Tesla's Hidden Revenue Sources
Elon Musk compensation now 1% of sales instead of 3%
There is about $500 million dollars left in Elon Musk's CEO compensation plan of the about $2.3 billion total. That's just over 20% of the entire package and the average quarterly recognition and cost to Tesla is going to be significantly down in Q3 and Q4 of 2021.
The majority of Elon Musk's compensation plan was realized in 2020. The question is, won't there be a new CEO compensation plan once this one ends? I agree with Rob and hope there will be. It has rewarded investors just like Elon Musk has been rewarded and could likely build Tesla into a multi trillion organization. Elon Musk only gets rewarded if Tesla grows to a point shareholders are equally rewarded.
Energy Solar Roof Margins
Tesla energy, in particular, the Solar Roof, has contributed disproportionally to margin loss for Tesla. What this means is that Tesla Solar Roof is a negative margin project, equaling a loss for Tesla.
Tesla is continuing to improve on the margins for Solar Roof and I would expect this to no longer be a loss in the future, equaling more revenue for Tesla.
FSD Deferred Revenue
There is deferred revenue from FSD (full self-driving) and over the air updates. This is about $2.13 billion. This is very high margin revenue and will add mostly to the bottom line.
Once Tesla actually delivers FSD out of Beta, it will be able to realize most of this money and will continue to add to revenue in the future as people buy FSD in full or subscribe to it.
The other part of this revenue is for over the air updates and the supercharger network.
Deferred Regulatory Credits Revenue
Regulatory credit sales were down in Q2, 2021. Tesla has about $41 billion in deferred regulatory credit revenue. Tesla cannot recognize this money until the other party they got these credits from puts them on their own income statement. Then Tesla can put them on Tesla's income statement.
Reduction in Debit Interest
Tesla is aggressively paying off debt as can be seen by the reduction in cash from Q1, 2021 to Q2, 2021. At the end of Rob Mauer's video, you can see the change in debt, which was from $9.5 billion in Q1, 2021 to $8 billion in Q2, 2021. This is why Tesla's cash on hand decreased from Q1, 2021 to Q2, 2021.
I expect Tesla's debt to continue to decline.
Tax loss deferred revenue
At some point in Tesla's past, there was a tax loss that has not yet been realized in revenue. When it does, it will greatly boost Tesla's earnings per share for the quarter it is realized as it will all be added to the bottom line to the tune of about $2 billion.
If you take a look at James Stephenson's forecast for Tesla in the future, you can see a very high earnings per share in Q4, 2021. This is when he is forecasting that tax loss to be realized, but nobody knows for sure when Tesla will do this.
Here is my latest $TSLA forecast thread (20 tweets), updated to include actual Q2 deliveries & other forecast changes.
4 tweets summarizing my forecast
11 tweets with updated charts
5 tweets with charts that didn't change, for those who haven't seen them
— James Stephenson (@ICannot_Enough) July 11, 2021
The highest Tesla’s accumulated deficit ever got, I think, was close to $7 billion. That would’ve been maybe Q2 2019?
But the amount Tesla can reduce their taxes owed by is only a fraction of that, about $2 billion.
— James Stephenson (@ICannot_Enough) August 2, 2021
What do you think about these hidden revenue sources? Are investors not realizing these are coming and that Tesla is growing faster than anticipated?
Jeremy Johnson is a Tesla investor and supporter. He first invested in Tesla in 2017 after years of following Elon Musk and admiring his work ethic and intelligence. Since then, he's become a Tesla bull, covering anything about Tesla he can find, while also dabbling in other electric vehicle companies. Jeremy covers Tesla developments at Torque News. You can follow him on Twitter, Facebook, LinkedIn and Instagram to stay in touch and follow his Tesla news coverage on Torque News.