2017 Investor Roundtable: TSLA Market Action

[vgrinshpun]

If Osborne effect were to happen, it would mainly be in US Model S sales. Looks like the QoQ increase in US Model X sales is making up for some of that, and I wouldn't expect much impact in ex-US sales. P&D numbers should be within guidance of 50k in 1H17.

I would advocate some caution here. Hong Kong sales are likely a massive reduction from the 3k+ recorded in Q1 due to tax change. US sales potentially off by 600-700 (if one to assume insideevs numbers are close to actuals). I doubt that deliveries in Europe grew by several thousand, so the only way Tesla can approach 25k deliveries is by massively increasing sales in China. A large increase in Chinese sales IMO is the only way Tesla could deliver around 25k in Q2. As of now, I am quite pessimistic that this would be the case.

 

[Willuknight]

Poked around in the general press and they seem to be down selling the event, on NPR and here is Yahoo:

Tesla says its Model 3 car will go on sale on Friday



So you all were good at predicting the reaction of the press.

What people don't realize is that car companies, for structural reasons, are not capable of producing non "meh" cars. EV or not. People do not want to buy their cars. There is a fundamental difference in demand.

Poked around in the general press and they seem to be down selling the event, on NPR and here is Yahoo:

They can't do math that's not how km's and Miles work.

GM beat Tesla to the mass market with the Chevrolet Bolt, a $36,000 car that goes 238 miles (about 200 kilometers)

 

[Gerardf]

GM is up more than 2,6 %. F more than 3,5 %.
Well, let's see what happens on the 28th..

 

[ValueAnalyst]

I would advocate some caution here. Hong Kong sales are likely a massive reduction from the 3k+ recorded in Q1 due to tax change. US sales potentially off by 600-700 (if one to assume insideevs numbers are close to actuals)deliveries in China. A large increase in Chinese sales IMO is the only way Tesla could deliver around 25k in Q2. As of now, I am quite pessimistic that this would be the case.

Remember that they only have to deliver 22k in 2Q17 to be in 1H17 guidance.

 

[W84M3]

Trading near LOD now..This is not convincing at all. GM up 2.7%; Ford 3.5%. I know I know NSDQ flat.

The longer the P&D numbers stay out, the less convincing they will be. Also, in my humble opinion the 100 production fct for August is not inspiring..

 

[Gerasimental]

I strongly suspect December will be below 20,000. Musk said they'd reach the *rate* of 20,000 cars per month by December, which I believe, but December is a weird month filled with holidays which should throw off the production numbers, and there's still a lag between production and delivery. (That said, I do believe we'll see >20,000 deliveries in January.)

I really have no idea how the Oct/Nov/Dec ramp will look, could be front-loaded, could be back-loaded...

Didn't even say they would, just that it 'looks like' they 'can'. Would consider 20k in Dec a very positive surprise. Expect 11k-13k.

 

[FredTMC]

I would advocate some caution here. Hong Kong sales are likely a massive reduction from the 3k+ recorded in Q1 due to tax change. US sales potentially off by 600-700 (if one to assume insideevs numbers are close to actuals)deliveries in China. A large increase in Chinese sales IMO is the only way Tesla could deliver around 25k in Q2. As of now, I am quite pessimistic that this would be the case.

Agreed.

I just hope they hit guidance low end of 22k for Q2

 

[neroden]

So when's the short squeeze going to start?

The short thesis right now is (idiotically) that Tesla "loses more money every time it sells a car". Therefore the shorts will keep piling in until profit is reported, and probably until it's reported two quarters in a row. I currently predict that this milestone will be reached at the end of Q2 or Q3 of 2018. (We'll know which when we see the Q1 numbers.) That will scare most of them off and the addition to the S&P 500 will make it much harder for the remainder to stay in, so that's when I expect the next short-covering rally.

(FWIW, we had short-covering rally behavior in the last rally, with shorts continuously trimming their positions to stay below 10 billion dollars)

 

[neroden]

If the market is rational at all,

An interesting counterfactual! Remind me, how long have you been trading stocks?

 

[neroden]

Short interest down 6%

Confirming the theory that they start to cover every time it goes over ~$10 billion. Thanks to whoever first proposed that theory.

 

[vgrinshpun]

Agreed.

I just hope they hit guidance low end of 22k for Q2

Yea, that is my take as of now as well..

 

[traxila]

A lot of traders have been waiting to sell this news. Think buying opp ahead.

 

[22522]

Trading near LOD now..This is not convincing at all. GM up 2.7%; Ford 3.5%. I know I know NSDQ flat.

The longer the P&D numbers stay out, the less convincing they will be. Also, in my humble opinion the 100 production fct for August is not inspiring..

Elon may be using some ambiguity between customer deliveries and employee deliveries.

I don't know that those first 30 will be going to employees, though they might be. I think the employees should be celebrated.

 

[Waiting4M3]

I strongly suspect December will be below 20,000. Musk said they'd reach the *rate* of 20,000 cars per month by December, which I believe, but December is a weird month filled with holidays which should throw off the production numbers, and there's still a lag between production and delivery. (That said, I do believe we'll see >20,000 deliveries in January.)

I really have no idea how the Oct/Nov/Dec ramp will look, could be front-loaded, could be back-loaded...

I think front/back loading will matter less for M3, at least from the delivery aspect. For the MS/MX, with international sales, when they don't have large # going to one region, they have to batch the shipment to fill up cargo ships. With the M3, especially in Dec 2017 where cars are likely all going to California customers, I think they will deliver continuously.

 

[FredTMC]

A lot of traders have been waiting to sell this news. Think buying opp ahead.

NAZ is rolling over. That's a lot of this.

 

[elasalle]

A lot of traders have been waiting to sell this news. Think buying opp ahead.

Thats the advice on title of this Forbes link
Forbes Welcome
(didn't read , cause i dont agree with the headline )

 

[neroden]

Great that production is underway this week! My read on Elon's tweet numbers is that the monthly numbers are weekly run rates that may only be achieved during the last week of the months noted. Assuming that the monthly run rates are achieved in the last week of each month cited, the total monthly productions would look something like:

July - 30
August - 60
September - 750
October - 4,000
November - 11,000
December - 17,000

total - 32,840

I like it. I'd caution that the last week of December is usually shut down for holidays, so knock 5000 off of that and get 27,840 (or a bit more). (Then, of course, January is going to be amazing.)

Why is it that the Q3 ramp is so slow?

Debugging?

Maybe there are some problem parts where the first supplier didn't come through and was replaced and the new supplier is taking some time to ramp up?

 

[dennis]

Great that production is underway this week! My read on Elon's tweet numbers is that the monthly numbers are weekly run rates that may only be achieved during the last week of the months noted. Assuming that the monthly run rates are achieved in the last week of each month cited, the total monthly productions would look something like:

July - 30
August - 60
September - 750
October - 4,000
November - 11,000
December - 17,000

total - 32,840

Why is it that the Q3 ramp is so slow?

Because there will be many many issues to deal with as they produce the first cars and fine tuning of every production step as they ramp up. Tesla has both the S and X experience to draw upon so Elon is being realistic about how slow the initial ramp will be.

 

[ValueAnalyst]

Oil and oil equities are up today.

NASDAQ/NVDA seem to be weighing on TSLA.

 

[EinSV]

Yea, that is my take as of now as well..

I thought we had a good shot at a beat, but would be happy to see them be toward the high end of guidance at this point.