2017 Investor Roundtable: TSLA Market Action

[Doit]

Just in:

UPDATE - Tesla Q2 2017 Vehicle Production and Deliveries

PALO ALTO, Calif., July 07, 2017 (GLOBE NEWSWIRE) -- UPDATE: In response to questions we have received about the number of customer vehicles in transit at the end of Q2, we are updating our Q2 delivery release to provide this information. This information will continue to be included in all future quarters.

In addition to Q2 deliveries, about 3,500 vehicles were in transit to customers at the end of the quarter. These will be counted as deliveries in Q3 2017.

Tesla delivered just over 22,000 vehicles in Q2, of which just over 12,000 were Model S and just over 10,000 were Model X. This represents a 53% increase over Q2 2016. Total vehicle deliveries in the first half of 2017 were approximately 47,100.

The major factor affecting Tesla’s Q2 deliveries was a severe production shortfall of 100 kWh battery packs, which are made using new technologies on new production lines. The technology challenge grows exponentially with energy density. Until early June, production averaged about 40% below demand. Once this was resolved, June orders and deliveries were strong, ranking as one of the best in Tesla history.

Provided global economic conditions do not worsen considerably, we are confident that combined deliveries of Model S and Model X in the second half of 2017 will likely exceed deliveries in the first half of 2017.

Q2 production totaled 25,708 vehicles, bringing first half 2017 production to 51,126.

We always want our customers to experience the newest versions of Model S and X while their cars are in service, so we added fully loaded, newly built cars to our service loaner fleet. We always want the service loaner Tesla to be *better* than the customer car being serviced. The customer should never suffer for something that is our fault.

We also finally added a sufficient number of Model X cars to our test drive and display fleet because our stores had been operating with far short of what was needed and, in some cases, none at all. There appears to be substantial untapped sales potential for Model X. It should also be noted that production quality and field reliability of the Model X, for which Tesla has been fairly criticized, have improved dramatically. It is now rare for a newly produced Model X to have initial quality problems.

The first certified production Model 3 that meets all regulatory requirements will be completed this week, with a handover of ~30customer cars at our Fremont factory on July 28. More details to follow soon.

Our delivery count should be viewed as slightly conservative, as we only count a car as delivered if it is transferred to the customer and all paperwork is correct. Final numbers could vary by up to 0.5%. Tesla vehicle deliveries represent only one measure of the company’s financial performance and should not be relied on as an indicator of quarterly financial results, which depend on a variety of factors, including the cost of sales, foreign exchange movements and mix of directly leased vehicles.

Forward-Looking Statements
Certain statements herein, including statements regarding future deliveries of Model S, Model X and Model 3, are “forward-looking statements” that are subject to risks and uncertainties. These forward-looking statements are based on management’s current expectations. Various important factors could cause actual results to differ materially, including the risks identified in our SEC filings. Tesla disclaims any obligation to update this information.

For additional information, please visit ir.tesla.com.

Investor Relations Contact:
Jeff Evanson
Tesla
[email protected]

 

[D-egg-O]

I'm not sure that's FUD... with >500,000 reservations, a planned 400,000 production capacity in 2018, and maybe 20K-40K produced this year, Tesla really doesn't need that much in the way of "stores" for 2018. I think many reservation holders will still want to take test drives before finalizing, so some Model 3s will have to be delivered to stores for test drives, but having a lot of salespeople would be silly.

If anything it's incredibly bullish. "We not only don't need to pay for advertising, we don't even need showrooms to sell our cars. They sell themselves."

(Of course, now I'm having the humorous vision of a Model 3 "selling itself" by autonomously driving up to people and showing off its features, with a "please input your credit card number on the touchscreen to buy me" message. So I don't literally mean "selling itself"; it's a metaphor. )

Claiming that the reason for closing stores is because Model 3 isn't selling for another year is FUD. Absolutely no evidence to back that claim up.

I've met Ed in person. I've read a lot of what he writes. He claims to take on the, "let's be critical of Tesla (and other automakers) to make them better" position. I'm skeptical. He jumps to conclusions without evidence, and they are always negatively biased. Just like I don't like people clinging to the fanboy side of Tesla no matter what happens, I also don't like folks clinging to the bear side of Tesla 100% of the time.

 

[ValueAnalyst]

I'm not sure that's FUD... with >500,000 reservations, a planned 400,000 production capacity in 2018, and maybe 20K-40K produced this year, Tesla really doesn't need that much in the way of "stores" for 2018. I think many reservation holders will still want to take test drives before finalizing, so some Model 3s will have to be delivered to stores for test drives, but having a lot of salespeople would be silly.

If anything it's incredibly bullish. "We not only don't need to pay for advertising, we don't even need showrooms to sell our cars. They sell themselves."

(Of course, now I'm having the humorous vision of a Model 3 "selling itself" by autonomously driving up to people and showing off its features, with a "please input your credit card number on the touchscreen to buy me" message. So I don't literally mean "selling itself"; it's a metaphor. )

@neroden is finally coming around on Level 5 autonomy... THIS IS A JOKE!

 

[Crowded Mind]

Just in:

UPDATE - Tesla Q2 2017 Vehicle Production and Deliveries

PALO ALTO, Calif., July 07, 2017 (GLOBE NEWSWIRE) -- UPDATE: In response to questions we have received about the number of customer vehicles in transit at the end of Q2, we are updating our Q2 delivery release to provide this information. This information will continue to be included in all future quarters.

In addition to Q2 deliveries, about 3,500 vehicles were in transit to customers at the end of the quarter. These will be counted as deliveries in Q3 2017.

Tesla delivered just over 22,000 vehicles in Q2, of which just over 12,000 were Model S and just over 10,000 were Model X. This represents a 53% increase over Q2 2016. Total vehicle deliveries in the first half of 2017 were approximately 47,100.

The major factor affecting Tesla’s Q2 deliveries was a severe production shortfall of 100 kWh battery packs, which are made using new technologies on new production lines. The technology challenge grows exponentially with energy density. Until early June, production averaged about 40% below demand. Once this was resolved, June orders and deliveries were strong, ranking as one of the best in Tesla history.

Provided global economic conditions do not worsen considerably, we are confident that combined deliveries of Model S and Model X in the second half of 2017 will likely exceed deliveries in the first half of 2017.

Q2 production totaled 25,708 vehicles, bringing first half 2017 production to 51,126.

We always want our customers to experience the newest versions of Model S and X while their cars are in service, so we added fully loaded, newly built cars to our service loaner fleet. We always want the service loaner Tesla to be *better* than the customer car being serviced. The customer should never suffer for something that is our fault.

We also finally added a sufficient number of Model X cars to our test drive and display fleet because our stores had been operating with far short of what was needed and, in some cases, none at all. There appears to be substantial untapped sales potential for Model X. It should also be noted that production quality and field reliability of the Model X, for which Tesla has been fairly criticized, have improved dramatically. It is now rare for a newly produced Model X to have initial quality problems.

The first certified production Model 3 that meets all regulatory requirements will be completed this week, with a handover of ~30customer cars at our Fremont factory on July 28. More details to follow soon.

Our delivery count should be viewed as slightly conservative, as we only count a car as delivered if it is transferred to the customer and all paperwork is correct. Final numbers could vary by up to 0.5%. Tesla vehicle deliveries represent only one measure of the company’s financial performance and should not be relied on as an indicator of quarterly financial results, which depend on a variety of factors, including the cost of sales, foreign exchange movements and mix of directly leased vehicles.

Forward-Looking Statements
Certain statements herein, including statements regarding future deliveries of Model S, Model X and Model 3, are “forward-looking statements” that are subject to risks and uncertainties. These forward-looking statements are based on management’s current expectations. Various important factors could cause actual results to differ materially, including the risks identified in our SEC filings. Tesla disclaims any obligation to update this information.

For additional information, please visit ir.tesla.com.

Investor Relations Contact:
Jeff Evanson
Tesla
[email protected]

So basically the news is that 3,500 were in transit. For some reason the stock spiked like $4 on this release. Should we take that to mean that algos are now in pump mode or is that a stretch?

 

[elasalle]

Just in:

UPDATE - Tesla Q2 2017 Vehicle Production and Deliveries

PALO ALTO, Calif., July 07, 2017 (GLOBE NEWSWIRE) -- UPDATE: In response to questions we have received about the number of customer vehicles in transit at the end of Q2, we are updating our Q2 delivery release to provide this information. This information will continue to be included in all future quarters.

In addition to Q2 deliveries, about 3,500 vehicles were in transit to customers at the end of the quarter. These will be counted as deliveries in Q3 2017.

Tesla delivered just over 22,000 vehicles in Q2, of which just over 12,000 were Model S and just over 10,000 were Model X. This represents a 53% increase over Q2 2016. Total vehicle deliveries in the first half of 2017 were approximately 47,100.

The major factor affecting Tesla’s Q2 deliveries was a severe production shortfall of 100 kWh battery packs, which are made using new technologies on new production lines. The technology challenge grows exponentially with energy density. Until early June, production averaged about 40% below demand. Once this was resolved, June orders and deliveries were strong, ranking as one of the best in Tesla history.

Provided global economic conditions do not worsen considerably, we are confident that combined deliveries of Model S and Model X in the second half of 2017 will likely exceed deliveries in the first half of 2017.

Q2 production totaled 25,708 vehicles, bringing first half 2017 production to 51,126.

We always want our customers to experience the newest versions of Model S and X while their cars are in service, so we added fully loaded, newly built cars to our service loaner fleet. We always want the service loaner Tesla to be *better* than the customer car being serviced. The customer should never suffer for something that is our fault.

We also finally added a sufficient number of Model X cars to our test drive and display fleet because our stores had been operating with far short of what was needed and, in some cases, none at all. There appears to be substantial untapped sales potential for Model X. It should also be noted that production quality and field reliability of the Model X, for which Tesla has been fairly criticized, have improved dramatically. It is now rare for a newly produced Model X to have initial quality problems.

The first certified production Model 3 that meets all regulatory requirements will be completed this week, with a handover of ~30customer cars at our Fremont factory on July 28. More details to follow soon.

Our delivery count should be viewed as slightly conservative, as we only count a car as delivered if it is transferred to the customer and all paperwork is correct. Final numbers could vary by up to 0.5%. Tesla vehicle deliveries represent only one measure of the company’s financial performance and should not be relied on as an indicator of quarterly financial results, which depend on a variety of factors, including the cost of sales, foreign exchange movements and mix of directly leased vehicles.

Forward-Looking Statements
Certain statements herein, including statements regarding future deliveries of Model S, Model X and Model 3, are “forward-looking statements” that are subject to risks and uncertainties. These forward-looking statements are based on management’s current expectations. Various important factors could cause actual results to differ materially, including the risks identified in our SEC filings. Tesla disclaims any obligation to update this information.

For additional information, please visit ir.tesla.com.

Investor Relations Contact:
Jeff Evanson
Tesla
[email protected]

Yay just yesterday I had made a post on this on this thread. We did get an answer prior to earnings.
One FUD factor removed

 

[Jonathan Hewitt]

So basically the news is that 3,500 were in transit. For some reason the stock spiked like $4 on this release. Should we take that to mean that algos are now in pump mode or is that a stretch?

A lot of people must have believed the FUD that cars delivered was a lot less than cars produced because all those Model s and Model X were sitting on a lot somewhere because of no demand, GM And Ford style. No way they were in transit just like every other quarter

Or it could be algos went into pump mode.

 

[erthquake]

Managed to grab some more shares below $314. This makes a mere 209 shares I've bought on the dip (and incidentally these are my highest-cost-basis shares ever). Also sold a Jan 2018 $320 put into the very high volatility, even though it's backed basically by "sell my other stocks" rather than by cash. (One of my other stocks is a cash merger arb bet which should be clear one way or another by then.)

I'm actually more fully invested than I'm normally comfortable with, but this was just such a nonsense dip, and it dipped below my target price, I had to get a little...

I'm reminding myself that "the last eighth is the hardest to get" and not worrying about missing out on the $306 prices.

Based on my learning from this thread, I waited out the first 23 minutes this morning until I was reasonable confident the morning dip was over and picked up 5 more shares under $311. My last purchase was back in April when it was at $301. After today my cost basis is still under $217 (and I've never sold). I was planning to build up my savings more for my Model down payment, but like you, this was just too good an opportunity to miss.

Thanks to everyone for being so generous with your insight. This forum is amazing!

 

[Curt Renz]

In my area they are closing or re-allocating smaller locations. For example, they changed one service center in a place where they work on used Tesla to get them ready for resale. They used to be a service center/store location. They moved the store and service to a huge dealership like building with a huge log and good sized showroom. They did not close down the old location as they are using it, but the overall footprint for sales and service got much larger. I was just as a store/service center yesterday and all the same folks where there. But that was yesterday.

You must be referring to the Westmont store and service center. That is where I will receive my Model 3. I was on the phone with them a few minutes ago, at the same time that the email came adding more detail about the second quarter deliveries and the share price jumped.

The agent with whom I spoke there knew nothing about store closings. I made inquires by email with the sales department in California about media coverage of the Model 3 produced today and rumors of store closings. Here is the response:

Good Morning Curt,

I touched base with my management team and they have confirmed that there will be media outlets there, but as far as which media outlets we are unable to specify.

In regards to the Tesla stores closing down, that is nothing more than a rumor. We are expanding our brand more than ever with the launch of the Model 3. These are exciting times for our company!

Best,

John Howard Inside Sales Advisor, North American Inside Sales
45500 Fremont Blvd Fremont, CA 94538

 

[Reciprocity]

Westmont

Yeah, that one. Very nice location. Looks like they got a fire sale from failing ice dealers. Should be more of that in the future.

 

[MitchJi]

Still remember when 315 was incredible

It still is unfortunately.

 

[Curt Renz]

The FUDster's are jumping on the reddit thread.

View attachment 234517

There is no need for stores to sell the Model 3. The 400,000 reservationists have already been "sold" on the idea and simply need a local service center for receiving the car.

Questions can be answered by phone or online with Tesla headquarters in California.

Future Model 3 prospects can test drive a friend's car or test drive one at a service center, then order or ask questions by phone or online.

Now that the initial upscale buyers have been introduced to Models S & X in malls, those stores are not really needed anymore. Later S & X customers can simply go through the same procedures described above for Model 3 prospects.

Welcome to the 21st century!

 

[jsrawa]

It still is unfortunately.

This has been a stressful week with TSLA, I'll even take $311-312 close and be happy.

 

[D-egg-O]

There is no need for stores to sell the Model 3. The 400,000 reservationists have already been "sold" on the idea and simply need a local service center for receiving the car.

Questions can be answered by phone or online with Tesla headquarters in California.

Future Model 3 prospects can test drive a friend's car or test drive one at a service center, then order or ask questions by phone or online.

Now that the initial upscale buyers have been introduced to Models S & X in malls, those stores are not really needed anymore. Later S & X customers can simply go through the same procedures described above for Model 3 prospects.

Welcome to the 21st century!

Also, what's a good way to reduce SG&A? Especially if most of your sales come from online orders.

 

[GoTslaGo]

There is no need for stores to sell the Model 3. The 400,000 reservationists have already been "sold" on the idea and simply need a local service center for receiving the car.

Questions can be answered by phone or online with Tesla headquarters in California.

Future Model 3 prospects can test drive a friend's car or test drive one at a service center, then order or ask questions by phone or online.

Now that the initial upscale buyers have been introduced to Models S & X in malls, those stores are not really needed anymore. Later S & X customers can simply go through the same procedures described above for Model 3 prospects.

Welcome to the 21st century!

Yep.

Got a friend who already made a reservation with ME, and another co-worker who owns an S for a test ride in the Model 3 (whoever gets one first).

 

[bobinfla]

Increased my holding 50% two months ago at $311 for the Q1 report. Had a great ride up and didn't think I'd see the chance to buy more at this price ever, but jumped back in and bought almost twice as much more today. Hoping that last run was just practice, and once whoever is driving it back down these last two weeks gets their foot off the brake, we can do the real "Model 3 Run" now.

 

[tinm]

Wait a sec. Why would Tesla close stores when only RECENTLY it said it was adding lots of new ones?

Tesla is adding hundreds of new stores, service centers and repair trucks before Model 3 launch; will open own body shops

 

[neroden]

Wait a sec. Why would Tesla close stores when only RECENTLY it said it was adding lots of new ones?

Tesla is adding hundreds of new stores, service centers and repair trucks before Model 3 launch; will open own body shops

OK, so first of all, they absolutely do have to add hundreds of service centers and mobile units.

Secondly, they do need stores in some places they don't have them. Geographic coverage, remember? It's probably worth having one in Alaska. Definitely need one in Perth. And one in Tasmania. One in Maritime Canada. And then there are the new markets which were allowed to make reservations, like Brazil, and India...

At the same time, having 11 stores/galleries in the NYC metro area (which they do now) is frankly silly, and probably wasteful. So I would absolutely believe a "rationalization" of stores involving closure of redundant stores which aren't causing much turnover.

 

[Alketi]

There is no need for stores to sell the Model 3. The 400,000 reservationists have already been "sold" on the idea and simply need a local service center for receiving the car.

There will always be a need to be a place to go for test drives and such, but I completely agree that there will eventually be 400K (common) sales folk driving around on the streets and offering all their co-workers rides. I think people underestimate how impactful this will be.

 

[CyberDutchie]

Ugh.. I have a feeling this week's plunge could have been largely avoided if they had included the 3500 in transit vehicles in the Sunday press release, and, if they hadn't mentioned any shortage of battery packs during the last quarter (as the issue has been resolved already).

Any excuse will be taken as a negative. Why bring it up?

 

[Curt Renz]

There will always be a need to be a place to go for test drives and such, but I completely agree that there will eventually be 400K (common) sales folk driving around on the streets and offering all their co-workers rides. I think people underestimate how impactful this will be.

Indeed. Other than friends' cars, I imagine that Tesla service centers eventually will be the place for test drives. Questions can be answered there, or by phone or online with California headquarters. If a car is being custom ordered, it's a quite different procedure from test driving the actual car one might buy from a dealership's inventory.

It's becoming more and more obvious how outdated the franchised dealership model has become. If the only local connection is a service center, state laws disallowing Tesla stores may be circumvented. I wouldn't be surprised if eventually all automakers attempt to follow the Tesla model for online sales and local service. Bye bye franchised dealerships. Welcome to the 21st century!