by F. Robert Jacobs, PhD. 10/16/2018
Given the estimates from the learning curve analysis of the production capability of Tesla, it is interesting to predict what the financial implications might be. The following table has the financial data reported by Tesla in quarterly reports since 2016-Q4.
Quarterly Financial Data (all revenue and expenses in thousands
|
2018-Q2 |
2018-Q1 |
2017-Q4 |
2017-Q3 |
2017-Q2 |
2017-Q1 |
2016-Q4 |
|
|
Automotive revenue |
$3,357,681 |
$2,735,317 |
$2,702,195 |
$2,362,889 |
$2,286,616 |
$2,289,600 |
$1,994,123 |
|
Automotive gross margin – GAAP |
20.6% |
19.7% |
18.9% |
18.3% |
27.9% |
27.4% |
22.6% |
|
Expenses |
$2,665,999 |
$2,196,460 |
$2,191,480 |
$1,930,480 |
$1,648,650 |
$1,662,250 |
$1,543,451 |
|
Model S and X units delivered |
22,300 |
21,800 |
28,320 |
25,116 |
22,000 |
25,000 |
22,299 |
|
Model 3 units delivered |
18,440 |
8,180 |
1,550 |
220 |
|||
|
Total units delivered |
40,740 |
29,980 |
29,870 |
25,336 |
22,000 |
25,000 |
22,299 |
Using the data, we first developed a regression model to estimate the revenue from Model S and X products (these are grouped together, since they are similar), and the Model 3 product. The regression indicates that the average revenue for Model S and X is $94,045.54, and that the average revenue for Model 3 is $70,610.36. The F statistic for this model is 1433 indicating very high confidence in the numbers.
Similarly, a regression analysis was run on costs over the period. Fixed expenses over all three models were estimated together with variable expenses for the combined S and X product, and for the Model 3 product. The model indicates that fixed expenses are approximately $18,429,936.85 per quarter. Expenses for the Model S and X product are $72,033,599.15 and for the Model 3 are $59,599,668.52.
Using this data, the following table was prepared that estimates Revenue, Expenses, and Net Profit for 2018-Q3 and beyond.
|
Quarter |
Model S and X units delivered |
Model 3 units delivered |
Revenue |
Expenses |
Net Profit |
|
2016-Q4 |
22,299 |
0 |
$1,994,123 |
$1,543,451 |
$450,672 |
|
2017-Q1 |
25,000 |
0 |
$2,289,600 |
$1,662,250 |
$627,350 |
|
2017-Q2 |
22,000 |
0 |
$2,286,616 |
$1,648,650 |
$637,966 |
|
2017-Q3 |
25,116 |
220 |
$2,362,889 |
$1,930,480 |
$432,409 |
|
2017-Q4 |
28,320 |
1,550 |
$2,702,195 |
$2,191,480 |
$510,715 |
|
2018-Q1 |
21,800 |
8,180 |
$2,735,317 |
$2,196,460 |
$538,857 |
|
2018-Q2 |
22,300 |
18,440 |
$3,357,681 |
$2,665,999 |
$691,682 |
|
2018-Q3 |
26,903 |
55,840 |
Not reported yet |
||
|
Forecast |
|||||
|
2018-Q3 |
Actual from above |
$6,472,990 |
$5,284,395 |
$1,188,594 |
|
|
2018-Q4 |
24,217 |
78,948 |
$7,852,069 |
$6,468,159 |
$1,383,910 |
|
2019-Q1 |
24,217 |
128,874 |
$11,377,349 |
$9,443,721 |
$1,933,628 |
|
2019-Q2 |
24,217 |
187,010 |
$15,482,339 |
$12,908,596 |
$2,573,743 |
|
2019-Q3 |
24,217 |
259,051 |
$20,569,234 |
$17,202,261 |
$3,366,973 |
|
2019-Q4 |
24,217 |
346,102 |
$26,715,932 |
$22,390,469 |
$4,325,464 |
To explain this table, the numbers for 2016-Q4 thru 2018-Q2 are actual as reported by Tesla. For 2018-Q3, Tesla has reported delivery numbers, but the financials have not been reported. These estimates assume that Tesla will actually deliver the Model 3 cars that the Learning Curve estimates that they can make (apparently this has been a problem recently). In addition, these estimates assume that the Model S and X deliveries are equal to average past deliveries.
The implications are that potentially Tesla Automotive related Net Profit could more than triple by 2019-Q2, compared to 2018-Q2. Being realistic, the numbers beyond 2019-Q2 will probably not be realized since by that time the Model 3 order backlog should be gone, and regular market demand will dominate.
It will be interesting to see how this works out in the future.
Operations and Supply Chain Management 