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Second Quarter 2012 Financial Results Q&A Conference Call on Jul 25, 2012 at 2:30 PM PT

The Q2 2012 Q&A conference call is scheduled for Jul 25, 2012 at 2:30 PM PT. Live audio broadcast will be available at:
http://ir.teslamotors.com/eventdetail.cfm?eventid=116710

I bet the number of listeners will break new records...! ;-)
(Just hoping they will be able to handle the load, technically.)

The Q2 2012 financial report with some basic news and the latest public numbers will likely be made available at the same URL shortly before the event.

Less than a week! Yes, this could be the most interesting and arguably important quarterly report yet.

I assume the "big news" Elon promised dealing with long trip range anxiety will be released there. Some elaboration on the Supercharger network, we're all assuming.

For your reference, the discussion that entailed the last Q&A conference call:
http://www.teslamotors.com/forum/forums/first-quarter-2012-financial-res...

If you were actively participating in the call, what would you ask?

Hm! Based on info and projections already public, not much. But depending on what is in the presentation and new outlook, possibly some clarifications.

One area of curiosity is what changes and alterations and disruptions will be involved in putting the Model X production line in place in time for (?? late 2013 ??) production start-up estimates. Will they impact next year's Model S production?

Volker.Berlin, I would ask:

When will the details be available for the general warranty, battery warranty, service costs, internet data plan(s), optional console options and actual EPA mileage for the 40KWH and 60KWH cars?

I would ask for the reason of the delay in production and a possible future planning.
Second, possible improvements for future versions and timing.

Volker.Berlin, What would YOU ask? Very curious.

I would ask when would Canadian pricing be announced.

Volker.Berlin, What would YOU ask? Very curious. (ddruz)

Honestly, I'm not sure. I feel a little detached lately, b/c now that we really get to the meaty details of production cars, it's up to anyone's guess which of these details are relevant for me as a German reservation holder, and which details will change for the German (or European) version of the Model S, anyway. At the same time, for asking this very question -- which details will change for the roll-out in Europe? -- I feel it is not yet the right time. Currently Tesla focuses on getting the car out the door in the US and they probably couldn't care less for us Europeans in the next couple weeks (and rightfully so). Thus, even if I would get an answer, it would be a preliminary one, which isn't really better than no answer at all.

Of course I want to know if there are any unexpected problems in ramp-up, and if so, what they are. But IMO that question is similarly pointless since they will find some evasive answer that essentially is meant to say "don't worry, everything is going according to plan". That doesn't help me any.

Thus, I rely on the investors on the call to find the right questions and squeeze some new information out of Elon and Deepak. I'm looking forward to the call, obviously.

a couple of conflicting analyst reports

Tesla Motors, Inc. (NASDAQ:TSLA) is expected by Wunderlich to deliver Q3 guidance lower than consensus expectations with its Q2 results on July 25. The firm thinks that Tesla will probably produce fewer cars during Q3 than the Street estimated, and the company states that its test drive for the new Model S suggests that there are a few issues remaining in regards to the interior and the range. Wunderlich keeps its Sell rating and $28 price target on shares of Tesla.

Tesla Motors, Inc. (NASDAQ:TSLA) is expected by Needham to maintain its near-term objectives, including making it to profitability next year, in the course of its Q2 earnings conference call. Needham thinks production of the Model S electric vehicle is ramping to internal plan and maintains a Buy rating on Tesla stock with a price target of $40.

What would YOU ask? Very curious. (ddruz)

I'm certainly not V-B, but here are a few investor-related questions I would ask:

Elon, we've heard rumors that TM will not meet its self-impossed delivery quota of 5,000 vehicles in 2012. Are you still confident that the company will meet that quota? If you are, can you give us some insight into how you'll roll out deliveries in the 5 months remaining in 2012?

Elon, can you provide any indication of the quality issues you have encountered since the last conference call and whether any one or more of these has created production delays?

Elon, are you now satified with your suppliers and the quality of the OEM components they are providing? Is your supply chain management ready for 1,600 cars a month?

Elon, there has been some criticism of the Model S interior on blogs and in some reviews? Is any of it justified? Are you worried that the current interior might not meet the needs of future buyers going forward into 2013, 2014? (sorry, I know this one is parochial, but I really would ask it :)

I think the answer is somewhere between, but leaning a tad toward Wunderlich.

I don't know what all TM said to the "street", but they may have been coy enough to leave certain details out....such as ramp plan. There are many ways to get to 5K units by the end of the year. Some analysts may assume a straight line ramp and others may assume a geometric ramp and yet other may assume an exponential ramp. The first few months of production will vary wildly depending on how they "plan" to ramp production.

Other informaion suggests that they are in fact pushing out deliveries slightly. The delivery month stated on our MVPAs are only estimates based on then current information. When it comes to ramping up technologically advanced products, anything can and will occur during production ramp.

Also, since image is very important to TM (at this early stage in the company and I hope for a long time), they won't want to rush to a delivery schedule at the expense of quality and reliability - I certainly wouldn't want them to and would rather wait another month or two to ensure that I get a quality product.

One other comment: Any changes in the product this late in the game will likely add delays to production ramp. They made a few changes in the last several months, which means new tooling for plastic parts (center console), testing the tool to get it "just right", and making mods if needed. These take time (unless they were already in the works long ago).

At some point, the program managers and execs have to say "this is enough changes" and let the product move to production. I certainly hope they've gotten to that point by now, otherwise ramp will be slower than expected.

+1 soflauthor's questions

I would adjust this one though:
"Elon, can you provide any indication of the quality issues you have encountered since the last conference call and whether any one or more of these has created DELIVERY delays?"

"Production delays" is wishy washy compared to delivery delays.

Elon, we've heard rumors that TM will not meet its self-imposed delivery quota of 5,000 vehicles in 2012. Are you still confident that the company will meet that quota? If you are, can you give us some insight into how you'll roll out deliveries in the 5 months remaining in 2012? (Soflauthor)

We never actually reported what third quarter production will be. The only number we talk about is the production target of 5,000 this year. It’s not a demand issue: We have orders for well over 10,000 cars. We’re confident that the 5,000 number will be approximately correct. The production ramp is very narrow as we iron out the supply chain, but it ramps up very quickly. We want to be careful about the quality of each car.
(Elon Musk, July 23, 2012)
http://www.plugincars.com/elon-musk-talks-several-more-years-helm-123364...

[...] they will find some evasive answer that essentially is meant to say "don't worry, everything is going according to plan" (myself, above)

VB;
Elon recently responded to a quota question by re-iterating it was a target, not a quota. While reasonably sure that number will be reached, he was very sure the 2013 20K would be met. I think the market (and owners?) are trying to put words in his mouth, or pushing for a commitment, while TM is refusing to put themselves in that position.

IMHO.

VB;
Heh, your italicized patch-job threw me off a bit.

If you think their answers are evasive, I wonder what you would expect/wish them to say in the present circumstances. Specifically, in the first-ever run-up to production of their first car (taking the Roadster as an assembly job rather than manufacturing one.)

But all quibbles aside, I think the goal will be to hit the 4th quarter in good stride. 3rd Q is where most of the line and product tuning happens; output is secondary.

Heh, your italicized patch-job threw me off a bit. (Brian H)

I agree, I could have done a better job formatting that "dialog" between Soflauthor and Elon. It is hard to see who says what in my post.

If you think their answers are evasive, I wonder what you would expect/wish them to say in the present circumstances. (Brian H)

Do you know what the present circumstances are? I don't. It's tricky: I'm afraid that their answers will be (almost) no different, whether or not they actually have problems with ramping up production. If they have problems, they will certainly try to keep them under wraps as long a possible, sending a message that "everything is ok". And of they don't have problems? Well then they will also say "everything is ok". So, what would you expect to learn from this kind of answers?

That little information that may be found in these kinds of answers is in the subtleties, of course. Thus, when Elon says "We're confident that the 5,000 number will be approximately correct", I hear "We think it is not unlikely to not hit that number", because otherwise he would just say "We're confident that we will reach or exceed the 5,000 number." And when Elon says "We want to be careful about the quality of each car", I hear "Getting the quality right is trickier than we thought, so be prepared for some delays", because otherwise he would just say "We don't have any problems and quality is as expected."

Fair enough. OTOH, TM and Elon's practice has been to try and avoid saying anything that might have to be backed down later. So if Elon says he's sure of something, he's likely to be really sure.

I don't think TM is going to do much to "stroke" the stock market, or worry much about share price, till it's much later in the year. Pandering to analysts or even to shareholders at the expense of actual operational effectiveness is a greased slope to oblivion.

I still want to know about service schedules and pricing, service locations being extended and supercharging stations.

the stocks are going down and down...

do you think they'll become a boost after the results?

Yeah, looks like a major buying opportunity! >:)

will be interesting if O'Neil from Wunderlich is correct when he claims that production for 212 will be reduced from 1000 to 500 per month.

http://www.forbes.com/sites/greatspeculations/2012/07/25/tesla-earnings-...

The Second Quarter 2012 Shareholder Letter is online now:
http://files.shareholder.com/downloads/ABEA-4CW8X0/1860381136x0x585609/2...

The call starts at 2:30 PM PT

Current production as of today is 10 cars a week - information below is from the quarters letter to investors.

"We are maintaining our revenue guidance of $560 - $600 million and our Model S volume projection of 5,000 units for 2012. We expect to deliver approximately 500 vehicles to customers in Q3 with the balance delivered in Q4. In June we were producing cars at the rate of about 5 per week. The pace of production has approximately doubled as of this week and we are ramping methodically. This plan gives us more time in Q3 to ensure quality production and allows us and our suppliers time to ramp operations commensurate with our delivery schedules."

Elon: "A total of 40 production vehicles have been produced so far."

I am also on the call via the net cast.

Elon: "We will be at a higher production rate than 20k/y by the end of the year."

He mentioned production quality concerns with things like the shinny door handles. They are FOCUSED on quality which is what I wanted to hear.

Elon: "We're expecting that the battery packs have a useful life time probably double the time of the warranty."


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