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Q2 2020 Update

ir.tesla.com

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Re: Q2 2020 Update

#111

Post by marc__1 »

itsoktocry wrote: post #73
marc__1 wrote: post #28

Earlier quoted context omitted.

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…

>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.

From 2017 to 2018, they were focused in ramping-up production at the Fremont factory [0]. And compared to Q2 2019 Capex is actually 118% * higher ! * (546m vs 250m), so I can't see how they are slowing investments.

>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.

I do believe they did a tremendous job in ramping-up deliveries (page 18) in such a short period of time). It is 2x the number from just 3 years ago.

>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.

By delivery Tesla probably needs to recognize revenue according to ASC 606, or when the product is delivered instead of paid. I'm sure theirs auditors must pay close attention to this number.

[0] https://en.wikipedia.org/wiki/Tesla_Factory

Re: Q2 2020 Update

#112

Post by guerby »

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.

Q2 2018: 53,339 vehicules produced Q2 2020: 82,272 vehicules produced

2 years ago flat?

Source: https://en.wikipedia.org/wiki/Tesla,_Inc.

Tesla production will be around 100k+ per quarter until they open a new factory (Berlin, july 2021) or expand current ones.

If they're still production limited the only growth in production numbers for the next 12 monthes will be in their China factory and may be a bit in Fremont (p7 of PDF).

Tesla announced they hope to be close to 500k produced vehicules in 2020 (p10 of PDF) so that makes 157k/quarter for the next two quarters. I don't think they'll reach 500k in 2020.

But of course the thing you have to look at is results from other automakers (hint: ugly).

Re: Q2 2020 Update

#113

Post by xoxoy »

baggachipz wrote: post #76
matthewdgreen wrote: post #52

Earlier quoted context omitted.

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.

look at the pipeline for EVs coming to market in 2021/2022. there are dozens.

Re: Q2 2020 Update

#114

Post by xnx »

jeffbee wrote: post #98
JMTQp8lwXL wrote: post #9

I've seen a great deal of speculative investment in Tesla as of recently. I pray no middle class people will lose their entire net worth, much less in the middle of a crisis.

Old people on my Nextdoor are asking whether they should buy some TSLA, which was as good a signal as any I've ever seen when the same people were asking if they should maybe get some bitcoins (at $20k each). TSLA like every other US equity right now is supported by retail momentum alone.

TSLA is absolutely the present-day BTC.

Re: Q2 2020 Update

#115

Post by alonmower »

grecy wrote: post #82
sbahr001 wrote: post #43

Earlier quoted context omitted.

I would argue that the model S/X should be updated for their respective costs; They pretty much sell a 6 year old interior that was "space age" at the time. Since then their have been minor interior/exterior and looks extremely dated as the competition has "caught" up and the cheaper models surpass it. The only main changes to the car have been better battery and performance, the latter doesn't improve the day to day…

> When your spending 100k on a car you expect Mercedes type of luxury This is the old way of thinking, and it illistrates perfectly why the other auto manufacturers have been caught flat footed re EVs. For many decades what you said held true - more money on a car meant a higher quality interior. Now things have changed dramatically, because what we thought of as a "car" has changed so much. You can now spend 100k to…

I don't think they disagree with this, but that Tesla now has the 3/Y that get you all of the benefits of an electric car, with interiors that aren't too far off of the S/X for a fraction of the cost. If they want to continue to sell the S/X for a big premium they now need to offer a differentiated product (whereas pre 3/Y you were paying the premium to get a fully electric car)

Re: Q2 2020 Update

#116

Post by qeternity »

ckastner wrote: post #89
marc__1 wrote: post #28

Earlier quoted context omitted.

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

> "The list goes on in terms of growth & profitability" It better. Tesla has a market cap of 4x that of VW, a car maker with €256bn revenue and ~€17bn profit in 2019. It is beyond me why anyone would buy this stock over VW, let alone pay 4x the price for it. Even if Tesla could put out 900K cars in a quarter instead of the current 90K, they'd still not come even close to the competition is terms of financial success.…

For bulls, TSLA isn’t a car company. It’s the climate change company. They are the best bet right now to upend the entire power mix.

I’m not saying I agree with this. Even if achieved, the amount of future success being priced in today is extraordinary. Combine that with a stock that’s become “cool” to own with retail, and the huge short interest...and well it starts to make sense.

TSLA price action at the moment is really down to a lack of sellers. Shorts have been bent over in a way not seen at this scale since (ironically) VW. Simply put: everyone who has said TSLA is overbought has paid dearly. The bubble will burst, but it’s never shorts that pop bubbles.

Re: Q2 2020 Update

#117

Post by FireBeyond »

danhak wrote: post #24
jennyyang wrote: post #13

Revenues down Year over Year, and yet their stock price is 8x. Profiability increased, but its market cap is larger than Toyota which has over 10x the revenues. This stock is truly one for /r/wallstreetbets.

You realize their factory was shut down for much of this period, right? Comparing YOY quarterly figures here is very disingenuous.

And yet their stock price went up 8x, with factories shut down. That's not a valid question, though?

Re: Q2 2020 Update

#119

Post by philwelch »

adventured wrote: post #107
ckastner wrote: post #89

Earlier quoted context omitted.

> "The list goes on in terms of growth & profitability" It better. Tesla has a market cap of 4x that of VW, a car maker with €256bn revenue and ~€17bn profit in 2019. It is beyond me why anyone would buy this stock over VW, let alone pay 4x the price for it. Even if Tesla could put out 900K cars in a quarter instead of the current 90K, they'd still not come even close to the competition is terms of financial success.…

> It is beyond me why anyone would by this stock over VW, let alone pay 4x the price for it. The better answer is that nobody should buy VW either. Their business has zero potential upside and a huge downside risk in the transition to EVs; along with the inevitable rise of China's domestic automakers, which will eat a very large amount of market and sales away from the old giants. VW's position is its weakness, it ha…

> The better answer is that nobody should buy VW either. Their business has zero potential upside and a huge downside risk in the transition to EVs

VW is an EV manufacturer and is investing heavily in the transition to EVs themselves. And they’re already at a much larger scale than Tesla in terms of distribution and manufacturing the rest of the car.

Re: Q2 2020 Update

#120

Post by DanCarvajal »

shuckles wrote: post #74
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.

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.

Let's be clear we're mostly talking about, Fiat is the company buying tons of Tesla credits. This might be better for everyone all around. Would you want a Fiat EV?
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