Tesla Delivers Record 97,000 Vehicles in Q3
ir.tesla.com
ir.tesla.com
Of course, we're still seeing issues where Musk is getting sued for threatening workers on Twitter for unionizing, but that's a slightly different issue than lying about production predictions.
Before last year it was basically just Tesla and a few token cars e.g. Leaf in the electric vehicle space. Now every car company is jumping in and any detractors e.g. BMW CEO are being swiftly moved on.
And so Tesla is now competing against the most highly capitalised, profitable and experienced companies in the world. Porsche Taycan is based on every review the best EV car money can buy. VW has the ID.3/ID.4 coming out shortly which look seriously good and they have plans for 70 models to be released in the coming decade. You have startups like Rivian which are attracting significant outside funding and disrupting segments. And at the cheaper price points you have dozens of Chinese manufacturers entering the fray.
Tesla is about to have the fight of their life and all while they are losing hundreds of millions each quarter.
The Taycan is roughly twice as expensive as the equivalent Model S Tesla and has greatly inferior range and, among people likely to buy electric cars, presumably less brand value. People haven't forgotten VW's emissions scandal. Let's not forget they haven't even shipped a single Taycan yet. BMW has sold a crappy, overpriced electric car/washing-machine-lookalike for years (i3) without it catching on.
Furthermore, there's no real competition on the horizon just yet for the Model 3. Tesla have a 3-6 year head start on making electric cars which will be difficult to overcome.
Car companies have been doing nothing for years. But now for the first time they are all 100% committed to EV. And as we've seen with the Taycan, EQC and the ID.3/4 they can easily compete with Tesla.
The Taycan is not really competing with anything but Tesla's highest-end and presumably lowest-volume products, and the ID.3 and 4 don't exist as production cars yet (AFAIK).
Competing with them is obviously possible but these aren't very good examples.
No, they'll be selling about 20,000 a year which is what they always planned for. They're actually increasing production capacity at the moment:
https://electrek.co/2019/10/02/porsche-taycan-increase-produ...
> I’m not about to spend 150k
There are two cheaper variants on the way. Buy one of them if you want:
https://www.cnet.com/roadshow/news/cheaper-porsche-taycan-ev...
https://www.bloomberg.com/news/articles/2019-08-23/tesla-sai...
The link you provided refers only to the LG supply deal exclusively for Model 3 / China.
Tesla owns the largest battery production facility on the planet (Gigafactory 1 in Sparks NV) which supplies battery in partnership with Panasonic.
But the difference is Ionity is CCS and all EVs can charge at its chargers. CCS cars can use any CCS provider like Ionity, FastNed, Allego, etc. which is the correct approach. I can fuel my ICE car at any fuel station and I should be able to charge my EV at any charging station.
You're making the case for CCS. I agree with you. A common charging standard is better for everyone, just like common internet protocols allow Facebook and Apple to be successful.
Back in 2010, Audi said they would produce the etron by the end of 2012, which apparently is German for 2018. ;)
Volkswagen will be delivering a lot of EVs in 2020. They're targeting everything from the low end (SEAT Mii) to the high end (Porsche Taycan).
Here's Volkswagen's EV lineup for the next 18 months:
- VW e-Up!: https://www.carscoops.com/2019/09/vws-updated-e-up-offers-16...
- VW e-Golf (will be replaced by the ID.3, but still available): https://www.youtube.com/watch?v=ah4lrqWx8E0
- VW ID.3: https://www.youtube.com/watch?v=op4HO6GHC8Q
- VW ID.4: https://www.autocar.co.uk/car-news/motor-shows-frankfurt-mot...
- SEAT Mii: https://www.electrive.com/2019/09/11/seat-mii-available-to-o...
- SEAT el-Born: https://www.youtube.com/watch?v=DZI7WFtwc8g
- Cupra Tavascan (maybe, not confirmed): https://www.youtube.com/watch?v=YNYHRKp4n1w
- Skoda Citigo iV: https://www.autocar.co.uk/car-news/motor-shows-frankfurt-mot...
- Skoda Vision iV: https://www.youtube.com/watch?v=-f1g9xl6W_E
- Audi e-tron (and also a new "sportsback" variant): https://www.audiusa.com/models/audi-e-tron
- Audi e-tron Q4: https://www.youtube.com/watch?v=DiwevzHsCbU
- Audi e-tron GT (maybe 2021): https://www.youtube.com/watch?v=tMEdiq2xTbQ
- Porsche Taycan (and the Cross Turismo variant in future): https://www.porsche.com/uk/models/taycan/taycan-models/
And they'll have more models out in 2021, more in 2022, etc. Volkswagen means to be the biggest EV maker in a few years. They have both the investment and the scale to achieve it.
I'm actually glad they are trying, but they need to try harder.
Taycan's Nürburgring performance: https://www.youtube.com/watch?v=8m31EgQkswg
Tesla Model S Plaid's Nürburgring performance: https://www.thedrive.com/news/29946/porsche-taycan-laps-brok...
It's disappointing they're not even trying with the current Model S. The Plaid drive train is still a year away. Porsche is a year ahead on performance at this point.
https://www.thedrive.com/news/29865/watch-the-2020-porsche-t...
But you're going to be in a queue behind the 20,000 or so preorders.
On any CCS charger. Here are some examples of Taycan road trips:
- https://www.carscoops.com/2019/09/porsche-taycan-makes-408-m...
https://www.cnet.com/roadshow/news/evgo-electrify-america-ch...
Tesla should convert their chargers to CCS now rather than sticking with a propriety plug. They've already converted their European chargers to CCS, although they're still not allowing non-Tesla EVs to charge at them:
https://insideevs.com/news/343728/most-tesla-superchargers-n...
What are they spending it on? Maybe they're spending it on the same aggressive growth without which they'd never have achieved the head start they have now?
I'm not a Tesla owner nor a Tesla fanboy and my original comment was meant to be a bit tongue-in-cheek, but I have to say that your comment seems to me to be dripping with narrative.
Anyway, we will see, won't we? I've got my popcorn ready.
They have cut back drastically on capital expenditures.
From what I understand, most domestically produced, internationally branded vehicles are sold within the county. (Audi, VW, Mercedes all manufacturer cars in China for domestic consumption)
So the Chinese factory is purely for domestic sales.
But GF3 is what will push them from 8,500/wk ultimately to above 10,000/wk, and depending on exactly how quickly that ramp happens in Q4 will determine whether they end the year with 360k, or 380k cars sold.
They will head into 2020 at or close to an annualized production rate of 500k, which is what Elon predicted back in February. [1]
Assuming no further increases at Fremont, this requires GF3 to be producing at a rate of ~2,250/wk. Tesla has stated they expect to be producing between 1,000 - 2,000 cars per week at GF3 by the end of the year, rising to 3,000/wk in 2020. So more likely there are still some gains to be made in Fremont before the end up the year in order to hit 500k annualized.
By comparison Fremont was making 2,250/wk roughly 1 year after the first TM3 was produced (July 2017 - July 2018). This goes to show how much faster the production ramp can be the second time around. Unlike the first time when Tesla had never mass produced s vehicle before and was expecting “production hell”.
[1] - https://twitter.com/elonmusk/status/1098080063801585664?s=21
Model 3 is cannibalising sales of the S and X models. Which means their ARPU and gross margin has rapidly decreased causing impacts to their revenue and profit.
Tesla's fiscal position is simply unsustainable.
Lowering ARPUs and tightening gross margin % are an issue - yes. But the single most important factor here is gross margin in absolute terms. If sales volume increases to offset decreasing ARPUs, this doesn't make 'Tesla's fiscal position simply unsustainable'.
That's the problem. And you only have to look at Tesla's profit numbers to see this.
June 30, 2019 590.40M
March 31, 2019 -944.80M
Dec. 31, 2018 880.66M
Sept. 30, 2018 831.52Mhttps://www.macrotrends.net/stocks/charts/TSLA/tesla/net-inc...
Answer: a $5 Billion factory costs $0 in terms of profit. Its a capital-expenditure, affecting Cash Flow (not profits). Depreciation is how factories "wear out" in the income statement.
Tesla is not selling enough cars to make up for its $5 Billion investment in the Gigafactory. After many years, Tesla will only have made ~$4 Billion from a $5 Billion factory, by the time it has to replace all the equipment and pay $5 Billion again. (Made up numbers to roughly estimate what is going on here).
Tesla needs to make more cars out of the factory it has already built if they want to be able to rebuild the factory by the time all the parts wear out.
Tesla's CapEx has been disappointingly low. Any kind of improved automation will require new equipment. Unless Tesla can scrape together more cash to improve their CapEx figures, its basically impossible for them to get "Better equipment".
IMO, Musk is spending too much money on unnecessary projects (ex: Cuphead ported to Tesla. Full-self driving custom designed chip. Etc. etc.) and not enough money on simple & boring stuff like better factory equipment.
That's incorrect.
These other differences (eg. a few extra battery cells) are so chickenshit that if a factory level product engineer was making these changes 99% of the time it would be signed off by max one other engineer. I know because I used to be one of those engineers. The gist of what I'm saying is totally true. It's not like they are using different battery chemistries on their different models. All their big stuff has moved or is moving to a common platform.
People like you have been predicting every quarter for the last 10 years that Tesla was on the verge of going out of business, and yet it keeps going from one success to another.
That's Tesla's total sales worldwide. About 50k of those sales are Model S/X. Their total sales for Model 3 in the US are at 114,500 for the year. Source: https://insideevs.com/news/373812/ev-sales-scorecard-septemb...
Still great numbers but just wanted to be accurate.
You can use the data from here:
https://en.wikipedia.org/wiki/Tesla_Model_3#Deliveries
and here:
https://ir.tesla.com/news-releases/news-release-details/tesl...
Edit: Just realized the Model 3 actually is the 12th best selling vehicle in the US for September! 20th best selling vehicle in the US in Q3 :) Source: http://www.goodcarbadcar.net/us-vehicle-sales-figures-by-mod...
This puts Tesla on track to build and deliver 500k+ vehicles a year next year. This does not include energy storage sales out of GF1 in Nevada.
Tesla could use a COO to manage operational expectations and let Elon focus more on engineering in the future. It'll keep his twitter/email free from setting market expectations.
Edit: Wow, so much hate for a one-line comment. I have five replies and three downvotes as of now.
I stand by my comment. I think Tesla is building long-term value (brand recognition, a reputation for innovation in an stodgy industry, technical know-how in multiple industries) that will allow them to be profitable. I know well how Amazon got here, but I don't care about the technicalities. It is the behemoth that it is because of the compounded value added over 14+ years. I see Tesla equally driven and able to take advantage of the things it puts in place now.
Amazon can be forgiven for losing $1.6 Billion in the 2001 recession, but their pathway to profitability was rather short all else considered.
Amazon has famously low margins, but those low margins commanded a mighty profit for decades. They are not the company you want to compare against Tesla. Tesla's strategy is supposed to be luxury vehicles at high margins and relatively (relative to Ford / Toyota / its other competitors) low production.
In contrast: Amazon is low margins while out-producing its competition. A very, very bad comparison.
2003: $35 Million profit
2004: $588 Million profit
2005: $359 Million
2006: $190 Million
2007: $476 Million
2008: $645 Million
2009: $902 Million
2010: $1,152 Million
2011: $631 Million
2012: $(39) Million <--- First loss
2013: $274 Million
2014: $(241) Million <--- 2nd loss
2015: $596 Million
2016: $2,371 Million
2017: $3,033 Million
2018: $10,073 Million
----------
Aside from 2012 and 2014, Amazon was both profitable AND cash flow positive. Amazon was Cash flow positive all 15 years in this time period as well. But I'm talking net profit / net loss here.
IMO: there's no valid comparison to Tesla here. Amazon is not the company you want to compare against Tesla's performance.
---------
Anyway, yes, Jeff Bezos sacrificing one year or two years of profits (over 15 years) for greater long-term growth could make sense. That doesn't actually mean its healthy for Tesla to consistently lose money for 10 years straight.
That's longer than average, but it's also a lot shorter than 16 years.
Tesla is likely coming to the end of the period where they have a relatively unique portfolio of products. We're starting to see the traditional car makers come up with competitive vehicles.
Whilst Tesla may ride this out fine, it's likely to have an impact on things like margins, going forward.
closest competitor for the Model X at the moment appears to be the Jaguar I-Pace.
For the model three there's things like the Hyundai Kona and Renault Zoe which are becoming competitive.
I don't think it's there yet, but if I was an investor looking at a 2-3 year timeline, you've got to expect increased competition as there's various models coming along from various companies. Not all of them will be successful, but it's a fair likeliness that some will be.
Amazon chooses to make little/no profit as a long-term business strategy to reinvest everything.
Tesla is forced to make little/no-profit as a short-term business obligation to their suppliers.
Tesla is in a completely different situation. Cars require massive upfront investment before their revenue is realized, and given the results just posted, Tesla will most likely post a quarter with declining revenue.
People should stop comparing things to Amazon. Amazon was successful because it was unique.
And you only get to play the startup card so long. Tesla is indeed a 16 year old company whose production struggles look even more troubling considering their growth isn't what anyone would really consider hockey stick, and their competitors have none of their scaling issues.
Add in a leader that has shown some stability issues, and its tough to make a case for it.
Personally, I root hard for Tesla the company, want to see them succeed, and after recently buying a house with a parking spot, may buy a Tesla as my next car, but I am not buying shares anytime soon.
The problems with customer service and production quality are to be expected if you scale at the speed that they currently do.
All the while, they are still losing money. This is not just about cash flow, this is about actual earnings. You have to look into where the disconnect there is as well to make a bull case.
Their other issues are a combination of scale and fundamental business issues with selling cars. Other manufacturers have profitable dealer networks selling their cars. Tesla has a money losing sales and service network. Some of this is due to their relatively small scale, but some of the problems are deeper than that, unfortunately.
I would argue that slow down is mainly due to the nature of the production ramp, which goes exponential in the beginning but is now starting to flatten out. As it flattens though margins should continue to get better. If they get additional factories like the one in China it should reinvigorate the growth rate.
For me the bull story goes something like: they sunk a lot of money building out their very first mass producing production line, making a lot of mistakes on the way. Although they have some quality and service and margin issues people still keep buying their cars, which is the most important. Fixing the margin and other secondary issues is just a matter of time and continuous optimization.
So the most important of Musks hypotheses that people like buying electric cars if they are better in every important category is pretty much proven by now.
The second, that they are able to produce them at a profit is still to be proven, but economies of scale play a big role in that and they are first beginning to really leverage those.
Currently Tesla's valuation is higher than both BMW and Mercedes. No doubt, they're enjoying rich multiple due to other forward-looking business units, but they're not generating any money. Their car business is what's keeping the light on.
On long term, Tesla's car business is uncertain. The first-mover advantage is eroding quickly as legacy mfrs are stepping up.
It's an extremely competitive business. And with $45k model flooding the market, the novelty factor of the brand is going to wear off very quickly.
Look at the new Porsche Taycan. To me, that's the new Model S.
Jung,
Younger demographics have less disposal income so they are hardly the type of customer you want to be betting on.
OP said Taycan is the new Model S, I think that your comment vs. mine highlights that this isn't true -- Taycan customers are not the same as Tesla customers. Tesla customers get a good bang for their buck -- speed, range, charging network at a cheap price. Porsche customers get brand, design, & build quality.
Someone who values what Porsche has to offer probably was never interested in a Tesla.
Meanwhile a Model 3 Performance -- the same speed as the Taycan -- costs $90,000 less.
And not sure why you are comparing the Model 3 to a Taycan as they are completely different segments.
The real metric is miles added per minute, though, and I haven't really seen an apples to apples comparison there.
Yes, its way better.
> design
Yes.
> interior fit
I much rather have the interior of a Tesla. I car much more about the cool features then complaining about a slight overlap of two plastic panals that are under the seat, or whatever car german fetishits obsess about.
> charging speed
They have a small advantage on a tiny number of actual charging stations but the majority of the time your gone charge much slower.
But I do agree that they could definitely use a COO. Musk seems like a bright guy but I'm just not sure how suited he is to handle operations at scale.
Lets just look at Kimbal who has been on the board since the beginning, with a multi-million dollar compensation package even though he has zero relevant experience in the industry and is a huge outlier compared to the rest of the industry. Sure they are making strides in electric cars but as a business its very out of the norm.
There isn't a car company around right now that doesn't have an electric model coming out in the next couple of years. And so Tesla has nowhere to go but down.
It's actually simpler. The attack campaigns negatively influence the stock.
VW ID.3/4 are looking like being winners and will likely outclass the Model 3/Y. eTron, I-PACE and EQC are all selling well against the Model X.
And again. Everyone is coming into EV this year and next.
“The maximum range for the Taycan is listed as just 450 km (279 miles) on the WLTP test cycle. The Audi is rated at 255 miles on WLTP and 204 on the U.S, EPA cycle. When the Taycan gets its EPA certification, it will likely have a range of around 220 miles.” - Forbes
The VW ID.3 is ugly, and it's long range version is 100 less miles than the Model 3 long range version.
Neither have Tesla's charging network either.
Range and charging is the most important thing about an ELECTRIC car. 100 miles is a big gap, and every car coming out has that gap.
And in many places e.g. EU the Tesla charging network isn't a huge advantage as you have superior alternatives e.g. Ionity.
The VW ID.3/4 are not coming to North America.
The eTron, last month sold 434 units in the US. The Model X sold 1,675 in the same month in the US. The Model 3? 20,250. The I-PACE sold 160 units and the EQC isn't being sold yet. The eTron has been a massive sales disaster, sales are not growing. https://insideevs.com/news/369439/august-audi-e-tron-sales-u... https://insideevs.com/news/373812/ev-sales-scorecard-septemb...
I'm not trying to say Tesla has no risks at all, but you have to _really squint_ to not seem them as the clear market leader currently. The Model 3 simply has no competitors today - and to invoke the Taycan is about as disingenuous as it can get.
b) VW ID.4 is coming to the US.
c) There is more to this world than the US so not sure why you seem to restrict the sales there.
Ahh, I see - the line must be at $120k, right? Since I can order a $115k Tesla which is somehow mass market?
Its a good car, but this is as exaggerated a position as I've seen from anyone on either side.
Tesla is the leader, not a follower in the segment. They have advantage of manufacturing, charging network, battery, software, and last but definitely not least their brand. If anything some laggards will lose out, for example Chrysler or Mazda.
Tesla booked about 110,000 orders this past quarter. That's a very healthy demand. [0]
[0] https://electrek.co/2019/09/26/tesladelivering-record-cars-q...
https://www.cnbc.com/2019/04/23/why-tesla-is-such-a-battlegr...
Plus, keep in mind that, if TSLA isn't massively more profitable on a per-car basis than other car companies or doesn't essentially take over the automotive market, any upside is already priced in.
https://www.zerohedge.com/technology/morgan-stanley-predicts...
One of the most prominent TSLA shorts was predicting 82,000:
https://mobile.twitter.com/markbspiegel/status/1167484390366...
Full-year guidance is 360,000 - 400,000. They should have no problem hitting the lower end at this point.
He runs his "long-shirt macro hedge fund" out of his 1 bedroom upper east side apartment but probably manages (significantly) less than 10MM USD, although he stopped releasing figures. I'm fascinated by how someone ends up like him. The absolute insistence in his own ability despite all reasonable evidence to the contrary is something to behold.
I have to acknowledge the possibility that his public personality is at least to some extent a performance, perhaps designed to raise his profile among potential investors. But he's so consistently and thoroughly repulsive (see his pinned Twitter non-apology for a since-deleted "joke" involving Epstein, Greta Thunberg, and child rape) among others that I don't think it's all performative.
Wasn’t the source of the 100k number Elon himself?
Wall Street analysts were estimating below Elon (and the actual numbers). It looks more like investors ignored Wall Street and took Elon at face value again.
I don't follow Tesla stock much, but it looks like there was a significant bump in mid September, perhaps on some of these earnings forecasts being updated, and now the price is just falling back in line with reality.
Really cool to watch Tesla absolutely kick ass.
97,000 was above what several prominent forecasts had.
The meet expectations game is de facto Wall Street financial fraud. They very aggressively, very openly use it either direction to manipulate the market as they see fit. It's one of the few direct levers of fraud they have that won't get them thrown into prison.
And on the other side, you have companies like Cisco that for a decade had a notorious reputation for beating estimates perfectly, by a penny. Every single time, like magic. Obvious financial gaming.
And for the most part analysts, I don’t know if you’ve ever met one, are honest people. There can be perverse incentives at times, but calling stock analysts fraudsters isn’t accurate
The multiple on this stock has it pegged to be an extreme growth company, but 5% annualized delivery growth with shrinking ASPs is decidedly not a "growth" number.
TSLAQ is wrong that it's a fraud and/or insolvent. But they're absolutely right that its valuation is absurd and needs to eventually come down to meet reality.
[0] : https://www.zerohedge.com/technology/tesla-stock-tumbles-aft...
That’s what the anti-Tesla crowd fails to understand.
Compared to the (notoriously reliable) Subaru Impreza WRX I drove for 10 years prior to that, there are no regular oil changes, etc.
I do spend more on tires now :(
https://www.marketwatch.com/story/tesla-stock-falls-after-co...
Don't trust these market "targets": these are mostly published and (silently) changed to pleased some analyst's clients and make the SP price to move in a preferred direction.
Edit: Wasn't aware of the 100k expectation.
https://www.bloomberg.com/news/articles/2019-09-26/tesla-sur...
https://www.sbsun.com/2019/09/26/business-briefly-tesla-surg...
"He breaks clear of the defender and has a shot at goal" doesn't imply "it's unlikely to happen", but there's a notable chance of it.
If the market priced the stock based on an expectation they'd deliver 100,000 vehicles, 97,000 is a miss.
https://finance.yahoo.com/m/6d74ee60-9cf8-33a6-96ef-133909a1...
Also, the revenue is what matters and the breakdown of 3 vs S vs X indicates they will have significantly lower ASPs and probably will post a YoY revenue decline. That's not great.
Considering the factory coming online very soon, I think the situation is looking pretty good, actually.
Additionally, they have a significant update to the high end Model S & X coming (three motors), the 2020 Roadster, the Model Y, the Semi, and the Pickup all announced, some of which likely has suppressed demand for their current offerings, which they've been too busy ramping up Model 3 production for to ship. So I think demand is not a problem. And considering they're doing this at a time when their EV credit is nearly completely gone and gas prices are at a near-all-time-low, I think they're doing remarkably well.
...especially considering they don't have a moderately-priced SUV/truck/crossover available yet. None of the top 6 best-selling cars/trucks in the US are actual cars. Model 3 is doing remarkably well considering it's not an SUV, crossover, or a truck.
E.g. A $60k Model 3 in 2018 with a $10k credit in MA (State + Federal) is now a $50,500 car with a $1,875 credit. (Federal and no State)
Economically speaking the tax credit was always effectively a payment from the government to Tesla. The real consumer price is basically unchanged over the last year.