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Tesla 10-Q Highlights: Model Y Production, Alternative Financing, And More Optimistic Guidance

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Via Zerohedge

Tesla filed its keenly-awaited 10-Q for the first quarter 2019 this morning, and the document was full of additional color on the company’s horrific Q1 earnings report, which missed analyst estimates by a mile and caused the stock to crater more than 10% in the days following the report.

Hilariously, the company turned more of its focus to the Model Y in the 10-Q, saying that production of the new model will reach “high volume” by the end of 2020. This is also funny because, as we first reported, customer deposits actually decreased after the introduction of the Model Y.

And so while the company may be producing at a high-volume come 2020, but the demand is another question.

The company also said it has ’adequate’ liquidity over at least the next 12 months and that capital expenditures would be $2.5 billion to $3 billion annually for next two fiscal years. As we’ve already questioned, we don’t know where the company is going to get the cash to meet its capex guide for the rest of the 2019. 

The company also said that cash generated from its core operations would be “generally be sufficient to cover our future capital expenditures and to pay down our near-term debt obligation,” but then said it “may choose to seek alternative financing sources”. The financing questions continue: why include language about alternative financing? Is the company free to tap the equity markets, as it has claimed? If it does, would there be a bid? Have the credit markets soured to Tesla? It smells like the next financing could come from individual investors or Beijing – or perhaps debtors in possession. 

By the end of 2019, Tesla is still guiding to produce 7,000 Model 3s per week – a run rate that the company hasn’t really even come close to achieving, but has talked about several times. Tesla has been notorious for missing its production run rate guidance for the Model 3 – and its guidance in general – over the last couple years, as one user pointed out. 

The company also took Elon Musk’s 500,000 yearly total unit guidance that recently got him in trouble with the SEC and claimed that they would shift that forward six months, meeting the goal of 500,000 units produced in 12 month period by June 30, 2020.

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Finally, Twitter weighed in with some additional “anomalies”, including the company’s sale of $216 million in regulatory credits during the quarter, observing that without them, company’s automotive gross margins were below 10%.

The company wrote down $64 million in inventory in Q1:

One user noted the nearly 50% drop in the company’s money market account despite having $2.1 billion in cash:

It was also noted that the company’s Q1 cash included $140M from that “$500 million” FCA deal the company signed weeks ago:

It was also brought up that discovery was under way in the Solar City litigation:

Long story short, getting a small glimpse inside of the black box at Tesla led most Twitter sleuths to arrive at the same conclusion:

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