Short-Term TSLA Price Movements - 2015

[sundaymorning]

Nobody at Tesla ever said 'demand is really out of the chart'. What they have said is that they have enough demand to produce 55,000 vehicles this year without having to advertise. They have said that they want to exit 2015 at a production rate of 2000/wk. They have said that the second half of 2015 will see more vehicles produced than the first half. While deliveries were under guidance the last two quarters, Tesla hit their 2014 yearly production guidance. Tesla exited 2014 with 10,000 Model S reservations and 20,000 Model X reservations, that's your proof of demand. You'll get nothing else from Tesla as far as I can tell, and I think you'll be getting less in the future.

Less is likely best. The more TSLA gives the more the company opens itself up for comments to be taken out of context at a later date. Elon cannot simply satisfy the insatiable appetite of investor greed, no matter how high the stock goes. Better to keep his cards close to the chest. If demand was once outrageous, and suddenly falls a bit 6 months later, then according to Mr. Market, Elon was lying. If demand suddenly jumps, then Elon is hyping. If Elon curbs market enthusiasm by stating Tsla is over valued, then he isn't do his job as CEO to shareholders. It's a no win situation... to me, TSLA & Elon simply states what they currently see as the existing true picture of demand and readjusts or gauge their forcasts accordingly. If demand is high, Elon isn't shy to let us know, and everytime there are challenges to this demand curve, he lets us know without hesitation. Elon has done his job, as investors we should do ours, and readjust our short/long term goals accordingly. Right now, I'm sticking with 50-55k for 2015. Everything else I read on here is a matter of unfounded opinion until the facts are spilled.

I will certainly be ready to exit all my put positions soon, while all my long term shares remain intact. Once again, if you are playing short term, be prepared for surprises in either direction.

 

[vgrinshpun]

Regardless whatever reasons behind, TM was supposed to reach 1k/week production rate in 14' Q3, while the 1k/week guidance stays flat through 15' Q2. If demand is really out of the chart, then TM should had all motivations to do whatever possible to increase production rate steadily instead of flatting for almost 4 quarters. I was a big fan of TM's production growth trajectory speculation, but the reality forced me to put reasonable doubt on this strange pattern until strong demand is proved (not by Elon's claim) by every angel we can observe (e.g. website wait time).

Well, you are just choosing to stick with your preconceived notion, or may be just intuitive feeling that demand is not there, regardless of the facts. Sorry to say this, but it is completely irrational.

I am going to mention this again, because you seem to brush aside the hard production limitation which is not going to be relieved until some time in Q2 or Q3.

Currently, in order to produce 1000 cars/week a lot of production areas are running partial third shift. There is no staff to cover the third shift, and no reason to hire and train any because in second half of the year, after the upgrade of the factory is completed, TM will be able to produce 2500 cars/week with two shift operation. The only way for TM to cover the third shift in the interim is to have staff work overtime. This is far from optimal because working OT for several month is a recipe for the burnout of the workers. It additionally erodes gross margin. So increasing production beyond the 1000 cars/week is not feasible at this time. The production will be increased as soon as all bottlenecks with the "old" design production rate are eliminated.

Regarding you mentioning almost 4 quarters of the flat production rate, it is just not true. TM reached 1000 cars/week in November - middle of the Q4 2014. They will have to increase production some time in Q2 in order to hit 40% of 55K in 2015 1H. So production is likely to be "flat" for 1.5 to 2 quarters.

 

[CyberDutchie]

Wow -- I'm always sorry to hear stories like this. I have personally never used margin to make option trades, even when day trading, as there is too much room for abrupt losses to create emotional trading decisions. I hope you dig out, sometimes taking a long break is in order.

I've been using margin for options trading for about a year now. I just buy calls, some quartery, mostly leaps, at various strikes. I like to hold them till expiry, then exercise them. At the ATH last September, I looked really smart with all of them in the green with big gains. Now, six months later, my portfolio is down more than 50% and only one of my calls is still in the green. Seeing them expire worthlessly is very painful, especially knowing that you still owe the margin and pay interest on it. My strategy was to keep buying more, on margin, so that when the eventual turn-around is there, I can make gains and start bringing down the margin balance.

Someone here predicted that we wouldn't see $300 until some time in 2016. That is a frightening thought. Many here were sure we would see $300 by the end of 2014.

I'm posting my current holdings, in case anyone has some thoughts on which ones to keep, vs. cutting my losses. Or any other advice. It's obvious that I'm a rookie when it comes to options trading, but you live and learn.

TSLA Mar 20 '15 $220 Call - Last trade $0.01 - Price paid $31.5 - Gain/loss (-100%)
TSLA Jun 19 '15 $180 Call - Last trade $18 - Price paid $26.5 - Gain/loss (-33.22%)
TSLA Jun 19 '15 $240 Call - Last trade $1.94 - Price paid $12.5 - Gain/loss (-84.52%)
TSLA Jun 19 '15 $285 Call - Last trade $0.92 - Price paid $11.07 - Gain/loss (-93.68%)
TSLA Jan 15 '16 $150 Call - Last trade $45.8 - Price paid $35.55 - Gain/loss 33.73%
TSLA Jan 15 '16 $210 Call - Last trade $19.06 - Price paid $22.5 - Gain/loss (-16.1%)
TSLA Jan 15 '16 $220 Call - Last trade $15.72 - Price paid $31.51 - Gain/loss (-50.22%)
TSLA Jan 15 '16 $300 Call - Last trade $3.4 - Price paid $33.5 - Gain/loss (-88.69%)
TSLA Jan 20 '17 $190 Call - Last trade $40 - Price paid $50 - Gain/loss (-20.19%)
TSLA Jan 20 '17 $240 Call - Last trade $24.40 - Price paid $41 - Gain/loss (-40.75%)
TSLA Jan 20 '17 $260 Call - Last trade $23.94 - Price paid $38 - Gain/loss (-43.85%)
TSLA Jan 20 '17 $280 Call - Last trade $16.5 - Price paid $26.93 - Gain/loss (-38.89%)
TSLA Jan 20 '17 $300 Call - Last trade $13.5 - Price paid $44 - Gain/loss (-70.19%)
TSLA Jan 20 '17 $330 Call - Last trade $10.91 - Price paid $33.5 - Gain/loss (-67.54%)

 

[maoing]

I've been using margin for options trading for about a year now. I just buy calls, some quartery, mostly leaps, at various strikes. I like to hold them till expiry, then exercise them. At the ATH last September, I looked really smart with all of them in the green with big gains. Now, six months later, my portfolio is down more than 50% and only one of my calls is still in the green. Seeing them expire worthlessly is very painful, especially knowing that you still owe the margin and pay interest on it. My strategy was to keep buying more, on margin, so that when the eventual turn-around is there, I can make gains and start bringing down the margin balance.

Someone here predicted that we wouldn't see $300 until some time in 2016. That is a frightening thought. Many here were sure we would see $300 by the end of 2014.

I'm posting my current holdings, in case anyone has some thoughts on which ones to keep, vs. cutting my losses. Or any other advice. It's obvious that I'm a rookie when it comes to options trading, but you live and learn.

TSLA Mar 20 '15 $220 Call - Last trade $0.01 - Price paid $31.5 - Gain/loss (-100%)
TSLA Jun 19 '15 $180 Call - Last trade $18 - Price paid $26.5 - Gain/loss (-33.22%)
TSLA Jun 19 '15 $240 Call - Last trade $1.94 - Price paid $12.5 - Gain/loss (-84.52%)
TSLA Jun 19 '15 $285 Call - Last trade $0.92 - Price paid $11.07 - Gain/loss (-93.68%)
TSLA Jan 15 '16 $150 Call - Last trade $45.8 - Price paid $35.55 - Gain/loss 33.73%
TSLA Jan 15 '16 $210 Call - Last trade $19.06 - Price paid $22.5 - Gain/loss (-16.1%)
TSLA Jan 15 '16 $220 Call - Last trade $15.72 - Price paid $31.51 - Gain/loss (-50.22%)
TSLA Jan 15 '16 $300 Call - Last trade $3.4 - Price paid $33.5 - Gain/loss (-88.69%)
TSLA Jan 20 '17 $190 Call - Last trade $40 - Price paid $50 - Gain/loss (-20.19%)
TSLA Jan 20 '17 $240 Call - Last trade $24.40 - Price paid $41 - Gain/loss (-40.75%)
TSLA Jan 20 '17 $260 Call - Last trade $23.94 - Price paid $38 - Gain/loss (-43.85%)
TSLA Jan 20 '17 $280 Call - Last trade $16.5 - Price paid $26.93 - Gain/loss (-38.89%)
TSLA Jan 20 '17 $300 Call - Last trade $13.5 - Price paid $44 - Gain/loss (-70.19%)
TSLA Jan 20 '17 $330 Call - Last trade $10.91 - Price paid $33.5 - Gain/loss (-67.54%)

Sorry to hear your story. But you are not alone, with SP declined 37% from ATH, I believe many folks portfolio shrinked by more than 50%. I decided to cut loss of all my options (Jan 16 leaps and March calls) before Q4 ER and I still recorded 50% and 33% loss for two of my option trading accounts. It's very bad and too bad. For your case, don't be panic at this point. I believe SP is very close to short term bottom or already bottom out on Friday. So you can handle some June calls in upcoming rebounce, especially those high striking price ones (240, 285), for 180 striking price one, you might hold it through Q1 ER, it might potentially give you some surprises. For Jan. 16 leaps, you can hold it until model X reveal to see what happens at that time. I wouldn't worry too much about Jan. 17 leaps at this point. Just IMHO, good luck!

 

[Crowded Mind]

The correct advice is stop trying to learn about options while using margin... And surely don't use more margin to try and correct losses. That's just a recipe for disaster.

 

[maoing]

My reasoning is from what I observed and surely it's speculation, slow production ramp up, weak China demand, strong dollar implying weak EU demand as well. What's the fact from what you claimed below? Is it just from your speculation? I didn't see TM officially talk about the details of how difficult to improve production rate.

Currently, in order to produce 1000 cars/week a lot of production areas are running partial third shift. There is no staff to cover the third shift, and no reason to hire and train any because in second half of the year, after the upgrade of the factory is completed, TM will be able to produce 2500 cars/week with two shift operation. The only way for TM to cover the third shift in the interim is to have staff work overtime. This is far from optimal because working OT for several month is a recipe for the burnout of the workers. It additionally erodes gross margin. So increasing production beyond the 1000 cars/week is not feasible at this time. The production will be increased as soon as all bottlenecks with the "old" design production rate are eliminated..

TM was supposed to reach 1k/week rate from August 2014 from Q2 ER although it didn't happen until November 2014. From guidance, entire Q1/Q2 production rate is around 1k/week. So from guidance point view, the production rate almost flatting for 11 months.

Regarding you mentioning almost 4 quarters of the flat production rate, it is just not true. TM reached 1000 cars/week in November - middle of the Q4 2014. They will have to increase production some time in Q2 in order to hit 40% of 55K in 2015 1H. So production is likely to be "flat" for 1.5 to 2 quarters.

- - - Updated - - -

TM kept complaining battery supply issue from all 2013 ERs until 2014 Q2 ER. After that, it's just simply production constrained. Not sure how do you know the details of Panasonic contract and what's the model S/X volume those contracts can support? I think that's business secret.

Nope, it's not out of date information. Go back and look it up. The second Panasonic contract still only allowed for so many Model S's and X's. There's zero chance of Tesla going all out in production, not even mentioning the fact that they have dozens and dozens of other suppliers who also have to be able to produce at the same rate. We aren't making one piece forks here. Methodical, quality, and improving efficiency always rank higher than just spitting out at a higher rate because you think that's what they should be doing..

 

[MikeC]

TM kept complaining battery supply issue from all 2013 ERs until 2014 Q2 ER. After that, it's just simply production constrained. Not sure how do you know the details of Panasonic contract and what's the model S/X volume those contracts can support? I think that's business secret.

2 billion cells from 2014-2017: Panasonic to Supply Tesla With 2 Billion Lithium-Ion Battery Cells From 2014 to 2017 | Inside EVs

 

[maoing]

I know this, but it's not specific about the supply for each year.

2 billion cells from 2014-2017: Panasonic to Supply Tesla With 2 Billion Lithium-Ion Battery Cells From 2014 to 2017 | Inside EVs

 

[Krugerrand]

2 billion cells from 2014-2017: Panasonic to Supply Tesla With 2 Billion Lithium-Ion Battery Cells From 2014 to 2017 | Inside EVs

And there you have it. Further, maoing, you can calculate how many cars that makes by dividing by the number of cells in the 60 and 85 batteries at the general ratio at which they sell. Hint: Tesla sells the majority of cars with 85s. And don't think for a second that the amount of batteries is somehow front end loaded as it's well known that Panasonic had to reopen closed battery lines to fill this contract.

- - - Updated - - -

I know this, but it's not specific about the supply for each year.

Of course it's not specific about the supply for each year, but it's certainly not a diminishing amount as the years go by because that wouldn't make sense.

 

[vgrinshpun]

My reasoning is from what I observed and surely it's speculation, slow production ramp up, weak China demand, strong dollar implying weak EU demand as well. What's the fact from what you claimed below? Is it just from your speculation? I didn't see TM officially talk about the details of how difficult to improve production rate.

The 800 cars/week is the run rate of the production process per the initial design. This is fact. It was deduced very long time ago by Randy Carlson based on National Geographic Giga Factories video, and then confirmed by TM many times. The Q4 2014 shareholder letter specifically mentioned areas that need to be upgraded to get the whole production from 800 to 2500 cars/week. So portions of the production process are currently limited to 800cars/80hrs week, and will be until TM completes the upgrade of the factory. This is not my speculation this is fact.

Ahead of the Model X launch in Q3, we plan to expand capacity in several areas. In our Lathrop manufacturing facility in central California, we are installing a state of the art,highly automated casting and machiningoperation for various aluminum components used on both Model S and Model X. We are also increasing production on our new drive unit line to meet All-Wheel Drive Dual Motor demand.

In late summer, we plan to begin Model X body production in our new robotic body assembly shop that will run in parallel with our current Model S body shop. Shortly thereafter, we plan to start painting Model S and Model X vehicles in our new paint facility in Fremont. Should we achieve our design targets, this new paint shop will set new standards for high volume paint shops worldwide in terms of paint quality, labor and energy efficiency, and low environmental impact. It will also be flexible enough and have the capacity to paint Model 3 in the future. These and other investments should provide us with sufficient capacity to increase our production to 2,000 vehicles per week by year-end.

TM was supposed to reach 1k/week rate from August 2014 from Q2 ER although it didn't happen until November 2014.

Well, this is just wrong. During the Q2 call Elon indicated that they will reach 1000 cars/week in Q4. He specifically stated that it is ***NOT*** going to happen in Q3.

Elon Musk - Chairman and CEO
No. We actually won't be delivering at the 1,000 or 1,000 plus per week rate at the end of Q3

I am going to repeat one more time - because this is very important point which seems to be routinely overlooked by many - the fact that TM is producing around 1000 cars/week since November of last year has nothing to do with "throttling" the production because of weak demand. It is the limitation of the production process which was designed to handle 800 cars/week (approx. 40K cars per year for two shift operation) and is currently in the process of being upgraded to 2500 cars/week (approx. 125k cars per year for two shift operation).

Ironically, this situation is the result of TM initially grossly underestimating demand and under-sizing their production capacity for Model S/X - by factor of three.

 

[maoing]

Vgrinshpun, I still didn't get how you conclude there is "portions of the production process are currently limited to 800cars/80hrs week"? Also how you interpret from Q4 shareholder letter those bottleneck will wait until other factory upgrades (mostly for X production) to be resolved?

If you said is true, then it's ridiculous that TM knew the bottleneck from 2012 (at the time the NG video took) and the bottleneck still exists well into 2015. In the meanwhile, Elon blamed himself and TM several times not be able to ramp up production fast enough to catch up demand. And this "hidden" bottleneck was not mentioned in any official ERs as far as I know. So I'm not convinced that's the root cause of slow production ramp up and nor the main street investors.

Also in Q4 shareholder letter as you quoted, it only mentions the factory upgrades to X production and as a result it can boost the production rate to 2k/week by end of 2015. There is no words of handicaps barring steady production ramp up in Q1/Q2 which is in fact flat from guidance. It's everybody's call to interpret this abnorm production ramp up curve.

The 800 cars/week is the run rate of the production process per the initial design. This is fact. It was deduced very long time ago by Randy Carlson based on National Geographic Giga Factories video, and then confirmed by TM many times. The Q4 2014 shareholder letter specifically mentioned areas that need to be upgraded to get the whole production from 800 to 2500 cars/week. So portions of the production process are currently limited to 800cars/80hrs week, and will be until TM completes the upgrade of the factory. This is not my speculation this is fact.

Ahead of the Model X launch in Q3, we plan to expand capacity in several areas. In our Lathrop manufacturing facility in central California, we are installing a state of the art,highly automated casting and machiningoperation for various aluminum components used on both Model S and Model X. We are also increasing production on our new drive unit line to meet All-Wheel Drive Dual Motor demand.

In late summer, we plan to begin Model X body production in our new robotic body assembly shop that will run in parallel with our current Model S body shop. Shortly thereafter, we plan to start painting Model S and Model X vehicles in our new paint facility in Fremont. Should we achieve our design targets, this new paint shop will set new standards for high volume paint shops worldwide in terms of paint quality, labor and energy efficiency, and low environmental impact. It will also be flexible enough and have the capacity to paint Model 3 in the future. These and other investments should provide us with sufficient capacity to increase our production to 2,000 vehicles per week by year-end.

.

 

[pGo]

So was TM claiming to reach 1000/wk but actually have process to support 800/wk only in mid November? I don't get it.

TM lowering production this quarter can be attributed to 1000+ inventory cars in China & 1500 undelivered cars from q4. Since they are undelivered, they are also counted as part of 10000 orders.

 

[Auzie]

I have not investigated the subject much as I am not that much interested in these details, but vgrinsphun post makes a lot of sense to me and I find the described scenario quite likely.

Designed production capacity can be exceeded by running extra shifts on bottlenecks. That increases costs and overworks people.

Ramp up curve is not a curve, it is a flat line that goes up in increment when upgrade is done.

 

[maoing]

If TM is not intentionally dialing down production, with 1000 inventory sold in China and 1400 undelivered cars left over from Q4. Given 10 production weeks in Q1, I would expect a blow out 12400 (1000x10+1000+1400) delivery in Q1 which is 2900 more than the Q1 9500 guidance (30% beat). Anything significant (>500) below that number, it's kind of evidence for soft demand IMO. So that's the risk of Q1 ER I envision now, unless a huge beat (25-30%), the market might react just negatively to barely meet or slightly beat.

Edit: Vigrin asked me why I correlate website wait time with Q1 ER risk in another thread. Here is the reasons:
1) TSLA could be still well in downwards channel before Q1 ER, so theoretically the chance of moving down is much bigger than moving up unless a blow out thing happen;
2) I'm trying to figure out what's the blow out thing for Q1 ER, I think unless 12400 cars delivered in Q1, actually it doesn't speak a big surprise although it's much higher than lowballed guidance.
3) If TM can't make a blow out ER, say the delivery just above 10K. Then I think many media and bear side analysts will spin into that number and get conclusion that demand is soft, blah, blah...... If it's conincident with a short website wait time (say 1 month for US and 2 months for EU/China), then it won't bode well at all.

TM lowering production this quarter can be attributed to 1000+ inventory cars in China & 1500 undelivered cars from q4. Since they are undelivered, they are also counted as part of 10000 orders.

 

[vgrinshpun]

Vgrinshpun, I still didn't get how you conclude there is "portions of the production process are currently limited to 800cars/80hrs week"?

Here is basis of my conclusion:

Step 1. Original production capacity 800 cars/week.
Step 2. The only area that was upgraded prior to Q1 was general assembly line (where interior, drive unit and battery mounted to the painted body). The body in white production and various other areas were not upgraded in Q4. It was originally slated to be upgraded (by building another parallel line) in Q1. We do not know the current status of this.
Step 3. If some areas of production are upgraded to 2500 cars/week, but others are not, te overall production is still limited to 800 cars/week on a two shift operation. The only way to increase it is to work areas that are at 800 cars/week for more than two shifts per week.

If you said is true, then it's ridiculous that TM knew the bottleneck from 2012 (at the time the NG video took) and the bottleneck still exists well into 2015. In the meanwhile, Elon blamed himself and TM several times not be able to ramp up production fast enough to catch up demand. And this "hidden" bottleneck was not mentioned in any official ERs as far as I know. So I'm not convinced that's the root cause of slow production ramp up and nor the main street investors.

You are totally missing it! The bottleneck did not exist in 2012! The whole production process was designed for a run of 800 car/week because nobody, even Elon, dare to think that demand for MsSMX will be higher than 40K per year.

This "mistake" just illustrates how much of a stellar product TM came up with, right out of the gate. So now TM is revamping the whole production process to increase capacity more than three-fold to meet projected demand.

The other thing is that this bottleneck was not "hidden" at all. The discussion on upgrading the factory in a step-by-step process was part of several ER calls. So it seems that this "bottleneck" was "hidden" only from those, who for quite some time was overlooking something that was in plain site, discussed by the company (and analysts) many times!

- - - Updated - - -

So was TM claiming to reach 1000/wk but actually have process to support 800/wk only in mid November? I don't get it.

Well, this is simple - they were planing to run more than two shifts for the production areas that were still limited to 800 cars/week on a two shift operation.

TM lowering production this quarter can be attributed to 1000+ inventory cars in China & 1500 undelivered cars from q4. Since they are undelivered, they are also counted as part of 10000 orders.

First of all, they did not lower production - they are still running at 1000 cars/week. The inventory and undelivered cars, whatever the number is, is ***OVERWHELMED*** by the 10 to 11K backlog of MS. There is absolutely no reason for TM to slow production and they did not. The logic in your proposition is just wrong.

- - - Updated - - -

If TM is not intentionally dialing down production, with 1000 inventory sold in China and 1400 undelivered cars left over from Q4. Given 10 production weeks in Q1, I would expect a blow out 12400 (1000x10+1000+1400) delivery in Q1 which is 2900 more than the Q1 9500 guidance (30% beat). Anything significant (>500) below that number, it's kind of evidence for soft demand IMO. So that's the risk of Q1 ER I envision now, unless a huge beat (25-30%), the market might react just negatively to barely meet or slightly beat.

Your math is based on the assumption that there will be zero cars in transit at the end of Q1. This is not going to happen. TM guided to 10,000 produced and 9,500 delivered cars. So taking into account 1,400 cars overhang from Q4 2014, they were planning to have 1,900 cars in transit at the end of Q1. (14,000+10,000-9,500). They will most likely maintain this number of cars in transit at the end of Q1. Even if we assume that china had 1,000 cars in the inventory (and jury is out whether this number is accurate), the delivery in Q1 would be 10,500 cars, not 12,400 as you suggested.

 

[Bgarret]

http://www.cnbc.com/id/102541240?par=cnbcsocial&__source=cnbcsocial%25257Cusnews

so forgive me if I'm being obtuse....thanks to vring, causalian, papa and others for chiming in. I am salty enough to remember Luv2b and Capitalist Oppressor and others that once posted here and wish for a little more substance and detailed analysis than the shite that passes as analysis like the article above. So a new product line, the Model (what do you call it?).X will put pressure on the Tesla's margins....when? In 2015, when Tesla plans on delivering about 5,000 X of 55,000 total cars? The 10% that will be X will ""threaten the company". Or 2016, when Tesla will deliver 50,000 Model X's at 20+% margins. A caution to Robert Boston and the other mods...Maoing, Pgo and Ingineur may be appeased based on the idea of a tolerance of a diversity of opinions, but when everything is spun to the negative, there may be more appropriate outlets for their opinions, like Seeking Alpha with John Peterson, Merrill blogs with John Lovallo or comments on the Wall Street Journal editorials where red meat is the currency of choice. Tesla is complex....and flawed....and disruptive...but it is not what some are characterizing it - part of the problem. Elon et al will often fail miserably, as one does when you take risks. I don't believe they will fail terminally. It has been fun to participate in this dialogue for 2 years, during both good and bad. It is becoming more difficult to stomach the serial posters with a negative bias.

Tesla may fail, and financially and spiritually I understand that as a risk...I'm weary of a subset of this board that both relishes in this possibility and seems to wish this eventuality sooner or sooner. You are on the wrong side of history....and will lose.

Peace out.

 

[sundaymorning]

http://www.cnbc.com/id/102541240?par=cnbcsocial&__source=cnbcsocial%257Cusnews

so forgive me if I'm being obtuse....thanks to vring, causalian, papa and others for chiming in. I am salty enough to remember Luv2b and Capitalist Oppressor and others that once posted here and wish for a little more substance and detailed analysis than the shite that passes as analysis like the article above. So a new product line, the Model (what do you call it?).X will put pressure on the Tesla's margins....when? In 2015, when Tesla plans on delivering about 5,000 X of 55,000 total cars? The 10% that will be X will ""threaten the company". Or 2016, when Tesla will deliver 50,000 Model X's at 20+% margins. A caution to Robert Boston and the other mods...Maoing, Pgo and Ingineur may be appeased based on the idea of a tolerance of a diversity of opinions, but when everything is spun to the negative, there may be more appropriate outlets for their opinions, like Seeking Alpha with John Peterson, Merrill blogs with John Lovallo or comments on the Wall Street Journal editorials where red meat is the currency of choice. Tesla is complex....and flawed....and disruptive...but it is not what some are characterizing it - part of the problem. Elon et al will often fail miserably, as one does when you take risks. I don't believe they will fail terminally. It has been fun to participate in this dialogue for 2 years, during both good and bad. It is becoming more difficult to stomach the serial posters with a negative bias.

Tesla may fail, and financially and spiritually I understand that as a risk...I'm weary of a subset of this board that both relishes in this possibility and seems to wish this eventuality sooner or sooner. You are on the wrong side of history....and will lose.

Peace out.

What makes this thread both a joke and entertaining to read is that as soon as some "serial poster" or day traders flips a trade, their sentiments can change from "the sky is falling" to "the heavens are rising" in a matter of 24 hours. Then it's rinse and repeat after another trade, "the heavens are now no longer rising, but is falling before our eyes."

So let me guess, if Tesla hits the bargain price of $150 Monday hypothetically, sentiments will automatically change on this forum to "we've hit the bottom so Tesla should will be fine, they're back on track bc demand is longer a problem." Then after a 10 point plus rise in the following 48 hours, the top is here guys, so demand is questionable. Rinse and repeat. Welcome to 2015.

Edit: I want to thank those posters who are genuinely concern about the accuracy of questionable articles and spent countless hours in refuting the "demand" myth. Without your collective contributions, I could not have been as successful of an investor. Keep up the good fight.

 

[Papafox]

http://www.cnbc.com/id/102541240?par=cnbcsocial&__source=cnbcsocial%257Cusnews
So a new product line, the Model (what do you call it?).X will put pressure on the Tesla's margins....when?

This past week, Andrew Fund of CLSA in Hong Kong warned of lowering margins with the introduction of Model X. His thesis was that since Model S showed lower margins when it was first introduced, the same type of inefficiencies would be present with the introduction of Model X. August is the expected released date of Model X. I see a few problems with this approach. First, Model S margins should still be strong, and Model X margins are contributions above and beyond Model S margins, so even if Model X has some teething problems when it is introduced, the contributions of Model X will be merely a smaller addition to the Model S contributions, not something that is dramatically cutting Tesla profitability. Secondly, Elon Musk has said that he expects the Model X ramp-up to go faster and smoother than Model S ramp-up. Do you think Elon and the Tesla team learned anything from Model S introduction? You bet they did, and I believe them when they say the Model X ramp-up will be faster and smoother. I'm not holding my breath for Model X margins to reach Model S margins right away, but I consider Andrew Fund's position to be an over-reaction. Pricing for Model X hasn't even been published yet.

 

[Newb]

If TM is not intentionally dialing down production, with 1000 inventory sold in China and 1400 undelivered cars left over from Q4. Given 10 production weeks in Q1, I would expect a blow out 12400 (1000x10+1000+1400) delivery in Q1 which is 2900 more than the Q1 9500 guidance (30% beat). Anything significant (>500) below that number, it's kind of evidence for soft demand IMO.

maoing, I kept silent to many of your guestimates in the past but in instances like this when you clearly expose that you're not capable (or, even worse, consciously unwilling) of differentiating between "production" and "delivery", I'm unable to keep silent and I can't stop shaking my head. You're like: "10 production weeks equals 10.000 cars deliveries". please... Even if Tesla was selling cars in California ONLY your equation would be utterly false. Now consider Tesla's ongoing worldwide expansion to more and more markets around the globe and orders from overseas (Australia, Japan, China, Europe, etc.). This is inevitably INCREASING the number of produced cars which are put on ships/trains/heavy duty trucks for looong trips, not decreasing it!

And then you go on to say that less than "11.900" deliveries (which would be a crazy beat of 25% and best quarter ever) in Q1 would be "kind of evidence for soft demand".......... I don't know how to respond without swearwords, seriously.

Please refrain from posting before you have got your thoughts in order. I don't think we should allow for such unfounded conspiracy talk here on TMC, especially if it's way off reasonable argumentation and full of ridiculous equations and assumptions. Enough is enough, at least for me.

 

[AlMc]

Someone here predicted that we wouldn't see $300 until some time in 2016. That is a frightening thought. Many here were sure we would see $300 by the end of 2014.


QUOTE]
Sorry to hear about your positions. I think many of us have been there and know what a sea of red looks like. IF it were me (and what I am doing) is keep the J17s for sure. The J16s and earlier are tougher. IF you feel Q1 will beat guidance (I do at this point) then I hold them as some are so red that you have little more to lose and the others should gain in value.

I don't do margin.

I was one of the people who questioned $300 this year after Q3/Q4 ERs. Now, I can't see a 60% price increase from $185 this year. I will be happy to exit 2016 at $250 and see $300 in 2016. This is not DaveT, Sleepyhead, CapOp analysis I admit (however, while there are many great posts/posters here I have not seen any detailed analysis/projections since they have gone silent). It is based on whatever tea leaves and any inherit investing bias I have developed over the years. Mine is an opinion only.

My opinion on demand/production/deliveries. TM is still supply constrained. I am in the VGrin camp that acknowledges that TM/EM never anticipated that the modelS would be so popular or that model X would command 20K+ reservations before production even started. Ramping production is an imperfect science and the perfect execution near impossible. Batteries, seat issues, port closures have all constrained production. TM/EM will get themselves and TSLA investors to a good place long term. In the short term it is painful for them and us,