Short-Term TSLA Price Movements - 2015

[MitchJi]

Hi,

In any case, the potential deliveries miss/peak demand topic will continue to feed the bears until ER, I think. But I agree that for long-term investors the ups and downs of TSLA in the weeks ahead is essentially just unimportant noise.

I disagree. I think a smooth MX production ramp is huge, because at this point everyone is sceptical about Tesla' ability to smoothly introduce and ramp a new model.

 

[Newb]

Hi,



I disagree. I think a smooth MX production ramp is huge, because at this point everyone is sceptical about Tesla' ability to smoothly introduce and ramp a new model.

Never questioned that. All I'm saying is that bears will spread the doubts in the weeks ahead until next reaffirmations from TM that we're on track, like during the next ER CC hopefully. It will continue to be an argument for the bears throughout autumn, again until positive reaffirmation smashes those doubts out of the way again.

 

[AlMc]

Never questioned that. All I'm saying is that bears will spread the doubts in the weeks ahead until next reaffirmations from TM that we're on track, like during the next ER CC hopefully. It will continue to be an argument for the bears throughout autumn, again until positive reaffirmation smashes those doubts out of the way again.

We, and the bears, have seen deliver delays and not so smooth ramps before with Tm, so until proven otherwise we can't dismiss this argument out of hand. It is the single biggest 'short term' risk. *IF* the ramp is an issue in Q3/4 2015 it will be forgotten within Q1/Q2 2016 as TM seeks to cut into the growing back log of X orders.

 

[Paracelsus]

Perhaps Tesla found an angle to sell cars in Texas?

http://www.mysanantonio.com/busines...for-commercial-buildings-on-North-6400483.php

 

[NigelM]

I stand by my prediction in the 2015 prediction thread (5000 Model X produced in 2015).

Bear in mind that the guidance is 55k deliveries, not production. Shipping is currently taking 3 weeks plus since Tesla changed from trucks to trains which would mean that you could effectively discount a huge chunk of December production as unable to be delivered by year end. I agree with you about the potential myopia of Wall St but missed guidance is definitely seen as an issue.

 

[sub]

Bear in mind that the guidance is 55k deliveries, not production. Shipping is currently taking 3 weeks plus since Tesla changed from trucks to trains which would mean that you could effectively discount a huge chunk of December production as unable to be delivered by year end. I agree with you about the potential myopia of Wall St but missed guidance is definitely seen as an issue.

Focus on California deliveries after dec 1st would solve most of this issue.

 

[uselesslogin]

Perhaps Tesla found an angle to sell cars in Texas?

http://www.mysanantonio.com/busines...for-commercial-buildings-on-North-6400483.php

I'm sure this is just another gallery like in Houston, Austin, and Dallas.
Edit: wait... 40,000 sq. ft., oh ok so service center probably with gallery as well.

 

[Krugerrand]

Focus on California deliveries after dec 1st would solve most of this issue.

...of Model Xs....Yep.

 

[jhm]

I'm sure this is just another gallery like in Houston, Austin, and Dallas.
Edit: wait... 40,000 sq. ft.?!?

Can Tesla test drive, sell and sercice CPO vehicles as a used car dealer in Texas?

 

[MitchJi]

http://www.zacks.com/stock/news/182842/3-reasons-to-buy-tesla-motors

2.) Generating More Revenue Each Quarter

Regarding the revenue, Tesla’s 2015 first quarter was promising. Adjusted revenues jumped 55% to $1.1 billion in the reported quarter, surpassing the Zacks Consensus Estimate of $1.04 billion. On reported basis, revenues increased 51.5% to $940 million.

Furthermore, it has been reported that the upcoming second quarter revenue is expected to be the highest on record, at $1.16 billion, from 2014’s second quarter total of $857.5 million.

 

[austinEV]

Talk me back up please.

I have taken my turns at being mildy bearish at times but I am losing zero sleep about the model X launch. I think the temptation is to figure that the X launch will be like the S launch, but that was years ago and it was really a different company. When the S launched, it was really fumbled. They had part shortages, they were putting parts on jets, they delivered cars with parts missing and (I argue) they cut corners on the design itself. They also shipped with imperfect, incomplete software and have updated it over time. Updates are nice, but the glass-half-empty view is that the SW was not complete at shipping. All in service of meeting the launch date because if they missed that the company was dead. Because the car is so great, and because the WORST model S ever produced is a great car, we forget how rushed and crappy the S launch was.

With the X launch, its a horse of a different color. This time they have had relatively long time to get it right, including famous lengthy schedule slips. Elon has said himself, and I take this at face value, that they are taking the time to get it just right. That to me signals that they know they missed some design things on the S, and don't want to do that on the X. They have had lots of time to not make the same mistakes. I suspect they have a good supply of third party parts on hand. They have probably stamped a zillion body panels. They have lots of bodies. They have a huge team that knows exactly what the goal is and has for YEARS. Elon is famous for providing public stretch goals, which probably pushes his team to go above and beyond but sometimes causes small schedule misses. I think this is a style; if something should take 9 months he publicly says they will do it in 6 and then it happens in 7 and we call it late. But with the X launch, I think Elon is smart enough to put it in a different category. Zoomed out, Tesla has only set two MAJOR goals* as a public company. Release the S and X. The S they sort of met in the crappy way. I think Elon knows the X should be a demonstration of a mature capable company so he is not setting up his team to fail. Not on this one.

*Plus gigafactory and model 3 releases. only 2 that are in the past/present.

 

[Johan]

I very much agree AustinEV. The X launch and production ramp will be one magnitude better than S. They're taking their time with opening the floodgates for a good reason, I suspect. They learnt a lot from the S launch.

We mustn't forget that the S launch was rushed and hurried due to dire need for capital. Back then TSLA was what, $30? They could only then dream of the offering + debt sale they proceeded to do at MUCH higher valuations.

 

[Jonathan Hewitt]

We keep trying to guess how the Model X launch will go. I think the next (first) question to ask is, how does WS think the launch will go? Based on this information we can possibly position better from a risk/reward standpoint.

Personally, I feel like a lot of people are skeptical. A totally botched launch would then just confirm expectations. Stock price would drop but not as much as we might think otherwise. On the other hand, a rocky ramp up that has us miss 55,000 deliveries but reaches the goal production rate by the end of the year may be good enough to raise the share price if expectations are low.

 

[Paracelsus]

Exactly..................a 'service center' that can repair the cars it sells. That was the 'Tesla shortfall' the Gov of Texas was describing:

“Texas has a very robust, very open, very effective automobile sector that seems like it’s working quite well the way that it is,” the Republican told Bloomberg Radio on Tuesday. “If you’re going to have a breakdown in a car, you need to have a car dealership there to make sure that the vehicle is going to be taken care of. We haven’t seen that from Tesla.”

Should Tesla create a 'hybrid service center' in this location, they could meet the requirements without extensively deviating from their national model.............both sides save face and doors are open to Tesla. It would still be a service center, but could fulfill the basic support duties of a dealership................without all the inefficiencies that go with it. There is an angle to this. You can feel it.

 

[uselesslogin]

Exactly..................a 'service center' that can repair the cars it sells. That was the 'Tesla shortfall' the Gov of Texas was describing:

“Texas has a very robust, very open, very effective automobile sector that seems like it’s working quite well the way that it is,” the Republican told Bloomberg Radio on Tuesday. “If you’re going to have a breakdown in a car, you need to have a car dealership there to make sure that the vehicle is going to be taken care of. We haven’t seen that from Tesla.”

Should Tesla create a 'hybrid service center' in this location, they could meet the requirements without extensively deviating from their national model.............both sides save face and doors are open to Tesla. It would still be a service center, but could fulfill the basic support duties of a dealership................without all the inefficiencies that go with it. There is an angle to this. You can feel it.

I don't think they extensively deviate in Texas today. Despite what the governor says there is a service center and a gallery in Austin. They aren't far from each other either. The people in the gallery can't discuss price or process a sale. But I think they let you call someone in California to do it. And then they deliver the car at the service center. The biggest issue it sounds like is that you can't finance the sales tax. Now, OTOH, 40,000 sq. ft. ?!? I have to check and the Austin service center is only 5,000 sq. ft.

 

[FluxCap]

A flat market day so far, nothing much to see here. I expect excitement will continue to build going into next week, and we may track the NASDAQ a bit.

From my viewpoint, I think conjecture about Model X release and ramp timing is just that at this point -- conjecture. We will know more when we know more, likely on the call. There have also been plenty of articles drumming up this notion of Model X risks recently, so I think a mediocre Model X timeline is already baked into the share price.

There are many other facets of Tesla's business model and financials that analysts will be eager to hear about on the call, including progress in Model S revenues and margins, more description of the revenue model for Tesla Energy and the utility-scale market, progress on GigaFactory, battery cost reduction / energy density increase, and details about the unprecedented ability to significantly upgrade not just the software, but the hardware, energy and propulsion systems of our cars after purchase direct from the manufacturer. We take the last point for granted around here, but it is really nothing short of incredible for most people that hear about it. It reveals to a wider audience that this is a completely new type of relationship between car manufacturer and customer, one that no other "sell it, forget it and sell the next one" company (all of them) comes close to caring about, much less pursuing.

They think it's ludicrous, in fact. But we like ludicrous, don't we?

 

[mikes_fsd]

I'm gonna be a downer for a moment:
Logistically, it's arguably already too late to meet that pattern. Tesla is still apparently road testing (see the Model X section various threads) and we know that at least 70% of the components are new i.e. not shared with Model S. Factor in lead times and it's potentially easily September before production can start; as with Model S expect the first cars to be slowly hand built and rigorous QA to take place. September may only see Founders cars delivered and in any case it's looking increasingly likely that we won't even get to see the design studio until August. Add in the the complexities of building a new car, and therefore high risk of ramp-up issues, plus the fact that Sigs are national and recent information that delivery times are getting longer (Bummer-Three-weeks-on-train) all equals we might be looking at a worst case of 200-300 deliveries in October, 500 in November and 1,000 in December.

Talk me back up please.

So, you basically took my numbers and halved them... I am willing to bet we will be in the 3500-4000 produced Model X's in 2015 (maybe deliveries will be slightly different).

About the 3 weeks to ship by train, I have a gut feeling that later half of Q4 will be done via expedited shipping (i.e. trucks).

 

[Paracelsus]

Battery-powered trucks...........?

 

[NigelM]

Focus on California deliveries after dec 1st would solve most of this issue.

True, but then make sure you have earplugs ready for the screams of anguish on the forums as deliveries take place out of reservation order. ;-)

 

[austinEV]

I don't think they extensively deviate in Texas today. Despite what the governor says there is a service center and a gallery in Austin. They aren't far from each other either. The people in the gallery can't discuss price or process a sale. But I think they let you call someone in California to do it. And then they deliver the car at the service center. The biggest issue it sounds like is that you can't finance the sales tax. Now, OTOH, 40,000 sq. ft. ?!? I have to check and the Austin service center is only 5,000 sq. ft.

I financed my sales tax... The biggest pain is that you have to apply for the license plate yourself, which normally dealers do. And that isn't hard.