Short-Term TSLA Price Movements - 2015

[Scott Ales]

I wouldn't go so far as to say CR had 0 effect. The brand took a hit because the media made the headlines terrible. As you know... Most people just read the headlines and become subject matter experts. Its a problem of brand perception. This kind of anchoring can erode the goodwill Tesla has worked to build so far. A well done response needs to be made.

I unfortunately must agree completely with this position.

 

[ev-enthusiast]

Jalopnik columnist Alex Roy took an autopilot Model S from west to east coast during the last days.
He is about to arrive in NYC (link).

 

[JRP3]

Jalopnik columnist Alex Roy took an autopilot Model S from west to east coast during the last days.
He is about to arrive in NYC (link).

He's been trashing the SC locations fairly heavily along the way.

 

[ev-enthusiast]

He's been trashing the SC locations fairly heavily along the way.

Yea, correct.
A bit strange as he needs the SC stations to do his trip.

In my news feed: Doug Kass covered half his short position yesterday (link):

I caught a bad Consumer Reports article that is the primary catalyst for the decline.

Here is an interesting snippet of the Stifel note from James Albertine out yesterday saying that the issues reported by Consumer Reports are neither new nor significant:

 

[Electrifying]

Agree with this. Furthermore, I expect Elon to surprise us with something during CC that will make people buy, e.g. something with regards to revenue, cash flow, EPS projections for Q4 and beyond. I wouldn't give my hopes up that this ER/CC will be followed by a lift-off instead of the drops after Q1 and Q2.

In Q3 investor letter, Tesla wrote: " In Q4, we will ramp production and delivery ofTesla Energy products, ...". From a number of news sources I think this has already happened, it will be interesting to hear how much this new product line contribute to Q4 cash flow. Also Elon stated that Tesla had seen a “a big, a very big jump on order + on Model S” since the X launch, which leads me to speculate that model X slow ramp will NOT affect Q4 deliveries because Tesla can easily have both lines produce model S and only switches line 2 to model X production when they have stockpiled enough model X parts to ensure model X will be produced at peak capacity non-stop afterwards. So it will not surprise me they guide for 55,000 deliveries for 2015. I took some big losses on my near term calls too but the key to this game is to never go all in and always keep some spare firepower standby. I have some Jan 250's and March 320 calls right now. If TSLA does turn cash flow positive by Q1, I think SP reaching $350 by March is not out of the question.

 

[pGo]

In Q3 investor letter, Tesla wrote: " In Q4, we will ramp production and delivery ofTesla Energy products, ...". From a number of news sources I think this has already happened, it will be interesting to hear how much this new product line contribute to Q4 cash flow. Also Elon stated that Tesla had seen a “a big, a very big jump on order + on Model S” since the X launch, which leads me to speculate that model X slow ramp will NOT affect Q4 deliveries because Tesla can easily have both lines produce model S and only switches line 2 to model X production when they stockpiled enough model X parts to ensure model X will be produced at peak capacity non-stop afterwards. So it will not surprise me they guide for 55,000 deliveries for 2015. I took some big losses on my near term calls too but the key to this game is to never go all in and always keep some spare firepower standby. I have some Jan 250's and March 320 calls right now. If TSLA does turn cash flow positive by Q1, I think SP reaching $350 by March is not out of the question.

Curious how your math leads you to believe 55K deliveries are possible in 2015 since only about 170 MX will be produced (not delivered) by the middle of November (best case) as per the latest from MX thread.

 

[Electrifying]

Curious how your math leads you to believe 55K deliveries are possible in 2015 since only about 170 MX will be produced (not delivered) by the middle of November (best case) as per the latest from MX thread.

First it's pure speculation from my side. I remember that another forum member (Vladimir?) observed the Model S wait time did not change after model X launch (he was arguing that if Tesla indeed started producing model S on both lines the wait time should have shrunk). However we know that model S orders jumped, the only logical explanation then would be the production of S jumped as well, in the remote possibility that model S demand and production both jumped 30 to 40% from Q3, then 50,000 to 55,000 deliveries should be still possible.

 

[ev-enthusiast]

Tesla Motors outselling BMW 7 series and Audi A8 even on a combined basis in Europe during 2015:
Tesla Zooms Past BMW, Audi Limos In Europe, Closes In On Mercedes

Tesla’s all electric Model S has overtaken established and conventionally powered luxury car market leaders like the BMW 7 series and Audi A8 in their own European backyards, and is threatening the long-established market leader, the Mercedes S class.

BTW what does it take for a short squeeze to get started?
Too many greedy shorts?
I got rid of my remaining protective puts yesterday.

 

[Bobbyducati]

setting up a new straddle (my version anyway) today, got some jan puts (already in the green) and looking to open some calls. should be interesting.

 

[ev-enthusiast]

setting up a new straddle (my version anyway) today, got some jan puts (already in the green) and looking to open some calls. should be interesting.

Please get the latest news from the X.

 

[Krugerrand]

Tesla Motors outselling BMW 7 series and Audi A8 even on a combined basis in Europe during 2015:
Tesla Zooms Past BMW, Audi Limos In Europe, Closes In On Mercedes

The more relevant information would be if as a result to Model S sales that the BMW 7 series and Audi A8 are taking a hit in terms of numbers of units sold, or if Tesla has just expanded the market segment.

 

[ev-enthusiast]

The more relevant information would be if as a result to Model S sales that the BMW 7 series and Audi A8 are taking a hit in terms of numbers of units sold, or if Tesla has just expanded the market segment.

Good question, I would like to know the same.
My expectation is that it is a mix of both.

My quick calculation is as follows:
With a combined sales from Merc, BMW, Audi and Tesla during 2015 in Europe of 29350 vehicles and Tesla Motors selling 10600 we are well past the point where anybody can say that Tesla does not grab significant market share of the big three Germans, aren't we? That is a bit more than a third of the over all sales!
In case someone says this is not significant, my question is: What would be a significant market share, two thirds?
There are two reasons that this hurts German car manufacturers disproportionally:
1. They need sales of these prestigous cars to create their brand awareness and sell more of the ceaper cars as well.
2. They need sales of these prestigous cars as they provide a higher margin compared to the higher production volume cars.

Just to add an other data point:
Last years Model S sales have been about the half of Merc S class sales.
This years Model S sales are almost the same as Merc S class sales.
What will next years Model S sales be compared to Merc S class sales?

 

[Bobbyducati]

Good question, I would like to know the same.
My expectation is that it is a mix of both.

My quick calculation is as follows:
With a combined sales from Merc, BMW, Audi and Tesla during 2015 in Europe of 29350 vehicles and Tesla Motors selling 10600 we are well past the point where anybody can say that Tesla does not grab significant market share of the big three Germans, aren't we? That is a bit more than a third of the over all sales!
In case someone says this is not significant, my question is: What would be a significant market share, two thirds?

Just to add an other data point:
Last years Model S sales have been about the half of Merc S class sales.
This years Model S sales are almost the same as Merc S class sales.
What will next years Model S sales be compared to Merc S class sales?

id have to think if you had the largest piece of the pie, regardless of what % of the pie that is, you have a significant market share. just my 2 cents

 

[erha]

I don't buy the argument that Tesla is producing Model S on both production lines. Even though the new one is capable of producing Model S doesn't mean they can just start producing cars without any tuning. An unqualified guess would be that it is not that much more work tuning it for Model X than for Model S. (Albeit the Model X might have some engineering design challenges left.)

It is much better to produce Model S on the line that is already tuned for Model S and spend all extra effort into getting Model X production running. They are probably having some struggles there, but they'll eventually sort it out. Hopefully before Wall Street lose patience.

 

[ev-enthusiast]

I don't buy the argument that Tesla is producing Model S on both production lines. Even though the new one is capable of producing Model S doesn't mean they can just start producing cars without any tuning. An unqualified guess would be that it is not that much more work tuning it for Model X than for Model S. (Albeit the Model X might have some engineering design challenges left.)

It is much better to produce Model S on the line that is already tuned for Model S and spend all extra effort into getting Model X production running. They are probably having some struggles there, but they'll eventually sort it out. Hopefully before Wall Street lose patience.

To my opinion nobody should lose any patience if this takes roughly as long as with the launch of the Model S (e.g. about 6 weeks pause with the Model S).
If this takes significantly longer than with the Model S, e.g. about 8 or 9 weeks, then I would slowly start to lose a bit of a patience.
Right now, everything is on track

- - - Updated - - -

Coast2coast rally in autopilot Model S successfully completed setting two new records: twitter

 

[Spidy]

Good question, I would like to know the same.
My expectation is that it is a mix of both.

My quick calculation is as follows:
With a combined sales from Merc, BMW, Audi and Tesla during 2015 in Europe of 29350 vehicles and Tesla Motors selling 10600 we are well past the point where anybody can say that Tesla does not grab significant market share of the big three Germans, aren't we? That is a bit more than a third of the over all sales!
In case someone says this is not significant, my question is: What would be a significant market share, two thirds?
There are two reasons that this hurts German car manufacturers disproportionally:
1. They need sales of these prestigous cars to create their brand awareness and sell more of the ceaper cars as well.
2. They need sales of these prestigous cars as they provide a higher margin compared to the higher production volume cars.

Just to add an other data point:
Last years Model S sales have been about the half of Merc S class sales.
This years Model S sales are almost the same as Merc S class sales.
What will next years Model S sales be compared to Merc S class sales?

You did not really answer the question. 1/3 market share? Is that the same market? Or did the market just grow those 1/3? You say the Model S has more sales, but it can has more sales without the other cars actually losing sales.

More than 3000 Tesla's were sold in Norway a market where those other cars have close to no sales at all, because nobody can afford them. Denmark similar story. Netherlands? Also a very small market for those cars.

 

[vgrinshpun]

The more relevant information would be if as a result to Model S sales that the BMW 7 series and Audi A8 are taking a hit in terms of numbers of units sold, or if Tesla has just expanded the market segment.

I think that Tesla expanded the market segment more than stole sales form the segment leaders. This includes, IMO, both NA and European market. (This BTW includes also myself and majority of other owners that I met). This is very significant because by expanding the market segment Tesla gained a *lot* of visibility, and it is just matter of time before the consumers customarily shopping in this high end premium segment will start turning to Tesla in significant numbers. This why I think that Tesla MS/MX demand has a very good potential to grow well beyond 100K units/year.

 

[Noble Ninja]

I wouldn't go so far as to say CR had 0 effect. The brand took a hit because the media made the headlines terrible. As you know... Most people just read the headlines and become subject matter experts. Its a problem of brand perception. This kind of anchoring can erode the goodwill Tesla has worked to build so far. A well done response needs to be made.

All too often when people talk about stock market news they hear and ask them if they read beyond the headlines, they almost always say NO.

Nice timing! I bought SCTY instead of Tesla at about the same time. It seemed to be mirroring the Tesla downturn. Tesla popped back up a bit while Solar City stayed where it was. I'm still very happy as I expect SCTY to hit $50 before the end of the year.

SCTY was trading between $50 - $60 for most of the year until the China BS in August, and now trades between $40 and $50.

 

[jhm]

I think that Tesla expanded the market segment more than stole sales form the segment leaders. This includes, IMO, both NA and European market. (This BTW includes also myself and majority of other owners that I met). This is very significant because by expanding the market segment Tesla gained a *lot* of visibility, and it is just matter of time before the consumers customarily shopping in this high end premium segment will start turning to Tesla in significant numbers. This why I think that Tesla MS/MX demand has a very good potential to grow well beyond 100K units/year.

I think expanding a market is always better than merely taking marketshare. It means you are bringing something truly new and compelling to the market. This is precisely what high end competitors fail to do. There are plenty of consumers who can spend more on the cars they buy, but simply do not find compelling products to motivate the to do so. I am one of those. Before Tesla I was perfectly content to drive a Camry and save my money for other things. I saw absolutely no point in wasting money on a BMW or Mercedes. But I was delighted to buy a Model S this year with 55% cash down payment. So the Audis of the world have a very serious problem with consumers like me; they've got nothing to sell me. This was true prior to the Model S, and I expect it will be so for quite a long time to come.

 

[SW2Fiddler]

Before Tesla I was perfectly content to drive a Camry and save my money for other things. I saw absolutely no point in wasting money on a BMW or Mercedes. But I was delighted to buy a Model S this year ...

I believe there will be a lot of hands raising, "ME TOO" on this point. I am definitely way above my previous life-long Car Price Point on the Tesla. Simply because no one had made "My Car" before then. I went from no-exposure-to-Tesla, to Model-S-on-order, in a shocking 2.5 months.