Short-Term TSLA Price Movements - 2013

[vfx]

A poster in another TMC forum indicates that such email ads are sent to not only shareholders, but also to those who already own a Tesla car. ....

Emails for these test drive days are sent to store mailing lists. If someone has gone to a Tesla store and expressed an interest in the car and left an email, they are contacted for these drives.

It's an opportunity to feel the acceleration and handling of the car that was not available at the time they were in the store. This is done even for people who can not afford the car. All EV makers know that word of mouth from people who have driven the car is the best marketing ever.

 

[Joel]

I wonder why Tesla would want to announce a giga factory so early (ie., Q4 ER)? I would imagine they wouldn't need it up and running until late 2016 for GenIII. In that case, I figure they could buy some land right now but they wouldn't need to start building the factory probably until 2015. Am I missing something?

Couple things:

1) There is no such thing as an early announcement with Tesla. Elon Musk is the anti-Steve Jobs. If he has something on his mind or Tesla has a plan, Elon Musk will tell the world through his Twitter account or if he is in front of a microphone. There is a long, long history of this. My personal favorite is at the 2013 All Things Digital conference when Walter Mossberg asked Elon Musk what the big Super Charging announcement would be. Elon's response, "I shouldn't ruin the surprise but,...." 10 Things You Missed From Days One and Two of D11 - Eric Johnson - D11 - AllThingsD "Tesla Motors CEO Elon Musk announced — one day early — that the company plans to triple the coverage area of its faster electric car Superchargers by the end of June, and release a car in the $30,000-$35,000 range within “three to four years.”

2) Again, back to the speculation game, I believe Tesla (and Panasonic) are going to move fast on this giga factory. Think NUMMI. Tesla acquired NUMMI in October 2010. Less than two years later, Tesla completely retools NUMMI with machinery from Detroit that Tower Automotive could never operate and starts to manufacture 100% electric vehicles. This giga factory will be operational in less than two years. I believe they are recruiting a Gilbert Passin equivalent to run it. And like Toyota did with NUMMI, Panasonic will be able to help out with location and most likely a pre-existing structure.

I agree with Bonnie, Tesla probably wanted to announce this yesterday.

 

[Convert2013]

Couple things:

1) There is no such thing as an early announcement with Tesla. Elon Musk is the anti-Steve Jobs. If he has something on his mind or Tesla has a plan, Elon Musk will tell the world through his Twitter account or if he is in front of a microphone. There is a long, long history of this. My personal favorite is at the 2013 All Things Digital conference when Walter Mossberg asked Elon Musk what the big Super Charging announcement would be. Elon's response, "I shouldn't ruin the surprise but,...." 10 Things You Missed From Days One and Two of D11 - Eric Johnson - D11 - AllThingsD "Tesla Motors CEO Elon Musk announced — one day early — that the company plans to triple the coverage area of its faster electric car Superchargers by the end of June, and release a car in the $30,000-$35,000 range within “three to four years.”

2) Again, back to the speculation game, I believe Tesla (and Panasonic) are going to move fast on this giga factory. Think NUMMI. Tesla acquired NUMMI in October 2010. Less than two years later, Tesla completely retools NUMMI with machinery from Detroit that Tower Automotive could never operate and starts to manufacture 100% electric vehicles. This giga factory will be operational in less than two years. I believe they are recruiting a Gilbert Passin equivalent to run it. And like Toyota did with NUMMI, Panasonic will be able to help out with location and most likely a pre-existing structure.

I agree with Bonnie, Tesla probably wanted to announce this yesterday.

Purchase and set-up of pre-existing structure seems more logical and cheaper, as you said. There's plenty of empty ones in the US.

 

[bonnie]

Purchase and set-up of pre-existing structure seems more logical and cheaper, as you said. There's plenty of empty ones in the US.

Yes, but are there plenty of empty ones in the US that could allow co-location of a Gen3 manufacturing plant, tax breaks, with ready supply of labor, and good distribution corridor? Probably, but it does cut down on viable options.

 

[DaveT]

=
I agree with Bonnie, Tesla probably wanted to announce this yesterday.

I'm skeptical that Tesla was planning to make a gigafactory announcement yesterday but things fell through. I admit that it did seem peculiar when Elon mentioned that they weren't ready to make an announcement regarding the gigafactory, almost as if they were preparing/planning/working toward that announcement in the not-so-far future. But it also seemed from the call that they were still in the process of exploring their options, even though it did seem fairly advanced with considering various locations. I would imagine they would need to narrow their options more, commit to one, develop plans, sign up partners, etc. before making a big announcement about it. I can imagine though them making a smaller announcement, for example purchasing a few hundred acres of land for the gigafactory not too far from the Fremont factory and making an announcement about it.

Also, they just announced the expansion of their Panasonic battery deal and that likely took a long time to get done. A gigafactory (presumably multi-billion dollars in investment) is a much bigger deal than the Panasonic battery deal and I would guess it would take some time develop concrete plans and to negotiate with all the players involved.

 

[Zzzz...]

Couple things:

1) There is no such thing as an early announcement with Tesla. Elon Musk is the anti-Steve Jobs. If he has something on his mind or Tesla has a plan, Elon Musk will tell the world through his Twitter account or if he is in front of a microphone. There is a long, long history of this. My personal favorite is at the 2013 All Things Digital conference when Walter Mossberg asked Elon Musk what the big Super Charging announcement would be. Elon's response, "I shouldn't ruin the surprise but,...." 10 Things You Missed From Days One and Two of D11 - Eric Johnson - D11 - AllThingsD "Tesla Motors CEO Elon Musk announced — one day early — that the company plans to triple the coverage area of its faster electric car Superchargers by the end of June, and release a car in the $30,000-$35,000 range within “three to four years.”

2) Again, back to the speculation game, I believe Tesla (and Panasonic) are going to move fast on this giga factory. Think NUMMI. Tesla acquired NUMMI in October 2010. Less than two years later, Tesla completely retools NUMMI with machinery from Detroit that Tower Automotive could never operate and starts to manufacture 100% electric vehicles. This giga factory will be operational in less than two years. I believe they are recruiting a Gilbert Passin equivalent to run it. And like Toyota did with NUMMI, Panasonic will be able to help out with location and most likely a pre-existing structure.

I agree with Bonnie, Tesla probably wanted to announce this yesterday.

QUOTE: "the initial investment required to build a U.S. manufacturing facility for cylindrical 18650 lithium-ion cell production is roughly $4 per cell produced each year"
Source: CO post

So 8 billion $$$ for a factory that produce 2 billion cells a year. Or ~14 billion to cover 500k units per year production rate. You choose.

Looks doable, just 50mil shares secondary at $200 per share will give 10 billion $. Problem is - those investments do not cover supply chain for such factory. There had to be another gigafactory build for cathode material. And somehow supply chain created for other components like anode, electrolyte, separator production etc.

 

[FredTMC]

I vote for the giga factory to be in Texas in exchange for Texas dropping this silly dealer blockade. In addition, labor and facilities are cheaper than Cali. I know, I live in Cali

 

[Joel]

I'm skeptical that Tesla was planning to make a gigafactory announcement yesterday but things fell through. I admit that it did seem peculiar when Elon mentioned that they weren't ready to make an announcement regarding the gigafactory, almost as if they were preparing/planning/working toward that announcement in the not-so-far future. But it also seemed from the call that they were still in the process of exploring their options, even though it did seem fairly advanced with considering various locations. I would imagine they would need to narrow their options more, commit to one, develop plans, sign up partners, etc. before making a big announcement about it. I can imagine though them making a smaller announcement, for example purchasing a few hundred acres of land for the gigafactory not too far from the Fremont factory and making an announcement about it.

Also, they just announced the expansion of their Panasonic battery deal and that likely took a long time to get done. A gigafactory (presumably multi-billion dollars in investment) is a much bigger deal than the Panasonic battery deal and I would guess it would take some time develop concrete plans and to negotiate with all the players involved.

We are all saying the same thing.

Internally, Tesla has committed to this and is planning this "big" project. History demonstrates, this is how Tesla operates: pursue a large project, secure money and then announce big idea. They never have very specific details just money and big ideas (and a lot of grey matter). Look at the Gilbert Pasin's quote in the History Channel's "Mega Factories." Elon approaches Passin and tells him he wants Passin to build the best factory so they can build the best car. Passin asked where's the plant and Musk's response "we don't have it yet." Secured NUMMI from Toyota for $40 Million in stock and Tesla announces "The Tesla Factory" shortly after the deal. Super Charging Network: shortly after the secondary stock offering, Elon announces doubling down on SCs a they update their website with dots in general unspecified locations on a map. Money and big ideas. What's missing with the giga factory? They need to finance it, which they will. I mean Panasonic invested $30 million in Tesla back in 2009. That worked out for them :smile: So, the "specifics," were not in place yesterday. And Tesla won't have a problem raising the capital for this project. After all, Elon and the team are not super heroes, it's going to take some time to put this together (by time I mean a few days, weeks, or a month at the very latest).

 

[Zzzz...]

And Tesla won't have a problem raising the capital for this project.

Could be. But market had to realize that such investment require north of dozen billion $$$ investments from Tesla. Probably way more than that - if we look into supply chain for such factory. And I mean a smallish one, that still qualify as gigafactory.

If you look at all current investments in Tesla Factory, fully build Supercharger network in North America nad Europe and all SC plus retail investments - all of them combined would be order of magnitude cheaper assets(in terms of invested USD). Not worth even mentioning in the grand scheme of things...

 

[FredTMC]

Could be. But market had to realize that such investment require north of dozen billion $$$ investments from Tesla. Probably way more than that - if we look into supply chain for such factory. And I mean a smallish one, that still qualify as gigafactory.

If you look at all current investments in Tesla Factory, fully build Supercharger network in North America nad Europe and all SC plus retail investments - all of them combined would be order of magnitude cheaper assets(in terms of invested USD). Not worth even mentioning in the grand scheme of things...

I think you'll agree that they don't need to launch the giga factory with full capacity. They'll do limited line at first and then add more lines over time.

 

[brianman]

My forecast is they wanted to have the announcement ready for the Q3 earnings call, didn't quite pull it off, and will make the announcement in Q4.

While we're speculating...

"... and Andrea knew it, hence the teed up question"?

 

[justthateasy]

damn... shhhhhushhh

I disagree with all above "no time to panic" comments
- this is the perfect time to panic- you should all sell everything you have immediately;
I've been waiting a long time for this opportunity-loss and none of you are going to spoil it... Tesla is doomed - sell now...
to me

Cute, very cute.

 

[Zzzz...]

I think you'll agree that they don't need to launch the giga factory with full capacity. They'll do limited line at first and then add more lines over time.

Correct, but even 10% of gigafactory, enouph cells for 50k EVs yearly would be a massive investment. Tesla might find a way to drop investments from $4 per cell mentioned in report estimate to lets say $2. Using new cheaper chemistries, ordering equipment in bulk etc. But still - remember Tesla is about to produce 22k Model S this year. 40k next year. I would rather want them to grow their main business for few years before doing huge investments into battery production.

And if they choose to do so - they better pick right tech they will invest into. There are silicon anodes being commercialized. There are Li-S cells being commercialized. First one probably would be more competitive in short term scale. But Li-S have higher grows potential in terms of specific energy and potential price reduction per kWh, but still very risky. And it would take years to get invested money back...

I'm not against idea, and actually think it is a right thing to do. More vertical integration. But that would be a huge investments for Tesla, even for a non gigafactory scale, like enouph to supply cells for 50k Model S yearly. Plus if they go into such attempt of vertical integration it would most likely make sense not to do it half way, but at least try to produce cathode material themselves too, cathode is the most expansive part of li-ion cells.

I could see Tesla making 20 million shares secondary offering - lots of money. Just last year there were 105 mil shares outstanding, in latest shareholder letter Tesla is talking about 139 million fully diluted shares at Q4...

 

[Mario Kadastik]

Not a nice thing to wake up after quite an ER rape on the portfolio to read about the 3rd fire. Pre-market so far 2.2k shares and price is flat ($151 now). Then again, IB at least doesn't have the fire in the news yet so probably will take a while, but I'm fairly sure it's picked up before market open so we really need a Tesla comment saying that it was a third freak accident or what not to avoid panic selling again. This time I think with three being the rule there will be a lot of people folding and taking out the profits to secure them for the short term volatility. I'm heavily considering what to do with the remaining TSLA investments as most are longer term and shouldn't be an issue, but getting kicked in the nuts like this isn't fun at all...

 

[Mario Kadastik]

Ok, IB news feed shows 3rd fire now about 2 minutes ago and we have 55k traded stock and price is at $145.8, mostly dropped just in the last half hour and on volume. So the fire is causing a fire sale......

- - - Updated - - -

And now it's 75k volume and $144.3 already :/ With no bottom in sight, this is quite high volume for pre-market this early.

 

[MartinAustin]

It just jumped up to $147.01. (small consolation)

 

[aznt1217]

For short term bulls, you do realize shorts are going to put enormous pressure on. Between the circuit breaker being lifted, twitter IPO, and third fire I say be nimble with your profits and don't get greedy.

For the long term bulls, don't log in to your accounts lol

 

[Curt Renz]

Reuters is reporting yesterday's Model S fire was an accident due to hitting metal on road.
http://www.reuters.com/article/2013/11/07/autos-tesla-fire-idUSL2N0IS0TL20131107?type=companyNews
_______________________________________________________

Thu Nov 7, 2013 8:52am EST

By Ben Klayman and Bernie Woodall
Nov 7 (Reuters) - Tesla Motor Inc's Model S electric car has suffered its third fire in six weeks.

The Tesla Motors Club website is running pictures and a story about another fire involving a Model S on Wednesday afternoon that a company spokeswoman confirmed. The accident occurred in Smyrna, Tennessee, where Nissan Motor Co makes the Leaf electric car.
Tesla said it has been in touch with the driver, who was not injured.
"Our team is on its way to Tennessee to learn more about what happened in the accident," Tesla spokeswoman Elizabeth Jarvis-Shean said in a statement. "We will provide more information when we're able to do so."
The company said the fire was the result of an accident and was not a spontaneous event.
The Tennessee Highway Patrol said the incident occurred on Interstate 24 in Smyrna around 1:30 pm.
"It's possible that it ran over a piece of metal in the roadway and it got up in the engine compartment," police dispatcher Kathy Bryant said. "There was extensive damage."
Police do not know how fast the 2013-model year car was traveling, but the driver was able to pull over to the shoulder and exit the car.

 

[ZenMan]

I don't see how Tesla can get out of this without a recall. No matter how safe the car actually is, the perception will be that it can become a total loss by running over a piece of road debris. Maybe they need to replace the 1/4" aluminum armor with kevlar or titanium to make it virtually impregnable...

 

[ckessel]

I don't think any explanation for the fire, no matter how valid, is going to help save a stock drop this time. In most minds, this is going to create a pattern of Model S catching on fire. The fact that the pattern is really a random cluster of events (presumably) isn't going to affect perception.