"Are you referring to Tesla's 9,500 guidance?"
Yes, I think they'll be very close to that number. Norway came in higher than I expected in March, otherwise I'd be predicting something closer to 9,000.
Unless Elon's guidance was totally bogus, they should come in with a $172M GAAP loss. Non-GAAP should improve it to an $80M loss, which is in line with analyst estimates. If ZEV credits sales are strong, there might even be a surprise.
DV, I didn't have a chance to respond sooner to your follow-ups:
How do you think the following will negatively affect gross margin:
(1) Sub-optimal production rate Jan/Feb
(2) Kr/$ pain from 1500 or so total deliveries to Norway at Fall 2014 pricing
(3) Discounts in China to move stuck inventory
As you surmise, these factors are huge. Assembly plants have huge fixed costs, so they really need to keep product rolling through the plant. They need to maintain a certain line rate just to break even on expenses. The profit/loss line is very steep at the break-even point. Norway is certainly the most important of all foreign markets, but they’re in trouble with most currencies. If this comes out of revenues, then gross margin will suffer. But maybe foreign exchange gets buried further down the balance sheet. And of course discounts for inventory cars, whether in China or the US, comes directly out of gross margin. So yes, GM will be under great pressure this quarter. Maybe an infusion of ZEV credits will help.
I think they're going to be very close to guidance. (I previously estimated about 500 lower). Norwegian deliveries look strong, maybe around 1150 in March. In the US, I'm seeing several April deliveries pulled into March, and only a few slipping the other way.
"Here is what seems to be up - the need to deploy the excess battery cells on-contract."
JMC - You hit the nail on the head! You also saved me the time to go back and look up "minimum of 1.8 billion lithium-ion battery cells that we intend to purchase from Panasonic from 2014 through 2017". I regret that I can only give you one green thumb.
Someone had asked for a link to the production cut info. I couldn't find the specific post, so I'll answer this thread. From the Shareholders letter: Last quarter, Tesla produced 11,627 cars. This quarter, they are guiding for 10,000. Draw your own conclusion from the data, but many people would consider this a production cut.
Also consider that this is coming right at the peak of S85D deliveries.
Is American arrogance usually well received in Asian culture? Someone help me understand this.
"((( to get the Vin # the same day as the order. ))) Interesting but in reality it doesn't mean much IMO"
KB, I would have to disagree with you on this one. A month ago, it would not mean much because they always try to squeeze in extra orders for the end of the quarter. But now, "same day VIN's" are scheduled for delivery in May. It means that cars are being scheduled for production on the day they are confirmed. The order backlog is completely exhausted. It would be a good time for Elon to create demand at will.
Imagine life on Mars:
Life on the Martian colony will be much like life on the International Space Station. You have essentially the same resources and the same living space. What are the differences? Mars has the benefit of 3/8g gravity. The ISS has the benefit of supply ships, rotating personnel, and the protection of a magnetosphere. Which would you rather colonize?
"Where could discrepancies arise."
Last year, there were about 6000 more VIN's assigned than there were cars produced. A 17% surplus.
This quarter, the percentage of surplus VIN's will be higher. They are faithfully increasing the VIN count at 1000/wk despite their guidance for producing only 10,000 in Q1. For those without a calculator, that's a 30% surplus. If you are judging demand from VIN assignments, be very, very careful.
So how are those UK sales going? In Jan and Feb, there were 186 "Other Imports" I wonder how many of them were Telsa's?
"Someone ordered over the weekend and questioned whether it was common to get the Vin # the same day as the order."
And yet another one reported today. In fact, the majority of the VIN's assigned in the past month were within a week of confirmation. Now that the D's are fulfilled, the order backlog for the Model S is officially history.
T2T, I would agree that as long as investors are willing to buy bonds, Tesla can continue in business. But without an external source of cash, their current business model is not sustainable. It doesn't matter how cool their product is.
From the 1q13 shareholders letter: "Other income, net, for the three months ended March 31, 2013 includes the gain from the elimination of the $10.7 million DoE common stock warrant liability and a $6.4 million favorable foreign currency exchange impact."
Net income from the quarter was $11.2 million. Profitable business?