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Tesla Model 3 deliveries beat Wall Street targets, shares up 7%
- errantspark 7y agoand they lost three VPs in a week's time and the shares slumped correspondingly, this bump is despite that [edit] my mistake about the slump in share price, I had misread the chart
- peaktechisnow 7y agoStock was $224 on June 19th, hit $224 again on the 24th and closed today at $224. Not sure what the slump is you're referring to?
- errantspark 7y agoahahah you are absolutely correct I was looking at the wrong zoom level on the chart, my mistake
- omarforgotpwd 7y agoAmazing. The Tesla haters were going to town on them all quarter, claiming bankruptcy was imminent and there was "no demand". Now they've delivered more cars than any other quarter in their history.
- DevKoala 7y agoWhat's amazing is the power of their message. There is just too much money to gain by Tesla competitors and investors who bet against Tesla. All the negative headlines going into this quarter results had little to no substance, but were louder than ever.
- dralley 7y agoI'd hardly say 3 VPs leaving in a week says nothing of substance whatsoever.
- sixQuarks 7y agowhat's new about this? They'v always had high levels of turnover. Their head of production left right as model 3 was in the midst of production hell.
- threeseed 7y agoHave we seen 3 VPs leave in such rapid succession especially after what was supposedly an amazing quarter ? Tesla isn't some startup any more. They've been around long enough to not warrant this level of chaos.
- HeadsUpHigh 7y agoEeeeeh there's always something new. At this point unless it's legal trouble I don't pay attention to any negative article about Tesla -or any article in general-. I just look at the quarter numbers.
- new_realist 7y agoWill you be looking at Q2 and Q3 earnings?
- HeadsUpHigh 7y agoYes every quarter I take a peek.
- sixQuarks 7y agoexactly.
- sunstone 7y agoIt's clear now that an avalanche of electric vehicles are on the way. These VP's are in very high demand, not unlike star athletes on the championship team. They are leaving now because they know that with this quarter most of the major issues (other than battery supply) have been taken care of. Counter intuitively, perhaps, it's a good sign for Tesla. Next man up.
- 3327 7y agoGood point - it shows that those betting against tesla on the short side have some SERIOUS connections and clout. So who are they? Koch money and texan hedge funds maybe, who knows. It would be interesting to see when the 13F comes out.
- threeseed 7y agoOf course they delivered more cars. The Model 3 is substantially cheaper than the S/X models which means you get more volume with lower margins. And we are seeing quarter by quarter a drop in the ARPU as the S/X models are being cannibalised by the Model 3. It's amazing that Musk has twisted the narrative to be all about deliveries instead of profitability. But ultimately unless they can dramatically reign in costs it will be their downfall.
- new_realist 7y agoWith their deep discounts this quarter, Tesla is selling a dollar for ninety cents and will suffer massive losses. US Model 3 demand peaked in 2018, and Europe is down in Q2 (especially considering the two month sales window in Q1).
- woodandsteel 7y agoIf you are a typical Tesla hater then you have been making mistaken predictions every quarter for the last ten years.
- zaroth 7y agoOf course they delivered more cars! Probably because TM3 is light years ahead of anything else on the market, EV or otherwise. One thing I love about Tesla is their plan was always all about the Model 3 (and eventually Y). They didn’t relegate their best technology into S/X and hobble the 3. They put everything they had into TM3 to make it the pinnacle of what they could accomplish and as forward thinking as possible. It’s an absolute generational leap which I think will sell very strongly for a decade. All the while they will continue to work on cost efficiency, margins, and scale, while delivering a constant stream of software and hardware updates to the growing fleet. The next big refresh of S/X will drive them forward with their newest battery tech, powered by their Maxwell acquisition, and motor, suspension, and most notably I would assume materials improvements which will re-differentiate S/X from the 3 and pull more buyers up to that level. But TM3P is just so incredibly compelling I’m not at all surprised a Tesla buyers at the $60k+ price point would go with that over the S. I think we will see in Q3/Q4 that Tesla does not need a $60k ASP in order to be profitable. Part of that of course will be buoyed by credits and rebates which is an important part of their overall strategy. Legacy carmakers will pay Tesla billions to cover their ICE pollution cost.
- elihu 7y agoI expect some of the orders were people wanting to get their car before the federal tax credit phased out entirely. (I thought about it, but couldn't convince myself to buy a very expensive car with no access to service manuals.) Hopefully they can keep selling cars as fast as they can make them even without the credit.
- zaroth 7y agoIt halved again (-$1875) where it will stay for another 6 months.
- Phase_White 7y agoFYI on the service manuals. The service manuals are out there on the internet if you look.
- new_realist 7y agoIt’s very likely Tesla lost money in Q2 whist pushing Elon’s sales narrative. I expect retained earnings to soon exceed -$7B and another capital raise in 2020. Demand in existing markets, like the US and Europe, is down from 2018 and sales are being driven by heavy discounts this quarter, including the SR+.
- deleted 7y ago[deleted]
- taway3324 7y agoI normally try to stay out of Tesla discussions on HN, and I've had more than one get quite toxic in the past so I'm writing this from a throwaway, but in what world is demand down from 2018 for tesla? According to this release, they still have more orders than deliveries which means they are still taking more orders than they can produce and deliver right now, this quarter had a record setting number of deliveries for the company, and i'm not sure what other markets they are currently delivering to in huge numbers other than the US and Europe (The UK just recently started getting deliveries, and I doubt a large portion of Q2's deliveries was from the UK, but I fully admit I could be way off base there). There also aren't really any "discounts" they are offering, especially not on the SR+. I just helped a friend go through the process of picking one out, and he waited until near the end of the quarter hoping there would be discounts, but there weren't any, even for the few inventory cars that were available (Tesla's website shows literally 0 inventory cars within 200 miles of me in Florida right now...) In fact over the course of Q2 they INCREASED the price of the Model 3 (SR+ included) by at least $400 in the US. I can't speak to their financials at all, for all I know Tesla is losing money at crazy speeds, but demand seems to be there just fine, still over what they can produce, and they sure as hell aren't discounting any car that my friend or I was able to buy. If you answer nothing else, please at least answer where you got the idea that they are heavily discounting anything at the company, ESPECIALLY the SR+ Model 3? Because that seems almost entirely made up and 100% against literally everything I can see myself. Unless you are somehow counting the lower price of their "refresh" Model X and S that they announced march 1st, which seems to be literally the only time prices have gone down for their lineup over the past quarter.
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- Y-bar 7y agoA general observation/question related to this style of headline we see here: “[...] beats [analysts] target” Why do we write like that? Wouldn’t it make more sense to write “[analysts] misses [...] target”? It feels to me like writing “Weather rains more and beats meteorologists’ expectations” when “Meteorologists underestimates rainfall” would be more true.
- rawrmaan 7y agoI'm trying hard to find a flaw in this argument but I can't. Good point.
- 40acres 7y ago"X beats Y's target" makes sense to me due to the nature of the stock market, and how expectations are "baked into" the share price. Quarterly earnings are all about performance relative to expectation, while it is accurate to say that the analysts are wrong in this instance, the market gives so much "trust" to analysts that we expect their targets to be expressed in good faith (I sense an SEC violation otherwise), so when a company beats expectations we view that as a decent proxy for performance.
- scribu 7y agoBecause you want the most salient piece of information at the start. Otherwise, the front page of a financial site would look like this: * Analysts miss target regarding Tesla * Analysts are optimistic about Q2 returns for Boeing * Analysts etc.
- 11thEarlOfMar 7y agoVery curious to learn whether they are cash flow positive this quarter, and whether/how much gross margins went up. If so, and demand exceeded deliveries, could be sailing into blue skies.
- gok 7y agoThey're almost certainly still losing money, however.
- checkavail 7y agoWill they ever not "lose money" like the Amazon strat?
- 11thEarlOfMar 7y agoI bought AMZN stock in 1996. Rode it up to $420 ($60 at today's prices), then back down to $14. In 2004, it was around $55. Quarter after quarter, AMZN was reporting massive losses and massive borrowing. Debt climbed to $2BB or thereabouts. I was sitting on a modest profit, and I lost faith and sold. It turns out that the massive losses and debt were because AMZN was building a monster company. Building a monster, capital-intensive company, and bringing it up fast, requires huge debt. The question at this point in TSLA's life is the growth rate. At the time I sold, AMZN's revenue were also growing at a huge rate, 40-50% annually. Write TSLA off if you want, but I've seen this movie before and those who invest for the long haul are going to be very well rewarded.
- new_realist 7y agoAmazon was almost always cash flow positive. Debts are not losses.
- prepend 7y agoThat’s Amazon’s story and thousands of others that failed. Trying to paint a parallel between Tesla and Amazon based solely on they both had losses for a certain period is foolish. You’d need a lot more similarities to make the comparison useful.
- kjksf 7y agoHis argument is not that Tesla is like Amazon because they both had losses. His argument is that Tesla's losses can be explained by investment in the future, just like Amazon invested in the future while half of wall street was telling them to make a profit. Tesla is growing revenue 50% YoY for the last decade. In Q2/2019 they delivered over 2x cars than in Q2/2018. If you can find a single company in the history of capitalism that grew that fast in a capital heavy manufacturing business then let me know. Tesla is currently building a giant factory in China (at record-breaking speed). That requires a lot of money. When they start delivering cars from that factory sometime in Q1/Q2 2020, their profitability will skyrocket because they'll flip from "lots of expenses, zero revenue" to "no expense, lots of revenue". This has happened 3 times in Tesla's history when Tesla bounced from heavy losses to profit. First when they scaled production of Model S and before they started investing in design and manufacturing of Model X. Then after they scaled production of Model X and before they started investing in design in manufacturing of Model 3. Then when they scaled production of Model 3 and before they started Model Y / european expansion / china factory.
- smilekzs 7y agoMy inner cynist asks: So when a company beats whatever targets set by analysts, the stock goes up. What happens if analysts deliberately set targets that they believe the company would have slim chance of achieving? What if only some (arguably optimistic) analysts set a high target which the pessimists act on? I think it's likely I have some fundamental misunderstandings on how "targets" work in general, but I can't help but feel that "all Tesla news can and will be interpreted as a weakness"...
- xwdv 7y agoThen they wouldn’t be good analysts and people wouldn’t give a sentient fuck about them.
- redler 7y agoThere’s a big market for the services of analysts who hit close to the mark. The size of that market exceeds the size of the market for analysts who miss, intentionally or otherwise.
- yellow_lead 7y agoYou may see one bank's analysts do this, but others should balance them out. If one bank's analysts are routinely off every quarter, no one will listen. All the analysts could conspire to set impossible targets, but the only way to profit would be considered illegal. For this reason bank's have a Chinese wall between analysts and traders. On a similar topic, I think it's common to see CEOs try to mislead analysts into lowering their targets. I believe this happened with Apple for a long time, but to the same effect - analysts stopped listening to Cook's guidance.
- deleted 7y ago[deleted]
- microtherion 7y agoIt's somewhat odd that the stock is benchmarked against conservative analyst estimates, instead of against the predictions of the company's own CEO: https://twitter.com/elonmusk/status/1098013283372589056 https://twitter.com/elonmusk/status/1098013283372589056 Any Tesla cheerleaders willing to bet that Tesla will build ~340k cars in 2H2019? Or is this another "LOL, nothing that Musk says matters" moment?
- mcv 7y agoSee what you can do when you're not picking stupid online fights?
- jmpman 7y agoIve been bearish on the stock since the $7500 credit expired. However, this weekend, the stars aligned, and I pulled the trigger on a Model 3. It’s nothing less than amazing (panel gap issues aside). I now understand why Tesla has so many fans. They’re light years ahead of the competition.
- new_realist 7y agoDespite heavy discounting, introduction to new markets and introduction of lower cost variants, unit sales declined ~9% from 2018H2 to 2019H1.