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Tesla Q4 2018 Earnings Letter

ir.tesla.com

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Re: Tesla Q4 2018 Earnings Letter

#11

Post by anilshanbhag »

Looks like everyone is worried about a few percentage points up and down in financial numbers. There are three keys points I took away:

1) We expect the capital spend per unit of capacity for this factory to be less than half of that of our Model 3 line in Fremont.

2) Since Model Y will be built on the Model 3 platform and is designed to share about 75% of its components with Model 3, the cost of the Model Y production line should be substantially lower than the Model 3 line in Fremont, and the production ramp should also be faster.

3) This year, we will continue to implement more automation projects, and our ongoing cost reduction efforts will also make an impact.

In the end if Tesla wants to achieve its mission of moving to world to sustainable energy, costs need to go down. Every quarter they are making improvements and the three points above show significantly potential to further improve costs. The global auto market at $2 trillion is gigantic and good fraction of it is going to be electric - it is really a race to improve costs and Tesla is significantly ahead of the pack so far.

Re: Tesla Q4 2018 Earnings Letter

#12

Post by fosco »

chollida1 wrote: post #2

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 t…

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!

Re: Tesla Q4 2018 Earnings Letter

#13

Post by rjplatte »

anilshanbhag wrote: post #11

Looks like everyone is worried about a few percentage points up and down in financial numbers. There are three keys points I took away: 1) We expect the capital spend per unit of capacity for this factory to be less than half of that of our Model 3 line in Fremont. 2) Since Model Y will be built on the Model 3 platform and is designed to share about 75% of its components with Model 3, the cost of the Model Y producti…

This is the best breakdown I've seen yet. I doubt we'll see the "Production Hell" experienced with the Model 3 again.

Re: Tesla Q4 2018 Earnings Letter

#14

Post by ucaetano »

anilshanbhag wrote: post #11

Looks like everyone is worried about a few percentage points up and down in financial numbers. There are three keys points I took away: 1) We expect the capital spend per unit of capacity for this factory to be less than half of that of our Model 3 line in Fremont. 2) Since Model Y will be built on the Model 3 platform and is designed to share about 75% of its components with Model 3, the cost of the Model Y producti…

Given how wrong forward-looking statements by Tesla are, any forward-looking statement is largely irrelevant at this point.

So the only thing that actually matters is results: how they performed last quarter.

Re: Tesla Q4 2018 Earnings Letter

#15

Post by threeseed »

chollida1 wrote: post #2

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 t…

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.

Re: Tesla Q4 2018 Earnings Letter

#16

Post by [deleted] »

marvin wrote: post #10
dragontamer wrote: post #6

Earlier quoted context omitted.

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.

Didn't also Musk abstain from voting before the SolarCity acquisition? That's what I remember, anyway.

[deleted]

Re: Tesla Q4 2018 Earnings Letter

#17

Post by Cyclone_ »

I think Tesla may start to face issues when the other automakers start coming out with electric cars within the next few years. I sold off all my stock in Tesla, although I think they may still be a good short term bet. The supercharger network and cool factor is their big advantage at the moment, but I think in the future they won't do as well when there's more competition.

Re: Tesla Q4 2018 Earnings Letter

#18

Post by 11thEarlOfMar »

chollida1 wrote: post #8
11thEarlOfMar wrote: post #4

Earlier quoted context omitted.

"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.

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

Of course, thanks.

Re: Tesla Q4 2018 Earnings Letter

#19

Post by dragontamer »

marvin wrote: post #10
dragontamer wrote: post #6

Earlier quoted context omitted.

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.

Didn't also Musk abstain from voting before the SolarCity acquisition? That's what I remember, anyway.

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.

Re: Tesla Q4 2018 Earnings Letter

#20

Post by threeseed »

anilshanbhag wrote: post #11

Looks like everyone is worried about a few percentage points up and down in financial numbers. There are three keys points I took away: 1) We expect the capital spend per unit of capacity for this factory to be less than half of that of our Model 3 line in Fremont. 2) Since Model Y will be built on the Model 3 platform and is designed to share about 75% of its components with Model 3, the cost of the Model Y producti…

> Tesla is significantly ahead of the pack so far

Not really.

Audi e-tron, Jaguar iPace and BMW i3 are all well reviewed.

And 2019/2020 will see a wave of car companies e.g. Hyundai, Mercedes entering the market including plenty of interesting startups coming out of China. So Tesla is going to need far more to differentiate themselves than just range.

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