4nursebee wrote: ↑
Thu May 03, 2018 3:28 pm
On tesla survival and need to raise funds.
They say and might well be just around the bend from selling 5,000 cars a week.
@minimum $35,000 a car, that is 175M a week revenue, 700 M month revenue, and that would be more than 9B/yr revenue.
And they might have 2yrs worth of orders.
The earnings call was fascinating. I encourage interested parties to read the shareholder letter because it is extremely well written and approachable. Highlights:
About 1/3 market share in April for this car segment. Wow! And that is at current production volumes. Once other automakers start introducing EVs, they actually won’t compete with Tesla, instead they will compete with their own ICE vehicles, expanding the size of the EV market even that much more.
They are doubling capacity by July to 5k/mo. I know a lot of us are dying to have the car and want them to scale ASAP, but they are taking their time to pause production on a regular basis, monthly, to address bottlenecks. First bottleneck was battery packs, but that is largely solved and will be enhanced even further when they install the German enhancements, followed by modest ongoing sw improvements. Next, general assembly is the current bottleneck they are working on. Next up after that will be paint. There was some discussion about production speed at burst, vs over a longer time. Tesla might have already proved 5k/wk at burst, but they are still only hitting about 2-3k.
I was entertained to hear Elon comment on the crowd sourced data that already exists showing real time production rates etc, saying this data is available weeks before Tesla makes announcements. And he railed against the capricious nature of the media giving false sound bytes. This really seemed to drive his comments to the analyst who asked about reservation cancel rates. It was a stupid question because any analyst worth his mettle would know that reservations are being delayed only to either wait for AWD or to wait for short range - both coming in July. Honestly, the question seemed intended to bait Elon. Imagine the headlines: “Only 1/3 of reservoirs are actually buying!” This is true but disingenouos, because the orders are not being cancelled, they are deferred and because the total number of backlogs are growing beyond 450k. Finally, this leads to a discussion as to whether Tesla will game US deliveries to hit the 200kth sale on July 1, which seems like a possibility as they ship to Canada, China or to service centers for demo cars. Can’t really Telegraph that. It will be tough because US consumers will not see an effective ramp over the next two months if this is true, but everyone will love an extra quarter of the full 7500 in Q4, especially considering a production level at maximum rate by then. Fingers crossed!
Speaking of China, Model Y will be built in China, with production targeted for May 2020, with both Gigi and Car factory colocated. They are heavily in planning mode now but won’t commit capex until Q3 or Q4. He answered this twice and got tired of the 3rd time this was asked.
He seemed conciliatory at one point, saying how important quarterly metrics were for Wall Street and wants to be laser focused on hitting the Model 3 ramps before asking time on the earnings call to talk about the Semi, but it was exciting to see the progress in the semi reservations (and we have seen them using the semis for battery shipment runs between Reno and Fremont). Cool stuff!
He railed against the day traders, but it was encouraging to get the updates, specifically the shareholder letter.
I am getting more excited about EVs as I follow all these developments. (I might have to buy one!) I will make a game time decision if/when our current car craps out. I might want to rent one on Turo for the next roadtrip(?)