Tesla 4Q15 Earnings Call Notes

posted in: Notes | 0

Tesla Motors (TSLA) Elon Reeve Musk on Q4 2015 Results

Expect to be cash flow positive starting next month

“something I’m personally quite excited about is that we expect to be positive cash flow starting next month and then continuing on into Q2 and beyond. And there’s one caveat there, that’s including the asset-back line, and the asset-back line is – that’s just funding for cars that are en route to customers. So, particularly as sales to international markets increases, there’s more finished goods inventory on its way to customers.”

Model S was the best selling premium sedan in the US last year

“The Model S was the best-selling premium sedan in the United States last year, of any kind. And our sales actually increased by 51%, whereas everybody else’s sales declined and the overall market segment declined by about 1%.”

We’ve done what we could to suppress demand for the Model X

“we – to the degree that we could suppress demand for the Model X, we did. So, we took basically every action we could to suppress demand for the Model X, because production wasn’t – we need to get production up. There’s no point in amplifying demand if production cannot meet that demand. So, we did our best to really suppress demand, or simply not encourage demand.”

The Gigafactory will not be a constraint to Model 3 production

“Basically, to the best of our knowledge, you shouldn’t worry about the Gigafactory as a constraint in Model 3…That does not appear to be anywhere near the critical path for Model 3. So, yeah.”

The gigafactory will be the largest footprint building on earth when it’s done

“the Gigafactory will be the largest footprint building in the world when it is done. I’ll tell you, (40:54) the Fremont factory is currently number two; and, if you’re curious, number one is a flower auction house in The Netherlands.”

We don’t plan to obsolete things we just relentlessly make things better

“we don’t plan to obsolete things. We just relentlessly make things better. So, for example, for the Model S, there’s an average of 20 improvements per week. Mostly, these are a little tiny nuance things that most people wouldn’t notice. But, it is a continuous improvement process. That’s why I say, when people say, when should they buy Model S? Like what model year? It’s like, we don’t really have model years. We keep improving the car. If you want to wait until the car stops improving, you’ll be waiting forever.”

The model 3 is designed for ease of manufacturing

“Yeah, I think the way to think of the customers is really that the Model 3, being a sedan, is about 20% lighter than – and actually quite a bit less complex to manufacturer, than the Model S. Model S was really the first car we ever made ourselves. So, it was – we were designing to make it work, as opposed to designing it from ease of manufacturing, whereas the Model 3 is really designed for ease of manufacturing.”

Jonathan McNeill – President-Global Sales & Service

Autopilot is a core story of what’s going on here at Tesla

“Autopilot is certainly one of the core stories of what’s going on here at Tesla.”

Jason Wheeler – Chief Financial Officer, Tesla Motors, Inc.

Gigafactory going according to plan despite reports

“Sure. In general relative to the initial forecasts and timelines, we feel pretty comfortable and where we’re at. I think there has been a lot of drama and a lot of negativity in the reporting on this. Somewhere around the head count recently that I think a lot of people picked up on…So, the general plan is executing actually quite closely to what we had laid out back in 2014. Because it’s a fast growth, we have to be really careful at what snapshot in time you actually look at, and what you compare that against.”