Short-Term TSLA Price Movements - 2014

[JRP3]

A $4K drop on a $70K vehicle is not going to suddenly increase demand by a large amount, and I'd bet most of the people waiting for the Model 3 aren't going to get a Model S to hold them over for a few years, even at a slightly lower price point. A large number of Model 3 buyers are waiting for a $35-$45K car, and that's not going to be a Model S.

 

[chickensevil]

After reading all the thoughts on the subject of cost of the cars. Three reasons I think they won't drop the base price any time soon:

1: DA package appears to be stuck in all the cars (including the 60s) as standard. This is an impact on their bottom line since they are basically giving this away for free. Note that these packages are normally around 3,500 in competitor vehicles (I know Lexus and MB that is around the price). This means you are getting your ~4k price drop on the 60kW, they are just jumping the price back up by not allowing you to NOT take the DA package. The Mobileye piece alone is worth about 1,000 give or take... and that is just the one camera... add the extra sensors and the radar and such and that is quite a price savings.

2: They REALLY want to hit 30% GM. I am willing to bet they want to hit 30% GM BEFORE the release of Model 3 simply because getting 30% GM on those cars is going to be really tough. So they are not going to be lowing the price of any of the cars until some point in the future when they have pushed over the 30% mark and then balance themselves back down to that point.

3: It kills the resale value of the car (which note that because of the buyback guarentee, Tesla is financially interested in keeping the resale value high) as such if you make the car naturally better over time AND drop the price you will kill resale value. Gen1 Leafs had a huge hit in resale value loss because of this. Since they are financially incentivized to maintain a high resale value, they will likely keep the Model S at the same base pricings or keep sneakily raising the prices across the board (Which has happened... many times... The base prices of the 60, 85, and P85 only jumped once in 2013, but the option prices have definitely gone up overall to where the car you order today is no where near the same price from a year ago.)

 

[TSLAopt]

I also don't think Tesla needs to drop prices, if anything they should increase the price to increase their margins and could justify it with the enhancements they are now including as standard (even faster charging capabilities, driver assist cameras, etc).
the demand for the S and X is way beyond supply for the foreseeable future in my opinion, there is so much untapped demand that Tesla is trying to tap slowly as they increase supply

what if demand rises to 500k annually for the S and X? And what if it continues to rise? That brings up an interesting question...do they delay the Model 3 indefinitely until they can meet demand for the S and X? Or do they starve some of the 90k car supply in order to build some 35-50k Model 3 cars while they build new factories to catch supply up to demand

 

[Krugerrand]

So let's brainstorm folks. There's got to be more ways to tap into Model 3 demand in waiting.

Tesla doesn't need to tap into that demand. Even though Panasonic is now producing more batteries for the S and X, it's not an unlimited supply. Model S and X are sold out for next year (2015). With AWD S's coming online (if we've guessed correctly), and if Model X is even close to what it's expected to be, both S and X can be considered sold out at the run rate Tesla has planned until the GF comes online in 2017. It makes no sense to focus on creating more demand in the short term, there still aren't going to be enough batteries. I believe Tesla will be sold out going forward until at least 2020 when they hit (hopefully) their 500k per year run rate and have started to build their second assembly factory and second GF. But if not, I agree with others, you have good ideas.

 

[chickensevil]

I also don't think Tesla needs to drop prices, if anything they should increase the price to increase their margins and could justify it with the enhancements they are now including as standard (even faster charging capabilities, driver assist cameras, etc).
the demand for the S and X is way beyond supply for the foreseeable future in my opinion, there is so much untapped demand that Tesla is trying to tap slowly as they increase supply

what if demand rises to 500k annually for the S and X? And what if it continues to rise? That brings up an interesting question...do they delay the Model 3 indefinitely until they can meet demand for the S and X? Or do they starve some of the 90k car supply in order to build some 35-50k Model 3 cars while they build new factories to catch supply up to demand

I highly doubt demand for a 105k ASP vehicle (or two) is going to hit 500k. At best it pulls out decently ahead of MB S Class's global sales of ~70k a year giving us something close to 75k-80k per model. Even if something magical happens, I wouldn't put demand for the MS/MX above 100k for each. The price barrier is just going to lock too many people out.

If they did 200k for MS/MX and 300k for M3 that would still be pretty fantastic since 300k for a mid size I think puts them also in the running against the BMW 3 series. By 2017 I highly suspect they will have plans to start construction on a second car factory.

But alas all of this is better for the long term fundamentals thread, instead of here.

 

[vgrinshpun]

Tesla Model S at Paris Auto Show - in a video Gerome Guillen re-iterates delivering 35,000 cars in 2014:

Video | Tesla's electric cars join the luxury Paris Motor Show | Toronto Star

 

[chickensevil]

Tesla Model S at Paris Auto Show - in a video Gerome Guillen re-iterates delivering 35,000 cars in 2014:

Video | Tesla's electric cars join the luxury Paris Motor Show | Toronto Star

How appropriate to have Gerome Guillen at the Paris Auto Show , Leave it to him to let something good slip, if only he had accidentally said how many cars they had delivered for Q3...

 

[aznt1217]

How appropriate to have Gerome Guillen at the Paris Auto Show , Leave it to him to let something good slip, if only he had accidentally said how many cars they had delivered for Q3...

Well I think he's there more because he's french lol.

 

[chickensevil]

Well I think he's there more because he's french lol.

That was what I was implying haha!

Meant to post this earlier and forgot to, I spoke with the sales guys at the Bethesda store while getting a charge and the only useful thing I could gleem from them was that they sold off their floor models and other location's cars for the end of quarter push. I think we are likely to see a strong delivery number like we saw in Q4 that is comprised of a ton of fleet vehicles. He said he was surprised they hadn't sold off their last floor model yet since it seems to be rather common end of quarter occurrence for them. Will be interesting to see where things shake out come November.

 

[Causalien]

So, my magic 8 ball says +6%. If I interpreted it correctly, some kind of news got leaked over the weekend.

 

[twinklejet]

Yea, there was some report/speculation from GER about the model 3 being unveiled on oct 9... rubbish if u ask me.. they've been forced to retract their notes before with regards to the gigafactory and stuff so i wouldn't put much weight on that.. but who knows they may be trying to pump and dump..

 

[Causalien]

Yea, there was some report/speculation from GER about the model 3 being unveiled on oct 9... rubbish if u ask me.. they've been forced to retract their notes before with regards to the gigafactory and stuff so i wouldn't put much weight on that.. but who knows they may be trying to pump and dump..

My guess is the amount of new D model that was made in October.

 

[Johan]

Yea, there was some report/speculation from GER about the model 3 being unveiled on oct 9... rubbish if u ask me.. they've been forced to retract their notes before with regards to the gigafactory and stuff so i wouldn't put much weight on that.. but who knows they may be trying to pump and dump..

Trip Chowdry's predictions have been known as "Claim Chowder" as per another poster on this forum . Apparently he has made many very bad calls on AAPL too in the past.

 

[Cattledog]

So, my magic 8 ball says +6%. If I interpreted it correctly, some kind of news got leaked over the weekend.

I'd be thrilled with $6, 6% would be amazing.

 

[chickensevil]

I'd be thrilled with $6, 6% would be amazing.

Yeah, by my math that would be a 270.52 closing price. If we hit anywhere near that, I think I am bailing on all my short term options haha!

 

[FluxCap]

If this movement up continues, we may start to see some snowballing short covering which could propel us upwards even further. The order book looks a bit like the deep-pocket entity from last week is starting to give up defending a flat price in the face of massive buying pressure.

 

[Causalien]

Yeah, by my math that would be a 270.52 closing price. If we hit anywhere near that, I think I am bailing on all my short term options haha!

Well, I never trust any move above 3% from my indicator.

 

[FluxCap]

It looks to me like the big order maker started defending 260 hard in both directions.

 

[chickensevil]

There is some immense downward pressure on the Nasdaq right now as well dropping it down into the negative. The Dow and S&P 500 is holding out for now but also trending down, so I think unless the market turns around it is going to keep on the pressure on TSLA. There is certainly support to hold above 259.

 

[FluxCap]

Indeed, hard red movement on NASDAQ at the moment, though not seeing concrete news yet.

I'm still predicting a monster of a good week for TSLA.