This has been one of those days where I cant remember what I wrote, vs what I thought about writing. This is my thought on the last couple of weeks:
1) This all started a couple of weeks ago when someone came out and said Techs had to high of valuations. This started a rotation out of tech that seemed to pull Tesla along with the Nasdaq only because Tesla was up 5x the Nasdaq, it was going down 3x as much.
2) Sold the news. It appears when the model 3 came out ahead of schedule, many sold the news.
3) Tesla announced delivering just over 22k cars for just over 47k cars for 1H 2018 which was inline with the lower end of guidance. Mind you that Bears didnt believed they would hit within 10000 cars of the low end, and frankly they where over 10,000 below the top line of guidance for the whole year in 2016. To me, hitting 47,100ish cars was about what I expected, because I trust Tesla to hit their numbers now.
4) GS seemed to jump on this to say that demand was for S/X was down. Even though Tesla qualified the lower deliveries to issues with a new system for packing cells. This reminds me of something Elon said I believe at the Barrons event. When he said that cost savings came from the Cells, but also from the pack. The 100KWh packs are different then their predecessors, Someone, I think @wk001 tore down a P100D pack and noticed that the cooling was much different allowing for a tighter packed package which allowed for 100KWh. My point is that resolving an issue to automate the packaging for 100KWh packs should have been seen by knowledgeable people as being friggin awesome, they instead interpreted this as a drop in demand. On what planet is successfully overcoming some initial issues and automating the most expensive part of the most expensive model mean that demand has gone down? Its beyond simplistic thinking. This is also after a Q2-2017 over Q2-2016 gain of 53% in deliveries, even with issues. Need I even mention that this extremely high margin 100KWh pack did not exist in Q2-2016? Or that it enables the longest range EV on the planet by like a lot. Did I mention its high margin?
Demand is not down, this is fiction and based on absolutely 0 facts. Does Tesla want to sell some model 3 reservation holders an S? Absolutely. Will they, Absolutely. Just like future model 3 owners will want an S/X as their next car. Is model X suffering from a demand issue? Man, they just finally caught up with the original reservations backlog and someone thinks there is a demand issue, on what planet? Elon literally was shaking his head in disbelief when he stated model 3 reservations keep coming in, ever week there are more. I just read an article on Slurping Alphalfa about model 3 reservations dropping like a rock. Certainly proved his point with some very doubious math and logic, but he was a green person who wants to see the EV succeed while shorting TSLA. They literally moved up the release and volume production of the Model 3 and GF1 by as much as 18 months. You know the thing that was beyond impossible that is actually happening in 23 days? And this makes you want to sell the news?
In short, Tesla is and will be Supply constrained for the next 2-5 years. The high end of the range because it will depend on the Y and how quickly they can ramp. The fact is that they might never catch up to demand, which is why I think the price for a Tesla will always be high, just like an Iphone. But profits will also be high. Let someone else lose money making EVs, Tesla needs capital for expansion. I expect Tesla to improve the offerings but not lower the prices, more value for the dollar but not less dollars. You see it today with faster 0-60 from better inverter/motors. Never forget that the Model 3 is not 2 weeks ahead of schedule, its 18 months and 2 weeks ahead of schedule. Yes Elon talks a lot of crap, but he also delivers the impossible about every 6 months, so cut him some slack.
Anyway.. GLTA, long and strong! Embrace the FUD, it is your friend!
