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Tesla Surges After Guiding Lower, Reporting Record Cash Burn: The Quarter In Charts

Tyler Durden's picture




 

Amazon, and its "story", was a piker compared to what Tesla has done, and keeps on doing.

Because the car company with a market cap of $28 billion, or half that of Ford at $54 billion, just reported "earnings" of $0.02, beating expectations of a $0.00, having delivered some 7,785 cars, just shy of the whisper estimate of 7,892. Actually, scratch that: GAAP EPS was a loss of $0.60 the worst number since Q4 2012, but who needs GAAP in a world in which everyone is desperate to stick their head in the sand. In any event, putting TSLA's car deliveries in perspective, Ford, with its market cap of $54 billion, sold 188,654 cars in just the month of October, which means TSLA is delivering about 1% what Ford's business.

But don't blame the decline on receding consumer demand: it was all a "supply issue", and Tesla was quick to note as much in the very first sentence of its investor letter: "Over the past quarter, despite losing almost a month of production due to factory retooling, we delivered the highest number of Model S vehicles ever, with several new records set in North America and worldwide."

In addition to the slightly weaker, and paltry in the grand scheme of things, Q3 deliveries, Tesla also guided to lower 2014 deliveries:

Production for the full year is expected to be about 35,000 cars, despite entering Q4 with a deficit in production of 2,000 units from Q3. However, the loss of these cars in Q3 means fewer available to deliver in Q4 and our ability to ramp up production in Q4 is constrained by the complexity of launches related to dual motor and autopilot hardware. Consequently, we expect to deliver approximately 33,000 vehicles for 2014. This is 50% above 2013 deliveries, but 5% to 7% below prior estimates for 2014. Previous projections for 2015 are unaffected.

And then this:

To accommodate accelerating Model S demand and prepare for the rapidly growing order book of Model X reservations, we are investing to increase production to more than 2,000 vehicles per week by the end of 2015. We began this process with a production shutdown this summer to transition to our new, higher volume final assembly line and expand our Model S body center. The ramp to our target production rate took longer than expected due to system integration challenges, reducing our production by almost 2,000 vehicles. Being unable to increase production fast enough, not lack of demand, is a fair criticism of Tesla. That said, we expect our annual production will increase by over 50% in 2014, again in 2015 and probably for several years to follow. This is unusual in the car industry.

So the factory retooling... is dragging on? And that's what is causing the lowered forecast?  Whatever will Musk blame the guidance cut in 3 months: even more "ramp up" constraints and an even more complex "autopilot hardware"? But no matter what, end demand is certainly there, and is growing by 50% per year. Supposedly.

And while the Tesla endgame is increasingly apparent to anyone who is not hypnotized by the Musk siren song, here, for everyone else, are three charts that scream that the Amazon "growth story" revulsion is just one determined seller away.

GAAP vs non-GAAP revenue

 

GAAP vs non-GAAP EPS

Finally, TSLA cash flow: alas, there is no such thing as non-GAAP cash.

 

And the result of all that awesomeness... TSLA +6% AH

 

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Wed, 11/05/2014 - 17:56 | 5416749 kaiserhoff
kaiserhoff's picture

Cash is trash.

Remember that from the nineties?

Oh, wait.

Wed, 11/05/2014 - 17:56 | 5416750 Bell's 2 hearted
Bell's 2 hearted's picture

car burns

cash burns

 

they need to hire smokey the bear as consultant

Wed, 11/05/2014 - 18:05 | 5416797 stant
stant's picture

That's what's missing!! T tops and electric chicken on the hood!

Wed, 11/05/2014 - 20:45 | 5417509 StormShadow
StormShadow's picture

I thought the title said "record crash burn". It does fit in Tesla's case.

Thu, 11/06/2014 - 04:32 | 5418663 StychoKiller
StychoKiller's picture

Whew, that's a relief, I thought my disylxia was getting worse!

Wed, 11/05/2014 - 17:56 | 5416751 medium giraffe
medium giraffe's picture

Electric white elephant.

Wed, 11/05/2014 - 17:59 | 5416758 RobD
RobD's picture

Giga Factory Bitchiz

Wed, 11/05/2014 - 17:59 | 5416768 Buckaroo Banzai
Buckaroo Banzai's picture

They have flushed $1.1 billion down the toilet and can't figure out how to retool a factory?? Something Henry Ford figured out how to do a century ago?

Wed, 11/05/2014 - 18:18 | 5416865 MayIMommaDogFac...
MayIMommaDogFace2theBananaPatch's picture

Prolly Stuxnet...

Wed, 11/05/2014 - 18:40 | 5416963 nightshiftsucks
nightshiftsucks's picture

They're in a big ass building,they shouldn't have had to shut anything down.Looks like the labor market is starting to get tight in the SF Bay Someone I work with has a relative who got a job on the line and they only pay $18 so either they hire slackers or they're going to have to start to pay more..... oh wait,that's what the illegals are for..

Wed, 11/05/2014 - 18:02 | 5416782 ebworthen
ebworthen's picture

And with this cash burn, lower EPS, and gas prices plummeting...this must be a short squeeze.

Wed, 11/05/2014 - 18:06 | 5416792 Dr. Engali
Dr. Engali's picture

No worries, I'm sure gas being down over a buck a gallon will create huge demand for electric cars.

Wed, 11/05/2014 - 18:06 | 5416801 Rainman
Rainman's picture

agree, even the shoeshine boy musta figured that out.

Wed, 11/05/2014 - 18:21 | 5416883 Bernoulli
Bernoulli's picture

Hey, don't insult shoe shine boys. I would bet 99% are smarter than the average CNBC viewers.

Wed, 11/05/2014 - 18:22 | 5416897 Dr. Engali
Dr. Engali's picture

CNBC has viewers?

Wed, 11/05/2014 - 19:56 | 5417301 Freddie
Freddie's picture

An old guy, Sol, who steals the free bagels at a local Charles Schwab branch.  He says he wants to stuup Maria.

He buys NY munis and Isra-hell Victory Bonds.

Wed, 11/05/2014 - 19:35 | 5417224 JuliaS
JuliaS's picture

Call me naive, but I don't think Tesla buyers are in it to save money on gas.

Thu, 11/06/2014 - 13:22 | 5420099 de3de8
de3de8's picture

And they still get their 7500 credit from the Feds, like they need it

Wed, 11/05/2014 - 18:07 | 5416804 Spungo
Spungo's picture

A message from Tesla to its share holders:

https://www.youtube.com/watch?v=-YVdf6qaH6o

(it's a song)

Wed, 11/05/2014 - 18:11 | 5416822 taraxias
taraxias's picture

Amazon on wheels

Wed, 11/05/2014 - 18:18 | 5416860 Buckaroo Banzai
Buckaroo Banzai's picture

Except amazon delivers real value to tens of millions of people worldwide, every day.

How many Tesla customers are there again?

Wed, 11/05/2014 - 19:50 | 5417290 Freddie
Freddie's picture

Tesla should start racin in NASCAR.  Sadly, Dick Trickle is dead because he would have been the perfect driver.

http://en.wikipedia.org/wiki/Dick_Trickle

Maybe they could get that murderer Tony Stew-rat to drive for them.

Wed, 11/05/2014 - 18:13 | 5416830 FieldingMellish
FieldingMellish's picture

Broken business models are always bullish. Luckily for Musk, he wasn't mining PMs.

Wed, 11/05/2014 - 18:56 | 5417028 Think Like A Crook
Think Like A Crook's picture

We get it Mr. Mellish, pm's are going to zero.
Even on a thread about the bullshit known as Tesla you somehow manage to squeeze your pm view in.

Wed, 11/05/2014 - 18:18 | 5416870 Bernoulli
Bernoulli's picture

A lot of "I'm proud to be in love with Elon Musk"-people out there. They buy whenever he opens his mouth.

"The messiah is speaking to us! He lost his shoe! Let us follow his example and hold up one shoe!!!"

 

Oh and WHAT THE FUCK is up with companies reporting earnings in "non-GAAP"?!?!

GAAP are already a joke, this means non-GAAP numbers are just a pure lie. Send the CFO to jail! Now!

 

Wed, 11/05/2014 - 20:28 | 5417440 lotsoffun
lotsoffun's picture

well, people love a hoax.  they need to believe in things, and belong to them.  they love the guy.  they love the fraud.  electric cars are WORSE in the long term for the environment unless you can fuel them with something other than fossil fuel based.

love to see these people endorsing more nuclear plants.

hah - what a hoax.  greenie beenies love it.  they don't want to know that the batteries that give them 'lower gas milage' - didn't come from waterfalls, or windmills, or pixie dust.

it comes from one place.  burning fossil fuels and storing the energy (inefficiently by the way) in batteries that are ecological disasters.

want to be green?  walk or ride a bike.

 

Wed, 11/05/2014 - 18:19 | 5416874 Yen Cross
Yen Cross's picture

      Do they have " Polar Vortex"  Non-GAAP adjustments on Nevada state tax returns? Ohhh wait! Nevada doesn't have a state sales tax. ( I'll get back to this later)

  Richard Florida Slams Tesla's Nevada Battery Factory Deal - Business Insider

  States With the Lowest Corporate Income Tax Rates (Infographic)

 

  So how are those Non-GAAP profit reports slipping through the cracks? There's no state income tax in Nevada. Those earnings/revenue for payroll figures are substancial. Those earnings are compared to other states with sales tax rates. Tesla I'd expect is taking a payroll consideration into account. I'll bet I can find much MOAR.

  It's these accounting practices that are allowing Non-GAAP to be used and traded on. This shitshow is about to end Bitchez.

  I don't know what the mechanism will be, but the clock is wound too tight.

Wed, 11/05/2014 - 20:04 | 5417351 Think Like A Crook
Think Like A Crook's picture

Additionally, they lowered guidance to 33,000 vehicles next year. 33freakingthousand. Valued at half the valuation of Ford Motor Company. This is the etoys.com of the upcoming carnage.

Wed, 11/05/2014 - 21:19 | 5417642 Freddie
Freddie's picture

Nevada has casinos and stuff so they can afford to foot the bill.  

If they really want to screw taxpayers then get a ball team like the Cowboys.

Wed, 11/05/2014 - 18:20 | 5416877 starman
starman's picture

who needs cash when the taxpayers fit the company bills!

Wed, 11/05/2014 - 18:45 | 5416987 Central Ohio
Central Ohio's picture

US New and World Report 2013

Article about how Telsa is only profitable at taxpayer expense.  Cronyism at its finest.

Wed, 11/05/2014 - 18:21 | 5416882 bigrooster
bigrooster's picture

This fucking scam is how assholes in SV afford those million dollar 1000sf houses.  Even the fucking janitor has Tesla options and unloads them onto the Mutual Fund holding sheep of middle America.

Wed, 11/05/2014 - 18:23 | 5416895 Chuck Knoblauch
Chuck Knoblauch's picture

Did they announce a buyback and new bonds to pay for it???

LOL!!!!!!!!!!!!!!!!!!!!!!!!

Wed, 11/05/2014 - 18:23 | 5416898 economessed
economessed's picture

I drove one.  Interesting experience.  And a couple of days ago, I drove the new Jaguar F-Type R.  Breathtaking experience!   The Tesla seems like it should be priced at about $34,500.  Musk may have the right idea, but the economics of his project don't support a sustainable business model.

Wed, 11/05/2014 - 18:38 | 5416958 Rainman
Rainman's picture

Collectors with cash will buy Tesla for their collection, so it will possibly pay off okay in 20 years.  Methinx it's DeLorean- like ... Mass production ? ....nah

Wed, 11/05/2014 - 18:39 | 5416964 Yen Cross
Yen Cross's picture

  Come drive my 599 GTO. That's a driving experience.

  Ferrari 599 GTB Fiorano - Wikipedia, the free encyclopedia

  I went for a run to the beach this morning and almost got run over by (2) Nissan leafs, and (1) Toyota Prius.

  It's like "War of The Worlds" dodging those little fuckers. They sound like someone  trying to leave a perpetual "skidmark" on the pavement, but lacking the horsepower to do so.

Wed, 11/05/2014 - 19:40 | 5417247 Lendo
Lendo's picture

No Ferrari pics, no care.

 

Wed, 11/05/2014 - 20:05 | 5417357 Freddie
Freddie's picture

Front engine Ferraris?  No thanks.  Bad weight distribution and they depreciate quickly unless you have a Daytona or a 250 GTO.

Wed, 11/05/2014 - 21:08 | 5417600 Yen Cross
Yen Cross's picture

 Freddie? Come on. Have you EVER driven a Ferrari?

  The person was talking about driving experiences.

    Personally I'll take a 68-73 Daytona over a " swb 60's California spyder" any day.

Wed, 11/05/2014 - 21:14 | 5417621 Freddie
Freddie's picture

512 BB

Wed, 11/05/2014 - 21:04 | 5417580 silverer
silverer's picture

Actually, the Tesla would gain immediate acceptance if they were price competitive, which they are not.

Wed, 11/05/2014 - 18:48 | 5416998 kchrisc
kchrisc's picture

One Teslaticle always hangs lower.

An American, not US subject.

Wed, 11/05/2014 - 19:07 | 5417072 homebody
homebody's picture

Have not driven one electric car yet, but should work for about 30 min here in snow country where heat is needed to live and keep the windscreen clear.

Wed, 11/05/2014 - 21:59 | 5417816 spqrusa
spqrusa's picture

Nah - I have a Tesla S @ 7700 ft. in Snow Country and it has the same range. The car sometimes takes over the heater from heating the cabin to heating the battery. That sucks but it keeps the batteries in good shape under all conditions. Tesla S is the best car I have ever owed out of BMWs, Audi's, Fords, GMs, Acuras and Toyotas.

Thu, 11/06/2014 - 02:21 | 5418534 IronForge
IronForge's picture

Yet, at Sea Level in the Northeast,

Its range drops so much that it can't make it from NYC to BOS.

I think i8 (from the MoretoPx Competitive End) and Chevy Volt / Volkswwagon's future release (from the Cheaper end) will squeeze out TSLA.  MB cashed out on their TSLA holdings last month, so it may look like the Stock/Company is going start paring downwards a bit.

Guess they never made it to 40K Cars as they boasted about...

Wed, 11/05/2014 - 19:26 | 5417166 Sirius Wonderblast
Sirius Wonderblast's picture

To be fair to Tesla, the S is a lovely looking car in the tin, and the chap I know who has one loves it and rates it above all the other (mostly top end) cars he's owned. Tesla may or may not make it - they're  trying to gain traction (no pun intended) for a much different driveline, driving experience, and source of energy, against a background of nascent infrastructure and a competitor product (internal combustion) that's had well over 100 years of R & D. I for one hope they make it.

Wed, 11/05/2014 - 19:59 | 5417323 Rhetorical
Rhetorical's picture

Im in agreement with you. Theyre nice looking cars and from what Ive heard fun to drive too. While theyre to expensive for what theyre worth imo I do hope tesla works out. I also look forward to electric cars becoming cheaper cause I wouldnt mind having one. Cheap oil is gone and I think electirc cars are one of the solutions to our current and future fuel needs.

Wed, 11/05/2014 - 20:23 | 5417421 lotsoffun
lotsoffun's picture

i am going to do it.  RHETORICAL - i'm going all caps.  DOES ANYBODY HERE GET IT? 

YOU:

' Cheap oil is gone and I think electirc cars are one of the solutions to our current and future fuel needs. '

SO TELL ME, IF FOSSIL FUELS DID NOT RECHARGE THOSE BATTERIES WHAT DID?  ELEPHANT FARTS?  NUCLEAR ENERGY?  WIND POWER (SOLYNDRA)?

does anybody get it?  unless you are using an alternative to fossil fuel - electric are NOT CHEAP.  infact THEY ARE MORE EXPENSIVE.

the concept of the electric car was from the late 70's when people were first concerned about the environment, and instead of burning fossil fuel and spewing it as the vehicle moved from place to place, the fossil fuel was burned in one place, where in theory, pollution could be better controlled and then distributed as 'clean' electricity.

i'm too rabid about this - can somebody else help me explain to readers how they have been fooled?  again.

 

 

 

Wed, 11/05/2014 - 20:45 | 5417504 Buckaroo Banzai
Buckaroo Banzai's picture

And I would like to date Miss November, but that shit ain't happening either.

Thu, 11/06/2014 - 02:27 | 5418541 IronForge
IronForge's picture

Sorry to disappoint; but I think Mr. Hefner has been there already...

Wed, 11/05/2014 - 21:01 | 5417567 silverer
silverer's picture

They will make it when their product aligns with the laws of economics, and it would have been wise to consider that first, not last.

Thu, 11/06/2014 - 01:42 | 5418471 talisman
talisman's picture

you mean like Apple?

Thu, 11/06/2014 - 04:41 | 5418672 StychoKiller
Wed, 11/05/2014 - 19:52 | 5417292 JuliaS
JuliaS's picture

I built competition grade EV's in early days. Great cars to drive on a short track, but wouldn't imagine having an EV as a daily commuter. Us - engineers, weren't allowed to do anything crazy before the race, but after the post-race parties we literally got to destroy everything.

I was once taking my turn trying to set the speed limit in a retired build and ran out of track before the car even finished accelerating. Did a sharp 90 degree turn at the end of the paved section and all 4 wheels snapped off their axles. The cage skidded at least a hundred feet on gravel. The cars were qute heavy but very stable with all the batteries loaded into the bottom tray.

Fun times. Still have all my bones (and teeth) to tell the story.

Wed, 11/05/2014 - 20:24 | 5417428 InanimateCarbonRod
InanimateCarbonRod's picture

All you need to know is who, exactly, owns the stock. FMR. JPM, Morgan, Blackrock...there's no way the stock gets tanked unless these guys want it to.  Helloooo short squeeze.  FMR is a master of this subterfuge.  Helps when you self clear.

Wed, 11/05/2014 - 21:48 | 5417761 Quantum Nucleonics
Quantum Nucleonics's picture

Remember, Tesla is not a car company, it's a tax subsidy company.  The cars are just an incidental part of the business, sort of how google gives you the search so they can show you the ads.

Wed, 11/05/2014 - 22:21 | 5417925 Quantum Nucleonics
Quantum Nucleonics's picture

No such thing as non-GAAP cash flow.  Nonsense, just a matter of enough creative accountants and attorneys funded by enough consulting $$$.

Thu, 11/06/2014 - 01:21 | 5418189 NEKO
NEKO's picture

I have never driven a Tesla but did get a ride in a Toyota Prius... nice car - but wouldn't like to have to pay for new batteries down the track.

Anyone remember the Sinclair C5 ?... here is a quote from Wikipedia

The C5 became known as "one of the great marketing bombs of postwar British industry" and a "notorious ... example of failure".

better cash in my stocks double quick.

Thu, 11/06/2014 - 00:37 | 5418360 AdvancingTime
AdvancingTime's picture

When talking about the CEO of Tesla Motors, Bloomberg News almost always says "Billionaire Elon Musk", this happens so often that many people probably think his first name is "Billionaire". As for Tesla the stock is trading at incredibly high multiples, much of that can be contributed to the historically low interest rates and the luck of being in the "QE moment" rather then the company's financial success. Bears and those that doubted if the company could hold together ironically have pushed up the stock, this adds to the image that Musk lives a charmed life. Remember the company had received a huge government low interest loan to kick start its existence.

 Today the stock of Tesla Motors has a market cap of around 35 billion dollars. By comparison Ford has a market cap of around 69 billion. At that time I have never seen a Tesla car in the "flesh" this means in a display or on the street. I take this to mean it is a very small player in the overall market. When all the hoopla ends, the question is whether larger competitors will simply overwhelm and crush Tesla, or will Tesla instead position itself to grow and maybe take over a competitor to help propel it forward. Remember this is a field where many have failed, one great example was the Delorean. I have become predisposed to discount, and have actually grown a massive aversion to "media hype", this is one reason you should color me skeptical. More on this subject in the article below.

http://brucewilds.blogspot.com/2013/05/tesla-motors-and-elon-musk.html

Thu, 11/06/2014 - 01:55 | 5418491 teslaberry
teslaberry's picture

DON'T EVER SHORT TESLA. 

 

it's one of the best run frauds on wall street. and when the stock goes from 30 billion market valuation to 1 billion valuation in ONE DAY-----you're shorts won't get paid out.

 

the battery factory they are 'constructing' will never be finished and the company will go belly up ENRON STYLE. you heard it here first. 

Thu, 11/06/2014 - 04:46 | 5418676 StychoKiller
StychoKiller's picture

Shame that they have to drag Nikola's name thru the mud, though.

Thu, 11/06/2014 - 02:11 | 5418520 talisman
talisman's picture

Anyone that underestimates Elon Musk's engineering genius, his business ability, or the sheer guts he has to put up his own money in something he believes in, is a DAMN FOOL.
Elon Musk and Craig Venter are the true visionary entrepreneur geniuses of our age.
Musk totally understands that a better battery is the key to successful electric cars, and I would not be in the least surprised if the next advances in battery technology as well as manufacturing cost reduction come directly from Musk. 

Thu, 11/06/2014 - 02:29 | 5418544 IronForge
IronForge's picture

Sorry to disappoint your "crush"; but Mr. Musk started off as an Investor to the T-Zero.  Didn't he take over the firm by ousting the CEO/Founder?

Maybe the Genius was in that.

Thu, 11/06/2014 - 04:52 | 5418680 StychoKiller
Thu, 11/06/2014 - 03:09 | 5418596 epicurious
epicurious's picture

Sorry missed I this early on, but the future will be electric cars.  The issue of course is the batteries, but because one can charge a car sitting idle off a few solar panels, in the long run that is where we are going.  If they made 4x4 versions I would have one today on an island home where you can't drive more than 5 miles in any direction. 

Thu, 11/06/2014 - 08:06 | 5418866 wildfry
wildfry's picture

Ignoring the unreasonably high valuations, the strain on free cash flow is what happens when you move into significant growth in a business so I don't get why the author of this article believes this is a bad thing.

The critizism here sounds suspiciously like jealousy. Ever tried starting a manufacturing company? Ever tried starting a new industry? It's Incredibly hard.

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