CGX car nut:

Can someone explain why Tesla’s Q2 inventories increased to $8.1 billion as revenue fell from $16.9 bn in Q1 to $14.6 bn while the company states automotive supply is at 4 days?

 

Actually it fell from $18.8 billion to $16.9 billion Q1 to Q2.

Tesla, or Elon, does accounting much differently than everyone else. The 'inventory' line means whatever stock they have on hand. Parts for making cars, finished cars waiting for transport and delivery, unfinished cars missing parts, mainly chips. As with all manufacturing factories, stock level for every part isn't the same, they basically tally up the shortest supply level, which is 4 days worth. For other JIT manufacturing companies, the supply level is measured in hours. 

But with so much 'inventory', it means they can selectively include sales for future reporting, they can decide when to book them to inflating the quarterly numbers. 

I believe they are also counting parts for making the incoming Cybertruck as inventory, jacking up that number even more.

Tesla cars, are still great sells, most don't sit on lots for long, But transporting the finished cars to buyers is an issue, not just for them, but for everyone else. Hyundai basically sold every Ioniq 5/EV6 on the line and whatever coming into the line for the next few years, they 'could' book everything right here right now, or wait and spread out those sales for each quarters. 

Before, Tesla been booking EV credit as profits depending on how bad the quarter looks, but the last quarter they used their bitcoin holdings as that buffer, inflating their cash holding amount and cash flow number, would have been cash flow negative if not for the bitcoin sell.

The old saying about numbers don't lie, people do, stays true. The facts are all there, if someone isn't all wrapped up with a influential spokesperson sugar coating the numbers, they can see the truth. But majority of people are too mesmerized the other way and can't see through the facade. 

 

 

 


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