Short-Term TSLA Price Movements - 2015

[Drax7]

Citizen t, +10

 

[Lump]

Low volume, but TSLA is currently up 2.5% at the German exchanges.

I guess this answers the question of how the Apple news will affect TSLA (up or down).

For those who hate when the US market is closed & need the "action" Tesla Motors Inc. | Equity | A1CX3T | US88160R1014 | Brse Frankfurt (Frankfurt Stock Exchange)

 

[jhm]

For those who hate when the US market is closed & need the "action" Tesla Motors Inc. | Equity | A1CX3T | US88160R1014 | Brse Frankfurt (Frankfurt Stock Exchange)

That's some nice price action, up about 3%! Thanks, Lump.

 

[schonelucht]

I would expect Q1 to be good.

For the 1400 cars that Tela was not able to get to customers in time, virtually all costs were already taken in Q4-2015
At 100k$ per car that is 140M$, I assume this number is reflected in the much higher Inventory (953M$ compared to 340M$). Just clearing this will give an income of 140M$ (or US 1.12 per share).
Sounds like a great headstart to me.

Not really. Read the shareholder letter. The 'headstart' will be more than offset by the surplus production needed in the first quarter to fill the pipeline for Europe and Asia again. In fact, they plan to deliver 9.5k and produce 10k so they are actually at a disadvantage of 500 units.

 

[CHGolferJim]

Can someone clarify the production cost accounting Tesla uses, please? Do all costs of production hit the P&L as the parts and labor are utilized in production (not when parts are purchased for inventory), but revenue recognition lags until delivery for cash/financed sales, and over time for leases?

 

[pGo]

Regarding home storage, if I have a Model S that requires charging at home, how big energy storage unit do I need to go completely off the grid? And how much solar panel installation is required to fill that battery? (A bit off topic, but trying to put some numbers for demand calculation)

 

[Causalien]

That's some nice price action, up about 3%! Thanks, Lump.

Gap almost closed. Looks like I need to stay up past mdnight again for Tuesday action.

 

[30seconds]

I highly doubt Q1 will be a good quarter. The revenue will be flat at best (Tesla will go from 9,834 deliveries to 9,500) and ZEV credits, drivetrain sales, and higher ASPs will be the only reason the revenue is flat and not down. Operating expenses will go up 12-15%, resulting in an even larger net loss than in Q4 2014. Capital Expenditures will go up due to the paint shop and Gigafactory accelerating construction and Elon said that Tesla will invest "Staggering" amounts of money. A larger net loss and more capex than last quarter will result in huge cash burn, perhaps half of the cash burn or more of the total cash burn in 2015. Don't get me wrong, I want Tesla to continue their massive investments, I just don't think the market will appreciate the investments and their huge potential returns in the future. The only positives I can see is Tesla beating deliveries significantly (unlikely unless they were sandbagging since they gave guidance half way into the quarter) and revealing more juicy details on things like battery storage and Gigafactory. Expect the Bears to have a field day with Q1.

That at being said, I'm confident that Tesla's stock will perform well prior to the Q1 quarterly report, and will perform very well once the initial drop after Q1 is over. I'm excited for the Model X, battery storage, the new paint shop and new body in white line coming later this year. I'm also excited for significant cash flow in the second half of the year. Finally, I think Tesla will beat 55,000 cars significantly (by more than 1000). I'd say I'm cautiously optimistic.

This is my take on Q1 as well. Given the comments on the call that they expect to be cash flow positive by the end of 2015 I am expecting that Q2 may also look like Q1 but with higher revenues and hopefully a smaller loss. In terms of total cash they have signaled to expect a raise via monetization of the lease book - this is key as Elon also mentioned that dilution at this point will be minimal (however additional debt is technically non-dilutive from equity standpoint).

i don't expect / want the company to turn a profit anytime soon, but I expect that the cash burn to be the focus of the bear argument in 2015. Other thank the leaf2 it doesn't look like there will be any meaningful competitive launches in 2015 so the Model X should take up most of the press. if this happens, along with increased deliveries in Q2, then Im looking for a Q3 pickup in price action in anticipation of Q3 results. Until then I don't expect much in terms of appreciation.

 

[Robert.Boston]

Regarding home storage, if I have a Model S that requires charging at home, how big energy storage unit do I need to go completely off the grid? And how much solar panel installation is required to fill that battery? (A bit off topic, but trying to put some numbers for demand calculation)

TMC member wk057 is planning to go off grid using a 85 kWh Model S battery he bought on salvage, paired to 28.7 kW of solar panels. He's considering bumping the storage up with a second 85 kWh battery. I'm not sure what his baseline power usage is.

 

[v12 to 12v]

I would expect Q1 to be good.

For the 1400 cars that Tela was not able to get to customers in time, virtually all costs were already taken in Q4-2015
At 100k$ per car that is 140M$, I assume this number is reflected in the much higher Inventory (953M$ compared to 340M$). Just clearing this will give an income of 140M$ (or US 1.12 per share).
Sounds like a great headstart to me.

There are continuing issues that are out of Tesla's control that can impact Q1. But it will impact other car companies too.

Automakers pinched by West Coast port delays

There are some ways to mitigate some of the issues, but not all. Starting up the rail to the East Coast and the ports to Europe was a good move. Less focus on Asia deliveries will help, but there will be lingering impacts to domestic shipping resources and parts coming in from Asia.

 

[v12 to 12v]

There are continuing issues that are out of Tesla's control that can impact Q1. But it will impact other car companies too.

Automakers pinched by West Coast port delays

There are some ways to mitigate some of the issues, but not all. Starting up the rail to the East Coast and the ports to Europe was a good move. Less focus on Asia deliveries will help, but there will be lingering impacts to domestic shipping resources and parts coming in from Asia.

Perhaps this news will help in the short term. Labor secretary to join talks in West Coast port dispute

 

[Robert.Boston]

There are continuing issues that are out of Tesla's control that can impact Q1. But it will impact other car companies too.

Automakers pinched by West Coast port delays

There are some ways to mitigate some of the issues, but not all. Starting up the rail to the East Coast and the ports to Europe was a good move. Less focus on Asia deliveries will help, but there will be lingering impacts to domestic shipping resources and parts coming in from Asia.

Seems likely that Tesla's imports of Panasonic's cells from Japan is also caught up in this mess.

 

[jhm]

Regarding home storage, if I have a Model S that requires charging at home, how big energy storage unit do I need to go completely off the grid? And how much solar panel installation is required to fill that battery? (A bit off topic, but trying to put some numbers for demand calculation)

I'm not an expert, but here's how I look at it. In the US, daily home use is about 30 kWh, so perhaps 10 to 20 kWh of storage may be desirable. Daily auto use is 10 to 20 kWh per car for 30 to 70 miles of daily driving. Now to avoid taking charge levels too low and ruining the usable life of the battery, you need about 25% more capacity than is typically used each day. So a family with a home and 2 EVs could easily need 40 kWh or more.

If storage is sold in say 10kWh modules, then a family could start with just a few modules and add to their system as needed and as prices come down. So I could envision families buying 10 kWh every couple of years as their demand increase (they replace ICE vehicles withEVs), as they price comes down (the ROI on marginal capacity improves) and as older modules need to be replaced (after 10 years or so). So longterm I could see the families buying about 4 kWh of stationary per year. We might add to that 8 kWh per year for automotive and get to a total consumption of about 12 kWh per year per household.

So for the US with about 90 million families, we are looking at market potential over 1000 GWh or 1 TWh year just for residential and private personal vehicles. The Sparks Gigafactory will only address 5% of this market for US families. Add too this commercial and industrial demand and multiply this time Europe, Asia and beyond, and it is not hard to envision a market for 5 to 10 TWh. Again the little ole Sparks Gigafactory is only addressing about 1% of this global energy storage market. Of course, with density doubling every 10 year, by 2040 the Sparks Gigafactory could be supplying 250 GWh/year, which is why the world may never need more than 20 Gigafactory equivalents (GFE) ever. So Tesla is actually staking claim to about a 5% share of the future energy storage market.

So what is a 5 to 10 TWh energy storage market worth? Its a little tricky because with technology and manufacturing efficiency gains the price should fall over time. Looking at 2030, I would expect the price per kWh to be in the range of $50 to $100. The lower it is the higher the volume. So 5 TWh @ $100/kWh is the same as 10 TWh @ $50/kWh, both about $500 B. Just for kicks let's compare that to crude oil production today. 76 million barrels per day @ $50/barrel is about $1.4 T. So even compared with cheap oil in a massive glut, the future energy storage market will replace the oil market because storage plus renewable electricity (~$500B for 10,000 TWh @ $0.05/kWh) is still about 30% cheaper than oil. This implies a parity price for oil at about $35/barrel in 2030 when EVs and storage reach scale. This sort of analysis starts to reveal why stationary storage is important to EV adoption. Stationary storage enables cheap intermittant renewable energy to power vehicles. Families will need about as much electricity for their cars as for their homes. Rooftop solar plus storage is sufficient to cover this incremental demand for power while driving the cost of electricity below $0.05/kWh with an additional cost of storage around the same amount. Renwables plus storage will save the global economy on order of $1T or per year just on the cost oil, not counting environental savings or economic stimulous from lower energy costs. So we see how the global oil market is to be disrupted.

- - - Updated - - -

Totally agree with this excellent point, jhm !!!

Just to try to work out how much Chevy is going to sell via the Bolt, they're going to start at 30,000 cars per year... let's assume it uses 250Wh/mile on average, and so it would need a battery of 50KWh. Chevy would be shipping 1.5GWh of batteries. (very unscientific math)

That's good. So they want to start production pretty much on level with where Nissan was last year in units of GWh. If I were Nissan, I would be worried about GM.

 

[hockeythug]

Can someone clarify the production cost accounting Tesla uses, please? Do all costs of production hit the P&L as the parts and labor are utilized in production (not when parts are purchased for inventory), but revenue recognition lags until delivery for cash/financed sales, and over time for leases?

Correct on the revenue recognition. I'm not sure on the costs of production part of it.

 

[Ocelot]

I'm not an expert, but here's how I look at it. In the US, daily home use is about 30 kWh, so perhaps 10 to 20 kWh of storage may be desirable. Daily auto use is 10 to 20 kWh per car for 30 to 70 miles of daily driving. Now to avoid taking charge levels too low and ruining the usable life of the battery, you need about 25% more capacity than is typically used each day. So a family with a home and 2 EVs could easily need 40 kWh or more.

If storage is sold in say 10kWh modules, then a family could start with just a few modules and add to their system as needed and as prices come down. So I could envision families buying 10 kWh every couple of years as their demand increase (they replace ICE vehicles withEVs), as they price comes down (the ROI on marginal capacity improves) and as older modules need to be replaced (after 10 years or so). So longterm I could see the families buying about 4 kWh of stationary per year. We might add to that 8 kWh per year for automotive and get to a total consumption of about 12 kWh per year per household.

So for the US with about 90 million families, we are looking at market potential over 1000 GWh or 1 TWh year just for residential and private personal vehicles. The Sparks Gigafactory will only address 5% of this market for US families. Add too this commercial and industrial demand and multiply this time Europe, Asia and beyond, and it is not hard to envision a market for 5 to 10 TWh. Again the little ole Sparks Gigafactory is only addressing about 1% of this global energy storage market. Of course, with density doubling every 10 year, by 2040 the Sparks Gigafactory could be supplying 250 GWh/year, which is why the world may never need more than 20 Gigafactory equivalents (GFE) ever. So Tesla is actually staking claim to about a 5% share of the future energy storage market.

So what is a 5 to 10 TWh energy storage market worth? Its a little tricky because with technology and manufacturing efficiency gains the price should fall over time. Looking at 2030, I would expect the price per kWh to be in the range of $50 to $100. The lower it is the higher the volume. So 5 TWh @ $100/kWh is the same as 10 TWh @ $50/kWh, both about $500 B. Just for kicks let's compare that to crude oil production today. 76 million barrels per day @ $50/barrel is about $1.4 T. So even compared with cheap oil in a massive glut, the future energy storage market will replace the oil market because storage plus renewable electricity (~$500B for 10,000 TWh @ $0.05/kWh) is still about 30% cheaper than oil. This implies a parity price for oil at about $35/barrel in 2030 when EVs and storage reach scale. This sort of analysis starts to reveal why stationary storage is important to EV adoption. Stationary storage enables cheap intermittant renewable energy to power vehicles. Families will need about as much electricity for their cars as for their homes. Rooftop solar plus storage is sufficient to cover this incremental demand for power while driving the cost of electricity below $0.05/kWh with an additional cost of storage around the same amount. Renwables plus storage will save the global economy on order of $1T or per year just on the cost oil, not counting environental savings or economic stimulous from lower energy costs. So we see how the global oil market is to be disrupted.

- - - Updated - - -


That's good. So they want to start production pretty much on level with where Nissan was last year in units of GWh. If I were Nissan, I would be worried about GM.

That was a great post. thanks.

 

[InTheShadows]

Can we take the Apple discussion back to the Apple thread.

Pre market is looking to gap up. Could this be a start of a small run up with the nice surge the last minutes of Friday.

 

[Causalien]

Can we take the Apple discussion back to the Apple thread.

Pre market is looking to gap up. Could this be a start of a small run up with the nice surge the last minutes of Friday.

Yeah if we do gap. This will actually form a strong candlestick reversal pattern called inverse island gap/island reversal. So bullish from here on.

*edit Gap and fizzled out. Move along people.

 

[Krugerrand]

Yeah if we do gap. This will actually form a strong candlestick reversal pattern called inverse island gap/island reversal. So bullish from here on.

So the unicorns are having a séance on Gilligan's Island?

 

[Causalien]

Non, mais ils font l'amour là bas.

 

[Krugerrand]

Non, mais ils font l'amour là bas.

I love it when you French talk me.