How are leases accounted for? We should expect a significant number of sales to be leases.I’m not sure how that affect quarterly profits.
I'm posting Q4 2018 numbers as Q1 2019 was a 'disrupted' quarter for sales due to S/X changes and a large number of cars in transit. In
millions thousands of dollars.
Vehicle sales revenue $6,073,471
Vehicle lease revenue $249,748
Vehicle sales cost of revenue $4,658,517
Vehicle lease cost of revenue $127,731
Leasing revenue/cost is a fairly small component of overall financial activity. And we might see strange things with non-business leasing. No longer will people be able to purchase their leased Tesla at the end of the lease period, Tesla wants them back for their robotaxi business.
The robotaxi business is likely to produce huge demand increases. Let's assume for sake of argument that Tesla has a FSD system ready to roll in short years, that individual car owners will be able to place their Teslas 'in service', and owners stand to earn $30k per year for the first 11 years of their car's life.
Note: This is a
could discussion. Not a
will discussion. Please treat it as such.
OK, purchase a Model 3s for $40,000. Earn $30,000 per year. Pay out $5,391 in payments (no down, 5 years at 5%). That leaves $24,000+ per year minus insurance and maintenance. It's not clear if the $30k includes electricity costs. Anyone not comfortable with earning at least $20k per year after all costs covered?
If you've got the ability to borrow $200k or have $200k available to invest where might you get the same return on investment? Where could you set yourself up in business for $200k and start earning $100k the first year?
People with a few hundred thousand in rental real estate would quickly jump to converting their property into Tesla taxis. And there are a lot of those people. People making nice annual salaries but would like to get out of their line of work are going to find this attractive. If you bought one Tesla per year after five years you'd have a six figure income from your cars.
At this point in time Tesla intends to use its 'returned from lease' vehicles as backup for privately owned robotaxis. I assume some businesses will continue to lease to some extent. Although this could get very strange if a three year old used Tesla sells for more than the cost of a new one if demand greatly exceeds ability to produce.
It's fun watching this all develop....