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Yeah, I get it. I really do. But it is refreshing to see you discuss those misgivings. On SA you come off as unrepentant and that seeming intransigence is not at all evident here. I realize that if you showed any doubt on SA a horde would jump to attack you (especially when the sp backtracks - “ha, VA, gittin skared now as this dog tanks, har har!!!” For example) but you are more realistic than you let on. (Admission that I am not immune to mockery and vicious attacks). Good to hear from you. Your material is helpful, even when I strongly disagree sometimes. Wouldn’t read if I didn’t think you put a lot of thought into it.
anticitizen13.7
Not posting at TMC after 9/17/2018
My perspective is that while the Model 3 production ramp has not gone as well as I would have liked, product is still making its way to customers, and VIN registrations continue to climb.
Also, the latest Autopilot update, 2018.10.4, has gotten overwhelmingly good reviews from Tesla owners. It shows real progress and is a solid win for Andrej Karpathy, Tesla’s AI chief.
TSLA has had a rough few sessions. I fully understand that many people find this disconcerting. As always, I encourage people to think about their risk tolerance and portfolio diversification. The only right answer is what allows one to sleep comfortably at night without concern about where the stock price might or might not go the next day.
sundaymorning
Active Member
Assuming that the 2.5x rate that you mentioned holds ground, and assuming that Feb. production was 700 M3 per week, that would equate to 2.5 X 700 = 1,750 M3 produces currently per week.
My SWAG is a little lower -- maybe 1200-1400/week -- but it's just a guesstimate. If we end up in the 1500-2000/week range at the end of the month that seems like a good place to be with the Grohmann line to be up and running relatively soon (hopefully!).
sundaymorning
Active Member
Conservatively, if the current rate is 1200-1400/week as you mentioned, wouldn’t the burst rate exiting the quarter be be much higher?
Sure, but no one cares about the burst rate. That's a term used when the steady-state rate is a big miss.
I am not sure the market will care about the burst rate very much if it doesn't align with overall production numbers or there isn't a convincing explanation that it will continue into Q2.
Reading the tea leaves it seems we had a relatively flat January and first part of February with a significant step increase after Feb 20-24. It could be flat until the next step increase or we could have some incremental gains over the next 11 days. If we are very lucky we could have another step increase, but I would not bet on it. I am guessing that one way or another they will get to 1500-2000/week. If they exceed a sustained run rate of 2000/week personally I'd be ecstatic, especially since the new battery line should be coming online "soon."
sundaymorning
Active Member
Agreed to both, the wild card here is how long can they hold that burst rate for? If they steadily hold at 2k/week for 7-8 days would that convince a buy? The previous Q’s burst rate was neither spectacular nor lengthy.
Nor, per estimates from Bloomberg and others, at all representative of the production rate. They 'extrapolated' to 1000/week and then continued to produce waaaaayy below 1000/week for *most of the following quarter*.
I repeat: no one cares about the burst rate. The way Tesla uses it, it's noise included to make an otherwise no-good, very bad number look ok. Until/unless Tesla shows some restraint in their use of the term, I don't think it's useful.
OK, here is where I bow out since I am out of my depth trying to figure out how the market would react in the short term to something like this.
I still can't figure out why the TSLA SP didn't increase 50% overnight in April 2016 after a mountain of Model 3 reservations rolled in.
Another potential factor is that VINs reported on the spreadsheet are fewer and farther between relative to the actual VINs being. Assigned. The more recent VINs reported may include a higher ratio of very recent 3 reservationists who are also S/X owners and now getting their cars...this group may be less likely to be such avid tesla fans as to follow these forums and pro-actively report their VIN on tesla forum community spreadsheets vs. 3 reservationists who have been waiting for a while and are avid tesla fans with nothing better to do that monitor any possible updates of the 3 on these forums.
Just a theory...
Waiting4M3
Active Member
If Tesla makes 2500 cars from 3/25-31, last 7 days in March, no extrapolation, would you call that a burst rate? Do you think that means nothing even if that is exactly what Tesla said they would do? What if they made 2000 cars the week before that? Would that change your view?
bdy0627
Active Member
True, but in all likelihood they won't tell us a clear steady rate. Elon is always talking about how it doesn't make sense to isolate out a weekly rate at a particular moment during a ramp. This is going to be a long ramp up to 5,000+/week. I would expect the language to continue to be a little vague and open to interpretation. Of course, the problem is that guidance focused on a weekly rate, so using any other language makes it difficult to evaluate where they are at.
bdy0627
Active Member
bdy0627
Active Member
Waiting4M3
Active Member
The price movement after April 2016 makes sense in rear view. The market saw it as Tesla will be spending a lot of money in 2016-2017 to gear up for M3 production, so cash flow and profitability will look bad until M3 production starts. Elon literally told them that they can wait till 2017 to get back in since July is the best case scenario for M3 production start.OK, here is where I bow out since I am out of my depth trying to figure out how the market would react in the short term to something like this.
I still can't figure out why the TSLA SP didn't increase 50% overnight in April 2016 after a mountain of Model 3 reservations rolled in.
So did the market as a whole. Now it's sliding downwards with the market.
In the absence of any new news, barring the occasional drop when a hit piece is published or a spike when Elon says something, TSLA has generally followed the market up and down lately. This is expected of any general stock during a period without significant news events.
Tomorrow we're going to have that vote on Elon's compensation package though. It remains to be seen if investors will treat it as a significant event that should be traded on. I don't believe the stock will move much tomorrow one way or the other regardless because it has no effect on the company's performance in the short term.
If they continue at 2500/week as the 2nd quarter progressed, sure, that means something. That's an example of the proper use of extrapolation (we did X over period Y, where Y isn't a standard week, but X is representative of what we will now do going forward). What they did last quarter, and have done elsewhere in the past (See: Model X ramp discussion) is say they did something with the intent for readers to view that thing as representative, but that was *not* representative. (Eg extrapolated 1000/week rate, then produced 600-700/week for half of the following quarter.
Their guidance is 2500/week as of end of Q1. That number is a part of a ramp to 10k. Therefore it's a 'hit' only if they then continue at or above that rate.
My point was simply that extrapolation is meaningful only if it's representative. I have no issue in that case. The problem is Tesla tends to use not-representative extrapolation, and we can't necessarily tell that they've done that until significant time has passed. And believe me, I understand that ramping is difficult, and stuff happens.
Chicago Tribune - this evening: Elon Musk’s firm one of two chosen as finalists in competition to build O’Hare Express train
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