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Tesla's Q2 Report Favorable to Other Automakers

Here's how the auto market stacked up for Q2.
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As other automakers are starting to report their second quarter earnings results, it is now possible to see how Tesla's results stacked up against the broader market. BMW, Toyota, Fiat-Chrysler, and Honda have yet to report.

Here's a look at performance across some key metrics:

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Zooming in on the June-end quarter top line numbers — sales units and revenue — Tesla significantly outperformed.

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Tesla's sales units (deliveries) came in 5% below last year's second quarter, while others (generally wholesale) ranged from -24% to -53%, at an average of -38%. Revenue numbers are similar.

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While there is some variance between automakers, Tesla outperformed the average by 35 percentage points. Tesla ended the quarter with just 17 days of inventory while other automakers generally have about 70 days of inventory. With high inventory levels, low sales results for other automakers is indicative of lack of demand. Tesla's result is much more likely constrained by production downtime, making the disparity even more telling.

Tesla's top line success led to relative bottom line strength as well. When looking at quarterly numbers it is important to keep in mind that they are just a snapshot, and one time items can have significant impacts. Here is a look at GAAP net income, in millions.

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Aside from Ford and GM, other automakers' results have been converted to USD for sake of comparison. Ford performed best, with a $1.1B profit, but was impacted by a one time contribution of $3.5B from their investment in Argo AI. Even so, the average loss for these six automakers was $1.0B.

Similar quarterly snapshot caveats apply to free cash flow, but it is an important number as well.

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Daimler was able to manage a positive free cash flow, but the average was negative $3.5B for the quarter.

While Tesla's volume is smaller, their financial strength is growing as evidenced by the second quarter results. Contraction among other automakers flips the equation on economies of scale acquired over long periods of time which is likely to continue to put pressure on managers to cut operating costs.

For more analysis on Tesla, including Panasonic's revealing comments on energy density, please see the included video.


Disclosure: Rob Maurer is long TSLA stock and derivatives