Short-Term TSLA Price Movements - 2014

[Krugerrand]

Wow, he actually says "...possibly colluding..." in response to why he thinks car companies are charging so much more for the same vehicles in China.

Yes, he did. I just love it when the throws out them fightin' words and gets the natives all up in arms. :biggrin:

 

[vgrinshpun]

Kingman AZ Supercharger is on-line! The coast-to-coast SC network is now intact. Yes, yes, it would be nice to have a few more in Pennsylvania and Maryland, but you can now drive from LA to DC using only Superchargers. Why has Tesla not scheduled a press conference?

With the addition of Hagerstown, MD SC the coast to coast travel is officially enabled. We should see Tesla Press Release or blog post any time now. The supercharger page now states:

Coverage
North America
Today – 71 stations
Coast-to-coast travel now enabled

 

[Discoducky]

I was actually thinking the other day how much I like the "giga-factory" term coined by Elon. To me it gets the message across that the battery factory going to be huge (and also the billions of cells produced).

I like the term as well, but always thought he meant Gigawatts of capacity as opposed to Giga-cells. But I'm fine with either or both. With the price being so low for the S in China TM is going to need that factory sooner than they think.

 

[aronth5]

I think they will wait for Cranberry Twp, PA; Hagerstown, MD; and Bethesda, MD to come online before announcing it officially. That way they can announce not only coast-to-coast, but also the east coast network (which IMO is more likely to be used in practice than a coast-to-coast route).

Agree. How many people will really want to drive from coast to coast thru the Dakotas? And lets face it how many people want to drive that far to begin with, besides some of the crazy folks on this forum. And please don't take offense if you live in the Dakotas: On the other hand you can drive from NE to Florida in 20 hours. (In an ICE vehicle that is) So 2 days by way of superchargers. Fabulous!

 

[Clprenz]

Agree, there needs to be cell capacity on the order of billions. Here is a suggestion:

Tesla needs each of:
"Gigacell Factory" -- Something that can produce billions of cells for Model E volume. I actually doubt that Tesla will build this. It will be a joint venture with minimal exposure to TM, is my expectation/hope.
"Big Car Factory"



While the NUMMI factory used to produce 500,000 cars per year, that was a different build out. It was a different factory, essentially. They DO have tons more space, but Elon himself seemed to write off the notion of expanding internally and was thinking ahead to his dream factory. I suspect this is because expanding further in the Fremont facility would be a sloppy affair of placing equipment and stuff in odd places around the factory and having lots of robots moving things around. Like most people I used to take great solace in the unused space in Fremont, figuring they had a way to increase capacity up to 500,000 year. But remember when they were laying out the current Model S line, they were spending Government loan money and had one chance to get the Model S in production. Because they surely optimized the line for low-cost, quick buildout, I think scalability was far down the list of priorities. This seems to have been confirmed by Elon's tired rambling during the Q3 call, where he seems to have written off the Nummi as a serious solution for Model E car capacity. It seems consistent with Elon's personality that he would want to design a really great factory from scratch. If he thought that Fremont was that factory he would have said so. I think Fremont will be used to expand to around 100k, all production for the next few years. Agree that the Big Car Factory might be overseas.

Edit: I concede that he was talking Gigafactory to make batteries during the Q3 call, and spoke of internal expansion to get to 100k/yr. I think the top capacity is much less than 500k/yr though, just due to the design decisions they made, but that is just my theory. So if its 300k/yr with painful internal expansion they would likely be thinking ahead a few years to the Big Car Factory, though Elon definitely didn't say anything like that.



You are right. I am just fretting.

I'm sorry friend, you are wrong. Tesla bought NUMMI very cheap and it would be idiotic not to use the other 80% of the factory. Investors, media, and analyst would murder Elon if he even suggested such a thing. NUMMI is very much a blank slate and Elon will be able to work wonders with it. Tesla doesn't have 3 billion for Elon to build his "dream" factory.

 

[austinEV]

I'm sorry friend, you are wrong. Tesla bought NUMMI very cheap and it would be idiotic not to use the other 80% of the factory. Investors, media, and analyst would murder Elon if he even suggested such a thing. NUMMI is very much a blank slate and Elon will be able to work wonders with it. Tesla doesn't have 3 billion for Elon to build his "dream" factory.

Yeah I get what you are saying. They will maximize the NUMMI factory and do a good job. What I am suggesting, clumsily, is that they need to have a beyond-NUMMI plan. People have gotten focused on solving the battery supply issue, which is for sure the biggest problem. I would love to hear this plan from Elon this year.

 

[FANGO]

Agree. How many people will really want to drive from coast to coast thru the Dakotas? And lets face it how many people want to drive that far to begin with, besides some of the crazy folks on this forum. And please don't take offense if you live in the Dakotas: On the other hand you can drive from NE to Florida in 20 hours. (In an ICE vehicle that is) So 2 days by way of superchargers. Fabulous!

I tell people this all the time. People simply don't do ridiculously long drives but perhaps once or twice in their lives. It's very rare for people to drive this much....and yet, everyone *thinks* they drive this much. Which is why the superchargers are important. They're there, so people can see that it's possible, but they don't need to have massive coverage because nobody's going to use them.

Here is the data I use to support that: http://research.microsoft.com/en-us/um/people/jckrumm/Publications%202012/2012-01-0489%20SAE%20published.pdf Note on page 2, a negligible number of cars are driven more than 150 or so miles a day. The range of single charge on a Model S is literally enough for 99.99+% of cars in America on a given day.

By the way, I have actually driven coast-to-coast via the Dakotas. South Dakota, anyway. Which for the Eastern 80% of the state is mostly barren except for a rather silly roadside in-joke which dominates the entire state, and the Western 20% of the state is one of the most densely interesting places in the country. The Black Hills are absolutely incredible, and completely full of cool stuff to do and see.

But I did that drive twice - once one way, once the other. And I probably won't do it again, unless I end up bringing kids along some time in the future.

 

[mrdoubleb]

I was actually thinking the other day how much I like the "giga-factory" term coined by Elon. To me it gets the message across that the battery factory going to be huge (and also the billions of cells produced). And IIRC it was Elon who coined the term when referring to a large-scale battery factory needed to supply Gen3.

The funny thing is, when Elon first talked about it we were guessing if it was a slip as this was just a response to an ad-hoc question (if I recall correctly).

Either way, I think it is an awsome word for it. This guy has a very good instinct for marketing. Sure, he could have said " a large factory able to produce billions of cells for our battery packs", but that wouldn't have gotten a tenth of media coverage. This is a perfect headline grabbing, easy to understand term. The media ate it up and ran with it. Companies pay huge amounts to agencies to coin catchy phrases for their next big thing, but really good ones, that people actually remember, are hard to come by. 1 phrase, that the media will repeat over and over for free and people understand, gets the message through, associates something exciting with your company. And we already hove Supercharger, Hyperloop, Giga factory... even "recall the word recall".

 

[Lessmog]

Originally Posted by Discoducky

Wow, he actually says "...possibly colluding..." in response to why he thinks car companies are charging so much more for the same vehicles in China.

Yes, he did. I just love it when the throws out them fightin' words and gets the natives all up in arms. :biggrin:

I think what he actually said was: "I mean, they're all basically colluding to have their prices be at that level" (double or triple profits).
Much stronger verbiage.
@1:07 in Bloomberg's phone interview.

 

[MartinAustin]

Nobody did the math yet? 500,000 cars per year each with 7,000 batteries inside would require a yearly production of 3,500,000,000 battery cells... or 3.5 billion cells. Very unscientific numbers but it's definitely in the "giga" range.

Looks like TSLA is going to open lower. Perhaps profit taking, or the beginning of a big fall? (justthateasy would know, of course LOL) Or perhaps just being dragged down by the rest of the market finally, after yesterday's triumph-in-the-face-of-adversity.

 

[Mario Kadastik]

Nobody did the math yet? 500,000 cars per year each with 7,000 batteries inside would require a yearly production of 3,500,000,000 battery cells... or 3.5 billion cells. Very unscientific numbers but it's definitely in the "giga" range.

Looks like TSLA is going to open lower. Perhaps profit taking, or the beginning of a big fall? (justthateasy would know, of course LOL) Or perhaps just being dragged down by the rest of the market finally, after yesterday's triumph-in-the-face-of-adversity.

I actually wouldn't mind a morning V shape action like yesterday as I sold the 180 calls again after closing them at the bottom and I'd like to repeat the exercise and go fully long now though I don't mind either if TSLA blows away upwards and I end up having to close the long calls with the short calls and taking a ton of profit (my break even for the 180 calls I sold is 184.2 on Jan 31st).

 

[callmesam]

He also slips in that they are currently at a 30,000 run rate.

 

[Chickenlittle]

I tell people this all the time. People simply don't do ridiculously long drives but perhaps once or twice in their lives. It's very rare for people to drive this much....and yet, everyone *thinks* they drive this much. Which is why the superchargers are important. They're there, so people can see that it's possible, but they don't need to have massive coverage because nobody's going to use them.

Here is the data I use to support that: http://research.microsoft.com/en-us...lications 2012/2012-01-0489 SAE published.pdf Note on page 2, a negligible number of cars are driven more than 150 or so miles a day. The range of single charge on a Model S is literally enough for 99.99+% of cars in America on a given day.

By the way, I have actually driven coast-to-coast via the Dakotas. South Dakota, anyway. Which for the Eastern 80% of the state is mostly barren except for a rather silly roadside in-joke which dominates the entire state, and the Western 20% of the state is one of the most densely interesting places in the country. The Black Hills are absolutely incredible, and completely full of cool stuff to do and see.

But I did that drive twice - once one way, once the other. And I probably won't do it again, unless I end up bringing kids along some time in the future.

You are correct but shorter than coast to coast more frequently like maybe 300 miles. It averages in and doesn't raise The average much. But you need a super charger even if 250 miles sinc you have to return. The transcontinental idea just shows the progress of the superchargers and opening teslas market to more americans sparsely populated state residents don't drive 5 miles to the store

 

[bonaire]

He also slips in that they are currently at a 30,000 run rate.

Slip? Said 600/wk a while back. With four weeks off a year, saying at or nearly at 30k is still nearly 600/Wk.

analysts like Baird give their estimate of 30-33K for the year. But a lot of speculators use terms like double of 2013 which is a synthetic pump. I think 40-50% growth is very respectable. The interesting thing will be reservations left.

 

[Jack6591]

Just kind of wondering, where in the world Andrea James (Doughertys) could be???

 

[Vidious]

Tesla China chief unveils aggressive growth plan for China - Yahoo Finance

A lot of news in one article here:

Wu, the 43-year-old executive who jumped ship to Tesla from Apple's China unit at the end of last year, said Tesla China had a "very aggressive growth objective". She said the unit was aiming to contribute "30 to 35 percent" of Tesla's overall global sales growth targeted for 2014. Wu said the company aimed to double overall total sales this year. She put global sales at 23,000 to 24,000 last year. "I have my work cut out for me," Wu said in an interview. "But I am pretty confident."
She said Tesla had also resolved a trademark issue that had long prevented the company from using "Te Si La" - the Chinese name best known among Chinese consumers, which Tesla wanted to use in China.

I'm pretty shocked by the following:
1. They would allow her to say that they are going to double sales next year (or did she just slip up). Seems like you would save that announcement for the Q4 earnings letter. Plus, given Elon's conservative approach to the sales targets you know whatever they say expect to beat.
2. That pre-market would be down with this news out. We've had quite a run lately, but a 46-48,000 target for next year would be beyond just about everyone's expectations.

Hoping this is all confirmed as accurate.

 

[Mario Kadastik]

Just kind of wondering, where in the world Andrea James (Doughertys) could be???

I would assume she and DB analysts are waiting for a fundamental update, the Q4 deliveries was a nice number, but not enough to rewrite their analysis note. The china numbers might be though as that kind of gives a view what the demand can be going forward globally. But I would assume they prepare most of the stuff and then wait for the ER.

 

[bonaire]

Is Andrea James quiet waiting for 2014 guidance from Musk?

 

[vgrinshpun]

During Q3 ER, it was announced that 5500 were sold and about 1000 more than that were produced (pipelined to Europe).
At 600/wk and 11.5 weeks, you have the possibility of 6900 production during Q4. That was the sales number pre-announced.
If 600/wk continued into 2014 - that will be another 6900 produced during Q1. The only way for Q1 to beat Q4 is to run additional production output of 103-105% of the rate of Q4. This is because new loaners produced (MS60s) can't be sold due to the 90-day rule and shouldn't be sold in Q1. Has anyone done any factory tours lately and spied the production board to say whether or not this is happening (ie. 615+ per week targets?)

The way the 10-Q reads, there is an option of recognizing revenue if it looks like there is a great chance of being paid. Meaning, if a car sat ready for delivery on Dec. 31 and wasn't completed into the first week of January, they could perhaps have recognized that as a sale during Q4. (throw ire my way if you want - but read the 10-Q for revenue recognition guidelines that Tesla uses). This is exactly how the software industry closes-out quarters. Or at least did before companies got into trouble ala Computer Associates for stuffing. We have to perhaps assume Q1 sales should be roughly that of 13Q4 until Tesla announces new run-rates of production, 3rd shifts or saturday shifts. 6900 for Q1 would be well above Q1 of 2013 (which was 4900 deliveries - which is an outstanding compare). If 2K per quarter more YoY are delivered, then this meets a possible guidance of "more than 30,000" for 2014.

Tesla is going to increase production in Q1. During his QA session in Germany Elon said that shipment to Europe will increase quite a bit in Q4 2013 and then it will be much more significant increase in Q1 2014.

The he first increase already happened, as planned, in Q4 - from 550/week to 600, with increased car production most likely entirely routed to Europe. I believe that the second much more significant increase (as mentioned by Elon) should be at least 100 cars/week.

 

[bonaire]

vgrinshpun: I pulled my post but then was quoted. I was editing it and thought I should just pull it down as I was adjusting the note regarding the revenue recognition element. 100/wk is substantial and would you think they need a later night shift or saturday to do that?