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6 tweets,
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1/ There was an astute question posed on Saturday by @notabigdeal111 (3Aces). I had hoped to process enough data for an accurate assessment, but there were too many variations in the option mix and model mix. So instead, I’ll just present a best-case scenario (in Tesla’s favor).
2/ In a nutshell, 3Aces wanted to know how Q3 and Q4 profitability would have been affected if the 2019 price reductions had been in effect during those quarters. Let’s summarize the 2019 price reductions.
3/ Early Jan - $2000 across the board.
Early Feb - $1100 more on M3.
Late Feb - $6000 to $13000 across the board.
Autopilot/FSD options took some away and added some back in.
Give and take, $TSLA is now grossing about $9000 less per vehicle.
Early Feb - $1100 more on M3.
Late Feb - $6000 to $13000 across the board.
Autopilot/FSD options took some away and added some back in.
Give and take, $TSLA is now grossing about $9000 less per vehicle.
4/ For the 83,775 vehicles sold in Q3 and 90,700 in Q4, it would have resulted in revenue reductions of $754M and $816M, respectively. Automotive gross margins would be reduced from the 25% range down to about 15%.
5/ These numbers come right off the bottom line and would have resulted in a GAAP loss of $442M in Q3 and $677M in Q4.
In case anybody misses the obvious, this is the profitability cliff that Tesla is facing in Q1. And Q2. And Q3. And Q4.
In case anybody misses the obvious, this is the profitability cliff that Tesla is facing in Q1. And Q2. And Q3. And Q4.
6/ 2019 will not be pretty. Likely, it will not be survivable. Curaçao, anyone?
