Alright, in the last video we spent a great deal of effort making sure we got the ASPs
right due to all these price rises, along with the exchange rate issues, and the new
margins we might see from the prices being so much higher. It was so much effort, it
required it's own video. But now we have the answers we are looking for. Just as a reminder,
we had an ASP of $54,500 including FSD, $53,000 without, $18.7 billion in auto revenue, 33.3%
gross margin, and $6.2 billion in gross profit for autos, without regulatory credits.
Pretty amazing, but just a quick reminder again, this excludes the 22,000 vehicles that
Tesla didn't get to deliver. So increase it all by about 7% if you want a more accurate
representation of where Tesla really is.
FINANCIALS Let's move on to the rest of the financials.
I am going to give us $300 million in regulatory credits this quarter. Bringing total auto
gross margin to 35.2%. Which is starting to look really high. And remember this is Tesla
expanding their lower range rear wheel drive variants. It's only going to get better when
they start expanding their 4680 long range Model Ys, that sell at much higher price points,
more margin, tax incentives and battery subsidies, yes, lots of great stuff still to come.
This brings Tesla's total gross profit for autos to $6.5 billion.
OTHER I think energy might have done a bit better
this quarter now Tesla have had so many more LFP cells, and they have mentioned that they
are no longer constrained by cells there. So I am giving energy $1.1 billion in revenue.
I have high hopes for the new factory being complete soon, and perhaps starts production
early next year, this will make a big difference in energy finally.
Services and other seems to continue to grow, as there are more Teslas on the road, it only
makes sense, and eventually this side will also start to expand, as Tesla's sales grow
exponentially. However I am not expecting it to yet be profitable, but we will keep
it break even. However due to all the LFP cells in energy, costing a lot less than 2170
cells, I am going to actually give energy a profit at just under 10% margin. With a
gross profit of $100 million.
This brings out total gross profit to $6.6 billion.
OPEX Under opex, I am going to allow $100 million
for the line upgrades in Shanghai. Research & development shouldn't have risen anything
too significant, perhaps we can add a little bit more on due to robotics research perhaps.
Selling, general and admin, I think might have actually reduced, due to some downsizing
and now relocating headquarters into Texas instead of Silicon Valley.
EARNINGS This gives us $4.8 billion in operating profit.
About double from Q2, and 37% more than Q1. Which after tax is $4.3 billion GAAP earnings
net, net income. Which is $1.23 EPS, or the all important non-GAAP EPS at $1.34. Again
not far off double Q2, and up 27c from $1.07 in Q1. This spreadsheet is available for download
in Patreon.
This is obviously way above the street's estimate as usual. Now would a result like this move
the stock price? I would say there is a good chance. I would hope that we see $250 again
soon enough, and perhaps this result will give us a bit of a base in order to achieve
that. And this is what the market uses to value Tesla on, it doesn't care about the
actual performance of the company, just the results it puts on paper. Two very different
things.
At the time of this video Tesla's stock price is $219, with a market cap of $687 billion.
If I annualize these net profit estimates, it comes to $17.2 billion, not too bad. But
it comes to a p/e ratio of just 40, at these earnings with this current stock price. In
my opinion we are a long way away from Tesla having a p/e of 40, given how much more potential
this company has. So I am not worried about how insane the market takes the stock price,
as it is not an accurate reflection on the value of this company.
PRODUCTION But I would actually go a step further again,
and declare that even that is not an accurate profit for this quarter, due to the fact that
about 6% of the vehicles produced didn't even get delivered. That should definitely contribute
to the success and value of the company. So to give you a rough idea, if I did include
the 22,000 additional vehicles that were not delivered.
That adds an additional $1.1 billion on to revenue, or $370 on gross and operating profit.
Taking net profit up to $4.7 billion, and non-GAAP EPS to $1.46. Quite a big difference.
Annualized it is now $19 billion in net profit, or a p/e ratio of just 36. And people keep
saying Tesla is over-valued, and some think it's going to drop a further $100 in the stock
price.
And that is still an average of the entire quarter of course, there was a lot more production
happening at the end of it than there was the beginning, with higher profit margins
too. Due to the massive line upgrade.
But then all of this is still absolutely minuscule when compared to these two massive factories
which are the core of the future value of the company, which of course still depend
on 4680 cells. And an update on where where we are with those, is what I look forward
to hearing about most on the earnings call, hopefully it's good news. I think shareholders
need to hear from Elon and the Tesla team in any event, and be reassured that the company
is still in good hands. There has been a tumultuous level of FUD circulating. A lot of negativity
that has snowballed. Investors are losing their rationality, when it is the market that
is really the one being irrational. But your sanity through it all, just makes you a better
investor than those whole couldn't handle it.
Anyway, we have moved on, and a lot of these new advances will be reflected in Q4, not
just the Shanghai ramp but the Berlin ramp too. Hopefully 4680s start to ramp properly
in the first quarter of next year, I think when they start going we should see a more
realistic perspective in the stock price, and it should recover to around where we like
it to be, then it should eventually hit it's all time high, yes even in this economy. But
for us to see the numbers we are really hoping for, then I think that will take the Cybertruck.
I think when the world sees Cybertruck in volume production it will be another major
pivotal point for the company, and the stock price will eventually react. Elon says volume
production next year, but there is lots of new technology and never before seen manufacturing
processes, so we can almost guarantee they will run into some issues, and Cybertruck
volume production may not happen until earlier in 2024. But I think the world is waiting
to see if this can really be achieved, then the stock price will react. Granted we do
have FSD on top of that, but it is less tangible, until is passes regulation, which could still
take a couple more years once its as safe as a human. So I am hoping Cybertruck is sorted
before then.
A lot of people want an update on that truck though, last I checked it was the number question
for the earnings call on Say.com, so we should get some answers, accompanied with some in-depth
4680 updates.
SUMMARY Anyway, this quarter was alright, it wasn't
the quarter it was meant to be, well Q2 was meant to be great, with all those price rises
and huge margins and the new factories opening, but they didn't work out so well, and then
we had the lock downs. So Q3 was meant to make up for all of that, and then in addition
to that we suddenly heard that they were upgrading Shanghai. And all in all, the production numbers
were alright, but we still didn't see too much action from the new factories, and now
I am hoping Q4 is going to be this magic quarter that we were expecting Q2 to be. I just hope
that Q4 actually will be what it's cracked up to be. But we are hearing that perhaps
it won't be that good, due to the limitations of ships from China, when it comes to Tesla
exporting. Supposedly limited to about 42,000 exports a month, and production could be upwards
of 90,000 a month. Some people don't think there will be enough domestic demand to cope
with that many units. This is just what I am hearing, but I am asking around to find
more concrete evidence of how limited China's shipping is. Equally if any of you know, then
leave me a comment.
Aside from that hopefully we get a good report and earnings call, and we can start turning
the negativity we keep hearing in a more positive direction.