hack where they create a wholly owned subsidiary that is a registered power company so that they can negotiate at grid rates for power rather than with various power providing entities where the super chargers are located.

greglindahl 8y ago
The amount of money lost in services is way too big to be free electricity.
- cmurphycode 8y ago
  You could estimate this in a couple different approaches, here's one. Tesla Model 3: 26 kwhr / 100 mi Model S: 33 kwhr / 100 mi Model X: 39 kwhr / 100 mi Hard to say where the balance of supercharging comes from (more expensive models more likely to have it free, but maybe less likely to use?) so let's be generous and call it 30 kwhr/100mi I pay 24 cents per kwhr but I hope their average price is more like 10 cents (not even counting the solar...) So each 100 miles charged would cost $3. So 100 million dollars spent giving out electricity would generate 3.3 billion miles charged. Back in september there were 20 million telsa miles driven per day, but a year long projection would be hard given the fast growth of model 3. let's just say 20M per day. That's about half of the year's miles driven covered with 100M. I can't imagine that even 1/2 of the total miles driven are charged by superchargers. So I am inclined to agree with you; the free-supercharging-electricity costs are probably a small piece of the total 500M.

Pharmakon 8y ago

Tesla also just lost another CFO. Deepak Ahuja announced he’s leaving. Again. https://www.cnbc.com/2019/01/30/musk-says-tesla-cfo-deepak-ahuja-is-leaving-the-company.html https://www.cnbc.com/2019/01/30/musk-says-tesla-cfo-deepak-a...

xkjkls 8y ago
And this much turmoil in an accounting department is never good. In the last year, they've lost 5 finance VPs, their CFO, and a CAO that they hired and left a month into his tenure. That would be shocking for any other $50 billion market cap company.
- Pharmakon 8y ago
  Oh absolutely. That much unplanned churn in the financial sector of a Girl Guides troop would be shocking! In a $50 billion market cap company it’s downright alarming. I really don’t know exactly what to make of it, but it factored into my decision to leave the stock the hell alone.
  - ksec 8y ago
    That is if they have something to hide, but since they are public and have to go through Audit. I wonder why are al these Financial people leaving.
    - kgwgk 8y ago
      Yes, they are public and have to go through audit and that's why all these people want to spend more time with their families... Probably the departing interim CFO won't be signing the 10-K filing, and apparently they weren't able to find anyone better than Zach willing to do so.
kgwgk 8y ago
Elon: "And we thought long and hard about who the right person is to take over from Deepak, and that's Zach. And Zach has been with Tesla now for nine years... [...] So Zach, you had management and technology at Wharton undergrad and then worked at Tesla and then spent a couple of years at Harvard Business School, which I actually don't think was necessary, by the way."