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Q2 2020 Update

ir.tesla.com

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Re: Q2 2020 Update

#71

Post by slg »

xoxoy wrote: post #64
slg wrote: post #59

Earlier quoted context omitted.

>Quarterly revenue has not shown any growth for nearly 2 years, despite introducing more models and expanding global deliveries. Isn't this pretty easily explained by the total number of deliveries not growing? They might be expanding internationally to new markets or introducing new cars, but total deliveries have been pretty consistently around 90k for the last 2 years also. They still seem to be selling every car…

that’s not true. they have a lot of inventory on their b/s

What specifically do you mean? On page 6 it shows that global inventory is currently lower than it has been in 3 of the last 4 quarters.

Re: Q2 2020 Update

#72

Post by [deleted] »

elil17 wrote: post #10
samfisher83 wrote: post #8

What are regulatory credits? I thought the 7500 credit ran out?

This is separate from the consumer EV tax credit. Every car manufacturer must produce a certain percentage of electric cars. If their actual EV sales aren’t enough to cover that requirement, they can purchase “EV credits” from companies that exceeded their regulatory requirements to avoid a fine. Essentially this policy gets car companies that aren’t producing EVs to subsidize the ones that are.

[deleted]

Re: Q2 2020 Update

#73

Post by itsoktocry »

marc__1 wrote: post #28
itsoktocry wrote: post #6

The difference in the narrative versus the financial data is stark: Quarterly revenue has not shown any growth for nearly 2 years, despite introducing more models and expanding global deliveries. Their sales of regulatory credits this year is greater than all of the net income ever earned in their entire history.

Tesla posted positive free cash flow (CFO - capex) for 4 of the last 5 quarters (page 24) and it the only company with increase in # of deliveries among the 10 largest autos globally (page 7). Gross margins >20% is also best in class in the auto industry The list goes on in terms of growth & profitability

>Tesla posted positive free cash flow (CFO - capex) for 4 of the last 5 quarters

Can you explain how their capex is decreasing as they build out more factories and invest in new technology? Seems odd, doesn't it? Yet is sure makes that cash flow number look good. These are the kinda things that analysts consider red flags.

>it the only company with increase in # of deliveries among the 10 largest autos globally

Do you think this is a reasonable comparison when Toyota builds as many cars in a few days as Tesla does in a quarter? Tesla can futz a few thousand cars with a fleet sale or inventory build and drastically change their growth trajectory.

By the way, what's a "delivery"? I don't think I've ever seen them define it. I would assume it means "car delivered to customer", and yet they build inventory. Very opaque.

Re: Q2 2020 Update

#74

Post by shuckles »

baggachipz wrote: post #45
xoxoy wrote: post #38

Earlier quoted context omitted.

they earn 100% margins on selling $400M in mysterious regulatory credits

There's nothing mysterious about them. Car companies are required to produce clean vehicles, or they can instead buy credits from companies who do. Companies are paying right now rather than producing, and Tesla is there to benefit from it. There's nothing shady or mysterious here.

Pretty odd to consider that every other carmaker, obsessed with optimizing their business, would rather pay Tesla straight cash than rush out an electric drivetrain car. Across the Taycan, i3, and Bolt, there’s certainly plenty of evidence that they can.

Re: Q2 2020 Update

#75

Post by DanCarvajal »

toomuchtodo wrote: post #40
almost_usual wrote: post #37

Earlier quoted context omitted.

Off of credits though right? Also isn’t Tesla considered a “tech” stock by a lot of investors? A 20% gross margin is not good for a tech stock.

“Regulatory credits” are getting paid for making electric cars other automakers won’t make. Fiat alone must pay Tesla $2B for credits to keep selling internal combustion vehicles in Europe.

> “Regulatory credits” are getting paid for making electric cars other automakers won’t make.

The problem long term is that's basically not the case anymore aside from FCA.

Re: Q2 2020 Update

#76

Post by baggachipz »

matthewdgreen wrote: post #52
baggachipz wrote: post #45

Earlier quoted context omitted.

There's nothing mysterious about them. Car companies are required to produce clean vehicles, or they can instead buy credits from companies who do. Companies are paying right now rather than producing, and Tesla is there to benefit from it. There's nothing shady or mysterious here.

I think the question is whether it’s sustainable as a business. And whether Tesla’s other businesses are growing quickly enough that they can make up for the loss of those credits when other manufacturers start producing more EVs.

I think it'll surprise you how long it lasts. These big car companies take a long time to change in a meaningful manner and every month they spend trying to do that is time Tesla is advancing themselves. These credits should stick around (albeit in a diminishing manner) for at least a few more years.

Re: Q2 2020 Update

#77

Post by xoxoy »

slg wrote: post #71
xoxoy wrote: post #64

Earlier quoted context omitted.

that’s not true. they have a lot of inventory on their b/s

What specifically do you mean? On page 6 it shows that global inventory is currently lower than it has been in 3 of the last 4 quarters.

17 days of inventory is on par with previous quarters except Q1...

Re: Q2 2020 Update

#79

Post by Brakenshire »

H8crilA wrote: post #36
bqe wrote: post #25

Earlier quoted context omitted.

The parent commenter was discussing revenue and not profit. If they were aggressively expanding, I would expect that profits to remain small or negative, but I'd expect revenue to grow as a result.

Just to make it more clear what bqe is saying: they are selling the ~same amount of cars as 2 years ago. Both in terms of $ and in terms of #. Growth is completely flat.

They’ve lost a $7500 subsidy in the US during that time period, and just recently had Coronavirus. So it’s not that surprising.

Re: Q2 2020 Update

#80

Post by Lendal »

ehsankia wrote: post #67

I know the domain name is there, but shouldn't the post title contain "Tesla"?

Unnecessary. Tesla is the only company whose quarterly updates regularly make the front page of Hacker News. For some reason.
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