Tesla Motors Inc (NASDAQ:TSLA) delivery numbers are in question again, and this time it’s for Europe. A report from Seeking Alpha by Alberto Zaragoza Comendador finds that European deliveries don’t match the revenue figure.
Missing units, higher ASP
From the official numbers revealed by Tesla, Commendador calculates $242 million in revenue for Europe excluding Norway or EEN. However, the author notes that there is a problem “with this number” as there were oonly 1,056 Model S registered last quarter.
Apart from the problem with the number of deliveries, the author notes that the implied ASP for Tesla in Europe is a “massive jump from previous quarters.”
Generally, it is expected that the ASP for Tesla would come down as more and more cars are made available through leasing, but “in 2014 we see a slight increase in ASP at first, a more notorious jump in the second quarter, and a ludicrous leap last quarter,” notes the author.
For such a high ASP, the report notes that Tesla must be selling more cars in ‘other’ regions. However, the author doubts this as Model S was launched in Japan only in September, and in Canada only 267 units were bought last quarter, and at a “far lower ASP than in Europe.”
Commendadaor also negates the possibility of the missing units being in transit saying that a car is not counted as sales unless it’s been delivered.
Where is Tesla investing?
Another observation made by the author is regarding the big gap between free cash flows and net income. The report notes that for the last quarter, Tesla reported net income of -$75 million while the free cash flow was -$320 million. This gap could be there because the company is “buying up or building assets.” Also, the EV maker has been on a construction spree, but the point to note here is that the CAPEX last quarter was more than “in all of 2013” says the author.
In 2014 so far, the amount spent on property and equipment are “more than triple the level of 2013,” but the production for the first three quarters is only 30% more than the same period last year.
The report also notes that the amount spent on the new Gigafactory has also not been as high as expected. Referring to page 12 of the third-quarter 10Q, the author notes that so far the spending on the Gigafactory totals $18.8 million. Also, the Lathrop facility will cost $19.2 million, of which only a portion has been spent in the last quarter.
Finally, Commendador questions ‘where is the money going?’ saying that the company’s 10Q offers no explanation over the missing revenue from Europe, and on the massive cash outflow.