Tesla Q4 2018 Earnings letter.

Tesla Q4 2018 Earning Letter.
SOURCE:http://ir.tesla.com/static-files/0b913415-467d-4c0d-be4c-9225c2cb0ae0

This is a very smart summery i found on hacker news from handle chollida1. Dude just breaks it down. I can’t write a summary like that and I thought i’d share it. Check it out below.

– Will they give guidance on Model 3, Geographic breakdown(most other peers do)?

– how many sales are high end cars vs low end?

– TSLA down 11% on year vs market up 5ish

– convertable debt issue, we’re now in the 20 day average window, option implied vols show market doesn’t think they’ll make it

– Elon commented that they could pay bond w cash and didn’t seem concerned, cash balance is up, though so are short term liabilities

Car Notes:

– current lowest price car sold is Model 3 $44,000

– reported to sustain 7,000 per week, a pretty big miss from the 10,000 that elon claimed they’d be at by mid 2018 but expected

– Est. 2019 delivered 360,000 to 400,000

– Est. Q1 delivers expected to be down vs 2018

– Est. Q1 deliveries expected to be down in North America

– still no funding secured for China plant

Solar:

– why even track anymore, installations fell, yawn

Numbers:

– cash balance is 3.7B

– cash flow positive again!!, beat last quarter, though capital spending fell alot( down to $300ish million)

– 4Q Adj EPS $1.93, Est. $2.14 (Big misses, what happend here?)

– layoffs could cut $400M annually from budget

– Customer Deposits $792.6M vs $908.5M in 3Q

– Bonds unmoved, yield still 8%

– Elon expects to be profitable each quarter in 2019

Misc:

Lots of analysts congratualting Tesla saying they’ve got the supply side sovled.

Shrinking sales on the high end indicate taht their next challenge will be on the demand side, especially on the high end that allowed them to survive for so long

Can they be profitable with $1000 in margin per car instead of 5,000-10,000?

Interesting note by Bloomberg

Services reported a loss of almost $500M

“So basically, Tesla is taking a $500 million hit just to save customers from the dealership experience.”