Tesla Has Started Shanghai Trial Production and Model Y Will Start Summer of 2020

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Here is the Tesla 28-page investor quarterly report.

$383M increase in Tesla cash and cash equivalents balance to $5.3B
$371M operating cash flow less capex (free cash flow)

Tesla Has Profit in Third Quarter

$261M GAAP operating income; 4.1% operating margin
$143M GAAP net income; $342M non-GAAP net income ex-SBC
22.8% GAAP Automotive Gross Margin

Results versus analysts’ expectations:

Adjust earnings per share of $1.86 vs. expected losses of 42 cents per share
Revenue of $6.3 billion, vs. expected $6.33 billion, according to Refinitiv consensus estimates

Operating cashflow was at $756 million which was $156 million above street estimates.
Automotive gross margin was at 22.8% instead of expectations of 19%

Highlights

Gigafactory Shanghai ahead of schedule, trial production has started
Model Y ahead of schedule, production expected by summer 2020
Record vehicle production of 96k and deliveries of 97k
Record storage deployment of 477 MWh and 48% solar growth QoQ

Tesla is trading at about $287$305 and is up about thirteentwenty percent in after hours trading

Tesla Had a Profitable Third Quarter

Tesla Production

Fremont
Model Y equipment installation is underway in advance of the planned launch next year. They are moving faster than initially planned, using learnings and efficiencies gained from our Gigafactory Shanghai factory design. Capex per unit of capacity is forecasted to be about 50% lower than their current Model 3 production system in the United States.

Shanghai
They are already producing full vehicles on a trial basis, from body, to paint and to general assembly, at Gigafactory Shanghai. They have cleared initial milestones toward their manufacturing license and are working towards finalizing the license and meeting other governmental requirements before we begin ramping production and delivery of vehicles from Shanghai.

China is by far the largest market for mid-sized premium sedans. With Model 3 priced on par with gasoline powered mid-sized sedans (even before gas savings and other benefits), they believe China could become the biggest market for Model 3.

Europe
They are in the final stages of our site selection process. The European Gigafactory is expected to produce both Model 3 and Model Y.

9 thoughts on “Tesla Has Started Shanghai Trial Production and Model Y Will Start Summer of 2020”

  1. Yes, that is my thinking too. Musk has been leapfrogging current technology his whole professional life, going to “First Principals” as he calls it. It’s been working for him and he probably has faith he can stay several steps ahead of the competition in the future. By not focusing on useless and time-consuming IP battles, let alone research-draining stock buybacks, he and his engineers can keep innovating, turning out newer and better products while the competition keeps draining itself copying old models.

  3. Take a look at those first few pictures. What do you see or don’t see? People. If that last picture is indicative and accurate of how many people you need these days in a mostly automated factory capable of pumping out somewhere north of 300,000 cars per year, then we’re going to have to have that talk about the throngs of unneeded and unemployable people and a universal basic income to put food on the table.

  5. I think you make some really good points here. My thoughts on this though go back to Tesla’s mission – Musk of all people understands how difficult it is to protect IP against a state actor and yet he has built a GF in China. I’m 100% certain that China will have watched very carefully. Perhaps Musk doesn’t even care if they copy GF; maybe he actually wants them to in order to accelerate the adoption of clean transport and energy..

  6. It’s fascinating that neither Musk nor China complains about IP being stolen even though Tesla probably has more to steal than any other American company in China. Musk has given away Tesla patent innovation for free in the past. He continues to stress innovation over protecting IP. Perhaps his greatest innovation is choosing innovation over fighting a losing battle to protect intellectual property?

  7. They had a bit of a revenue dip because of greater leasing versus buying apparently. I guess that works differently for the big boys, like GM and GM Finance (who handles leases?)

  8. As the trade war lingers on and the US and China decouples, Ill give it a few years before the Chicoms take over the plant under a nationalizing move.

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