Short-Term TSLA Price Movements - 2014

[TSLAopt]

Yes, this is another possibility, but if this would be true, why would they switch production to the new line in June? There seem to be no need to do that if the battery supply does not improve.

Or may be they switched to the new line so that the old one can be upgraded as well...

Maybe I missed something but im im not sure they are using a new line in June, did Tesla say that?

im hoping #4 is not the case...is anyone here well versed in Japanese business culture to explain if its acceptable to have a delay? Or to post-pone an ETA? (I.e. Pushing back deliver of new batteries but 2-3 months)
im hoping so done will jump in and say that they are very familiar with Japanese culture and think it is highly unlikely a Japanese business would miss a deadline or post-pone an ETA they have given Tesla.

 

[vgrinshpun]

Maybe I missed something but im im not sure they are using a new line in June, did Tesla say that?

No, this is my typo, I meant July...

 

[GravityPull]

Wait time doubles to 4 Months!

:smile:

OK guys, so we all know Q2 production was sold out by the conference call. I'm sure that is true but obviously they will put some US orders ahead so they can get in by the end of the quarter. Folks on the delivery tracker who confirmed May 9th are told they are getting their cars by the end of June. I think I went on the website not long after that and saw the date of July. Over on the order date thread someone else saw it go to August and then Late August. Well, when I checked now the standard cars are September and performance cars are late August.

Basically it would seem that in a matter of a week wait times have gone from less than 2 months to about 4 months. I suppose it could mean any number of things but I certainly don't think it means there is a demand problem.

4 Months! Even a (soon to be former) US demand bear like me finds this news to be exciting! I have money on the sidelines ready to go all in next week.

 

[AlMc]

It could mean one of the three things:

1. There was a rush of new US orders during the 9 days after the ER, but it could not possibly explain increasing wait time by two month. The math just does not work. Assuming that roughly half of current production is allocated for US, i.e. 350 cars/week, in order to extend wait time by 8 weeks (2 months) the additional order intake would need to be 8 x 350 = 2800, all within 9 days - just not possible in my opinion.
2. The future US allocation (beyond two month delivery ending in June) was significantly lowered, perhaps to increase allocation for deliveries in China. The reduction in US allocation to make this plausible would also need to be extreme.
3. Some kind of combination of 1 and 2.

Any way you slice this, the claims of diminishing demand are just preposterous.

I am of the opinion that it is mostly your second possibility. It is wiser for them to plan on producing for the overseas market in the first part of the quarter, July to early August so they reach their destination by the end of September, then concentrate on NA production from mid August on. In addition, if all goes well they may be able to ramp enough to drop those wait times.

 

[maoing]

I'm second for the 2nd possibility. Note this is actually the opposite from what I observed from chinese tesla forum. I reported on 05/05.
http://www.teslamotorsclub.com/show...Movements-2014?p=649969&viewfull=1#post649969

quote my observation below:

"Btw, one observation from Chinese auto forum is that many Model S moved ahead the delivery schedule by almost 6 months, say from end of 2014 to June 2014. Not sure the exact reason, it could be:
1) Elon is focusing on China market now to please the customers;
2) production rate is up big in Q2, more cars are available to ship to China than original plan
3) less demand in US, so more cars are available to China?"

Some more observation recently.

A guy made the order in Jan., the car arrived the port in mid-May, note this guy is not from Beijing/Shanghai, actually it's not even close.
http://club.autohome.com.cn/bbs/thread-c-2357-30107337-1.html

A guy made order at end of March, the car finished the production and in shipping now. It's quite amazing to see only 1.5 months from order to shipping for chinese customer, while the official estimated wait time is still 4-5 months.
http://club.autohome.com.cn/bbs/thread-c-2357-30141805-1.html
​

I am of the opinion that it is mostly your second possibility. It is wiser for them to plan on producing for the overseas market in the first part of the quarter, July to early August so they reach their destination by the end of September, then concentrate on NA production from mid August on. In addition, if all goes well they may be able to ramp enough to drop those wait times.

 

[vgrinshpun]

I am of the opinion that it is mostly your second possibility. It is wiser for them to plan on producing for the overseas market in the first part of the quarter, July to early August so they reach their destination by the end of September, then concentrate on NA production from mid August on. In addition, if all goes well they may be able to ramp enough to drop those wait times.

You might be onto something here. According to the shareholder letter Q2 deliveries are guided to 7500, while production projected to be 7500 to 9000. So TM is hedging here: if they will not be able to ramp-up to total 9000, they still want to ensure that they deliver at least 7,500, even if total production is also 7,500. The way to achieve this is to front load foreign deliveries. So in this case there will be no additional (on top of Q1) pipe filling. If, however, the ramp-up goes as planned, and Q2 production is 9,000 cars, TM will be able to pump additional 1,500 into the pipe.

 

[chillong]

I don't know, I was just explaining what the other person was saying.

Its pretty obvious:
http://www.auto-schweiz.ch/fileadmin/3_Statistiken/Autoverkaeufe_nach_Modellen/ModellePW2014.xls

Its a pretty bad way of reporting stats, but its very obvious that the current month is the total from Jan up to that month, unless you expect increasing sales month by month for all the models

 

[davecolene0606]

It could mean one of the three things:

1. There was a rush of new US orders during the 9 days after the ER, but it could not possibly explain increasing wait time by two month. The math just does not work. Assuming that roughly half of current production is allocated for US, i.e. 350 cars/week, in order to extend wait time by 8 weeks (2 months) the additional order intake would need to be 8 x 350 = 2800, all within 9 days - just not possible in my opinion.
2. The future US allocation (beyond two month delivery ending in June) was significantly lowered, perhaps to increase allocation for deliveries in China. The reduction in US allocation to make this plausible would also need to be extreme.
3. Some kind of combination of 1 and 2.

Any way you slice this, the claims of diminishing demand are just preposterous.

and..

I would add that this is in tandem with an announced increase in production to nearly a thousand cars a week in Q3.

 

[DaveT]

and..

I would add that this is in tandem with an announced increase in production to nearly a thousand cars a week in Q3.

When did they announce "nearly a thousand cars a week in Q3". I've only heard that for Q4.

 

[FANGO]

All this talk about explaining why the estimates are changing quickly I think really misses the point:

The estimates are just estimates.

Why does the drop-down list thing get updated at weird times?

Because they update it when they get around to it, when someone says "hmm, I guess we should change the drop down thing" and then does it.

Why are people getting cars earlier or later than expected?

Because they're just estimates, and they get the cars to people when they can get the cars to people.

Overall, production all sells immediately, so it's fine to say we're "sold out" until end of Q2, because there's enough orders to fulfill to run through the end of Q2. Might some people get their cars earlier, if they're getting a P+? Or some will get them later if they're in rural China? Sure, fine. That's why the estimates are just estimates, y'know?

 

[GravityPull]

All this talk about explaining why the estimates are changing quickly I think really misses the point:

The estimates are just estimates.

Why does the drop-down list thing get updated at weird times?

Because they update it when they get around to it, when someone says "hmm, I guess we should change the drop down thing" and then does it.

Why are people getting cars earlier or later than expected?

Because they're just estimates, and they get the cars to people when they can get the cars to people.

Overall, production all sells immediately, so it's fine to say we're "sold out" until end of Q2, because there's enough orders to fulfill to run through the end of Q2. Might some people get their cars earlier, if they're getting a P+? Or some will get them later if they're in rural China? Sure, fine. That's why the estimates are just estimates, y'know?

I know from personal experience that Tesla Motors, a company with exceptional customer service, is better managed than this:

"hmm, I guess we should change the drop down thing"

Especially since the estimate changed by not just one month but two.

It could have been a mistake or it could be something of more significance. Hopefully someone here with a good contact in Investor Relations can find out Monday morning or sooner.

 

[AlMc]

It could mean one of the three things:

1. There was a rush of new US orders during the 9 days after the ER, but it could not possibly explain increasing wait time by two month. The math just does not work. Assuming that roughly half of current production is allocated for US, i.e. 350 cars/week, in order to extend wait time by 8 weeks (2 months) the additional order intake would need to be 8 x 350 = 2800, all within 9 days - just not possible in my opinion.
2. The future US allocation (beyond two month delivery ending in June) was significantly lowered, perhaps to increase allocation for deliveries in China. The reduction in US allocation to make this plausible would also need to be extreme.
3. Some kind of combination of 1 and 2.

Any way you slice this, the claims of diminishing demand are just preposterous.

Another explanation I was thinking about: I know I would have done a business lease on the model S if it was available over a year ago when I ordered my car. For most people that own a business a business lease has many advantages over personal lease or purchase. While TM will most likely never reveal the number of business lease deliveries I suspect there could be an increased wait time partially from a surge after offering this financing product.

 

[vgrinshpun]

Another explanation I was thinking about: I know I would have done a business lease on the model S if it was available over a year ago when I ordered my car. For most people that own a business a business lease has many advantages over personal lease or purchase. While TM will most likely never reveal the number of business lease deliveries I suspect there could be an increased wait time partially from a surge after offering this financing product.

It is probably true that orders increased due to business leasing, but I just don't see that increase more than couple of hundreds orders. I guess we will know after the Q2 ER - TM indicated that they will provide full accounting of this - see FAQ on Tesla Business Leasing Program: Tesla - Investor FAQs

 

[chickensevil]

There has been a LOT of media coverage over Tesla these past couple months too. What with Jersey and now Missouri... Combine that with the news out about their Titanium plating added in March... The ramp up in China... If they are starting to fill RHD markets there is sure to be a lot of back order filling going on there... I am just saying it is likely a combination of everything, vice one major thing.

Elon and others have said they have no drive to advertise because it would just needlessly drive up demand and increase wait times. I am willing to bet that all of these things is upping demand without them even trying, and that is what is killing the wait times. Should be a nice, in your face, to people like Paulo always going on about demand being down...

 

[Causalien]

If they were to say that the plan has failed and model E will not happen. I for one will immediately throw my cash at them fir a model S. There is a hidden backlog of Model E buyers that is not accounted fir and have no way to be accounted for.

 

[InTheShadows]

Another explanation I was thinking about: I know I would have done a business lease on the model S if it was available over a year ago when I ordered my car. For most people that own a business a business lease has many advantages over personal lease or purchase. While TM will most likely never reveal the number of business lease deliveries I suspect there could be an increased wait time partially from a surge after offering this financing product.

I agree. I'm considering the business lease for the model X then removing all the mid and rear seats and using it as an installation vehicle. $0.04 Sure beats $0.29 per mile for the truck. 20k miles per year. The only thing we will use the truck for then is pulling the job and equipment trailers. I doubt the MX will be rated to pull 8000lbs.

 

[Bgarret]

It is probably true that orders increased due to business leasing, but I just don't see that increase more than couple of hundreds orders. I guess we will know after the Q2 ER - TM indicated that they will provide full accounting of this - see FAQ on Tesla Business Leasing Program: Tesla - Investor FAQs

Something to consider is the rapid growth of Model X reservations as a surrogate for Model S demand. Since Dec 31, 2013, the reservation rate per day in the US has gone up 200% and since 30 April it has gone up about 50% from 22/day to 30.2/day. If the number of people willing to put. $5000 deposit down and wait a year for a "possible" car has increased 50%, is it possible that the number of people willing to reserve and purchase and actual, highly rated, production car may have increased in a similar manner???

Google Sheets - create and edit spreadsheets online, for free.

 

[blakegallagher]

I agree. I'm considering the business lease for the model X then removing all the mid and rear seats and using it as an installation vehicle. $0.04 Sure beats $0.29 per mile for the truck. 20k miles per year. The only thing we will use the truck for then is pulling the job and equipment trailers. I doubt the MX will be rated to pull 8000lbs.

Very Interesting. This is getting off topic but now am thinking I could fit a small rain gutter machine in a Model X. Maybe I will not have to wait until Generation 3 to get my Tesla !

 

[chickensevil]

Something to consider is the rapid growth of Model X reservations as a surrogate for Model S demand. Since Dec 31, 2013, the reservation rate per day in the US has gone up 200% and since 30 April it has gone up about 50% from 22/day to 30.2/day. If the number of people willing to put. $5000 deposit down and wait a year for a "possible" car has increased 50%, is it possible that the number of people willing to reserve and purchase and actual, highly rated, production car may have increased in a similar manner???

Google Sheets - create and edit spreadsheets online, for free.

get out of here with that logic and reason! Don't you know, TM is hiding the truth from us all by not reporting all the numbers! Can't you see? Demand is falling! They are only staying afloat because they keep pushing into other markets... Run for the hills! Sell! Sell! Sell!

*Wakes up*
What happened... What was this weird nonsense I was mumbling about?

- - - Updated - - -

There's a "this is big" line in the article that shouldn't be overlooked: the Commissioners approved these staff comments by unanimous votes. So this issue has gone beyond being a deniable "what some staffers think" note to a Commission-endorsed POV. That's a big deal.

This is a great point, I noticed this in the article too. This basically is an official statement from the agency at this point that the dealerships better watch out because they are not only about to open the doors wide open for Tesla, but maybe, based on some of the comments in the letter, are about to make all the dealership franchise laws null and void... To the point where any manufacturer will be able to have their own stores, or go through a franchise... Which is exactly what they didn't want... If only they had just left things alone...

 

[Papafox]

With a moderate and somewhat steady climb in TSLA last week, I suspect that Monday morning will see a positive opening, provided there's nothing major happening with the markets. I sense a good week for the "Monday morning effect" as investors have had the weekend to ponder getting into Tesla for its climb back up.