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1/ $TSLA has been hiding the ball in its Quarterly Updates for years. But now, finally, it's being busted for it.
4/ In both instances, reporting on the $200 million in non-ZEV regulatory credits that are included in Automobile revenues, but that $TSLA neglected to mention in its quarterly update.
5/ The catalyst for both articles is the note today from AllianceBernstein's Toni Sacconaghi, which I threaded earlier today.
6/ Just want to clear up a few points that got lost in my thread and that are not spelled out in the articles. $TSLA did not specify the source of the $200 million of non-ZEV regulatory credit income.
7/ My surmise is that a relatively small part of it is from the $140 million emissions pooling deal $TSLA made with FCA. $TSLA got all that cash up front, but will be able to recognize the cash as revenue only over time as it delivers cars in Europe.
8/ I'm guessing the largest part of the $200 million is GHG and CAFE credits from the US. They likely were hoarded in late 2018 and then sold in Q1. Famous $TSLA trick.
9/ A key point in all of this is that $TSLA's $215 million of Q1 regulatory credits (ZEV and non-ZEV) is an unsustainable number. Its 2019 quarterly average is likely to be much closer to $100 million.
10/ A second key point is that non-ZEV regulatory revenues now swamp ZEV revenues. That's sure to continue. It is only a desire to deceive and evade questions that keeps $TSLA from reporting the non-ZEV revenues in its Quarterly Updates.
11/ CORRECTION: In #7 of this thread, I wrote that the FCA emissions pooling agreement is the source of the $140MM in cash. That's misleading. Let me be more precise.
12/ In the 10-Q, $TSLA reported: "Deferred revenue related to sales of automotive regulatory credits was $140.0 million and $0 as of March 31, 2019 and December 31, 2018, respectively. We expect to recognize the deferred revenue as of March 31, 2019 over the next 2 to 3 years."
13/ In other words, $TSLA received $140MM in cash in Q1 for regulatory credits that it has not yet earned, but expects to earn over the next 2 to 3 years.
14/ I assume the source is the FCA deal that Musk refused to discuss during the conference call, but $TSLA has not identified the source of that cash.
15/ The $200 million in Q1 regulatory credit revenue is IN ADDITION TO the $140 million of cash that is classified as deferred revenue.
16/ My best guess is that some relatively small part of the FCA deal cash is in the $200 million portion (with GHG and CAFE credit revenues making up most of the $200 million) and the balance is in the $140 million. But, that's simply my surmise.
