The deal with Samsung has nothing to do with the recent fire. Tesla has been working for some time on a second supplier. There is no reason to believe that the Samsung batteries will behave any differently in this situation. All Li-ion battery are prone to this behavior. It's up to the engineers to design safety systems and practices to keep these incidents to an acceptable level.
It's getting really hard to estimate deliveries based on recent VIN reports, but it's always fun to take a shot. There was a big push to get EU signatures delivered in the first part of the quarter, then a big push to unload the EU pipeline and deliver to ZEV states in in September. So where do we stand for end of the quarter? I'm estimating the EU waterline at about VIN 17000 and the NA waterline at about VIN 22000. These estimates are pretty coarse due to very sparse reporting, but I come up with 1200 EU deliveries and 5300 NA deliveries for a total of 6500 in Q3.
This is about 1000 more than my estimate a couple of months ago, due to both unloading the EU pipeline and increased weekly production. In fact, my profitability spreadsheet now shows a GAAP profit of $1M. My spreadsheet does not comprehend non-GAAP profit, but it should be phenomenal.
bottomntop, for sure you hit on some good points. There are so many things that will be a lot different from the last quarter. Gross margins should be up about 5% simply due to the price increases, but it may be cancelled out by reductions in ZEV credit sales. With the addition of European sales, SG&A expenses should be up considerably. And warranty costs will be much higher.
Although my spreadsheet shows a calculated profit of $1M profit, it's really just a number for your amusement. There are factors which I can't predict that can swing it by tens of millions.
JTF, I think it's certainly true that there were more cars in transit to Europe at the end of Q3 than at the end of Q2. I was expecting that it could be as high as 800-1000 cars, which would have resulted in a large operating loss for Q3 (which would have been recaptured in Q4). But instead they pretty much quit building EU cars in September. I'm guessing that there were less than 150 cars in transit at the end of the quarter. I'm also guessing that they will unload the pipeline again in December.
Childers, cars are not counted as sold until they are delivered to the customer. Cars have to be built before they are delivered. Therefore, Tesla must build cars that are not yet sold. And cars have to be scheduled before they are built. So the VIN assignments, especially to Europe are way out in front. At this point in time, EU VIN assignments are about 3 months ahead of delivery.
Regarding jmcvicker's math, he's right on the money. It doesn't matter whether you are long or short, he's still right on the money.
I thought Must was predicting a 40,000 rate by the end of 2014. Am I remembering wrong?
When I look at VIN assignments and VIN deliveries, it looks like as of mid-October there are about : 2200 EU VIN's assigned that have not been delivered yet. 2100 NA VIN's that have not been delivered yet.
6400 is a good Q3 estimate based on VIN delivery postings. Looking ahead to Q4, it looks like all of the European VIN's have already been assigned. And extrapolating VIN 27999 to be delivered on Dec 31st, I get these totals: EU 2370, NA 4350, for a total of 6720.
Nomore, the 1311.5 ZEV credits are not "vehicle credits"; they're "NMOG credits". From the CARB report:
Why are credit balances in units of grams/mile Non-Methane Organic Gases (g/mile NMOG)?
When credits are earned they are multiplied by the g/mile NMOG fleet average requirement for the appropriate model year. Please note that in the ZEV Regulation g/mi NMOG is used only as index (which decreases over time)—it is the “currency” that credits are stored in and does not represent actual values of g/mi NMOG. The intent of this multiplier was to reward early production of vehicles.
I haven't tried to deduce the conversion factor yet.
Tracking VIN's, both assigned and delivered, can provide a wealth of information. But you need to be careful about what conclusions you draw. Here's how VIN's work.
New cars begin life with a VIN assignment. They are assigned sequentially. For each VIN, a build sheet is generated that lists all of the options on the car. Then, based on parts inventories or other strategic needs, the cars are scheduled for build. Cars are not built in sequential VIN order.
The point in time where a VIN is communicated to a customer is purely at the discretion of the manufacturer. For Tesla, VIN communication has only been consistent for the past couple of months. Before that, there was little value in trying to track the assignment dates. But I fear that they might be going back to "just in time" communication, since there were only a few new ones posted in the past week.
Bottom line - there's information out there, but be careful about how you connect the dots.
Slowing down in October may be an understatement. For the 2 months prior to Oct 11, they were averaging over 700 VIN's per week. But in the last 10 days there have been only 150. Anyone want to equate VIN assignment rate to production rate?
Hydrogen can be a viable fuel if there is a lobby strong enough to persuade congress to mandate its use. Ethanol, which also does not compete economically, has already been blessed this way.
Remember the Bloom Box (as featured on 60 Minutes)? It was a solid oxide fuel cell that they claimed could run on any fuel (like diesel oil). Something like that could be sensational, assuming it could get about 50% energy efficiency. It seems to have fallen off the radar screen, at least my screen.
Under the current law, you can claim the fast refueling credit without ever providing fast refueling. It's good that Tesla has been able to profit from CARB's stupidity.
( those extra ZEV credits are worth a great deal. )
Exactly how much? Let's see, 10,000 cars sold in the last year in ZEV states at $5,000 per credit = $50 million!. The fast refueling credits are literally accounting for all of Tesla's profit!
This is American Entrepreneurship at its very finest. This is the future, baby!
The video on Jalopnik was rather impressive. It's hard to imagine that this is 1% of the combustion energy of an ICE car. But I'm not going to second guess Elon's calculation.
(The guy was going 70 MILES PER HOUR.)
Even more impressive was that he got there in 5.1 seconds.