Tesla Third Quarter 2018 Update [pdf]

Congrats to Tesla!

This is HILARIOUS to see after the thousands and thousands of negative articles and press over the last year.

One thing to consider that an analyst pointed out. Telsa has alot of net 60 and 90 and 120 day relationships with suppliers, but gets paid from car sales much quicker. This means that they can "financially engineer" quarters to make their cash flow look much better than it would if the payment periods were all net 30.

Pre Close:

- bit of a perfect storm for Tesla to make a profit

  - Model X ramp up spend is mostly done, Model Y ramp up spend hasn't really started yet.

  - Model Y ramp up could be $250 million/quarter drag 

  - Started selling dual motor Model X, more than single motor, (probalby push for more expensive cars first to try and get profitable)

  - this will mean we'll ahve to watch per car margins going forward as less profitable models are rolled out.
  

- Solar weighing on results, Spent 2 Billion to buy Solar City, and assumed alot of debt in the transaction

  - solar installations have fallen through the floor since then,  

  - Tesla is no longer largest solar company in the US

  - with multiple layoffs in Solar City division
  

- The Model 3 outsold all but four sedans in the U.S. last quarter.

- Tesla Junk Bonds trading at 86 cents on dollar, an 8% Yield, not too spicy, probably means bond market expects to be paid off in cash not shares.

- Good quote from car analyst "So Tesla going from 0% to 1% U.S. market share and not profitable or cash-flow positive for the ytd -- `Yay, Tesla!' -- but let's not get crazy. This is still a niche brand building vehicles by hand in a tent."

Numbers:

- 3Q Adj EPS $2.90, Est. Loss/Shr 15c

- 3Q revenue $6.82 billion, estimate $6.31 billion

- 3Q capex $510.3 million, estimate $612.9 million

- 3Q adj. automotive gross margin +25.5%, estimate +19.5% (BD

- 3Q Free Cash Flow $881.0M, Est. $280.0M holy shit that's incredible

- Tesla has made money!!! net income of $300 million, now can they show that they didn't just cook the books for a quarter?

- back to 3 Billion of cash in the bank

- even without ZEV(Zero emission credits) Tesla would still be well into the black

Misc:

- 15 days of inventory, for Model 3, about a quarter of what other companies have

- building an average of 4,300 Model 3's per week

- labour hours are down on the assembly line by 30%

- little under 20% of Model 3 pre orders have cancelled

- Musk said he wants to start producing cars in China next year, this is a put up or shut-up situation as they've sat on the factory and done nothing since announcing it.

- China acceleration seems to be pretty darn Tariff driven

AutoPilot:

- now on software upgrade 9.0, which can change lanes and exit highways on its own.

Fuck, yeah!

Bring on the electric revolution! Agreed...has there ever been so much hate levied at a company playing a HUGE role in moving technology forward?

it seems like you post negative comments on anything Tesla related. Any motivations?