Tesla just released some knockout earnings. Free cash flow of $881 million and a net profit of $312 million. Including the after-hours trading, the stock is up 25% over the past two days. Here are a some of the key takeaways 1/
First, they killed analyst estimates pretty much across the board. They now have $3 billion in cash on hand. That's should be plenty to cover the $1.5 billion in debt coming due in the next year, assuming they can keep the FCF positive 2/
They've had surprisingly little attrition of their reservations. They stopped taking new reservations in July, and of the 455k they had a year ago, only 20% have canceled. A lot of those will be waiting for cheaper versions or are overseas holders 3/
This is the first time Tesla has had a profitable quarter without the contribution of California's Zero Emission Vehicle credits. This quarter they claimed $52 million in credits—a relatively small contribution to their profit. To some, that makes it the first "legit" profit 4/
Tesla says the gross margin for the Model 3 will "remain stable" in Q4, even as more customers start dipping into the cheaper $45,000 version of the car Tesla just released. Tesla says the cheaper prices will be offset by manufacturing efficiencies. Key metric to watch 5/
"This, to me, is a real watershed moment," says BNEF's @SalimMorsy. "They are profoundly shifting purchasing economics and behavior in the car market." He says he's impressed by # of trading in $30k cars, seeing them as more than a utility. Like iPhone vs landline phone 6/
One note of caution: Tesla has a unique relationship with suppliers in which it pays them over several months after the sale of the car while Tesla accounts for $$ immediately. During rapid production ramp, this creates a bit of accounting distortion that gradually catches up 7/
Side note: Tesla does a little victory dance about its battery efficiency. If you haven't been following along, this paragraph is a direct dig at the Jaguar I-Pace, which does indeed have an unusually big battery for its specs 
One thing that could be worrying for Model 3 buyers: Tesla added just four new store and service locations (roughly 1 percent of its total) and 44 new Supercharger stations (~3%). At the same time they increased Teslas on the road by what, 25%? Best step it up 9/
The number of labor hours per Model 3 fell by 30%, for the first time below that of the Model S and Model X. This was expected to some extent—I mean remember the tent in Q2?—and they'll need to wring out much more efficiency to be on par with the big automakers 10/
The call has begun. Musk says Tesla will cash flow positive in all quarters going forward, except perhaps when making big debt payments. He says even with debt payments Q1 free cash flow should be flat 11/
Musk chokes up a bit about the Tesla owners who volunteered to help with deliveries this quarter (fwiw he tears up pretty reliably when talking about sacrifice—by employees, customers, or his own) 12/
So far this is the most boring Tesla earnings call I've experienced. I think that's by design. Tesla is focusing on tech, safety, worker conditions and not really taking a victory lap on earnings. It feels like a heavily crafted attempt to signal that Tesla is maturing 13/
Tesla hasn't yet given a production forecast for the Model 3 for Q4. It must be coming, right? They affirmed Model S&X 2018 production of ~100,000. Musk says long-term global demand for the Model 3 is somewhere between 500k to 1 million 14/
Tesla pushes back the solar roof ramp until 2019. I often think of that Wired article that went behind the scenes on roof decisions. SolarCity had been working on a more-developed integrated solar roof that resembled a standard metal roof. Musk killed it, but I wonder whatif 15/
Musk says time from factory to end customer went from 30 days to 20 days in Q3, and the internal goal is 10 days in Q4. That would be remarkable and a totally different timescale than any other car manufacturer 16/
"We do not intend to raise equity or debt, at least that is not our intention right now," Musk says. "The current plan is to pay off our debts and reduce the debt load and the overall leverage of the company" 17/
Musk: Customers will start receiving the $35,000 base Model 3 in "March, maybe in February" 18/
