The Model Y agreement says the $2500 is a "service fee" - which can immediately go to revenue (as Tesla is providing some "service" for the money - maybe place in line lol). As opposed to a "pure deposit for future payment" which cannot.

Why did they change the language from the previous deposit pages if they didn't plan to book the revenue? Maybe the auditors will stop them but unlikely.

Don't think the Y has enough orders to help them, rumor is <10k.

I'd expect ~20k Model Y orders, which is a cool $50mil to pay bills (and add directly to revenue probably) for putting up a webpage and pushing out on a stage a rushed-and-hand-modified Model 3.

85k reported seems very unlikely to me. They guided to low 70s in the letter, and are guiding to a loss for the Q, so I’m not sure they even need that much to meet expectations. Also more transparency on the Euro registration side so less room for fudge factor. I think 85k would be seen as a huge beat.

50m def possible on the Y res, but it doesn’t move the needle much on cash balance.

I also don’t see them turning a profit, but my delivery assumptions are much different than yours it sounds. If higher deliveries are achieved via deep price cuts, I don’t think it gets you there either. FSD rev recognition would be a wildcard but I think there’s a limit (if they can even recognize any). Don’t think Y deposits will be recognized as revenue, that seems well over the line to me. There’s also gonna be a restructuring charge and I think there will be some temptation to kitchen sink it and do some housekeeping (like inventory write downs).

The reasonable thing to do is take all the hits in Q1 like restructuring. But I have a feeling Elon wants to save face and will not report ~65k/big loss, that's too much of a sequential hit so I still think 80-85k. And yeah profit is still a longshot but possible, they are spending so little money (capex/r&d) and everyone agrees they are moving a lot of cars in March compared to Jan/Feb that it could happen.

They’ve already guided to sequential decline on the reasoning that 10k cars will be in transit on boats, so I don’t think low 70k deliveries with a big in transit number will shock people. Elon also warned about Q1 profitability specifically because of a restructuring charge, so I think they have managed expectations there as well. Just don’t see the burning need to report 80k+ (not to mention if it’s even possible)

Capex would only have a small impact on profitability (depr incr attributed to in period purchases), and R&D has already been cut quite a bit in prior periods. Of course they can always cut more, but the current number includes ongoing costs associated w current models which I believe OEMs normally book as COGS. Agree they are moving cars, but SR+ and discounted MRs will have very little impact on the bottom line.

Keep in mind elons email a few days before the end of Q32018 - "keep pushing, we're nearly profitable, going to be close" and then a month later posts blowout numbers.

His warnings on Q1 make sense, but when push comes to shove he overdelivers on the financials by any means necessary.

Yeah I think the "in transit" number offers a lot of room for a pump and even outright dishonesty, particularly since Tesla controls the narrative in the structure of their letters and none of it is audited as I as I understand. You can cover an awful Jan/Feb (and they're truly awful) with "seasonal reasons" and a "temporary dip" from the expiration of the credit but that now demand has ramped back up.

And the huge price cuts a few weeks ago certainly give room for a massive temporary demand spike. 40K+ euro drop overnight is certainly a tad further down the supply/demand curve.

Yeah, that’s fair. I do take these statements with grains of salt but I think they still show the expectation management for Q1 and lay the groundwork for a down quarter so the stakes aren’t as high for profitability. And as you’ve said, Q2 will be bad, so do they really want to book deliveries now that they will need in Q2?

Technically, no, they shouldn't be able to get away with that. You don't just change wording on a website and that changes your revenue recognition.

There also isn't much harm in trying to get away with it. I do everything I can to ride the line and leave it up to the corporate big wigs to shut me down

The letters are definitely not audited but the in-transit number is usually repeated in the 10Q which is at least reviewed. Im not really sure how seriously people take the “in transit” label though. On the whole it’s just one piece of the larger story Tesla is telling that demand is much greater than production, and here is a reason why some cars weren’t delivered. Even taken at face value, it doesn’t tell you what demand looks like beyond the orders for the in transit cars. Agreed that it’s a pretty nebulous number though.

Very unlikely without a disclosure of change in accounting treatment, also just plain unlikely because it is a super aggressive approach to the new ASC 606 rules


In summary, I have no idea, it’s tesla

They didn’t, model 3 had same language

A lot of strong accountants on twitter are saying you can expect a significant amount of FSD revenue to be recognized in Q1 because Tesla now considers stupid **** like summon as part of the FSD feature set


I think they are probably right

Whether they did it for legal reasons to have an at least slightly plausible defense that they'd partially delivered (they sold hundreds of millions worth of pure vaporware they never delivered for $5000/each and repeatedly lied about it over and over), or to recognize the revenue, it's definitely a cynical ploy and not a legitimate demarcation.

Or maybe it's just to start reselling their vaporware/ripping off customer. In that private call with reporters, he said:


Regardless of whether it's consumer fraud or accounting fraud or both, the fraud continues. Between ICOs and this ****, the SEC/FTC/state consumer laws may as well not exist.

The whole point to the language change on FSD and calling it "feature complete" was to grab the revenue, shouldn't be a surprise to anyone.

I don't think that's a given at all. I think the main reason is to avoid consumer law problems (under their old definitions they're committing outright fraud and would have to pay back hundreds of millions for non-delivered products since 2016), and have at least some defense on pending lawsuits.

In other words I'm not certain they're doing this to grab the revenue. But if syndrome who I believe is an accountant says they now can, then hard to see why they wouldn't.

Respectfully disagree the consumer laws are the driver, but would agree it was part of the analysis. What I am saying is if there wasn’t a real contract for FSD functions defined (honestly not sure, don’t think there is though ) I’m not sure there is guidance under the new legislation where you can (or can’t) change what functionalities are included in FSD. From there you could theoretically assign values to the different functionalities and consider those portions delivered and recognize the revenue. New situations always arise with new accounting guidance. Accounting is ironically the greyest area in all of business imo.


I’m not an auditor or a pure tax guy but I’m definitely a CFO/CPA and have a strong understanding of ASC 606

Not that it matters but I work in software too so I know there is wiggle room here.

The Taycan is starting to get some reviews and it kicks Musk's efforts to the curb:



Basic features:

- Charging in 1/3 of the time of a Tesla thanks to a much higher voltage. 80% charge of 90 kWh battery in 15 minutes.
- The fastest production car ever made
- Unlike the disorganized cuckshow that was the Model S/3/X, put through 4 million miles of brutal testing
- Amazingly, cheaper than a Model S at $67,000 to $85,000, and way cheaper than a Roadster

Tesla are already panic-dropping S/X prices 40K+ euro overnight due to demand death, partly caused by Jaguar's fantastic first attempt with the iPace. The Porsche Taycan looks like it knocks it out of the park though. And note that this is their first try.

This was always inevitable as electric cars became economically viable - amazing performance, great range, etc was always guaranteed, with a top of the car that makes Tesla's amateurish efforts look like a joke - and at a lower price point. Tesla have no hope of competing with the majors with their hopelessly disorganized culture and lack of capital.

sure, nice porsche, but does their ceo rap?

That kind of post usually doesn't age well. But at least if you post that kind of stuff at every car release you'll probably get one right at some point.

I was curious and looked for reviews that are kicking musk's effort to the curb and found some very hypothetical reviews. With possible prices and possible features and at best some short prototypes tests.

Reading your posts and checking if they have any bases is allways hilarious.

Ah, the Tesla bull. Musk's $420 "funding secured' was real, Tesla have "magic sauce" that other car makers can't touch, etc.

The post ages very well. They Taycan was obviously going to knock it out of the park when it was announced in 2016 (slated for 2019, it's 6 months late), and it has. It's delivered everything so far. I'm not sure you appreciate this is in the final stages of testing and reviewers are actually driving in these. It should be out in 8 months and reviewed properly long before then.

The posts that don't age well are Spurious' posts which throw cold water on these. Remember him rubbishing the iPace early reviews? That car that had Musk panicking and dropping prices 40K euro overnight. Which fact the moron also rubbished without even checking because it was so unbelievable that anyone would do that.

The lower end like Bolt, Volt etc has failed to materialize in big volume so far (at least, with a single car; together they're eating in Tesla's sales a lot in places like Norway), but like the Taycan these Tesla killers are merely a little late. They're a certainty though. Even the low end is not far off now with 100+ models coming out over the next year at all price points, all with decent range for the first time and many with great performance.

The year after that it'll be even worse as mainstream Tesla killers are out in the wild with a $7500 tax credit just as Musk is making his oh-so-not-exciting Model Y with no credits at all. At a $30K base price point that difference is huge. It's a BMW vs a Toyota in terms of quality or mainstream vs niche in terms of price.

Most of the majors have had cars for years racing in electric races with incredible performance (the Taycan is build on Porsche's electric race car). They have it all sorted out - the battery, the drive units, the electronics. It's purely a matter of economics when it becomes viable to ramp up, and we're nearly there. The delusion that Tesla have anything unique or special will be shot apart. Just as it's being shot apart right now with the iPace and the Taycan at the higher end. You'll be left with a heavily undercapitalized company with a toxic culture right as competitors are hitting it out of the park.

The Porsche ist great, but we are talking about 20'000 cars.

The iPace is selling at 1'000-2'000 units. It's out for a few months. Let's see how well it will hold up. Jaguar Land Rover is in a bit of trouble. The iPace is not taking away share from the Model X, that's your own fantasy.

The charging thing is hilarious, where do you think you'll be able to charge your car that quickly?

You are so mad that the stock just won't go in your direction - and that's for years.

Can you link the source that Porsche based the Taycan on their electric racing car?

This is like you with the "Tesla didn't drop top end S&X prices 40K euro overnight!" after they dropped top end S&X prices 40K euro overnight comment. Total reality denial.