Here's his post....
I spoke with Kewa yesterday after she confirmed with Mr. Hu, that the JV sold 4028 EV's in Q4. I also asked her about the choice of words in the headline "delivered" instead of sold, and she said something to the effect that while all these "deliveries" are "booked" as sold, since some have not been fully paid for yet but instead booked as "accounts receivables", Mr. Hu felt better about using "delivered". My followup question was; Is there any chance they can be "returned" and she said no, the contracts are firm. Supposedly, as in the case of most businesses, some of the buyers wanted normal AP terms up to 90 days. Likely in hopes of receiving their local subsidies before having to pay.
I also asked her why we didn't mention the average cost per EV ($21,500) and her response was Mr. Hu didn't want to confuse investors by trying to multiply the 14,200 by $21.5 since the EV;s sold in 2013 were at a cheaper price.
IMO, the Hangzhou subsidy delay was the main reason we didn't sell more EV's in Q4. As of the end of Q3, Hangzhou it appears owes ZZY somewhere between $75 to 80 million. My guess is that ZZY's financial backers were reluctant to advance too much more until they get what is already owed them. So, the always flexible Mr. Hu, had to hurriedly put together all these deals in other cities to get the 4k sales we did get. Apparently, we cut off Hangzhou for any new sales at the end of Q3 until we get paid. In the short run it may have hurt us a bit, but in the long run, getting our "foot in the door" of all these new cities so early will likely pay off big for 2015.
I guess my biggest complaint was why we never saw free standing PR's on some new cities with initial sales mentioned in the PR like Ragaou and Changstra, These could have been a "tipping point" had they come out prior to this announcement.
If you all remember when I was speculating we would sell 5000 in Q4, I had forgotten that the subsidy reduction had been changed to 5% from 10% previously announced. I suspect had there been a 10% reduction, the number would have been large enough to encourage more sales in Q4, but 5% probably was so small as to not create as much urgency.
Rob, We knew that the only two cities we had made sales to in the first three quarters were Hangzhou and around 400-500 in Shanghai. So if you add the totals in the PR for the other new cities you get 3860, so it appears we sold none in Hangzhou, and 150 or so more in Shanghai in Q4. Assuming the cars and batteries were sold somewhat together, this should still approximately double last quarter JV dollar sales.
