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That first line after the chart is the big takeaway in my opinion. The backlog of orders increased this quarter which is both good news, since it shows demand

by slg 7y ago

That first line after the chart is the big takeaway in my opinion. The backlog of orders increased this quarter which is both good news, since it shows demand is not a problem, and bad news, since Tesla still can't produce cars fast enough.

danhak 7y ago
Good thing they have another factory coming online this quarter :-)
- lgats 7y ago
  I would be surprised if gigafactory 3 cars are exported from China. From what I understand, most domestically produced, internationally branded vehicles are sold within the county. (Audi, VW, Mercedes all manufacturer cars in China for domestic consumption)
  - threeseed 7y ago
    There would be import tariffs on cars imported into the US. So the Chinese factory is purely for domestic sales.
    - grecy 7y ago
      I think it's for all of Asia-Pacific - i.e. Australia/NZ/Japan, etc.
  - zaroth 7y ago
    They absolutely will not be exported from China. They will sell every single TM3 they can make in GF3 in China locally, taking advantage of all the cost savings, tax savings, and incentives along the way. But GF3 is what will push them from 8,500/wk ultimately to above 10,000/wk, and depending on exactly how quickly that ramp happens in Q4 will determine whether they end the year with 360k, or 380k cars sold. They will head into 2020 at or close to an annualized production rate of 500k, which is what Elon predicted back in February. [1] Assuming no further increases at Fremont, this requires GF3 to be producing at a rate of ~2,250/wk. Tesla has stated they expect to be producing between 1,000 - 2,000 cars per week at GF3 by the end of the year, rising to 3,000/wk in 2020. So more likely there are still some gains to be made in Fremont before the end up the year in order to hit 500k annualized. By comparison Fremont was making 2,250/wk roughly 1 year after the first TM3 was produced (July 2017 - July 2018). This goes to show how much faster the production ramp can be the second time around. Unlike the first time when Tesla had never mass produced s vehicle before and was expecting “production hell”. [1] - https://twitter.com/elonmusk/status/1098080063801585664?s=21 https://twitter.com/elonmusk/status/1098080063801585664?s=21
- elisharobinson 7y ago
  This month
- new_realist 7y ago
  Model S, X and 3 production histories suggest grand proclamations and a half dozen deliveries followed by multiple quarters of production hell.
threeseed 7y ago
Demand mix is a huge problem though. Model 3 is cannibalising sales of the S and X models. Which means their ARPU and gross margin has rapidly decreased causing impacts to their revenue and profit. Tesla's fiscal position is simply unsustainable.
- clomond 7y ago
  I'm sorry for being pedantic here - but your final sentence does not necessarily follow from the previous. Lowering ARPUs and tightening gross margin % are an issue - yes. But the single most important factor here is gross margin in absolute terms. If sales volume increases to offset decreasing ARPUs, this doesn't make 'Tesla's fiscal position simply unsustainable'.
  - threeseed 7y ago
    Sales volumes are not offsetting decreasing ARPUs though. That's the problem. And you only have to look at Tesla's profit numbers to see this.
- ccorda 7y ago
  Last 4 quarters of free cash flow, seems quite sustainable: June 30, 2019 590.40M March 31, 2019 -944.80M Dec. 31, 2018 880.66M Sept. 30, 2018 831.52M
  - threeseed 7y ago
    This is what you want to be looking at: https://www.macrotrends.net/stocks/charts/TSLA/tesla/net-income https://www.macrotrends.net/stocks/charts/TSLA/tesla/net-inc...
    - llsf 7y ago
      Looking at it, it is revenue, gross profit and net income are all increasing by double digit percentage, every year. Still Tesla is spending a lot more, but less every year compare to the revenue. They are expanding quite quickly (new factory in China starting to produce this month), maybe too quickly ? It would be interesting to see during the next 6 months, how the production in China affects Tesla results.

by slg 7y ago

danhak 7y ago

Good thing they have another factory coming online this quarter :-)

lgats 7y ago
I would be surprised if gigafactory 3 cars are exported from China. From what I understand, most domestically produced, internationally branded vehicles are sold within the county. (Audi, VW, Mercedes all manufacturer cars in China for domestic consumption)
- threeseed 7y ago
  There would be import tariffs on cars imported into the US. So the Chinese factory is purely for domestic sales.
  - grecy 7y ago
    I think it's for all of Asia-Pacific - i.e. Australia/NZ/Japan, etc.
- zaroth 7y ago
  They absolutely will not be exported from China. They will sell every single TM3 they can make in GF3 in China locally, taking advantage of all the cost savings, tax savings, and incentives along the way. But GF3 is what will push them from 8,500/wk ultimately to above 10,000/wk, and depending on exactly how quickly that ramp happens in Q4 will determine whether they end the year with 360k, or 380k cars sold. They will head into 2020 at or close to an annualized production rate of 500k, which is what Elon predicted back in February. [1] Assuming no further increases at Fremont, this requires GF3 to be producing at a rate of ~2,250/wk. Tesla has stated they expect to be producing between 1,000 - 2,000 cars per week at GF3 by the end of the year, rising to 3,000/wk in 2020. So more likely there are still some gains to be made in Fremont before the end up the year in order to hit 500k annualized. By comparison Fremont was making 2,250/wk roughly 1 year after the first TM3 was produced (July 2017 - July 2018). This goes to show how much faster the production ramp can be the second time around. Unlike the first time when Tesla had never mass produced s vehicle before and was expecting “production hell”. [1] - https://twitter.com/elonmusk/status/1098080063801585664?s=21 https://twitter.com/elonmusk/status/1098080063801585664?s=21
elisharobinson 7y ago
This month
new_realist 7y ago
Model S, X and 3 production histories suggest grand proclamations and a half dozen deliveries followed by multiple quarters of production hell.

threeseed 7y ago

Demand mix is a huge problem though. Model 3 is cannibalising sales of the S and X models. Which means their ARPU and gross margin has rapidly decreased causing impacts to their revenue and profit. Tesla's fiscal position is simply unsustainable.

clomond 7y ago
I'm sorry for being pedantic here - but your final sentence does not necessarily follow from the previous. Lowering ARPUs and tightening gross margin % are an issue - yes. But the single most important factor here is gross margin in absolute terms. If sales volume increases to offset decreasing ARPUs, this doesn't make 'Tesla's fiscal position simply unsustainable'.
- threeseed 7y ago
  Sales volumes are not offsetting decreasing ARPUs though. That's the problem. And you only have to look at Tesla's profit numbers to see this.
ccorda 7y ago
Last 4 quarters of free cash flow, seems quite sustainable: June 30, 2019 590.40M March 31, 2019 -944.80M Dec. 31, 2018 880.66M Sept. 30, 2018 831.52M
- threeseed 7y ago
  This is what you want to be looking at: https://www.macrotrends.net/stocks/charts/TSLA/tesla/net-income https://www.macrotrends.net/stocks/charts/TSLA/tesla/net-inc...
  - llsf 7y ago
    Looking at it, it is revenue, gross profit and net income are all increasing by double digit percentage, every year. Still Tesla is spending a lot more, but less every year compare to the revenue. They are expanding quite quickly (new factory in China starting to produce this month), maybe too quickly ? It would be interesting to see during the next 6 months, how the production in China affects Tesla results.