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Short-Term TSLA Price Movements - 2015
- Thread starter Robert.Boston
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FredTMC
Model S VIN #4925
Responding to comment: "10k Production does not equal 10k Deliveries"... Thoughts/question:
Background: Tesla's scheduling of deliveries around the world have always favored producing AND delivering cars WITHIN the same quarter. In other words, Tesla's historically has worked to "minimize" the number of cars in transit (across quarters). For example, in the final few days of the quarter Tesla is delivering more california cars since transit time is minimal.
Question: Given the scheduling of deliveries above, what is a reasonable % of cars produced in Q1 that aren't delivered within the quarter?
Answer: My best guess is 5% (i.e. 500 cars). My reasoning is that last quarter we saw that tesla had next gen seat and weather issues with quarter-end and tesla made it a point to call out on Earnings Call that 1400 cars were produced in Q4 but couldn't be delivered. So, if 1400 is "bad" (not as planned) according to Tesla mgmt, then "good" is clearly some lesser number.
What's your guess on in-transit cars for Q1? Keep in mind we aren't seeing evidence of delivery issues unlike Q4
thanks!
Background: Tesla's scheduling of deliveries around the world have always favored producing AND delivering cars WITHIN the same quarter. In other words, Tesla's historically has worked to "minimize" the number of cars in transit (across quarters). For example, in the final few days of the quarter Tesla is delivering more california cars since transit time is minimal.
Question: Given the scheduling of deliveries above, what is a reasonable % of cars produced in Q1 that aren't delivered within the quarter?
Answer: My best guess is 5% (i.e. 500 cars). My reasoning is that last quarter we saw that tesla had next gen seat and weather issues with quarter-end and tesla made it a point to call out on Earnings Call that 1400 cars were produced in Q4 but couldn't be delivered. So, if 1400 is "bad" (not as planned) according to Tesla mgmt, then "good" is clearly some lesser number.
What's your guess on in-transit cars for Q1? Keep in mind we aren't seeing evidence of delivery issues unlike Q4
thanks!
I think its a little tough to do the detailed analysis due to Tesla's success and international roll out. Its becoming increasingly difficult to look at deliveries because of geography and lack of a solid data set. With that said, as I said before, it doesn't help that members of this forum and the public use demand, deliveries, and production synonomously. Another reason why its becoming more difficult to gauge is because Model S is beyond the niche Tesla enthusiast phase, so people aren't reporting deliveries... There are people who like the car besides us but jobswhich is a good thing.
The valuation on TSLA is furthermore even tougher because of the home battery storage and used car business. To me these are the two aces in the hole for cash flow in present and future. The used car market makes the model S more accessible and tackles the other crowd who is wealthy but wants a deal.
The CSLA analyst who is worried model X will impact margins.. Of course it will but the majority of R&D is done. Furthermore I like that Tesla is front loading its tech in these higher gross margin models because Model 3 is basically developed already but now its just a question of timing which is already being addressed with the GF progression.
Short term trades will be a play off of execution risk that's pretty much it.
e
i think cars in transit depends more on the geographies doing the ordering and the number of delivery prep sites in each country. In other words the farther from California you go the longer the actual transit time, plus the number of countries. So now TM has multiple points in Asia to deal with - China, HK, Japan, Australia - vs maybe just China and HK in a previous quarter.
so 1400 was considered to be bad just a few months ago but given the increased complexity I don't know if 500 or 1000 is reasonable for this quarter
I think we need to distinguish between "filling the pipeline" which requires increasing numbers to be in transit every quarter given the increase in international deliveries as markets expand vs. the 1400 stranded China cars which were in the pipeline at one point but then when they came out they still could not be delivered. If they only had 500 in the pipeline at the end of the quarter, we shouldn't expect to see more than 500 total delivered internationally in April, given ~1 month transit time.
Vgrin, thanks for your due diligence to analyze those data. Maybe I should trust your analysis by 50% because you are the only one make conclusion that 800/week bottleneck still exists as of today. I didn't see TM and analysts mentioned that specific bottleneck in past 6 months at least. Anyway, even it's the truth, it's very hard to comprehend by main street investors. So unless TM shows steady QoQ production increase, there is always doubts from different angles.
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I had a post earlier, there was ~5K vehicles produced but not delivered by end of Q4. Let's say 1400 is undelivered due to various reasons, 1000 inventories in China and 1000 in demo cars. So it still leaves 1600 as in transit. TM doesn't have new market expansion plan in 2015, and TM always skews production to oversees market in first 2 months of the quarter. So I would think 1600 should be sufficient number to fill the transit pipeline. I really doubt TM need to have another 1900 cars in transit by end of Q1. Use your analysis instead of purely rely on guidance, there are a lof cases that guidance varied from results widely.
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I had a post earlier, there was ~5K vehicles produced but not delivered by end of Q4. Let's say 1400 is undelivered due to various reasons, 1000 inventories in China and 1000 in demo cars. So it still leaves 1600 as in transit. TM doesn't have new market expansion plan in 2015, and TM always skews production to oversees market in first 2 months of the quarter. So I would think 1600 should be sufficient number to fill the transit pipeline. I really doubt TM need to have another 1900 cars in transit by end of Q1. Use your analysis instead of purely rely on guidance, there are a lof cases that guidance varied from results widely.
I think it will be more than 500 which go produced but undelivered. Hasn't that been the case in many quarters? Not just last quarter, but others.
Anyway, as for demand, here's a measure I had thought of then forgotten about and now just remembered: Anyone taken their car in for service lately and been given a Model S loaner? Or did you just get driven home in a Prius like the last few times I've gone? Because if the latter, than I'd say Tesla is still nowhere near catching up. If the former, then either a) they are able to breathe and finally get to the point they want, which is to have a Model S fleet for loaners, or b) demand is waning and it's the only place they can put cars. I still wouldn't count b) as the case, but it seems to me that having Model S loaners at service centers would be a prerequisite for anyone trying to show that demand is low.
Anyway, that's all the talking I'll do about this issue, since demand is not an issue.
Anyway, as for demand, here's a measure I had thought of then forgotten about and now just remembered: Anyone taken their car in for service lately and been given a Model S loaner? Or did you just get driven home in a Prius like the last few times I've gone? Because if the latter, than I'd say Tesla is still nowhere near catching up. If the former, then either a) they are able to breathe and finally get to the point they want, which is to have a Model S fleet for loaners, or b) demand is waning and it's the only place they can put cars. I still wouldn't count b) as the case, but it seems to me that having Model S loaners at service centers would be a prerequisite for anyone trying to show that demand is low.
Anyway, that's all the talking I'll do about this issue, since demand is not an issue.
"In November Tesla said its store in Shenzhen, across the border from Hong Kong, was one of the company’s highest grossing locations worldwide.
Two months later, Musk told an audience at the Detroit auto show that fourth-quarter China sales were “unexpectedly weak” due to incorrect perceptions about ease of charging. He blamed the ineptitude of the Chinese sales force."
Just a remainder, that Elon's sales pitch sometimes loses connection with reality.
Two months later, Musk told an audience at the Detroit auto show that fourth-quarter China sales were “unexpectedly weak” due to incorrect perceptions about ease of charging. He blamed the ineptitude of the Chinese sales force."
Just a remainder, that Elon's sales pitch sometimes loses connection with reality.
Krugerrand
Meow
Commenting according to what his company employees are telling him is neither a sales pitch nor a loss of connection with reality. What it is, is a bunch of people now out of a job for being dishonest in their work. A CEO can not be all places at all times. A CEO must delegate the workload and then trust others. It's not the first time people have screwed over the company they work for, and it won't be the last. What's most important was that once the dishonesty was found out, action was swift and exacting. So the reminder here is that people can always be trusted to act human.
Was it dishonesty or just incompetence? Either way, Musk or his immediate team put them in place to succeed and they didn't.
Unfortunately, the reality is that the SP is (was?) priced for perfection. Every mistake is a chink against that perception and is a big reason the stock has been down the past couple of months.
If Musk can turn China around, today's price is a bargain.
Krugerrand
Meow
fwiw, I see this "priced for perfection" phrase frequently tossed out. While Tesla at $290 crept a bit above what I would consider fair value, to me priced for perfection would be over $600/share today (I think pushing quite hard they could get to about 2 million vehicles/year in 2025 and a stationary storage business about half that size. This a more ideal scenario than the ones I base my $270 valuation), and apparently to Elon priced for perfection would be about $1250/share today (given the $5000/share price his comments a couple of months ago suggested). Of course, there is no authoritative idea of what value would reflect perfect execution, but in my view $290 wasn't anywhere near it.
anticitizen13.7
Not posting at TMC after 9/17/2018
I'm of the opinion that the $290/share was driven by a short squeeze as much as anything else.
Given the huge amount of uncertainty in 2013/4 over sustained Model S sales, Model X development, and all aspects of the Gigafactory, I find it difficult to believe that the aggregate market reflected a price representative of Tesla doing nothing wrong. Even today, with Model S selling very well and Model X just around the corner, I read much uncertainty around the Internet regarding Tesla's sustainability as a business.
The tipping point for EVs is still years away. Once that tipping point becomes obvious, TSLA will likely rocket quickly.
Once Tesla says what global demand for the Model S really is, any rumors about present demand in China, or any other country will become irrelevant, very quickly. Any weaker than expected demand in China has been offset by strong demand in other countries.
Based on Tesla's comments about expecting to produce 2000 vehicles per week, I have a strong feeling Tesla is currently seeing annual demand for at least 60,000 - 80,000 Model S. Also, based on the increase in Tesla Motors Twitter followers and comments from Tesla about expectations for long term demand, Tesla has a list of at least 500,000 people who have given some thought to buying a Tesla. If the number of Twitter followers continues to increase at the current rate, the figure will be around 750,000 by the end of 2015.
Has anyone done a poll of how many people who own or are planning to buy a Model S or Model X are also planning to buy the Model 3?
Based on Tesla's comments about expecting to produce 2000 vehicles per week, I have a strong feeling Tesla is currently seeing annual demand for at least 60,000 - 80,000 Model S. Also, based on the increase in Tesla Motors Twitter followers and comments from Tesla about expectations for long term demand, Tesla has a list of at least 500,000 people who have given some thought to buying a Tesla. If the number of Twitter followers continues to increase at the current rate, the figure will be around 750,000 by the end of 2015.
Has anyone done a poll of how many people who own or are planning to buy a Model S or Model X are also planning to buy the Model 3?
sundaymorning
Active Member
Mark Cuban CNBC interview: "I can't figure out this market"
"I try to look for market leaders.. If the story doesn't change I try to add more.."
http://video.cnbc.com/gallery/?video=3000345035
"I try to look for market leaders.. If the story doesn't change I try to add more.."
http://video.cnbc.com/gallery/?video=3000345035
These two statements are not necessarily contradictory. Say region one has twenty stores which all sell one widget. Region two has five stores which are expected to sell 3 widgets. One store in region two sells five widgets, the others each sell one. That's a total of 9 widgets, less than the 15 expected. And region one still sold 20 so its still beating region two. But that one store still did more business than any other store.
So I don't see your issue here.
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