Profile picture
h100gfld @h100gfld
, 7 tweets, 6 min read Read on Twitter
@j_stroik @KlendathuCap @MikeFlo46795160 If I had to guess, the transactions work out as something like: ERAC buys S75D at full price (78k). TSLA books the sale and 20k gross profit under automotive in Q3.
@j_stroik @KlendathuCap @MikeFlo46795160 TSLA agrees to rent it at 100/day for at least 300 days before the end of Q319. These rentals get charged to service or SG&A which are basically ignored in a lot of valuations. But it does go some way to explaining Q3 gross margin.
@j_stroik @KlendathuCap @MikeFlo46795160 Imagine for a moment that TSLA in turn gave ERAC a voucher that lets them trade in a TSLA towards a new one in late 2019 with push/pull/tow value of 60k. (This would be another parallel between TSLA and questionable used car dealers...)
@j_stroik @KlendathuCap @MikeFlo46795160 How to account for this? Well, tradeins are deposits, so maybe debit A/R and credit deposits for the 60k. Wasn't there an unreasonably large A/R balance at the end of Q3?
@j_stroik @KlendathuCap @MikeFlo46795160 Of course a car that's spent a year in a service loaner fleet (and since a loaner may be more likely for customers who live further from the service center, these could well have 30k miles next year) is probably not going to be worth anything like 60k...
@j_stroik @KlendathuCap @MikeFlo46795160 But that loss doesn't have to be recognized until the car is sold (CPO or auction) and the loss will get charged to service/other or SG&A, so no biggie.
@j_stroik @KlendathuCap @MikeFlo46795160 The ERAC loaners are basically more like a 10% APR loan to TSLA than anything else. 45k in likely non-automotive expenses for 20k in automotive gross profit and some quick cash.
Missing some Tweet in this thread?
You can try to force a refresh.

Like this thread? Get email updates or save it to PDF!

Subscribe to h100gfld
Profile picture

Get real-time email alerts when new unrolls are available from this author!

This content may be removed anytime!

Twitter may remove this content at anytime, convert it as a PDF, save and print for later use!

Try unrolling a thread yourself!

how to unroll video

1) Follow Thread Reader App on Twitter so you can easily mention us!

2) Go to a Twitter thread (series of Tweets by the same owner) and mention us with a keyword "unroll" @threadreaderapp unroll

You can practice here first or read more on our help page!

Did Thread Reader help you today?

Support us! We are indie developers!


This site is made by just three indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member and get exclusive features!

Premium member ($30.00/year)

Too expensive? Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal Become our Patreon

Thank you for your support!