Tesla's Q2 2023 Financials and The Possibility of a High EPS in 2023

Friday - July 7 2023, 22:44 UTC - 1 year ago

Tesla had a big beat on Q2, 2023 deliveries with 466,140 cars delivered and 479,700 car produced. Tesla's potential for a high EPS in 2023 involve good execution on car production, increased capacity, energy business with high growth, and FSD. This all could lead to a PE in the range of 30-150.

Tesla had a big beat on Q2, 2023 deliveries with 466,140 cars delivered and 479,700 car produced. I think Tesla will trend around 90% of actual production capacity (production being demonstrated sustained over weeks). In Q1 2023, Tesla delivered 423k cars and produced 440k cars. This was about 89% of real peak production capacity. Tesla Shanghai has shown three months of 88,000 cars produced. This would be 264k .

Fremont can make 150k cars per quarter (although the Tesla stated Fremont capacity is 650k per year. Tesla S/X are at 80k per year). Berlin and Austin had reached about 40k per quarter in Q1. IF Tesla could produce at full capacity in Q1 this would have been 494k cars. Tesla Shanghai has shown three months of 88,000 cars produced. This would be 264k. There was a few days of shutdown in China. Fremont can make 150k cars per quarter (although the Tesla stated Fremont capacity is 650k per year .

Tesla S/X are at 80k per year). Berlin and Austin each could produce 65k in Q2. IF Tesla could produce at full real potential capacity in Q2 this would have been 544k cars. Tesla produced 489k cars. This was 92%% of 530k cars. Tesla has increased production capability to 5k per week in Texas and 5k per week in Berlin. I had expected a continued production capacity ramp in q2. This has not happened yet .

However, Tesla will shutdown Texas Model Y production line for 5 days in early July to increase production capacity. The average quarterly production should be 7k per week in Texas and 6k per week in Berlin. The Texas shutdown and increase in production will see about 84k cars potentially from Texas and 72k from Berlin in Q2. China potential would be 264k and Fremont 150k. This would be 570k cars with real peak production capacity .

Tesla should produce 90% of that level or 513k cars in Q2. 92% would be 524k cars. If Berlin gets expanded or improvements were also made to the China lines, this could increase. Q4 each should be at 130k cars each for Berlin and Austin. Q4 peak potential would be 674k. Q4 at 90% of peak real production would be 607k. If Berlin and Austin only had 100k of potential each, then Q4 peak potential would be 614k and 90 would be 552k .

Randy Kirk also ran some Tesla numbers with about 1.95 million cars and increased energy. This would get to about $5 EPS for 2023. Tesla has had a wide range of price earnings multiples. Tesla PE was as low as 30 in Q1 and is back to about 80 now and was at 146 to 210 at the end of 2021 and beginning of 2022. IF Tesla has 50% growth and adds in an energy business with 20-30% margin and the energy business has 200% growth for the next several years then PE in the 50-100 range would be reasonable for Tesla most of the time .

Macro economic and stock market swings could send Tesla to a wider PE range of 30 to 150 PE. I think the high EPS is very doable for Tesla. It involves very good execution. Car production going well, good Cybertruck ramp, Semi and getting 4680s properly on track and scaling. Megapack factories in Lathrop, Shanghai and beyond should get built and scaled. The 100PE would be with solid 200% growth with Megapacks and Energy and with FSD coming of of beta and getting to full commercialization mid to late 2024 .