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Friday, Sept. 14 at 11:33 am Eastern Time, Tesla's favorite store for production volume leaks – Electrek – has released an update of Model 3 production and the total number of cars. : Tesla production is picking up again in the last few days as we approach the past quarter. This was verified during the discussion with Seeking Alpha: The Tesla office is about to reach the production forecast for Model 3 – Electrek.
While the news in the Electrek article has been presented to appear positive, it actually represents a huge gap both in relation to the model 3 production forecast and Moody's expectations. s concerning the obligations of March 27. We have.
According to Eletctrek sources at Tesla, the company has produced 42,200 Model 3 units until today. Let's see what means by day and by week. The month of July lasted 31 days, the month of August 31 days and let's say it's for the first 13 days of September. It's 75 days in total, to date.
42,200 divided by 75 days are 563 cars per day. Multiply by seven days and we are at 3,939 units a week. This is the production of model 3, quarterly, based on the figures of Electrek.
It's with great fanfare that Tesla announced on July 2 that it produced 5,031 models 3 units a week at the end of June: Tesla Q2 2018 Production and Vehicle Shipments | Tesla, Inc. So this line of 5,000 was supposed to be the new floor – and also make Moody's happy.
You may remember that when Moody's downgraded its rating on March 27th, the company was going to reach 5,000 a week, and not just for a single temporary week. Or two. Or three C's was supposed to be the new floor.
Despite moving mountains, with horrible quality of service – see this LA Times story: While Tesla struggles to get out of "hell of production," buyers complain about delivery times – Tesla's Has not been successful at 3Q so far. Can this change? Of course it is possible. But we have already heard it.
You may remember that Tesla had already pledged 5,000 Model 3 units per week in Q4 2017, based on what it said in July 2017. This was delayed by a quarter, then by two quarters and now more than three quarters.
The initial guidance of Tesla Model 3 was even higher. During the first quarter of May 2016 conference call, Tesla announced 100,000 to 200,000 models 3 for 2017 and 500,000 (including 100,000 S + X models) for 2018. Of course, none of these events were successful. is produced.
Of course, what matters even more than production is sales. And what matters more than sales is profits. And what counts even more than profits is the cash flow that can repay the debt on time. We will enter those again.
There are 17 days left in the quarter, which would mean that in the same quarter, 563 units, that would mean 9,571 other units produced. Add that to 42,200 and the number would be 51,771. This is essentially in the middle of the range of 50,000 to 55,000 – well below 5,000 per week. There are not even 4,000 per week for the quarter.
So here's the big question – before we get into sales and profitability: what will Moody do? The ball is in their court now. By the time the Moody rating was last modified on March 27, Tesla would soon reach 5,000 people. It only did that – supposedly – for a single week. But the average since then is 3,939 units a week, although they were given an extra quarter to complete the exam.
Moody's, please let us know your thoughts.
Disclosure: I am / we are short TSLA.
I have written this article myself and it expresses my own opinions. I do not receive compensation for this (other than Seeking Alpha). I have no business relationship with a company whose stock is mentioned in this article.
Additional disclosure: At the time of submission of this article for publication, the author was short TSLA. However, positions can change at any time. The author regularly attends press conferences, new vehicle launches and equivalent displays, organized by most major car manufacturers.
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