1/ Short thread on $TSLA Q2 deliveries. People keep asking me for my estimate. I've said 75k, but explained I don't track the data carefully. However, the delivery number Tesla announces DOESN'T MATTER. Let me explain...
2/ Tesla's delivery numbers are manipulable, as its definition of deliveries has changed over time. Think "factory-gated" and "financially delivered". Plus, the huge & persistent A/R balance tells you something untoward is afoot.
3/ On top of all that, in the quarter-end delivery crush, double-counting can & does happen. We already see reports of customers who, having paid for their car, are now told it won't arrive until July.
But, far more important than all that...
But, far more important than all that...
4/ Tesla guided for 500k this year. It needs to exceed 367,500 just to equal last year (which, btw, would equate to lower revenues, given the model mix & price cuts). And, remember, two factories now instead of one.
5/ With 88.4k deliveries in Q1, Tesla needs 161.6k Q2 deliveries to stay on the 500k pace. That. Won't. Happen.
Moreover...
Moreover...
6/ Unless and until Tesla offers detailed segment reporting, breaking out in detail its Shanghai delivery & financial results, the numbers are totally meaningless because Shanghai & Fremont are, for reasons I've endlessly explained, separate companies for all practical purposes.
7/ Yes, the Q2 numbers will be gushed over by analysts who, by now, as @markbspiegel has noted, been trained by $TSLA IR to expect a "beat" on the ever-changing "consensus". But here are some numbers that are far more significant...
8/ European premium EV sales, Jan - May 2020:
1. Audi eTron 11,366
2. Jaguar i-Pace 3,125
3. Mercedes EQC 2,243
4. Porsche Taycan 2,053
5. Tesla Model S 1,974
Overall European EV market share for Tesla: 9%
Model 3 was 8% of all European EV sales.
ev-sales.blogspot.com/2020/06/europe…
1. Audi eTron 11,366
2. Jaguar i-Pace 3,125
3. Mercedes EQC 2,243
4. Porsche Taycan 2,053
5. Tesla Model S 1,974
Overall European EV market share for Tesla: 9%
Model 3 was 8% of all European EV sales.
ev-sales.blogspot.com/2020/06/europe…
9/ The other OEMs have, up until now, largely ceded the US EV market to Tesla. But, in Europe, it's war. $TSLA is forced to cut prices on its high margin cars, and increasingly is selling low- and no-margin Model 3s.
10/ And the Model 3 will be squeezed much harder as each month passes & new competition arrives. As for the Model Y, it will provide a few months, at best, of high-margin sales from premium models. But, the order book doesn't approach that enjoyed by the Model 3.
11/ The latest, greatest bull hope is renewed FIT credits in the US after November, along with other green initiatives. Sure, that very well could happen. Our Congress Critters seems punch drunk with deficit spending. But that will benefit all EV makers, not just Tesla.
12/ Just by way of example, the Norwegian EV incentives (including ICE disincentives) are MASSIVE. And yet, $TSLA market share in what was its second largest market has shriveled up. It's being destroyed by better & more reliable EVs, and by its terrible service reputation.
13/ So, bottom line, I'm bored by the buzz around the delivery numbers. And Tesla's financial reporting is even more heavily manipulated than its delivery reporting:
14/ I think it's still far too dangerous to short this stock. That's just so obvious. It's religion, not investing. And we are in era where cynical traders are bidding up the price of bankrupt companies, and finding ignorant retail buyers to be left standing when the music stops.
