Short-Term TSLA Price Movements - 2015

[vgrinshpun]

Was just referring to the singular new assembly line that was built. This is all stuff, according to you, for the new line put in place in July. So it obviously wouldn't include the other parts of the factory. Just asking about the flow on the final assembly line since they had talked about making it basically one long line as opposed to a snaking pattern.

And to the other poster, yes they intend to run the MX through the same singular final assembly line. I don't remember what the latest number was that they assumed possible from this line but if I recall it was something like 2000 a week. Which would clearly be more than just for the MS. Don't hold me to the 2k number though... Really not remembering it off hand.
.

The new assembly line that was installed this summer "conservatively" (Elon's word) has capacity of 2500 cars per week. It is my understanding that this number is based on 5 days a week, 2 shift operation (80 hrs per week).

 

[Robert.Boston]

Moderator's Note

Shifted some posts to TSLA Trading Strategies

 

[chickensevil]

The new assembly line that was installed this summer "conservatively" (Elon's word) has capacity of 2500 cars per week. It is my understanding that this number is based on 5 days a week, 2 shift operation (80 hrs per week).

Thanks man, I knew 2k didn't feel right, just couldn't put my finger on the right number.

 

[FANGO]

For all those who groused about 'range loss' with the D: Official EPA Figures Reveal Tesla Model S 85D Is New Range King

 

[Raffy.Roma]

@FANGO

IMO there will be other software improvements corresponding to even higher ranges. Soon the table concerning the ranges that you reported will become obsolete.

 

[Cattledog]

For all those who groused about 'range loss' with the D: Official EPA Figures Reveal Tesla Model S 85D Is New Range King

Does anyone know the EPA criteria for highway testing? Is it simply a constant XY miles per hour? Is XY 65? 70? Other?

- - - Updated - - -

Does anyone know the EPA criteria for highway testing? Is it simply a constant XY miles per hour? Is XY 65? 70? Other?

More info on EPA site if you click through the link, but nice to see that it includes highway speeds up to 80 MPH.

4. I heard that the top speed in EPA’s highway test is 60 mph. Since everyone knowsthat people drive much faster, why should I believe EPA’s highway (and combined) mpgestimates?
Vehicles are tested at a top speed of 80 mph in order to calculate the highway mpg estimates.
EPA utilizes five test cycles to represent real-world driving conditions. While it’s true that thetest cycle historically labeled as the “highway” test has a top speed of 60 mph, this test is currentlymeant to represent driving on lower speed highways as well as rural and suburban driving. EPA’shighway mpg estimates are primarily derived from a separate “high speed” test cycle, which has atop speed of 80 mph. The remaining three tests are designed to simulate stop-and-go city driving,high air conditioning use, and driving in cold temperatures. For more information on the fivetest cycles and how EPA calculates its mpg estimates, go to [COLOR=rgb(0.000000%, 0.000000%, 100.000000%)]epa.gov/fueleconomy[/COLOR].

 

[TSLAopt]

As far as the X reveal for a catalyst to the stock price...I have hunch it will be in early April. It makes sense to me to be almost exactly 6 months after the D launch event for these two reasons:

a)sets a precedent where they do semi-annual new product/technology reveals

b)suppliers of parts and material Tesla uses to manufacture the S (and X) probably run on quarterly or semi-annual schedules with supplier agreements set for those time frames. My guess is the D reveal was timed so that Tesla could gage the demand increase enough to reform their supply partner agreements with accurate estimates for S increased demand for an efficient ramp up with D demand...this is why I think the X reveal being almost 6 months exactly after the D makes sense...Tesla then gets to gage the demand increase enough to re-calibrate their supplier agreements which are likely quarterly or semi-annual for practical reasons of the raw material supply chain of the suppliers themselves, if that makes sense.

Above both reasons I think it makes sense also to do it after Tesla is sure that the S backlog is big enough to cover the gap in time it takes Tesla to ramp up the X production to be at least as high as current S production (with a backlog buffer for the possibility of substantial S cancelled orders to order X instead during that timeframe). This would likely be in the Spring as well and I'd guesstimate April to be a fine time for when these stars all line up.

 

[Larken]

Maoing, I was tied up all day and could not reply promptly, here's a quick thought, I apologize in advance for my typos as it is difficult to operate an iPhone for this forum:

1. You're not sure the storm ended bc of a possible EPS miss on 1,000 undelivered vehicles....

response: I don't deny that there will be a possible EPS miss, and my judgement on this matter is that the negative impact has already been priced in, especially with Elon's comment on China hitting almost every news outlet, also with the recent note by MS on a "downgrade," you would need to be living under a rock not to have already priced in the risk/return ratio of selling/holding Tesla.

The other part of your concern about 2 consecutive misses in a row may be due to you forgetting that the recent miss was neutralized by positives of a beat on EPS last Q. Which was why the stock rose after QR. The recent pullback was a culmination of X being delayed, macro economic worries related to oil, EU uncertainty, US unemployment data, and possible China GDP dropping to 7.0.

What we know now: X will be on time for 3rd Q. OPEC Secretary General has stated oil will rise again in "a month," I believe this to be true due to this bit of info coming from a high level executive with insider knowledge. OPEC usually cuts down production in November bc winter is usually a "low demand" season for oil and historically rises 2nd Q. GDP data from Q1 in the US of 2014 was negative and spiked as expected 2nd Q.. Although it is currently low demand season, OPEC chose not to cut supply as they usually do, driving oil prices much lower than expected taking Tesla with it and causing all kinds of fear and panic in the market. A slowdown in the global economy and oil demand seemed as though it may have impacted China, and the forewarning was the drop in oil prices. This was in fact not the case, China's GDP data did not drop anywhere near 7.0 as some bears have suggested, it came in at 7.4, missing by a mere .1 margin. The U.S economy on the other hand, continues to look strong, and will continue to grow in 2015-2016 as suggested by the IMF, which leads me to be bullish bc North America is our biggest market. Additionally, the EU will pump more than $1 trillion into their economy next year, a move likely to be beneficial to global economics almost immediately. So how will the market react to a miss? I want to remind you that the market is, by nature, forward looking, hence the price reflects this down channel we've already been experiencing. What most investors will be concerned about is demand, demand demand. If outlook for 2015 remains strong, that data alone will quash any worries about a Q's miss, or seating nuances.. Elon has made clear that Tesla has no demand issues , and won't advertise till at least 2016. Even with the overblown China news Tesla still doesn't need to advertise... An upside to this stock currently is that there are many people who sold in December for general tax purposes, waiting for the "30 day wash period" to end... How many of them will jump on to squeeze out 25 million shorts? No one knows but having them on the sideline favors Bulls..

2. Momentum stock hindsight and availability of news as a short term catalysts.

response: first, the "momentum stock effect." If you have followed this stock and forum as much as many veterans here, the momentum stock effect on NFLX and amzn earnings are very real, you should compare the price movement of these three companies simultaneously after earnings to see the correlation..

Secondly, your logic that in the absence of news Tesla cannot build momentum cannot be more flawed. How do you explain the mini momentum we've been experiencing the last several days in the absence of news on low volume? Although this thread is "short term," investors generally do not buy stocks without, having first, factoring in its long term potential. The two goes hand in hand, which was why it became a debate here whether to split up the two "short term" & "long term" threads. The idea that Tesla can only move forward with news is not without merit, yes news does drive Tesla exponentially, but "quiet periods" are expected in every investment. The difference between Tesla and other investments is that there is transparency in its future and blueprints have been provided in the gigafactory and model X coming online. Can you find these types of transparencies in Apple, Nflx, Amzn, FB, GoPro, Twitter, etc in terms of future products coming online? Yet, they're worth billions and the appetite for those stocks show in the volume of trades per day.. This is why people hold and buy this stock, not for "news" but they are willing to pay big money for transparencies favoring huge returns.

3. Short term investment.

response: investing is not as black and white as "short term only" or "long term only." This dilemma is somewhat explained above. But here's a historical data investors may want to weigh.:

Sept 2013 TSLA reached an ATH of $193, this was over a year and 3 months ago..
within two months the stock experienced 3 f@res and retreated to $120.50, a 37% drop. This drop imo was Teslas darkest hours due to the company being infant, the technology unproven and shows signs of imperfection, the stock also rose to over 500% in just 8 months, fear of a bubble was on everyone's mind... During this period, there were no talks of a gigafactory, x was at least 6 unconfirmed months away..

Today, January 2015, we dropped from an ATH of $287.xx of September to 185.50. A comparable 35% drop in 4 months... The difference in just 1 year and 3 months from the last drop is that TSLA is building a gigafactory, X confirmed for 3rd Q, Elon talking millions of Gen 3... Is this Teslas darkest hour? Not even close..

Excellent post and summary. I too am very bullish going forward and think guidance, which I guess will be very positive, is the "only" thing that matters for TSLA.

 

[AlMc]

Excellent post and summary. I too am very bullish going forward and think guidance, which I guess will be very positive, is the "only" thing that matters for TSLA.

While I believe guidance is very important, ultimately execution of the plan laid out in the guidance is what is important and will make the company and stock price grow.

 

[sundaymorning]

While I believe guidance is very important, ultimately execution of the plan laid out in the guidance is what is important and will make the company and stock price grow.

2014 goals & execution.

1. Supercharger network rollout: goal executed..
2. Service center rollout for insane growth: goal executed..
3. Highest margins in the auto industry of >25%: goal executed..
4. Product innovation, 4 wheel drive, "D" rollout: goal executed..
5. Right hand drive: goal executed..
6. European and Asia expansion: goal executed..
7. Initiate gigafactory buildout: goal executed..
8. Safest rating in automobile industry: goal executed..
9. Continue product innovation, over the air upgrades: goal executed..
10. Battery swap: goal executed..
***11. Missed guidance by 6-8%. Yet company continues to grow 51% yoy..
***12. Missed X rollout date: goal delayed till 3rd Q.

If Tesla misses by 5% guidance on Model S for 10 years straight but continues to grow by at least 50% each year on S,X and Gen 3, will their stock price grow? Certainly..

 

[AlMc]

2014 goals & execution.

1. Supercharger network rollout: goal executed..
2. Service center rollout for insane growth: goal executed..
3. Highest margins in the auto industry of >25%: goal executed..
4. Product innovation, 4 wheel drive, "D" rollout: goal executed..
5. Right hand drive: goal executed..
6. European and Asia expansion: goal executed..
7. Initiate gigafactory buildout: goal executed..
8. Safest rating in automobile industry: goal executed..
9. Continue product innovation, over the air upgrades: goal executed..
10. Battery swap: goal executed..
***11. Missed guidance by 6-8%. Yet company continues to grow 51% yoy..
***12. Missed X rollout date: goal delayed till 3rd Q.

If Tesla misses by 5% guidance on Model S for 10 years straight but continues to grow by at least 50% each year on S,X and Gen 3, will their stock price grow? Certainly..

we are on the same page. Execution is more important, long term, than guidance. Ultimately you have to 'walk the walk' and not 'talk the talk'.

 

[JRP3]

I'm not sure I'd call battery swap as "goal executed", since none have actually taken place as far as anyone knows.

 

[jhm]

I'm not sure I'd call battery swap as "goal executed", since none have actually taken place as far as anyone knows.

I'm not sure how swapping fits in with the strategic vision for Tesla. This seems like a byway. I suppose it's good to test it out and see if customers really want to buy into it. But if there is not enough demand for a 30% margin on swapping, it think Tesla has better opportunities to pursue.

 

[Jack6591]

I saw the completion of the SX production line as significant. I'm a little surprised we haven't seen any media response.

 

[chickensevil]

I saw the completion of the SX production line as significant. I'm a little surprised we haven't seen any media response.

It happened like 6 months ago. There was various article on it if I recall.

 

[sundaymorning]

I'm not sure I'd call battery swap as "goal executed", since none have actually taken place as far as anyone knows.

It's great you brought this up. From start, I have always been indifferent about battery swapping, I think it's unnecessary but works to Tesla's advantage from a marketing perspective, and provides much needed data to fight the ICE. I believe the majority of Tesla owners won't ever visit a swapping station because they simply don't need to, and for obvious reasons--the existence of superchargers and home chargers..

The fact that not a single person on this forum has recorded a visit to a swapping station works in Tesla's favor. One anti-EV argument that has been used by bears&shorts has been the shorter charge duration it takes to fill a gas tank..by developing a swapping station you squash this argument. As time goes by and the battery swapping station continues to see nominal visits, Tesla can use this data to refute the bearish argument that customers prefer the shorter visits to gas stations as appose to a longer wait, but free fill-up at super charger stations. After all, swapping costs customers money, just like a gas station would, while the wait at chargers end up being free. Which would customers rather have? Here's the data to prove it.. Superchargers +1

 

[Papafox]

Isn't some type of California credit based upon range of the alternate propulsion vehicle with just so much time available for recharge? My understanding is that this credit had been tweaked to work well for fuel-cell vehicles but would not work well for Teslas unless battery swapping existed. Maybe someone familiar with this issue can chime in.

 

[breser]

Isn't some type of California credit based upon range of the alternate propulsion vehicle with just so much time available for recharge? My understanding is that this credit had been tweaked to work well for fuel-cell vehicles but would not work well for Teslas unless battery swapping existed. Maybe someone familiar with this issue can chime in.

There is a requirement for quick recharge to receive the highest Zero Emmision Vehicle credit. At one point Tesla demonstrating that the quick battery swap technology was possible was sufficient for Tesla to receive the maximum ZEV credit. It didn't matter that they didn't have it deployed and that none of the vehicles had ever used it. Recently, that changed to require that a small amount of the vehicles actually were using that recharging technology. The movement on the battery swap stations and the "beta" status is probably just enough to qualify for the higher ZEV credit.

Fuel-cell vehicles are excluded from this fast recharge requirement. Largely because they obviously would meet the requirement anyway.

I could go find all the exact details, they're not at the top of my head right now. But in my opinion battery swap has nothing to do with what customers want and everything to do with Tesla's bottom line. I believe that Toyota is going to be selling Fuel-Cell Vehicles for roughly the same reason. They didn't have the technology to ship fast recharging EVs (battery swap is probably not realistic on a modified ICE platform) and Tesla wasn't able to scale up the BEV to meet Toyota's needs for ZEV credits. So Toyota developed a FCV that they could build themselves and get enough ZEV credits to avoid paying Tesla (or some other automaker for them). I don't believe for a minute that Toyota thinks FCV are better long term for consumers, they are just currently better for Toyota's bottom line. But the strategy only works if they actually sell FCVs to get the credits so of course they're going to say they're better than BEVs.

 

[Papafox]

There is a requirement for quick recharge to receive the highest Zero Emmision Vehicle credit. At one point Tesla demonstrating that the quick battery swap technology was possible was sufficient for Tesla to receive the maximum ZEV credit. It didn't matter that they didn't have it deployed and that none of the vehicles had ever used it. Recently, that changed to require that a small amount of the vehicles actually were using that recharging technology. The movement on the battery swap stations and the "beta" status is probably just enough to qualify for the higher ZEV credit.

Fuel-cell vehicles are excluded from this fast recharge requirement. Largely because they obviously would meet the requirement anyway.

I could go find all the exact details, they're not at the top of my head right now. But in my opinion battery swap has nothing to do with what customers want and everything to do with Tesla's bottom line. I believe that Toyota is going to be selling Fuel-Cell Vehicles for roughly the same reason. They didn't have the technology to ship fast recharging EVs (battery swap is probably not realistic on a modified ICE platform) and Tesla wasn't able to scale up the BEV to meet Toyota's needs for ZEV credits. So Toyota developed a FCV that they could build themselves and get enough ZEV credits to avoid paying Tesla (or some other automaker for them). I don't believe for a minute that Toyota thinks FCV are better long term for consumers, they are just currently better for Toyota's bottom line. But the strategy only works if they actually sell FCVs to get the credits so of course they're going to say they're better than BEVs.

Breser,
Yes, you hit the nail on the head. Thanks much for putting this issue into perspective.

 

[Auzie]

I'm not sure I'd call battery swap as "goal executed", since none have actually taken place as far as anyone knows.

Battery swap adds value in several ways:

- Tesla car owners can easily migrate to any new battery technology, keeping their car's value from steep decay in case of superior battery technology release
- Some Tesla owners may wish to keep the car for many years (miles) and upgrade battery after certain number of miles;
- Some drivers may actually use the facility
- Zev credits, as per breser's post above