Short-Term TSLA Price Movements - 2015

[Auzie]

Yes. A lot of Model S owners here buy the D and sell their old Good thing for people waiting for a more affordable Model S.

That happens in US as well.

Bears often make an argument that eventually Tesla will run out of early adopters willing and able to buy expensive cars. This dynamic of early adopters trading up makes them continually available to buy the latest more expensive models. It also addresses the need to make Tesla cars available at a lower price point. Nice.

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Happy Easter from Georgia, USA. I love these 10,030 little Easter eggs rolling around.

Our state will lose a $5000 state tax credit for EVs in mid-July. Spoke with a LEAF driver and Tesla shareholder today about it and showed him my new car. He very well may try to purchase one before the credits expire. So demand in Georgia should pull forward this quarter. I hope that Tesla will make every effort to deliver as many as possible in Georgia before the expiration. Other states can wait. We need these cars now.

Congratulations on your new car:smile: Picture or it did not happen

 

[doggusfluffy]

Spot on. And that is why they should calibrate their discounted cash flow models to current or recent market prices, back solving for implied discount. The market discount is the price that the market puts on future earnings. It is enough to forecast the earnings and allow the market to put a price on it.

Speaking of forecasting future earnings. I am eagerly anticipating the stationary storage unveil and I'm guessing Tesla will assume a good portion of, if not possibly even significantly more growth than SolarCity already has projected. If anyone can tell me how or when the market will start pricing that in, I would love a heads up so I can stop losing money being the lonely guy who thinks we should also be counting battery sales and not just cars delivered. :smile:

FACT SHEET: Administration Announces Actions To Drive Growth In Solar Energy And Train Workers For Clean-Energy Jobs | The White House

 

[austinEV]

What are you basing the different lines from DaveT Model. If you refer me to the original article that's great.

They are a straightforward calculation of deliveries, asp, and some assumed PE. I am not sure he shared it with TMC. Even Elon's blind faith price target sets a similar trajectory.

 

[hobbes]

I've been thinking of these "end of quarter" rushes we've seen Tesla pull now time and time again. They have been taking some heat for it, being criticized for playing in to the hands of a near sighted Wall Street etc. But that kind of criticism really holds if this quarter's beat comes at the cost of a miss next quarter (by "emptying the pipeline" so to speak). This we haven't seen any sign of previously.

If they do a rush at the end of one quarter and consequently empty the "pipeline" they have to fill it up again in the beginning of the next quarter. So while filling it up, pace of deliveries slows. To make up for that, they need to do another rush at the end of that quarter... Once you start with the rushes, you are forced to continue.

The question really is to me: Is it more efficient producing cars at a continuous pace or an uneven pace? I am pretty sure a continuous pace is better. Actually, this quarter I have the feeling they have been starting to move away from that rhythm of quarter end rushes: Conservative guidance for Q1 and also guiding that 1400 cars produced in Q4/2014 going into the pipeline, also some people said showrooms keeping more cars and others getting their cars just *after* quarter end. I know we still had much more deliveries in March than Jan+Feb, but it still feels they didn´t push as hard as they used to.

 

[Johan]

If they do a rush at the end of one quarter and consequently empty the "pipeline" they have to fill it up again in the beginning of the next quarter. So while filling it up, pace of deliveries slows. To make up for that, they need to do another rush at the end of that quarter... Once you start with the rushes, you are forced to continue.

The question really is to me: Is it more efficient producing cars at a continuous pace or an uneven pace? I am pretty sure a continuous pace is better. Actually, this quarter I have the feeling they have been starting to move away from that rhythm of quarter end rushes: Conservative guidance for Q1 and also guiding that 1400 cars produced in Q4/2014 going into the pipeline, also some people said showrooms keeping more cars and others getting their cars just *after* quarter end. I know we still had much more deliveries in March than Jan+Feb, but it still feels they didn´t push as hard as they used to.

I agree in a way but look at it this way: Tesla's steadily increasing production rate is like a freight train with a nice and steady gradual acceleration. The end-of-quarter rushes are small bursts of extra acceleration added to that steady growth, like bonuses. It may not look that significant but these small "bonus increases" in growth in the early stages of the company can give substantial yields a couple of years in the future.

All this would be moot of course if one quarter's increase came at the expense of next quarter but again, look at the data, this has not been the case historically.

 

[FANGO]

Happy Easter from Georgia, USA. I love these 10,030 little Easter eggs rolling around.

Our state will lose a $5000 state tax credit for EVs in mid-July. Spoke with a LEAF driver and Tesla shareholder today about it and showed him my new car. He very well may try to purchase one before the credits expire. So demand in Georgia should pull forward this quarter. I hope that Tesla will make every effort to deliver as many as possible in Georgia before the expiration. Other states can wait. We need these cars now.

If Georgia is ending the EV tax credit I hope they are also ending the gasoline subsidy of $3.80/gallon. That's how much a recent study decided every gallon does in terms of environmental and health effects. So unless gas prices go up that much...then it's pretty ridiculous for them to subsidize gas and not electric.

 

[Auzie]

If they do a rush at the end of one quarter and consequently empty the "pipeline" they have to fill it up again in the beginning of the next quarter. So while filling it up, pace of deliveries slows. To make up for that, they need to do another rush at the end of that quarter... Once you start with the rushes, you are forced to continue.

The question really is to me: Is it more efficient producing cars at a continuous pace or an uneven pace? I am pretty sure a continuous pace is better. Actually, this quarter I have the feeling they have been starting to move away from that rhythm of quarter end rushes: Conservative guidance for Q1 and also guiding that 1400 cars produced in Q4/2014 going into the pipeline, also some people said showrooms keeping more cars and others getting their cars just *after* quarter end. I know we still had much more deliveries in March than Jan+Feb, but it still feels they didn´t push as hard as they used to.

I think a pipeline is unavoidable, at any point in time there are likely to be some cars in a pipeline. A pipeline is not a single pipeline, each different geographical market will have its own pipeline and all these pipelines will pulse in a particular rhythm, depending how often they ship to particular markets and depending if they group some shipments. I would expect the pipelines sizes to grow correspondingly with the sales and stores growth.

I see no reason to produce cars at an uneven pace unless there is an upgrade or similar disruption to the process. If they throw in some extra shifts, that increases costs and may not be sustainable. More deliveries in March may be due to the ports problems in Jan and Feb.

 

[Runarbt]

For the final time on here, take out the 1,400 and it's a miss for the quarter and a 12% decline from Q4. Unless Tesla says otherwise thats what I'm going with.

Ok, feel free to do as you please.

it doesnt make it any more correct.

 

[hobbes]

All this would be moot of course if one quarter's increase came at the expense of next quarter but again, look at the data, this has not been the case historically.

What I am trying to say is that you lose some deliveries at the beginning of each quarter and gain something from the rush at the end. As we only get the quarter total numbers, those cancel. Producing constantly would give the same number and less strain to the workers IMHO.

 

[mrdoubleb]

If they do a rush at the end of one quarter and consequently empty the "pipeline" they have to fill it up again in the beginning of the next quarter. So while filling it up, pace of deliveries slows. To make up for that, they need to do another rush at the end of that quarter... Once you start with the rushes, you are forced to continue.

The question really is to me: Is it more efficient producing cars at a continuous pace or an uneven pace? I am pretty sure a continuous pace is better. Actually, this quarter I have the feeling they have been starting to move away from that rhythm of quarter end rushes: Conservative guidance for Q1 and also guiding that 1400 cars produced in Q4/2014 going into the pipeline, also some people said showrooms keeping more cars and others getting their cars just *after* quarter end. I know we still had much more deliveries in March than Jan+Feb, but it still feels they didn´t push as hard as they used to.

I am wondering if what we see is a rush/burst in production or just the salesforce working overtime.
I think production is pretty even, except for scheduled stand downs (upgrades) and unschedued events (strike, supply chain issues). What may be happening is that most of the January production is shipped to Asia, most of the February production is put on boats to Europe and March production mainly goes to NA. Because of delivery times/customs/reassembly in NL most of the actualy delivery accross all 3 regions happens in March. Then we have the high end models which are pulld ahead in the schedule as a premium to customers who go all in and that's what's mostly responsible for deilveries inbetween.... or something like that. :tongue:

 

[Johan]

Even if production is ramping rather smoothly over time these end-of-quarter delivery bursts do put pressure on the whole production-delivery process to keep up, otherwise the pipeline would empty out in the next quarter.

So at Tesla they're basically doing this every quarter thus setting the bar a little higher all the time for the whole process. It has worked well so far.

It's lime if you're doing a 20 km run or whatever and you know you personal best is 1h20 mins but this time you want to go for 1h15 mins. What you might do is put pressure on yourself to finish each kilometer at 3min45 seconds and if you're able to do that for each single km you will finish at 1h15. It's psychology. If you're behind schedule you push yourself to reach that lap time. Break down the entire race in to smaller increments. The analogy for Tesla would not be to keep an even pace but a set pace of accelerating production and deliveries.

 

[Drax7]

The stumbling block for some people (Lovallo, Cramer, etc.) wedded to fundamental analysis is they assume it is their job to inform the market what a stock should be worth. In reality, their job is to estimate what a year from now the market will be telling them the stock is worth.

Cramer should know better, he just does not get the mind set of a straight shooter engineer dreamer like musk . He is used to financial/salesmen type CEOs That game the system with officious performance ; musk does not conform to his ceo model, let alone his p/e valuation methodology. Moreover, Cramer has not put in the time to comprehend the brilliant technology and its benefits.
Cramer just focuses on the cost and capital requirements and dismisses the business, without credit to the disrupting potential of the technology.
Cramers mindset is beat and raise one quarter at the time.

 

[Robert.Boston]

I love Elon's attitude lately.

Elon Musk on Twitter:

I don't like that Elon is belittling West Virginia. Sure, it's not an important market for Tesla, but there's no need to bad-talk the state.

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If they do a rush at the end of one quarter and consequently empty the "pipeline" they have to fill it up again in the beginning of the next quarter. So while filling it up, pace of deliveries slows. To make up for that, they need to do another rush at the end of that quarter... Once you start with the rushes, you are forced to continue.

The question really is to me: Is it more efficient producing cars at a continuous pace or an uneven pace? I am pretty sure a continuous pace is better. Actually, this quarter I have the feeling they have been starting to move away from that rhythm of quarter end rushes: Conservative guidance for Q1 and also guiding that 1400 cars produced in Q4/2014 going into the pipeline, also some people said showrooms keeping more cars and others getting their cars just *after* quarter end. I know we still had much more deliveries in March than Jan+Feb, but it still feels they didn´t push as hard as they used to.

You are confusing production and deliveries. The end-of-quarter pushes are on the delivery side; production rolls along smoothly (except for semi-annual shutdowns for maintenance). The delivery pushes are mostly about timing the long-distance shipments: put cars on a boat in January, delivery them in Norway in March. More cars on the boat in April, deliveries in June.

But you're right: once Tesla started on this cycle, it's very hard to get off it as long as the company is production-constrained without creating ups and downs in quarterly numbers. While those variations wouldn't actually mean anything from a business management perspective, the Street would shake their heads and wag their fingers.

 

[ecarfan]

I don't like that Elon is belittling West Virginia. Sure, it's not an important market for Tesla, but there's no need to bad-talk the state.

Elon tweeted "Oh no." I'm okay with that. Pretty low key. And funny.

West Virginia contains about 0.58% of the population of the U.S.

 

[InTheShadows]

I don't like that Elon is belittling West Virginia. Sure, it's not an important market for Tesla, but there's no need to bad-talk the state.

I didn't read it that way. I read it as this law is going to go the same way as the others eventually. Look at NJ.

I think all these state franchise law issues will be resolved before the 3 gets here. My tske was that that is his feeling too.

Fwiw WV is a beautiful state. (At least it is where the coal mines haven't destroyed it.)

 

[aznt1217]

Elon tweeted "Oh no." I'm okay with that. Pretty low key. And funny.

West Virginia contains about 0.58% of the population of the U.S.

True. I like that he did this as a pre-counter to all the stupid articles that will come out reiterating Tesla hurdles.

 

[hobbes]

It's lime if you're doing a 20 km run or whatever and you know you personal best is 1h20 mins but this time you want to go for 1h15 mins. What you might do is put pressure on yourself to finish each kilometer at 3min45 seconds and if you're able to do that for each single km you will finish at 1h15. It's psychology. If you're behind schedule you push yourself to reach that lap time. Break down the entire race in to smaller increments. The analogy for Tesla would not be to keep an even pace but a set pace of accelerating production and deliveries.

Actually I was thinking about a running analogy, too, to illustrate my point, and it would have turned out just the opposite: If you finish a race and one kilometer from the finish you realize you can still give some more, that means your perfect race pace would have been just a bit faster from the beginning and without a finishing sprint . So I think we have a different psychology/philosophy there and should leave it at that.

PS: Do you actually run that fast?!


@Robert.Boston: Yeah, I mixed production and deliveries there.

 

[InTheShadows]

Actually I was thinking about a running analogy, too, to illustrate my point, and it would have turned out just the opposite: If you finish a race and one kilometer from the finish you realize you can still give some more, that means your perfect race pace would have been just a bit faster from the beginning and without a finishing sprint . So I think we have a different psychology/philosophy there and should leave it at that.

PS: Do you actually run that fast?!


@Robert.Boston: Yeah, I mixed production and deliveries there.

That depends on the distance. That's easy for a 5,10k, a little more difficult for a 20 40 or more k race. Starting out nice and slow and gradually increasing is the best strategy for a long distance race. Depending on your training, survival is the strategy at the end of the longer races if it was inadequate.

 

[Yonki]

That depends on the distance. That's easy for a 5,10k, a little more difficult for a 20 40 or more k race. Starting out nice and slow and gradually increasing is the best strategy for a long distance race. Depending on your training, survival is the strategy at the end of the longer races if it was inadequate.

My strategy would be to go the 5-40k in my Model S* and enjoy some chicken enchiladas at my favorite Mexican restaurant while you guys are hoofing it.

But really, it's one thing to have perfectly smooth production and deliveries when you're an established car maker, quite another to expect that from a new company ramping production 50% year on year. You can't grow like that AND have a perfectly smooth ramp.

Fred

*that I will buy once the stock is >$400.

 

[FluxCap]

I don't like that Elon is belittling West Virginia. Sure, it's not an important market for Tesla, but there's no need to bad-talk the state.

I really don't either. Comments like this can make the job of advocating at the state level (in WV or any other state) harder for those of us fighting the political fights, both within Tesla and on Tesla's behalf. I would hope for a clarification Tweet from Elon that he was making light of the dealership lobby and their paid-for regulatory capture (President of WV Senate is an auto dealership boss), and not the people of West Virginia.