35k Model 3 is finally here!



Serous question for the mods…

Is it mandatory that every Tesla thread to turn into ev bashing and company smear?


Whomp whomp.


Off ramp is fair game. Everyone has an opinion; some are glowing…others are not.

Personally, I see no bashing going on here. Merely opinion discussion.


Lol…ok…so off ramp is where we go to the crapper…and if you think this happens only here than you obviously are not paying attention.


Do you have a link for that? I wanna do some reading on it…


Hope this helps.


Well, I think part of it is b/c Tesla is possible the highest profile EV maker, and Musk is… polarizing. And, from what I understand, Tesla is not the only Musk-backed enterprise that could be having some significant issues appearing on the horizon…


TBH, I’m not sure what you’re complaining about to begin with…this is a lease forum. Tesla Model 3 isn’t even a car that can be leased. You should be happy they get any publicity, good or bad, on this site.

You really need to relax. People have a free market to decide how to spend their money. Nobody HAS to like EVs, and not every criticism that is commented on is bad or wrong. People do have choices, and despite your choice of favoring and supporting EVs, not everyone has to, nor does everyone have to go gaga over an EV to be right.



I agree this is off ramp. No advice needs to be given or taken. And if u don’t like the banter. Leave. That said you tree huggers sucking air gotta snort some fumes every now and then to get perspective…
Wait what🙃


Do you even know how you got here?


I should? Do you think I work for them? And if i relax more i will fall asleep…you guys are not that entertaining.


Yes, i heard the Russians and Boeing are real mad at him right now…what can you do?


Are you a licensed CFA or did you just stay at the Holiday Inn last night? You do know some of your suspicious can be debunked easily or already covered in the 10K. Do you even know what that is? Here is a link if you want to read.


To your 3 major points.

#1 Get your story straight. They have asked for payment in full before the quarter end and then deliver the car a few days later directly to people’s house. They did it so they can recognize the revenue earlier. Is it illegal? No. Is it right? No.

#2 They delivered nearly 100K Model 3, a new model, in Q3 and Q4, you expect no change in service expenses? You expect a bunch of new cars to contribute to the service revenue?

#3 Have you ever read the statement of cash flow before? It’s a legal document they have to file quarterly. :rofl: They cover your cashflow from investing vs. operation.


$hit, I need them to beam me an odometer rollback of 20,000 miles. That would be amazing.

Btw, is Boeing a buy on your list tomorrow? Should we put a large order in for you tomorrow?


I’ve spent plenty of time working through the 10K.

Regarding #1:
They use a peculiar accounting policy called “financially delivered.” The presumption here is that when demand was pulled forward and there weren’t enough cars yet produced to satisfy, they would take a VIN assigned to someone who had paid in full, book the revenue, and reassign the VIN to a new customer willing to pay in full at EoQ. Thereby double booking cash for only one car delivered. Is it illegal? Possibly. Is it good business practice? We are in agreement that is a firm no. And make no mistake, brand equity is being damaged by recent practices.

  1. Yes, they did deliver 100k M3 in 2h18. But that would have little to no bearing on service expense.

You know that as part of COGS, auto manufacturers book a “warranty reserve.” Yes? This is supposed to cover work done under warranty. It’s not supposed to flow through service expense. Yes, Tesla is also intentionally understating warranty reserves, but that’s another story. I think you are out of your league here when it comes to accounting. Maybe you “looked” at the 10K, but you certainly haven’t analyzed it and seem to lack any sort of nuanced understanding of it. Yes, I do have a professional background in this stuff. You do not. This is very clear.

New cars should be COMPLETED when delivered, and the proper expenses associated with completing them booked as COGS. New cars should not be going in for goodwill repairs immediately following delivery. These repairs being booked as goodwill service is very questionable, and if you don’t believe that Tesla has nefarious intent here in an effort to boost gross margins to guidance levels, then it’s simply assembly line (and accounting policy) incompetence. Fwiw, the QA (or lack thereof) on the assembly lines is a disaster. Some first pass figures were released a couple months back, I recall it was something like 16% first pass rate. Abysmal relative to auto industry benchmarks.

The 100k M3s delivered in 2h 2018 is also meaningless today. We’re not investing for the cash flows of yesterday, we’re investing for the future cash flows. So far, 11k deliveries in Q1. Major slowdown. Backlog exhausted. It’s a precarious situation. Waning demand (and liquidity) is indeed the single most important aspect of the short thesis.

  1. I am not sure what your point is about c/f statement. But if it’s related to capex, note that capex is fundamental to the growth story here. Otherwise this should be trading in line with other auto manufacturers. If it’s related to what I said about interest income vs. cash balance, please learn how financial statements tie. The c/f statement is actually irrelevant to that particular point. Interest income is an i/s line and cash/cash equivalents is a b/s line.

Fwiw, I own zero Boeing and have no plans to buy any. I tend to avoid investing in companies that rely on government contracts and/or subsidies. Speaking of which… ZEV + GHG credits, which Tesla sells at 100% margin, are cooked moving forward. They’ve sold about $1.5b of them to date. If you consider them non-recurring, which you should, Q3+4 was pretty much breakeven. The two best Qs Tesla will ever have. Breakeven. Do you want to pay $60b for that company?

It does seem like you’ve “looked” at the 10K judging from your links to Tesla IR. Congratulations! I’d venture to guess most bulls have not. Understanding it and drilling down on analysis is a different story, I suppose. No point you’ve made contains reference to or understanding of any deeper analysis.


Let me see if I follow. You are accusing them for forging sales data. People sign paperwork on a car with a particular VIN and then it is also being signed by another person for the same car. For that to work, you would need both users to pay in full with cash as I am guessing the bank might have trigger for duplicate VIN. Someone would also be systematically sitting down to correct the car’s VIN afterward. They would also have to pass random audits from PWC when they pull contracts. That sounds like a really big scam, you should call the SEC immediately https://www.sec.gov/whistleblower . If you have an example of someone paying for the same car with cash, please show the details. I think you will have a slam dunk case.

And no, the specific practice I know they did was “deliver” a car on paper that are built but not picked up. They can do it because they are delivering it to your house and a car is built. Selling the same car twice and having the same MVPA is way different than what I said.

I don’t have access to their books, I don’t know how they record their reserve. Where are you seeing their service expense? I see a line under COGS as service and others. You must know something that I don’t or am I going blind?

I don’t know anything, but I seem to recall ZEV revenue is non-GAAP.

I don’t have any thesis. I did work for PWC and I would hope they are not going around committing fraud like you said.


We’re getting somewhere. What I am accusing them of doing is overstating cash balance. They aren’t duplicating VINs. They want to register as many as possible. When someone pays for their car and receives a VIN, at EoQ, there have been many reports that these VINs have been re-assigned to “new” customers who pay in full after the original customer had paid in full. The “original” customer receives a car with a different VIN after EoQ. One or two sales may be booked. Cash is received for two. Think of it as a micro term loans.

As for warranty reserves, they specifically go into the Automotive Sales COGS line. It is a cost of selling a vehicle. Obviously we cannot see Tesla’s internal books, but warranty related expenses should debit the warranty reserves. People have posted many receipts online from Tesla service centers where they are coding the repairs for manufacturing-related issues as “Serivice- Goodwill.” It’s sketchy.

Additionally, ZEV income is accounted under GAAP. It’s part of the Automotive Sales revenue line.

They do play some games with this and bury the related content. The Q3 (and 4, if I recall) earnings releases failed to disclose how much of Automotive Sales revenue was credit related. Had to wait for the Q and K to find out. Fairly intentional deception.

In any event, I share your hope that pwc is not party to the fraud. I have good friends who work at pwc. I also don’t believe that auditors can really be relied upon as a safeguard. They aren’t in the business of bringing down companies, and plenty of frauds make it through audit without a qualified opinion ever being issued before they implode.


You’re also probably a good guy, and I apologize for anything that may be construed as a personal insult in my previous post. I appreciate healthy discourse on the Tesla story, which I find to be quite possibly the single most interesting pub co financial story of the past decade. There’s too much hate between the bulls and bears on this one.


Is this in reference/related to the alleged over reporting by 44% in this article?


You might be right on the ZEV credit, I see the ZEV credit reconciliation on the GAAP to non GAAP section. They might just be deferring some parts of it.