Short-Term TSLA Price Movements - 2015

[chickensevil]

I don't think people are saying they didn't have inventory cars for sale, just that it clearly wasn't a big push this time around. It was a big deal in Q4 2013 which we know what that was about and Q3 2014 which we also know what that was about. One to make the year look like an amazing blowout and the other to make up for unexpected lack of production. All other quarters have just been the "normal" clearing of old inventory. Which means I give us a 99% chance we cleared the 33k number and a pretty high chance (greater than 60%) that we have a ok beat (nothing blow out worthy). Now that combined with an overly high anticipated ASP and I think we are still set up for a really great ER.

They had inventory to sell if they needed to. They didn't push it, so I am at the very least inclined to think we are safe hitting the revised guidance.

 

[maoing]

If we are hitting revised guidance 11000 in Q4 vs. 7800 in Q3 . Then the delivery jump (41%) should be reflected in Europe and China market also. One can argue NA market will take the biggest share, which I agree, but still expect 20-30% increase from other markets as minimum. Let's keep figure crossed.

 

[anticitizen13.7]

You have to consider that within the past two days, CNBC, Bloomberg, and BofA/Merrill Lynch all put out FUD regarding Tesla. CNBC's was world-class FUD. This isn't the SA crowd, this is a group of people who command a fair number of investor ears. The criticisms have been weak and fail to persuade informed investors that demand is falling or that production is not going to ramp up, but there are the uniformed investors who can be scared off by such tactics. I see the usual suspects on this forum dishing out FUD as well.

I think we're talking about a few hundred cars that might have been delivered in the final days of 2014 that didn't make it to owners. This number of cars should not be an issue if 2015 guidance is solid, as I expect it to be.

Unfortunate as this widespread FUD is, I see it as a continued indication that the broader market still does not understand Tesla's plans or its products.

This is bad news for short term traders as it promotes instability in share prices. It's good news for investors who want to load up on shares for the Model 3 time frame!

 

[jhm]

Does anyone know how Tesla counts the resale of vehicles? Last weekend I visited my local Tesla store and they had several used Teslas in stock. I was told that the previous owners had just traded them in to buy P85Ds. The sales rep did not seem eager to sell them. I think they may actually need to hold onto them as test drive and loaner cars. In fact, the car I test drove was scheduled to be delivered in a couple of days.

So now I am wondering about trade ins. If Tesla had sold one of those trade in cars last week, would it count as a vehicle delivered. In such a case, it would have been manufactured once, but sold and delivered twice! Regardless, if it is resold, it generates revenue and has a cost of goods. So it should contribute to revenue and cost of revenue.

It strikes me that this potential is fairly unique to Tesla among automakers. Other automakers sell through delears. Trade ins and resales are on the books of independent auto dealers, not the auto makers. But as a direct seller of new and used Teslas, it is all on Tesla's books.

 

[dmckinstry]

I was in the San Diego store on 12/24 ad they had just sold a loaner/test drive car to a guy who wanted to give it to his wife for Christmas. So they were doing it I guess to a degree.

Last Saturday afternoon at the Folsom Supercharger I ran into a guy with a new P85 red Model S. His wife got an S a week or so earlier and he couldn't resist any longer. He got a deal on an inventory car. A couple of other guys came by to talk and one of them is waiting on his Signature X.

Sunday morning after leaving Harris ranch I passed a carrier loaded with Model S's. Could be they were on they way to replenish the San Diego store.

 

[vgrinshpun]

Bank of America/Merrill Lynch published a report on US automakers this morning and its auto analysts remain the biggest TSLA bears on Wall Street. They still apparently rely purely on the fundamental valuation methodology they learned in college, and ignore the potential for disruptive innovators pouring revenues into R&D and expansion. Today they stated that valuation, “is one of the most important fundamental factors that should be considered when buying or selling the stocks in our coverage universe.” So they continue to rate Tesla Motors “Underperform” with a $75 price target. This may have been a factor in the decline of TSLA shares this morning. http://www.benzinga.com/trading-ide...just-released-a-new-auto-report-and-they-disc

Well, this is priceless.

With an "underperform" rating and $75 price target (for quite a while as far as I can remember) one would think that Bank of America would NOT hold any TSLA, leave along adding to their position in Q3... Yet, this is exactly what they did - increased their TSLA position by 14.59% in Q3. They now hold 200,391 shares:

Page 4 of Tesla Motors, Inc. (TSLA) Institutional Ownership & Holdings - NASDAQ.com

 

[Raffy.Roma]

Well, this is priceless.

With an "underperform" rating and $75 price target (for quite a while as far as I can remember) one would think that Bank of America would NOT hold any TSLA, leave along adding to their position in Q3... Yet, this is exactly what they did - increased their TSLA position by 14.59% in Q3. They now hold 200,391 shares:

Page 4 of Tesla Motors, Inc. (TSLA) Institutional Ownership & Holdings - NASDAQ.com

When I read the post of Curt I commented with an "unbelievable", but now I understand why Bank of America is behaving like this.
They hope there is a dip of TSLA in order to have a buying opportunity. :biggrin:

 

[vgrinshpun]

When I read the post of Curt I commented with an "unbelievable", but now I understand why Bank of America is behaving like this.
They hope there is a dip of TSLA in order to have a buying opportunity. :biggrin:

Their trading and analyst groups apparently are separated by really good fire walls. Poor souls in trading group just do not have access to their analysts reports... :wink:

At least one of the groups has it right...

 

[Johan]

Their trading and analyst groups apparently are separated by really good fire walls. Poor souls in trading group just do not have access to their analysts reports... :wink:

At least one of the groups has it right...

It's called hedging I believe?

Say one thing, do another.

 

[erha]

With the x pushed back there still is an opportunity to have four consecutive quarters of greater than 30% gross margin. That is another goal reached in Elon's compensation package.

 

[Lessmog]

With the x pushed back there still is an opportunity to have four consecutive quarters of greater than 30% gross margin. That is another goal reached in Elon's compensation package.

That may be an important observation!

 

[sundaymorning]

Well, this is priceless.

With an "underperform" rating and $75 price target (for quite a while as far as I can remember) one would think that Bank of America would NOT hold any TSLA, leave along adding to their position in Q3... Yet, this is exactly what they did - increased their TSLA position by 14.59% in Q3. They now hold 200,391 shares:

Page 4 of Tesla Motors, Inc. (TSLA) Institutional Ownership & Holdings - NASDAQ.com

This is what happens when one realized that they've missed out on the train, they're forced to chase the price upwards and resort to FUDs to buy in. Tesla by the quarter has grown with more capabilities, the storyline has gotten better, buy on the dip has been a successful strategy since 2012.

 

[Robert.Boston]

Does anyone know how Tesla counts the resale of vehicles? Last weekend I visited my local Tesla store and they had several used Teslas in stock. I was told that the previous owners had just traded them in to buy P85Ds. The sales rep did not seem eager to sell them. I think they may actually need to hold onto them as test drive and loaner cars. In fact, the car I test drove was scheduled to be delivered in a couple of days.

So now I am wondering about trade ins. If Tesla had sold one of those trade in cars last week, would it count as a vehicle delivered. In such a case, it would have been manufactured once, but sold and delivered twice! Regardless, if it is resold, it generates revenue and has a cost of goods. So it should contribute to revenue and cost of revenue.

It strikes me that this potential is fairly unique to Tesla among automakers. Other automakers sell through delears. Trade ins and resales are on the books of independent auto dealers, not the auto makers. But as a direct seller of new and used Teslas, it is all on Tesla's books.

An interesting point, @jhm. I think we've all been laboring under the assumption that Tesla is discussing new car deliveries.

As I look through Tesla's 10-Q, however, there is a remarkable lack of transparency about the other lines of business that generate revenues for Tesla. The operating revenues of Tesla are divided into exactly two categories: automotive sales and development services. Table 15 breaks "automotive sales" into two categories: "Vehicle, options and related sales" and "Powertrain component and related sales". So where are:

• Used car sales
• Non-warranty parts & service

Presumably these are bundled into "Vehicle, options and related sales", in which case we have to realize that the average transaction price that we compute by dividing the sales revenues by the new car deliveries is wrong, specifically, too high. OTOH, sales of loaner vehicles (which are technically new, since they have not been titled) are at a discount to new-car value. Consequently it's very hard to see through the accounting to understand what the average transaction price is for a new made-to-order car sold directly to a customer.

A related accounting oddness is that used cars owned by Tesla appear to be bundled into "finished goods" in the inventory table. It would be nice to see that broken out, as Tesla takes on a larger role in the used-car market.

 

[Krugerrand]

All that may get broken out Robert.Boston as Tesla does more of that stuff. I'm not sure it's a particularly 'significant' dollar figure to this point, but could/should/will grow as Tesla does more and more trade-ins etc...

 

[InTheShadows]

Is there a thread for NAIAS 2015 discussions?

 

[jhm]

Robert, thanks for looking at that. It confirmed my impression.

I think Tesla will need to break new car sales from parts and used car sales. In a not too distant quarter Tesla could have 30% or more of their sales as P85D or Model X. Suppose a third of these sales involve a trade in of a Model S. That would get us to 10% used car sales. So this could become material in one or two quarters.

I really hope Tesla moves on this quickly, like Q4 2014. Otherwise we risk FUDsters getting a hold of this and making it out to be some sort of deception. I think an accurate read on new car ASP that we can trend over time would be beneficial to all investors.

 

[chickensevil]

Tesla usually says something about the ASP which should already exclude the other services. They haven't been putting a number to is as of late since it has remained virtually unchanged at 106k (I believe) I would expect a significant change in ASP to be mentioned in the earnings.

 

[Raffy.Roma]

I read an article saying that Tesla will unveil a new SUV of 40 K at NAIAS 2015. Of course this will not be the Model X. Strange that I didn't read anything on this matter on TMC.

 

[mrdoubleb]

I read an article saying that Tesla will unveil a new SUV of 40 K at NAIAS 2015. Of course this will not be the Model X. Strange that I didn't read anything on this matter on TMC.

Unless they suprise us with a Model Y concept (Modle 3 platform SUV), which is very unlikely at this time, I bet it's nothing but the usual sloppy reporting confusing the Model X and Model 3. Not the first time we've seen the X mistakenly refernced as the "sub 40k car" Tesla is cooking up...

 

[Cattledog]

I read an article saying that Tesla will unveil a new SUV of 40 K at NAIAS 2015. Of course this will not be the Model X. Strange that I didn't read anything on this matter on TMC.

Well, that would be a surprise. It does make me want to repeat that when they unveil Model 3, it would be awesome to unveil the Model 3 SUV (Model Y?). At some point they need to accelerate bringing products to market and with a big battery factory looking to crank out billions of cells, the near future makes sense.

- - - Updated - - -

This looks like a source to the rumor:

http://www.magnetimarelli.com/focus-on-automotive/tesla-will-unveil-new-suv-40000-dollars-2015-naias-detroit