Ok we calculated an idea of what Giga Texas may lose in Q2.
Now again to be clear, we really just calculated the ballpark.
And I think we are looking at a range between 150 million and 200 million dollar loss for
the quarter just from Giga Texas.
TEXAS I even ran a poll to get an idea of what people
were thinking, and there was a wide range of values, from under 250m to over 1 billion.
The poll showed that only less than 1/5 of participants think that the factory costs
less than $1/4 billion for the quarter.
In other words, assuming we are correct, the vast majority is expecting it to cost significantly
more.
I showed you how I arrived at every single number, and there were not comments thinking
I had done anything wrong.
So I am to assume people were happy with my techniques, and thus potentially adding to
further credibility for our predictions.
We are only concerned with the number that will be felt in the actual Q2 earnings report.
The factory itself is costing more than that to run, or losing more than that, but we are
just working out the cost of it relating to profits, or cost of goods sold for the Austin
Model Ys.
And that was good to know, and considering we did it for Texas, we should probably do
it for Germany too.
We also want to do it for Shanghai, but we may as well wait for delivery numbers for
that, as they will be out soon.
So lets begin.
GERMANY Now obviously the Berlin site is significantly
smaller than Texas, but the Model Y production floor is probably about the same size.
And in reality, as we are not factoring in many of the other parts of Texas, then it
might be about the same.
We have already run our estimates as to what we think Texas is doing.
One of the differences here is that we are dealing with 2170 cells, not 4680 cells, so
they would have been purchased from LG, compared to the running cost of the Kato Rd facility,
producing low yields, which probably added to additional cost.
Berlin has more workers than we estimated for Texas, on top of that energy costs a lot
more in Berlin than Texas.
Therefore I am going to estimate that the Berlin Model Y floor potentially costs more
to run than Texas, possibly even over $200 million a quarter.
In addition costs will be higher as Tesla are producing more cars.
The other factor would be that as Germany has been using 2170s from the get go, they
have also managed to ramp up a lot more, due to 2170s not being as limited as 4680 cells.
So we should have a lot more sales for the quarter from Berlin, than Texas, which should
have hopefully subsidized some of the running costs.
On top of that Tesla was selling the most expensive Performance version from Berlin
which carries some good margin.
Although it appears to have started production of the Long Range versions now too, but that
was only towards the very end of the quarter.
DELIVERIES
The estimated deliveries for Berlin Model Ys is about 8,000 for the quarter.
If they were reaching 20% margins, and we have about $14,000 gross profit per vehicle.
Which would bring in an additional 112 million contribution to these costs.
To be honest, we are only dealing with ballparks here, and I could go into lots more depth,
and likely not get any closer.
So I would place Berlin at $100 to 150 million loss for the quarter.
I think the in-depth analysis we did with Texas, helps us arrive at this ballpark figure
pretty easily.
If you want to know more how that was calculated then watch the Texas cost video.
COMBINED I think that we are looking at about $50 million
less than Texas mainly due to the additional sales, they will definitely help with the
losses.
Combined I would guess $300 million total loss this quarter from both factories, that
will be felt in the earnings.
These factories are costing more than that, but will not play into the quarterly earnings.
I would say that a range of $250 to 350 million would be within one standard deviation of
the actual figure.
In my opinion, I think this is a really useful ballpark to use for Q2 earnings predictions.
I would say a lot of people will be expecting it to be in excess of a billion, and that
will dramatically affect their accuracy when it comes to EPS predictions.
I mean Elon did say they are costing billions of dollars, so I can see why some people might
have jumped to certain conclusions, but for me, the numbers do not stack up if that was
the case.
SHANGHAI So the next hurdle for this Q2 earnings estimate,
is going to be to trying to work out how much Shanghai was affected by the downtime.
Remember this was complete factory shut down, including having to ramp back up.
It makes more sense to do when we get the final Shanghai production and delivery numbers,
as it the more accurate numbers we can use the better results we will get.
Q2 ESTIMATES I am hearing some very low Q2 numbers being
thrown around, my initial thoughts are that it may not be quite as low as people expect.
Also I think June should be pretty good for Shanghai.
But there is still a lot to piece together.
Also Q1 received a huge regulatory credit payout, which is unlikely to be felt in Q2.
We have the bitcoin impairment to deal with as well.
It's going to be a heavy quarter, but the market is of the realization that it is indeed
most likely a one off event, and things should return to prosperity the following quarter,
and know it out the park in Q4.
Although it may not be as low as some skeptics are saying, it still won't look great in contrast
to Q1.
We think its more or less priced in though.
The deliveries we will find out shortly and they may have a small impact on the stock
price a few percent either way, nothing that will hold, and will eventually be diluted
by macro events.
Then the earnings will be approaching, and should likely beat expectations.
But even if it does the opposite, again, I am not really sure how much weight this earnings
report will hold with the stock price, because it's been such a volatile quarter.
I think we just accept whatever it is really and move on, unless there are some major surprises.
SHAREHOLDERS MEETING It's likely what is said on the actual earnings
call will have more impact to the stock price this time around.
Key things to listen out for would be any 4680 progress.
Whatever is mentioned about the line speed is of great value.
Perhaps some of the specific 4680 specifications may be asked, such as charging speed, actual
capacity or energy density.
Really, if anyone is listening, who might have any influence on questions asked then
that is the most important thing to ask, in as much detail as possible.
As for the future of the company, Elon has already expressed his confidence in achieving
FSD this year, so in my opinion I would love to know about Tesla's future plans in producing
their own LFP cell, as that is going to be required for the next level up after FSD and
Robotaxis.
Tesla's energy storage cell, which will be the most produced cell the planet will ever
see.
Then of course we have the actual shareholder meeting and split, which I think will be where
more of our energy is focused, looking forwards with this company, not looking back at a tragic
one off quarter.
And the energy for the stock price should also be focused more so there.
There is always the chance that the split could take us up a notch, possibly over $1,000
stock price again.
But with macros the way they are, a split doesn't carry quite the same excitement it
did last time.
In addition to that, it's possible that Tesla was originally aiming for a 5 for 1 split,
but reduced it down to 3 for 1, which probably wont carry as much enthusiasm.
Still it makes options trading that little bit easier.
SUMMARY By the time you watch this video we are probably
out of Q2, we still have to deal with the results of what was Q2.
I think most of us have looked on, and realize the main issue was Shanghai, which is hopefully
rectified.
We are now concentrating on the two new factories ramping.
In fact we are already hearing that Texas is up to over 100 vehicles a day already now.
The tooling equipment for 2170 batteries arrived at Texas from China finally.
So we will have Texas ramping up more with 2170 cells.
It would seem that Tesla appear to still have quite a few 2170 cells.
Perhaps Tesla are producing fewer long range model 3s, and making more standard ranges,
to free up 2170 cells.
I don't imagine Tesla have enough 2170 cells for volume production for either Berlin or
Texas.
I think this is just simply to mitigate the running costs whilst they are waiting for
4680 cells.
It's also helping ramp up the production line too as it takes a lot of time.