Short-Term TSLA Price Movements - 2015

[dha]

So...in my obsessive quest to analyze all available clues and information in advance of Thursday's "range anxiety" press conference I've decided to look back to December's Roadster 3.0 upgrade announcement ( http://www.teslamotors.com/blog/roadster-30 )

What we know:

* Tesla was able to boost range of Roadster to 400 miles with a 70kWh pack
* Roadster press release includes the following text: "No new Model S battery pack or major range upgrade is expected in the near term."
* Elon was relatively active on Twitter Christmas week, but one of his tweets was deleted within a day or two: https://twitter.com/elonmusk/status/548269323681529856


I managed to find a screenshot of that Tweet on a Google Groups thread:

Text: "Should mention that a battery pack upgrade is not coming soon for the Model S, but it obviously will happen long-term."

Not sure if any of this is pertinent at all, but it might be good food for thought. Or maybe I'm just going off the deep end.

 

[EnergyMax]

When the D came out Elon, said no more major upgrades to the S for a year. So I don't think news of hardware changes should be expected before Oct-Nov, 2015.

 

[dha]

When the D came out Elon, said no more major upgrades to the S for a year. So I don't think news of hardware changes should be expected before Oct-Nov, 2015.

I agree we can totally rule out hardware changes, given it's an OTA update. But I'm still unclear on what can be achieved via a firmware upgrade to the car's power electronics. I just don't see Elon building hype and holding a press conference for enhanced range-awareness in navigation. More substantial software upgrades have been rolled out far more quietly than that.

 

[EnergyMax]

I agree we can totally rule out hardware changes, given it's an OTA update. But I'm still unclear on what can be achieved via a firmware upgrade to the car's power electronics. I just don't see Elon building hype and holding a press conference for enhanced range-awareness in navigation. More substantial software upgrades have been rolled out far more quietly than that.

I don't think most people are aware of the range capabilities of the Model S. And I don't think most people appreciate the SuperCharging network. TeslaMotors doesn't advertise it. Since they will probably be making long distance travel even simpler through software (maybe also incorporating HPWC distributed to businesses), Tesla will want to reach as wide an audience as possible. Which means a press conference. This may not be a big deal to those who are experienced with a charging lifestyle, but it should help achieve the master plan.

 

[mdemetri]

When the D came out Elon, said no more major upgrades to the S for a year. So I don't think news of hardware changes should be expected before Oct-Nov, 2015.

Expected no, possible yes.

Elon also said on the Q4 call that he has a demand secret weapon that he can employ if demand falls. So if demand is waning (and I am not saying that it is) and the secret weapon involves hardware, then a hardware upgrade to Model S may have been deployed early (to end range anxiety and drive demand).

 

[EnergyMax]

Expected no, possible yes.

Sure. It's possible - there's a chance Dumb and Dumber - YouTube :wink:

 

[NigelM]

Why suddenly stop allowing a second charger to put in the car during manufacturing? Maybe to make room for other hardware? I know, wild speculation, but it is so much fun:biggrin:

Because very few people actually wanted the dual chargers; it only makes sense if you're on an HPWC and you want to go out again in a short space of time. You guys need to read other parts of TMC now and again. ;-)

 

[FluxCap]

I agree we can totally rule out hardware changes, given it's an OTA update. But I'm still unclear on what can be achieved via a firmware upgrade to the car's power electronics. I just don't see Elon building hype and holding a press conference for enhanced range-awareness in navigation. More substantial software upgrades have been rolled out far more quietly than that.

That is my hypothesis, as well.

- - - Updated - - -

Latest from Elon. His comments were again taken out of context by ALL the automotive press, but he fed them the headline this time.

 

[sundaymorning]

That is my hypothesis, as well.

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Latest from Elon. His comments were again taken out of context by ALL the automotive press, but he fed them the headline this time.

View attachment 75144

After listening to Elon's comment on software update and Thursday's release being a small fraction of hardware, I'm inclined to think the news will disappoint. A few puts were bought as insurance.

 

[vgrinshpun]

Ending of range anxiety, IMO, is really about taking the guess-work from the prediction of how far one can drive in MS, especially when environmental conditions change while on-route. The first attempt at this prediction was made in version 6.1, which includes real-time graph showing how much the battery is depleted at the end of the specified route. The important thing to note, that although this graph has, as an input, selected rout to the destination, it is **not** part of the navigation system – it is part of the Energy App.

The information about the route can be pulled either from the GPS based navigation system for cars with the Tech package, **or** from the Google navigation for cars without the tech. package. So improvement to the Energy App. could apply to the entire fleet of MS.

I think that elimination of range anxiety is most likely entails a significant improvement to the Energy App. Speed has a major impact on the range, but Energy App currently does not allow to enter planned speed for a trip (either in mph or in mph above speed limit). So I expect this to be added. The graph that shows real time progress along the route and predicted battery charge at the end can also be made “active” in that it could, if battery charge at the end falls too low (say 10-15%) could provide a real time advice on the speed that need to be maintained in order to arrive to the destination with enough charge.
Another enhancement that can help with range anxiety, and could be applied to the whole fleet, is ECO mode on conventional cruise control. Allowing speed to fall by several mph driving up-hill, and then allowing the speed to exceed the setting by several mph driving downhill will improve efficiency.

The third component affecting the entire fleet could be some tweaks in the software controlling the operation of power conversion unit which could result in slight improvement in efficiency (lowering Wh/mile).

Regarding the price action, given the above, I believe that we will see significant run-up into the press conference because of mass confusion and wildly optimistic expectation of increased range (confusion between “ending range anxiety” and increasing range). So I believe we will see very swift movement down after the press conference.

There is, however, a chance that prediction of dropping SP after the conference will turn out wrong – as others mentioned, it seems unusual that we have a press-conference rather than the usual “event”. This opens door to reporters asking wide range of questions on demand, production, personnel re-assignment, GF progress, etc. If Elon successfully dismisses the bear perpetuated concerns, we might see a reversal of the down ward trend.

I have a theory what could be the big announcement at the Thursday's press conference, aside from improvements to the Energy App that I described in my previous post (this part was covered in Elon's tweet about range anxiety).

This CNBC interview with James Albertine of Stifel has some very interesting information about the Thursday’s press conference. Here are the significant quotes:

(About Thursday’s press conference) “I think this is very important opportunity for Tesla to draw attention back to where they stand, from competitive stand point, with regards to range.” “When we were at the factory last week, one of the things we saw was transition from the 4[SUP]th[/SUP] generation to the 5[SUP]th[/SUP] generation of battery cell production technology. We think that they are going to show that they further extended their leadership as it relates to range. Quite frankly we think that this is most important catalyst for 2015.

Here is my interpretation what was said in this interview.

1. I think that transition from the 4[SUP]th[/SUP] t0 5[SUP]th[/SUP] generation of battery production technology relates to transition from D version of battery packs to E version. For those not familiar E version battery packs started to ship around December (VINS of approx. 56,000)
2. According to this TM thread E battery packs maintain high (higher than earlier variants of the pack) charging rate up to a higher state of charge. One explanation for this would be that TM tweaked composition of the battery so it can take higher charging rate longer. The other is that E-battery has bigger capacity than the previous variants.

So it seems that, similar to how they retrospectively released information about the auto-pilot hardware, TM shipped all cars with E pack with a slightly bigger battery (same 7104 cells but each having about 10% higher capacity). Utilization of this additional capacity will be enabled via a software release.

The reason that James Albertine assigns such significance to this, I believe, is that for D cars the range could be extended to hit symbolically important 300 miles EPA. I think that this will be accomplished via combination of increase capacity of the battery (additional 27 miles) and improved efficiency of the control of power electronics (via software changes) as well as improved efficiency of the motor, particularly at very low power consumption levels as in coasting (additional 3 miles of range). so the total EPA rating would be 270+27+3=300.

There is some level of speculation involved in this (on my part, as I believe James Albertine was not speculating, but pretty much conveyed the facts as he knows them), but the potential impact of hitting the 300 miles of EPA range could be very significant (the most important catalyst for 2015 in Albertine’s analysis).

 

[AlMc]

After listening to Elon's comment on software update and Thursday's release being a small fraction of hardware, I'm inclined to think the news will disappoint. A few puts were bought as insurance.[/QUOTE]

I never thought I would see the day:wink: but I think that was a wise move. To balance my and your puts I bought some March 20 200s calls when we had the big dip today. This is my 'just in case in am wrong about the impact of the press conference' play.

 

[NigelM]

So it seems that, similar to how they retrospectively released information about the auto-pilot hardware, TM shipped all cars with E pack with a slightly bigger battery (same 7104 cellc but each having about 10% higher capacity). Utilization of this additional capacity will be enabled via a software release.

Great theory, but Elon already confirmed that the new software will impact the entire fleet, i.e. it's not going to unlock some hidden hardware on a few cars.

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After listening to Elon's comment on software update and Thursday's release being a small fraction of hardware, I'm inclined to think the news will disappoint. A few puts were bought as insurance.

I'll counter that with the observation that disappointment will be on these boards (TMC) because too many people around here have been hyping themselves up for some big hardware/infrastructure/whatever news that isn't likely to materialize. Potentially, folks in the market haven't been drinking quite as much caffeine as TMC'ers. ;-)

 

[vgrinshpun]

Great theory, but Elon already confirmed that the new software will impact the entire fleet, i.e. it's not going to unlock some hidden hardware on a few cars.

Please read my post. The part that applies to the whole fleet, in my opinion, are modifications to the Energy App, as described in my previous post.

What I am speculating, based on Albertine's interview, is a reason for the press conference. I doubt that changes to Energy App and Nav. System warrant the full blown press conference.

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After listening to Elon's comment on software update and Thursday's release being a small fraction of hardware, I'm inclined to think the news will disappoint. A few puts were bought as insurance.

I've bought some puts as well as some weeklies and Jan 2016 calls. Still deciding what to do with calls - hold them through the press conference, or take profit just before it.

 

[Lump]

I can't believe this, you guys bought Puts?...no way!

I closed mine Monday morning at the open:biggrin:.

 

[vgrinshpun]

I can't believe this, you guys bought Puts?...no way!
.

???

 

[doggusfluffy]

Please read my post. The part that applies to the whole fleet, in my opinion, are modifications to the Energy App, as described in my previous post.

What I am speculating, based on Albertine's interview, is a reason for the press conference. I doubt that changes to Energy App and Nav. System warrant the full blown press conference.

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I've bought some puts as well as some weeklies and Jan 2016 calls. Still deciding what to do with calls - hold them through the press conference, or take profit just before it.

Well, a couple of the other things we know is the inverter algorithm Elon mentioned and Jerome mentioning the computer control produces the best range. I also remember Elon mentioning how difficult an achievement it was squeezing the last tenths of the supercar D 0-60 time and they shaved another tenth on top of that. So it might be an impressive tweak, along with the Nav and maybe some better big data overall improvements with more cars on the road.

 

[Jack6591]

Elon's tweet was ambiguous at best, cryptic at its worst. Just parse out "about to". There is no hard information in the tweet. We will know on Thursday.

 

[Auzie]

I'll counter that with the observation that disappointment will be on these boards (TMC) because too many people around here have been hyping themselves up for some big hardware/infrastructure/whatever news that isn't likely to materialize. Potentially, folks in the market haven't been drinking quite as much caffeine as TMC'ers. ;-)

It feels so good to be hyped, that is why we do it. :biggrin: The hype and entertainment value are delivered each quarter and in between to shareholders and I am prepared to pay the premium for these.

Most likely many others are paying such premium, it is so much fun to be invested in TSLA. We got hooked and are hanging on when maybe it would be prudent to get out but I have no regrets for hanging on, highs more than make up for the lows.

Agree with you that the conference might lead to a drop in price and lower mood. Next high is more likely to be propelled with business rather than car improvements.
Imo long term TSLA at below $190 is a good buy.

 

[vgrinshpun]

Well, a couple of the other things we know is the inverter algorithm Elon mentioned and Jerome mentioning the computer control produces the best range. I also remember Elon mentioning how difficult an achievement it was squeezing the last tenths of the supercar D 0-60 time and they shaved another tenth on top of that. So it might be an impressive tweak, along with the Nav and maybe some better big data overall improvements with more cars on the road.

Agreed, except that these are not "other things", I actually mentioned them in my original post.:smile:

 

[doggusfluffy]

Agreed, except that these are not "other things", I actually mentioned them in my original post.:smile:

Sorry I missed it! I skipped a couple pages. Might I add, excellent points too. :smile: