This is probably a good time to mention again that I expect an aggressive increase in bear raids for several months. There's a fairly short window for short-sellers to get out before Q1 financials are reported. I expect aggressive attacks on the stock price to happen more and more and more until then, as short-sellers try to exit at local lows. I'm not sure how long they'll keep it up -- they might give up as early as Q4 deliveries -- but I think Q1 financials will be the death knell for this very high short interest.
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DurandalAI
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I would have agreed, even before I looked at the pre-market. Today's prices represent a buying opportunity for those in the know, so I expect TT07 to bring TSLA up today.
jelloslug
Active Member
So if I am doing the math right, Jonas is expecting 531K-300K=231K net new Teslas on the road for all of 2018? Even assuming some scrappage of existing cars this is ridiculously low.
I would say that we might have some chance of a green day tomorrow. At least according to the stats below
About as accurate as can be. Looks like you'll get that green today. Maybe even a 3-day streak through end of month/quarter for the typical window dressing.
that is over 100% CAGR for car sales 2017->2018. Most businesses do not see this kind of growth. Revenue-wise, this will not be 100% CAGR due to the lower prices of Model 3 vs. the S/X. The hedge is if the assembly of Model 3 is not as "fast" per day as bandied about in the past claims it will be. Some have identified limited throughput of paint shop per day, etc (appx. 250k per year).
You have to be pretty darn bearish to get to the 250Kish number for 2018 that Jonas seems to be modeling. I agree that even the bear case is pretty remarkable growth.
I don't agree with the rest of your post but happy to agree to disagree.
I continue to consider the fact that Jonas -- one of the so-called Tesla bulls -- is so bearish compared to Tesla's plans to be a useful indicator of how much upside there is if Tesla gets anywhere near its targets.
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CyberDutchie
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Here's the rest of the note by Adam Jonas (Morgan Stanley),
We believe investors should get ready for a mix of opportunities and risks related to this nonlinear parc growth:
1. Hope you like the way the Model 3 looks, because you’re just going to see a lot more of them. You’ll probably see this car every day throughout the day within a couple of years, particularly if you live on the West Coast of the United States, many areas of the East Coast of the United States, or in key Northern European markets. However, as vehicle scarcity changes in such a short period of time, will the car be as cool anymore? We can’t possibly say. It’s a matter of opinion, and it depends on whom you ask. We can only ask the question.
2. Potential acceleration of addressable market through word-of-mouth advertising. Tesla experienced a similar phenomenon with the Model S. If your neighbor gets a Model 3, you may want to drive it. Assuming your neighbor lets you drive it, you may decide want one. In that case, you won’t need to visit a Tesla store. With a 3 to 5x multiplication of the car population, the Tesla store will effectively come to you.
3. Tesla’s investment incharging and service infrastructure will be put to the test. Compared to other OEMs, Tesla has made the biggest proprietary investment in superchargers and destination chargers globally. In most communities, we believe this infrastructure is larger than it needs to be in preparation for the expansion of the serviceable and charge-thirsty fleet. Other OEMs will closely watch how consumers react to this infrastructure
4. Miles traveled accumulation rises with the car population, helping Tesla to train its machine learning network faster than competitors. We estimate that Tesla's cars travel a bit more than 7 million miles per day, a figure we forecast to reach 100 million miles by the 2023 or 2024 time frame, a level on par with what we estimate Uber's fleet is executing on a daily basis today. In our view, firms that can capture sufficient quantity and quality of miles data will be in a strong position to develop competitive autonomous transport networks.
5. Tesla will also be exposed to things that can potentially go wrong.Risks with quality and safety are a fact of life in the auto industry. To date, Tesla has mostly benefitted from pushing the envelope of technology in such a high-profile consumer market. Tesla's ability to safely deliver high-quality products will impact the company's brand, access to new customers and access to capital.
We believe investors should get ready for a mix of opportunities and risks related to this nonlinear parc growth:
1. Hope you like the way the Model 3 looks, because you’re just going to see a lot more of them. You’ll probably see this car every day throughout the day within a couple of years, particularly if you live on the West Coast of the United States, many areas of the East Coast of the United States, or in key Northern European markets. However, as vehicle scarcity changes in such a short period of time, will the car be as cool anymore? We can’t possibly say. It’s a matter of opinion, and it depends on whom you ask. We can only ask the question.
2. Potential acceleration of addressable market through word-of-mouth advertising. Tesla experienced a similar phenomenon with the Model S. If your neighbor gets a Model 3, you may want to drive it. Assuming your neighbor lets you drive it, you may decide want one. In that case, you won’t need to visit a Tesla store. With a 3 to 5x multiplication of the car population, the Tesla store will effectively come to you.
3. Tesla’s investment incharging and service infrastructure will be put to the test. Compared to other OEMs, Tesla has made the biggest proprietary investment in superchargers and destination chargers globally. In most communities, we believe this infrastructure is larger than it needs to be in preparation for the expansion of the serviceable and charge-thirsty fleet. Other OEMs will closely watch how consumers react to this infrastructure
4. Miles traveled accumulation rises with the car population, helping Tesla to train its machine learning network faster than competitors. We estimate that Tesla's cars travel a bit more than 7 million miles per day, a figure we forecast to reach 100 million miles by the 2023 or 2024 time frame, a level on par with what we estimate Uber's fleet is executing on a daily basis today. In our view, firms that can capture sufficient quantity and quality of miles data will be in a strong position to develop competitive autonomous transport networks.
5. Tesla will also be exposed to things that can potentially go wrong.Risks with quality and safety are a fact of life in the auto industry. To date, Tesla has mostly benefitted from pushing the envelope of technology in such a high-profile consumer market. Tesla's ability to safely deliver high-quality products will impact the company's brand, access to new customers and access to capital.
production hell implies setbacks , shorts will prey on that to discredit tesla
The Model x ramp was a debacle for the stock , that's the playbook the shorts
Want to repeat.
Elon is super confident they will overcome manufacturing complexity
Though it might take more like three months beyond December
Until we are assured .
In the interm volatility reigns. This might be the optimum period to sell
Option premium
The Model x ramp was a debacle for the stock , that's the playbook the shorts
Want to repeat.
Elon is super confident they will overcome manufacturing complexity
Though it might take more like three months beyond December
Until we are assured .
In the interm volatility reigns. This might be the optimum period to sell
Option premium
You have to be pretty darn bearish to get to the 250Kish number for 2018 that Jonas seems to be modeling. I agree that even the bear case is pretty remarkable growth.
I don't agree with the rest of your post but happy to agree to disagree.
I continue to consider the fact that Jonas -- one of the so-called Tesla bulls -- is so bearish compared to Tesla's plans to be a useful indicator of how much upside there is if Tesla gets anywhere near its targets.
What is critical is the "turn" - turning from cars nearly $100K ASP to something less - perhaps factoring in Model 3 at $44k, the ASP overall drives down to say $68k. This number even at double the unit-sales rate is not condusive to profitability. Overall, the growth story is good but the drive to profits is not yet visible to analysts like Jonas and others - we have seen many analysts lowering forcasts for profit numbers every quarter for the next three out-years. It's hard to make profit on something that constantly has a downward price pressure in economic terms. Perhaps that is Tesla's secret. Going back to the Roadster, the statement was "Model S will pay for Model X which will pay for Model 3" and yet all along, no action was made to cut costs enough to ever do it. I still think, down deep, that the board room is well knowing that a profitable year may never be possible and they know that the story drives progress forward.
i see a close of around $337 today... let's see if that happens.
Elon and Deepak seemed very confident of 25% GMs for the Model 3 a few months after Tesla reaches a 5K per week production rate.
But yeah I agree that many analysts are not including that in their models yet. I view that as a good thing since it is an indication of upside potential since the market is not pricing it in.
Have you noticed that on days you don't make any comments, the stock goes down badly ...
California is talking about banning gasoline and diesel cars, maybe as early as 2030.
California is now also considering a ban on gas and diesel-powered cars
California is now also considering a ban on gas and diesel-powered cars
ValueAnalyst
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If this happened, Tesla would be supply constrained for ten years even if it just supplied California.
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