Short-Term TSLA Price Movements - 2016

[EinSV]

I was wondering the other day if maybe this could be a way for Tesla to gain capital: sell data. They maybe read a tipping point in which they are so sure about their competitive advantage that they can make a dump of 1y of data and sell it to the highest bidder or something. Tesla would be gaining another million miles just the day after that. I bet Google and Apple would be willing to pay a lot of money for that.
Is this a very stupid idea?

It's funny you mentioned this. I thought about something along these lines the other day as well (licensing AP 8.0 rather than selling data) and immediately dismissed it as "a stupid idea."

But then I thought about it some more. Say AP 8.0 does end up reducing serious injuries and fatalities by a factor of 3 in a short period of time as Elon predicts. That is a safety improvement of historic proportions -- a much bigger advance than airbags and potentially around the same order of magnitude as seat belts, which appear to reduce injuries by about half.

At some point it might not be completely crazy to license this (at least the accident avoidance portion) to the industry. Let's say you license it for, let's say $250 per car, multiplied by 100,000,000 cars per year, at about 95 percent margins (licensing doesn't cost much). That's about $24 billion in profit. Tesla owns the data, so the system continues to improve. That would be quite something.

I would be the first to admit that this is just crazy speculation and probably would never happen. And it might even be just plain stupid.

But, interestingly enough ..... the very last thing Elon said in his press call on AP v.8.0 was:

And my personal guess is that ultimately that will probably be a 3 fold improvement in safety. That’s approximately where it would asymptote with the current hardware system, which I think is a wonderful thing. And in not a long of time, well for me, I think it’s going to be next year type of thing. Not far. And the great thing is that it doesn’t require any additional hardware. It’s just software over-the-air update. It doesn’t even require for you to bring the car into service. The car could be in [Timbuktu] and we would be able to update it.​

I think this is a really good solution. Perhaps something that other carmakers would think about using as well. [inaudible] Thanks everyone. I appreciate your time.
​

Transcript: Elon Musk’s press conference about Tesla Autopilot under v8.0 update [Part 7]

Edit: Thanks again to Fred at electrek for posting the transcripts

​

 

[AlMc]

Great deals on new 'in stock' cars continue:

Bought new S 75D yesterday after tesla yesterday firesale overnight -$7500

 

[Hogfighter]

Licensing the data set that Tesla is acquiring was something that EM alluded to, in a subtle way, about a year ago on a conference call. It wouldn't surprise me, especially as future versions will most likely show a significant increase in safety.

 

[Papafox]

Great deals on new 'in stock' cars continue:

Bought new S 75D yesterday after tesla yesterday firesale overnight -$7500

These cars are typically well-optioned, and so Tesla will probably do well with the sales all the same. If the buyer would have purchased the upgraded stereo, the premium package, etc., anyway, then the discount results in lower income for Tesla for the year, but if the buyer accepted a few options they probably would have passed on, then the hit to margins probably wasn't so bad.

 

[AlMc]

These cars are typically well-optioned, and so Tesla will probably do well with the sales all the same. If the buyer would have purchased the upgraded stereo, the premium package, etc., anyway, then the discount results in lower income for Tesla for the year, but if the buyer accepted a few options they probably would have passed on, then the hit to margins probably wasn't so bad.

Here is my question (devil' advocate' ).
TM is now acting more like a traditional auto dealer...discounting new cars.
Will people now feel they do not have to pay list price anymore?

 

[Papafox]

Here is my question (devil' advocate' ).
TM is now acting more like a traditional auto dealer...discounting new cars.
Will people now feel they do not have to pay list price anymore?

My guess these deals will go away within 2 weeks. You might have some buyers waiting until the end of next quarter to buy, so that's a possible downside. You also have some well-informed buyers who know that an inventory car gives a nice discount for the level of wear and tear, so that's another possible downside, but it can be an upside too because some buyers expect to cut a deal, and buying an inventory car, especially at the end of a quarter, looks like an opportunity to do some wheelin' and dealin'. Most buyers will continue to want to configure a vehicle to their specs and get it brand new, and for these buyers the discounts will remain quite limited. For example, looking at "new inventory" on the Tesla site, there are no 60Ds, 90Ds, or 100Ds.

One upside to the discounting you're seeing right now is that Tesla is likely to not only reduce the vehicles in transit this quarter, compared to last, but they're likely to reduce inventory as well. All of these changes add up to bigger Q3 delivery numbers. Can you say, "Cha-ching?"

 

[tander]

Here is my question (devil' advocate' ).
TM is now acting more like a traditional auto dealer...discounting new cars.
Will people now feel they do not have to pay list price anymore?

This is a great example of how to answer the demand question. Discounting the product is one of many demand levers a business can use to increase sales. For Tesla this is a short-term thing until/unless they have a major surplus in something i.e. a bad product.

 

[esk8mw]

So the semi-annual period purchases were made some time during August, under Tesla's plan?



As you previously noted with the quarterly vs semi-annual pricing, different corporations have different terms for their plans including different holding periods Once the holding period pipeline is full, quarterly/semi-annual sales offer both a low-risk, assured return and favorable tax treatment. At the end of last year, Tesla's headcount exceeded 13,000 and continues to hire aggressively. Anyone who thinks zeroing out stock based compensation (of which the ESPP is only part) in non-GAAP as a no expense accounting technicality needs to look more closely.

I'm not sure when the offering period started as I haven't reviewed their plan document (and the offering period is often not stated in the plan doc, it's just an internal administrative procedure and isn't required to be made public). Assuming it is August, the exact offering period matters, assuming they have the optional look back (discount applied to lesser of beginning/end of the offering period).

Most companies don't have any sort of mandated holding period and employees are free to sell their shares at any point as long as there isn't a blackout. The two year holding period to obtain favorable tax treatment can't be altered, it's set by IRC 423. Thus, most employees don't sell before 2 years of holding. So, you can sell your shares right after the purchase if you want, but you will pay ordinary income tax rates on the full amount of the discount, the worst possible tax treatment (but guaranteed gains due to the discount, I agree).

To provide some context, a participation rate of about 25 percent is considered quite high. Then you consider that a good chunk of the tesla workforce probably makes in the area of 50k, the deferral rates are not going to be near 25k. In my personal experience, even many highly comped employees decline to participate as they don't want too much of their wealth or risk tied to their employer. They'd rather invest elsewhere.

ESPPs are excellent tools. They are very appreciated by those who participate and are relatively cheap, while getting additional employee skin in the game. Inspires loyalty and improves retention. I'm glad tesla has one.

 

[GoTslaGo]

Don't know if this has been posted yet:

Looks like regulators are firming up regulations:

Feds unveil plan to ensure safety of self-driving cars

 

[dc_h]

Agreed. I don't want to say these people don't know what they're talking about, but....

 

[sundaymorning]

Not sure if this has already been posted, there's a nice article that confirms Tesla producing at a rate of 2,000 cars per week. A sweet look inside Tesla's evolving factory, enjoy..

Tesla Factory Tour Reveals Model X Mania -- The Motley Fool

 

[Cosmacelf]

Tesla hit with shareholder lawsuits trying to block Solarcity merger. Two shareholders are pension funds. Looks like not all funds are happy...

Tesla’s Merger With SolarCity May Be Delayed by Lawsuits

 

[TrendTrader007]

Don't know if this has been posted yet:

Looks like regulators are firming up regulations:

Feds unveil plan to ensure safety of self-driving cars

Well this should definitely impact TSLA SP tomorrow maybe big time
Thanks for posting this
I'm guessing, and I can only guess based on stock chart that we could go up big time tomorrow at least that's how TSLA chart looks to be setting up technically unless those 15 point safety guidelines force TSLA AP to be recalled which I can not imagine happening. I suspect we'll see major UP move in the stock tomorrow unless I'm missing something in that article

 

[dennis]

And yes most if not all Mobileye customers seem to be quite happy to just outsource the whole driver aid area to them and let Mobileye collect the data for themselves.

And that is the sad commentary on most of the automobile industry. Whether it is GM outsourcing most of the Bolt to LG, Fiat outsourcing the 500e to Bosch, etc., other than Tesla and a few specialty manufacturers like McLaren the major automakers no longer take pride in their own engineering. So all of the innovations are coming from subs, and since those subs are serving multiple OEMs they are going to move more slowly that Tesla can.

BTW this is one the main things that tanked Fisker. They had very little engineering capability, just design because that was Henrik's forte. They depended on others to engineer everything, and some of it did not work well, even mundane things like the wiring harness. And they didn't have the engineering talent to spot the problems. Not that Fisker is at all important in the scheme of things...

 

[Drivin]

Well this should definitely impact TSLA SP tomorrow maybe big time
Thanks for posting this

TSLA will probably go up on this news, and potentially a lot.
That may embolden more investors to push for the classic "stick to the knitting" strategy and nail the Model 3 and get some early momentum on the Model Y.
Those would all be great things for Tesla and great things for the EV industry.

 

[GoTslaGo]

Well this should definitely impact TSLA SP tomorrow maybe big time
Thanks for posting this

Hopefully not negatively.

I keep trying to figure out what percentage of TSLA's sp is based on autopilot at this point. Looking back it didn't seem that the Florida accident had much immediate affect on the price (whereas the SCTY/TSLA merger announcement had a tremendous impact). It seems much of the market may not value AP that much. FWIW Brexit gave TSLA a boost...

That being said, I keep wondering if Mobileye's public tiff has anything to do with some knowledge they may have had about the regulator's intended announcement (distancing their product to deflect blame...).

 

[doctoxics]

Licensing the data set that Tesla is acquiring was something that EM alluded to, in a subtle way, about a year ago on a conference call. It wouldn't surprise me, especially as future versions will most likely show a significant increase in safety.

Licensing Autopilot data and updates that reduce car accident fatalities by two thirds seems too important not to do, just from a humanitarian point of view. Saving lives matters. Likely that Tesla will charge the minimum to facilitate adoption.

 

[vgrinshpun]

From the article:

160 robots on 1st line for MS vs. 580 robots on 2nd line for MX. Does it mean the second line is more automated? Or the MX is so complicated that it requires so many more robots to get the same number of cars throughput as for MS?

My understanding was that the Assembly line 2 was designed to transition to producing both S and X and this transition would free up the space of assembly line 1 to be used with Model 3. The much heavier use of robots on Assembly Line 2 is necessary to allow both S and X to be produced at suitable speed on the same line.

In addition to the fact that Body Line 1 is designed to handle less complex Model S, while Body Line 2 - both more complex MX and MS, as noted by Papafox, Line 2 has capacity of 2500 cars per week, while Line 1 has capacity of about 1200 cars a week.

Another interesting thing is that a while ago some analysts were speculating that if required, based on demand projections, Tesla could keep both Body Lines in operation, while increasing the throughput of the General Assembly line from about matching the throughput of Body Line 2 to matching Body Line 2 + 1.

The significant new information from the article is that Production of MS body-in-white was not blended into Body Line 2 yet. I think that such blending could require some slowdown for debugging the process. Hopefully Tesla would be able to build some extra bodies-in-white as a buffer prior to blending MS production onto Body Line 2.

 

[TrendTrader007]

Hopefully not negatively.

I keep trying to figure out what percentage of TSLA's sp is based on autopilot at this point. Looking back it didn't seem that the Florida accident had much immediate affect on the price (whereas the SCTY/TSLA merger announcement had a tremendous impact). It seems much of the market may not value AP that much. FWIW Brexit gave TSLA a boost...

That being said, I keep wondering if Mobileye's public tiff has anything to do with some knowledge they may have had about the regulator's intended announcement (distancing their product to deflect blame...).

Well at this point it seems pretty significant to me that TSLA is about to roll out AP latest version on Wednesday and these guidelines are being released Tuesday. All in all it should make for very interesting trading tomorrow
Actually I can't wait to wake up early tomorrow morning and see how the stock is trading premarket
I think it's a positive for TSLA. I mean if they are not indirectly addressing TSLA AP through these guidelines who else are they addressing! Uber and Google are nowhere close to real life data that TSLA collects and actual experiences on the road. TSLA can easily adapt to whatever 15 points they come up with

 

[dennis]

Looks like regulators are firming up regulations:

Feds unveil plan to ensure safety of self-driving cars

Key points from the article that may impact Tesla/TSLA:

Government officials stressed that they reserve the right to create new rules for the nascent industry, and reiterated that the National Highway Traffic Safety Administration will have the power to "remove from the road" any vehicle whose technology poses a safety risk.

The agency specifically noted that certain semi-autonomous driving systems - "ones in which the human continues to monitor the driving environment and perform some of the driving task" -- may be subject to recall.

While many automakers offer such driver aids, electric-car maker Tesla Motors has been in the spotlight for a few fatal crashes in Florida and China where its Model S sedans may have engaged the car's Autopilot partial self-driving system. NHTSA is investigating the Florida incident.

NHTSA administrator Mark Rosekind declined to say whether any action would be taken against the electric automaker.

Fortunately Tesla can use a mass OTA update to quickly alter any capability that would require the cars to be "removed from the road".