What are they basing this one on?
Hopefully we get a tweet from Elon saying that they intend to deliver more than the 5,000 Morgan Stanley predicts.
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What are they basing this one on?
Hopefully we get a tweet from Elon saying that they intend to deliver more than the 5,000 Morgan Stanley predicts.
Chickenlittle
Banned
You should definitely short. You are clearly on to something. I enjoy short squeezesWhat is more troubling is that deliveries are way down in the US. It is true that more product is allocated to foreign markets but this does not explain why deliveries are down dramatically in the US. Its not like anyone in the US was denied a sale. If you order one, you will receive one within 3 to 4 months. This one chart below is very telling. The few states that have increased sales are no where close to making up for losses in established states. This only means demand has peaked 1-2 years after sales have begun in any given market and this is also true for North America as a whole. Will this be expected in Europe/Asia. Will sales peak by 2017 in China? What will happen once Norway ends all incentives once EVs reach 50,000 sold?
I am more concerned with the EPS decrease part. I am OK (market OK?) with fewer X deliveries as long as the X deliveries start in early Q3 and total deliveries of S and X keeps to the 50% increase YOY that EM guided for recently.
Johan
Ex got M3 in the divorce, waiting for EU Model Y!
They are probably rightish on the 5000 Xs for whole year of 2015 (maybe up to 10k?). But I don't see why that in itself would impact EPS. If they build fewer X then they will build more S, right? So I guess we're back to the question of demand once again???
I'd just like to point out that the incentives do not automatically end once the number of EVs reaches 50k. What the politicians have agreed on is that they will last until 50k, *at minimum*, and any changes to the incentives have to be brought before parliament. The national budget is being negotiated right now, and it's extremely unlikely that we will see any sort of provision for altering the incentives in 2015. In fact, this year, they'll likely add up to $10k in incentives when buying a plug-in hybrid, and increase the taxes on gas/diesel.
The earliest we'll see any changes will be 2016, but as long as the party lines are as they currently are in the parliament, it's unlikely we'll see an outright termination of the incentives. We might see a gradual reduction in incentives starting in 2016, but if so, this means that EVs have been assessed to be competitive enough even without incentives. They might also wait until 2017 before starting to phase out the incentives.
Likely end-of-year totals:
2014: 40,000 electric cars
2015: 70,000 electrc cars
2016: 100,000 electric cars
2017: (here it starts to get fuzzy)
jhm
Well-Known Member
Yggdrasill, it seems that as EVs become more popular in Norway voters will come to prefer that incentives stay in place. As the biggest incentive is high taxes on conventional vehicles, I wonder if political interest will turn to lowering these taxes on conventional, rather than raising taxes on EVs. Does this makes sense for Norwegian political sensibility, or am I projecting my US sensibilities into this situation?
Muskol
Member
He's being overly cautious. What irks me about the note is the understatement of the p85d and 85d influence. That going to bump earnings and bring the Model X backlog down a bit via "people who just want AWD" conversions. Gross margins on Model S only go up from here, to me this equals incremental profit and even more economies of scale.
I also can't believe this issue of "demand" is still an issue. How do people not understand the concept of allocations and being production constrained. At this point, if they don't get it there is no helping them.
I think things could go this way. We have one party (the Progress Party) which is quite populist and wants to reduce taxes; my impression is that they view the EV incentives as a crowbar to get rid of a lot of the vehicle taxes. But while the progress party is in a coalition goverment, they do not have the majority in parliament. The coalition government is dependant on support from the Liberal Party (disclaimer - I'm a member), and the Liberal Party values itself on being green. They've taken a firm stance opposing proposed tax cuts on conventional vehicles and gasoline, and will likely succeed in getting their way. This is a fight that is too important, and the Liberal Party knows it can get the desired result by ending support of the coalition government (tossing them out) and opting to work with the Labour Party. It's highly unlikely to go that far, most likely the Progress Party will cave.
The next parliamentry election is in 2017, so the Liberal Party will still be in a very good position for supporting EVs until then.
chickensevil
Active Member
The timing of some of these notes is always interesting to me. Take this most recent example. Others on this board stated that TSLA was being kept below 260 over the last couple of days and now we have this note released with three days till monthly expiration, and max pain currently at $247.50. I am curious to see how this plays out by friday afternoon.
chickensevil
Active Member
According to the note it seems like they did adjust upward for MS sales but they were already way below management's guidance.
So based on this they are only expecting 53,000 deliveries total in 2015, whereas previously they were expecting 60k (45k MS and 15k MX). However in Q2 Management said that they could probably do 60k in 2015 and in Q3 Management said that they would do at least 50k MS. I still stand by us seeing at least a total of 60k for 2015.
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Oh and in case someone wants to read the write up it is on yahoo finance.
Morgan Stanley slashes Tesla estimates | Tumblr Blog - Yahoo Finance
Elon said he was hoping for 70k Model S plus whatever Model X they can do in 2015 on the last ER call, which would be significantly more than Jonas just "predicted". Jonas also released an "oops sorry I made up stuff about Falcon Wing doors" note this morning. And he maintains his $320 price target, saying he recommends TSLA as a buy because it is the most important global auto manufacturer in the world.
I'm not entirely sure he has all his marbles at the moment.
Krugerrand
Meow
chickensevil
Active Member
I'm sorry, what? 70k? I missed that! The only thing I remember in reference to 70k was that their current order rate right after the D announcement shot up to 70k equivalent, but that wasn't likely to sustain. Can you clarify where else you saw this reference?
Either way, AJ is still low on their numbers compared to Management guidance.
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It seems to be *somewhat* recovering. Down only 5.70, at it's worst point we were down almost 10$. Hopefully most of this dissolves in the next 20 minutes.
Johan
Ex got M3 in the divorce, waiting for EU Model Y!
Very good comment. I know there is not supposed to be any connection between the analysis division of the investment banks and their actual investment divisions or other market makers... but is there reason to believe the financial industry is more motivated by ethics than profit?
Krugerrand
Meow
The point may be that they should 'try' to not be so obvious about it, so it's not right in your face.
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