WILL TESLA BEAT RISING Q4 EARNINGS EXPECTATIONS?

EV Channels Review

Rob Maurer provides a detailed forecast for Tesla's Q4 2021 earnings report, focusing on understanding the underlying numbers rather than just predicting a beat or miss. He highlights key areas such as automotive sales, energy generation, and services, noting his forecasts are largely in line with analyst consensus, with a slight conservatism on regulatory credit revenue. Maurer emphasizes the importance of automotive gross margin, particularly excluding credits, where he anticipates a strong sequential improvement. He identifies average selling price (ASP) and material sourcing costs as the primary wildcards, with a potential decline in ASP due to a higher mix of lower-priced models in China and fewer Plaid Model S deliveries. Conversely, increased volume efficiency is expected to drive down the cost of goods sold. Operating expenses are projected to decrease quarter-over-quarter, largely due to lower CEO compensation and the absence of a Bitcoin impairment. Maurer's forecast suggests a significant increase in operating income and margin compared to street expectations. He also touches upon the potential impact of deferred tax allowance and FSD deferred revenue on GAAP net income, while stressing the importance of sustainable gross margins over one-time revenue recognition.