Short-Term TSLA Price Movements - 2015

[anticitizen13.7]

I'm actually not sure of the actual demand ceiling on Model S/X generation vehicles. I don't know that anyone really knows.

 

[Papafox]

I don't see any reason for all these arguments. Tesla itself guided down demand and production for 2016 in Q2 2015 shareholder letter. So, all these reasons for the shortfall in deliveries are irrelevant. Wondering, how many posters here bother reading the shareholder letters? Looks to me, this forum has too many emotional investors.

Q2 2015 shareholder letter: "Looking ahead to next year, we are highly confident of a steady state production and demand of 1,600 to 1,800 vehicles per week combined for Model S and Model X."

Q4 14 shareholder letter: "In late summer, we plan to begin Model X body production in our new robotic body assembly shop that will run in parallel with our current Model S body shop. Shortly thereafter, we plan to start painting Model S and Model X vehicles in our new paint facility in Fremont. Should we achieve our design targets, this new paint shop will set new standards for high volume paint shops worldwide in terms of paint quality, labor and energy efficiency, and low environmental impact. It will also be flexible enough and have the capacity to paint Model 3 in the future. These and other investments should provide us with sufficient capacity to increase our production to 2,000 vehicles per week by year-end."

So, a production capacity of 2000/week doesn't mean the company will produce at that level, or if there is demand for that. Now, looks like even meeting 1600-1800 steady state is a stretch.

PS: As noted here a week ago, I sold my trading shares @230 when I saw the rally stall.

If Tesla says they're confident they will have both the production capability and demand to produce 1600 to 1800 vehicles per week, you cannot deduce from that statement that Tesla has lowered their expectations of both production capability and demand. Rather, you can deduce that Tesla is saying that they see both demand and production capability equaling or exceeding 1600 to 1800 vehicles a week.

Let me put it in more of a mathematical context. Tesla is saying:
Model S + Model X demand will equal or exceed 1600 to 1800 vehicles/week
Model S + Model X production will equal or exceed 1600 to 1800 vehicles/week

You cannot logically deduce from these two statements that Tesla feels that 2000 vehicles per week demand is not possible. Nor can you deduce from the statement that 2000 vehicles per week production is not possible. All you can deduce is what is said, which is that Tesla feels that neither demand nor production will prevent a 1600 to 1800 vehicles/week average production and delivery rate.

Personally, I feel that production capabilities will continue to be the limiting factor, but I cannot deduce that conclusion from the statement above.

 

[DaveT]

I'll chime in here. I for one haven't been a believer in Tesla's "production constraints" this year. I've shared this opinion in a couple of google hangouts early in the year. I think the battery constraints of last year was real. But I think this year they've been more matching production to demand. And demand hasn't been growing as fast as they originally expected. This does not mean that demand isn't growing or hasn't grown. It just means that Tesla had certain expectations and I think demand growth wasn't as fast as those expectations. We know for certain that Elon/Tesla overestimated initial demand/orders for Germany and China.

Now, I take a long-term bullish stance on all this. Yes, demand growth hasn't been as fast as Elon/Tesla/shareholders would have liked. But I think we're likely to see some kind of "tipping point" where demand really spikes since people come to realize that Tesla is light years ahead of every other auto manufacturer. It's possible that the tipping point is Autopilot (auto-steering) and we've already seen the tipping point. Or it could come later; but I think it'll come if it hasn't already.

 

[mmd]

Let me put it in more of a mathematical context. Tesla is saying:
Model S + Model X demand will equal or exceed 1600 to 1800 vehicles/week
Model S + Model X production will equal or exceed 1600 to 1800 vehicles/week

I don't really see any math here. What I see is a distortion of what the company wrote in Q2 shareholder letter. Please read the statement again, this time without being biased by what you wish to read. It doesn't say "equal or exceed". Any logical person would read that as their best guess. It is possible to exceed, and also possible to miss. I would assume, with equal probability.

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I'll chime in here. I for one haven't been a believer in Tesla's "production constraints" this year. I've shared this opinion in a couple of google hangouts early in the year. I think the battery constraints of last year was real. But I think this year they've been more matching production to demand. And demand hasn't been growing as fast as they originally expected. This does not mean that demand isn't growing or hasn't grown. It just means that Tesla had certain expectations and I think demand growth wasn't as fast as those expectations. We know for certain that Elon/Tesla overestimated initial demand/orders for Germany and China.

Now, I take a long-term bullish stance on all this. Yes, demand growth hasn't been as fast as Elon/Tesla/shareholders would have liked. But I think we're likely to see some kind of "tipping point" where demand really spikes since people come to realize that Tesla is light years ahead of every other auto manufacturer. It's possible that the tipping point is Autopilot (auto-steering) and we've already seen the tipping point. Or it could come later; but I think it'll come if it hasn't already.

Yes, very reasonable post indeed. One can be bullish or bearish without being blind to new facts.
There are few more clues, if anyone wants to see them:
1. People have shown, by adding the surplus production in last many quarters, that Tesla currently holds nearly 9000 extra cars produced vs. delivered. This is not a sign of production constraint. It's a sign of demand constraint.
2. The order-to-delivery delay has remained the same, and some will argue even shrank, during the last 3-4 quarters. If more orders were coming in than delivered, and production is at the same ~1000-1100 cars/week, we would have seen delivery times skyrocket. That hasn't happened.
3. The current discounting in China is not a sign of production constraint.

 

[Papafox]

I'll chime in here. I for one haven't been a believer in Tesla's "production constraints" this year. I've shared this opinion in a couple of google hangouts early in the year. I think the battery constraints of last year was real. But I think this year they've been more matching production to demand. And demand hasn't been growing as fast as they originally expected. This does not mean that demand isn't growing or hasn't grown. It just means that Tesla had certain expectations and I think demand growth wasn't as fast as those expectations. We know for certain that Elon/Tesla overestimated initial demand/orders for Germany and China.

Now, I take a long-term bullish stance on all this. Yes, demand growth hasn't been as fast as Elon/Tesla/shareholders would have liked. But I think we're likely to see some kind of "tipping point" where demand really spikes since people come to realize that Tesla is light years ahead of every other auto manufacturer. It's possible that the tipping point is Autopilot (auto-steering) and we've already seen the tipping point. Or it could come later; but I think it'll come if it hasn't already.

DaveT, your point is well taken. The $1000 incentive program would likely not have been implemented if Tesla could have achieved their current Model S output this quarter without the program. A delay in Model X deployment likely necessitated an upward bump in demand. I agree, too, that autopilot may become a significant catalyst for reaching the tipping point.

mmd, Let me quote from your post:

Q2 2015 shareholder letter: "Looking ahead to next year, we are highly confident of a steady state production and demand of 1,600 to 1,800 vehicles per week combined for Model S and Model X."

To understand the logic involved in this statement, try substituting the numbers 1400, 1700, and 2000 for demand and production rate. Only 1700, 2000, or a combination of these numbers for demand and production rate would allow your quoted statement to be true. Once a 1400 is inserted as an average production or demand number, the statement you quoted no longer works.

 

[pGo]

DaveT, your point is well taken. The $1000 incentive program would likely not have been implemented if Tesla could have achieved their current Model S output this quarter without the program. A delay in Model X deployment likely necessitated an upward bump in demand. I agree, too, that autopilot may become a significant catalyst for reaching the tipping point.

mmd, Let me quote from your post:

Q2 2015 shareholder letter: "Looking ahead to next year, we are highly confident of a steady state production and demand of 1,600 to 1,800 vehicles per week combined for Model S and Model X."

To understand the logic involved in this statement, try substituting the numbers 1400, 1700, and 2000 for demand and production rate. Only 1700, 2000, or a combination of these numbers for demand and production rate would allow your quoted statement to be true. Once a 1400 is inserted as an average production or demand number, the statement you quoted no longer works.

Wow. I read a few times now. What Tesla says here is that they feel confident about demand and production of 1600-1800 cars. 1400 or 2000 would be beyond what is quoted.

Based on recent history, I would read the numbers at 1600/week. Not a car more unless I see improvement in quarters to come.

 

[Papafox]

pGo, you're talking practicalities, and I'm talking logic, two different things. On the logic side, if Tesla said they're highly confident they could produce and deliver 1600 to 1800 cars per week and actual demand was for 2000 vehicles per week, does that extra demand conflict with their confidence of being able to produce and deliver within that range? Of course not. Conversely, if demand was only 1400 vehicles per week, the confidence would have been unwarranted.

 

[maoing]

It depends whom you heard from? If he's TSLA cheerleader, then you might get misleading information. Do your own research, Telsa didn't mention battery contraint since 2014 Q2 ER.

What you listed IMO does not equate "Tesla has a demand problem".

I remember one guy analyzed the 70D release, and concluded it could actually be a smart way to optimize profit given a limited supply of batteries. If Tesla only had enough batteries from Panasonic to deliver 40,000 85KWh Models S's, then adding 70D into the mix would allow them to deliver up to 21.4% more cars (85/70 = 1.214). Yes releasing 70D allows more people to afford the car but we don't know Tesla did this because they were having insufficient demand.

As for the new incentive in China, if could be a temporary strategy to increase market share at the cost of profit. They did raise price in China about a month ago due to US dollar appreciation.

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MikeC already asked same question. See my reply http://www.teslamotorsclub.com/show...-and-outlook?p=1239549&viewfull=1#post1239549

So if you believe there is such a demand problem, why did you say in an earlier post that you plan to buy more TSLA on Monday with the market panic? I don't understand the logic.

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There is no supply issue either for model S production. Demand constraint is the hardest question Elon want to face also many TSLA bulls unfortunately. But market is smart enough to sense this already.

There could be limiting factors in the supply chain. Someone already brought up the issue of battery supply. Even if the line is physically capable of handling more cars, Tesla may not be able to acquire enough batteries to build more vehicles.

Basically, there could be any number of reasons that the production line didn't produce as many cars as you expected. This doesn't logically imply lack of demand.

Model S delivery lead times appear to have held fairly steadily at a bit under 2 months from ordering to delivery. If demand for the Model S was falling, a decrease in lead time would be an indicator.

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"In addition, we are adding new production capacity at our Fremont factory that will allow us to meet the growing
worldwide demand for our vehicles. The speed at which we are executing this capacity upgrade will allow us to exceed
35,000 Model S deliveries this year. Provided that we execute well and there are no serious macroeconomic shocks,
Tesla’s annualized delivery rate should exceed 100,000 units by the end of next year."

The 2000/week was expected "run rate", NOT meant to imply that the lines would build that many cars for the whole year.

I remember this being discussed a lot. There was much confusion over the difference between "run rate" and annual production.

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I overlooked recent shareholder letters. It's also good information that Tesla officially confirmed production rate will exceed demand rate by end of 2015 which probably already happened for most of 2015.

I don't see any reason for all these arguments. Tesla itself guided down demand and production for 2016 in Q2 2015 shareholder letter. So, all these reasons for the shortfall in deliveries are irrelevant. Wondering, how many posters here bother reading the shareholder letters? Looks to me, this forum has too many emotional investors.

Q2 2015 shareholder letter: "Looking ahead to next year, we are highly confident of a steady state production and demand of 1,600 to 1,800 vehicles per week combined for Model S and Model X."

Q4 14 shareholder letter: "In late summer, we plan to begin Model X body production in our new robotic body assembly shop that will run in parallel with our current Model S body shop. Shortly thereafter, we plan to start painting Model S and Model X vehicles in our new paint facility in Fremont. Should we achieve our design targets, this new paint shop will set new standards for high volume paint shops worldwide in terms of paint quality, labor and energy efficiency, and low environmental impact. It will also be flexible enough and have the capacity to paint Model 3 in the future. These and other investments should provide us with sufficient capacity to increase our production to 2,000 vehicles per week by year-end."

So, a production capacity of 2000/week doesn't mean the company will produce at that level, or if there is demand for that. Now, looks like even meeting 1600-1800 steady state is a stretch.

PS: As noted here a week ago, I sold my trading shares @230 when I saw the rally stall.

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you'd bet 1600/week is optimistic goal unless Tesla proves that. I think this is how the market reacted to Elon's 50K-52K Q4 guidance in last week.

Wow. I read a few times now. What Tesla says here is that they feel confident about demand and production of 1600-1800 cars. 1400 or 2000 would be beyond what is quoted.

Based on recent history, I would read the numbers at 1600/week. Not a car more unless I see improvement in quarters to come.

 

[Papafox]

Maoing,
I am disappointed. I was hoping we could have a discussion where we challenge each other's points and try to move the conversation forward. You never responded to my point that the 2014 prediction of 100,000 vehicles/year was for a combination of S and X and unfortunately, we will not have expected Model X production at the end of this year. Production constraints make this delivery rate impossible and we cannot deduce there's a demand problem when the X is completely production constrained at this time. All you did was republish the quote. This kind of behavior does not move the discussion forward.

You quote mmd, even though I pointed out the logical inconsistency with his argument. You ignored my comments.

I really tried to engage in a reasonable discussion on the topic.

 

[sub]

Unfortunately your judgement is completely wrong. I never short TSLA and even my minimum long postion (currently have) is much larger than average investors. I hope you don't make emotional mistake for your investment.

We can agree to disagree, I have no problem with that. You do offer up that you were so brilliant to call the bottom at 180 recently, yet bought in after post ER Run up and are now down on that position. Go back and read my pre ER posts, I was optimistic and in the small minority here that wasn't bearish. I also didn't buy in for more "emotionally" after the ER as it appears you did.

let me know if you need some trading tips, hate to see you go broke. I was in on TSLA under $100, no matter what happens to my current position Im still good, but thanks for your concern. #smug

 

[Causalien]

I don't see any reason for all these arguments. Tesla itself guided down demand and production for 2016 in Q2 2015 shareholder letter. So, all these reasons for the shortfall in deliveries are irrelevant. Wondering, how many posters here bother reading the shareholder letters? Looks to me, this forum has too many emotional investors.

Q2 2015 shareholder letter: "Looking ahead to next year, we are highly confident of a steady state production and demand of 1,600 to 1,800 vehicles per week combined for Model S and Model X."

Q4 14 shareholder letter: "In late summer, we plan to begin Model X body production in our new robotic body assembly shop that will run in parallel with our current Model S body shop. Shortly thereafter, we plan to start painting Model S and Model X vehicles in our new paint facility in Fremont. Should we achieve our design targets, this new paint shop will set new standards for high volume paint shops worldwide in terms of paint quality, labor and energy efficiency, and low environmental impact. It will also be flexible enough and have the capacity to paint Model 3 in the future. These and other investments should provide us with sufficient capacity to increase our production to 2,000 vehicles per week by year-end."

So, a production capacity of 2000/week doesn't mean the company will produce at that level, or if there is demand for that. Now, looks like even meeting 1600-1800 steady state is a stretch.

PS: As noted here a week ago, I sold my trading shares @230 when I saw the rally stall.

Please link back to the post you mentioned your trades. It's very hard for those of us who are not you to find out which one it is.

 

[maoing]

Papafox, I think some following posts already pointed out my answer and I also did explain that in my original post. Sorry I didn't respond to you directly. Let me rephrase it here:
1) Missing 2000/week delivery goal is not the only reason I made my suspect. Q4Q1Q2Q3 production rate stay flat or slight increase directly against TM's 11/17/2014 blog that "The line is now running at about 1,000 cars a week with the potential for significantly more with minor adjustments."

2) Yes, model X production ramp up hiccups make 2000/week rate complex. But the model X execution issue will only last a few quarters including Q4 2015. Why Elon excluded the possibility to achieve such rate by end of 2016. Instead in Q2 Shareholder letter (mmd pasted) : "Looking ahead to next year, we are highly confident of a steady state production and demand of 1,600 to 1,800 vehicles per week combined for Model S and Model X." It's a setback for the demand projection from 2014 and I don't believe we have cut off date from 01/01/2016 and it must be a gradual process which already happend in 2015.

Maoing,
I am disappointed. I was hoping we could have a discussion where we challenge each other's points and try to move the conversation forward. You never responded to my point that the 2014 prediction of 100,000 vehicles/year was for a combination of S and X and unfortunately, we will not have expected Model X production at the end of this year. Production constraints make this delivery rate impossible and we cannot deduce there's a demand problem when the X is completely production constrained at this time. All you did was republish the quote. This kind of behavior does not move the discussion forward.

You quote mmd, even though I pointed out the logical inconsistency with his argument. You ignored my comments.

I really tried to engage in a reasonable discussion on the topic.

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My TSLA trading is in deep green YTD even with some hit post ER. But I clearly remembered you double down your position around 200 early this year and you claimed you have about 75% postion of LEAP calls just several weeks ago when TSLA closing just under 250.
http://www.teslamotorsclub.com/show...-TSLA/page23?p=1179382&viewfull=1#post1179382

So my suggestion which is the same as last down turn. Hold your shares and it's not very far away from bottom, could be another 30 points or so. But what you need to concern is the LEAP calls, the correction could last well another 2-3 months, so timing value loss could be significant. Good luck and I do wish you thrive in TSLA investment.

let me know if you need some trading tips, hate to see you go broke. I was in on TSLA under $100, no matter what happens to my current position Im still good, but thanks for your concern. #smug

 

[Papafox]

Papafox, I think some following posts already pointed out my answer and I also did explain that in my original post. Sorry I didn't respond to you directly. Let me rephrase it here:
1) Missing 2000/week delivery goal is not the only reason I made my suspect. Q4Q1Q2Q3 production rate stay flat or slight increase directly against TM's 11/17/2014 blog that "The line is now running at about 1,000 cars a week with the potential for significantly more with minor adjustments."

2) Yes, model X production ramp up hiccups make 2000/week rate complex. But the model X execution issue will only last a few quarters including Q4 2015. Why Elon excluded the possibility to achieve such rate by end of 2016. Instead in Q2 Shareholder letter (mmd pasted) : "Looking ahead to next year, we are highly confident of a steady state production and demand of 1,600 to 1,800 vehicles per week combined for Model S and Model X." It's a setback for the demand projection from 2014 and I don't believe we have cut off date from 01/01/2016 and it must be a gradual process which already happend in 2015.

I appreciate your point that in early 2015 we did not see a production ramp-up of significance. Perhaps you are right that demand issues were at play at that time. We did see a production ramp-up in 3rd quarter, 2015, though, and 4th quarter should be a very sizable increase in both production and deliveries. The main point I wish to make is that the 2,000 vehicles per week would very likely have been possible if Tesla had a few months to increase Model X deliveries before the end of 2015. We cannot say that 2,000 deliveries at end of 2015 was missed because of demand issues. In fact, with 1200-1300 Model S cars likely being built each week at present, and with a backorder of tens of thousands of Model X vehicles, there is no reason why demand could not have supported 2,000 vehicles per week at the end of this year.

Do you believe that 1,000 Model S cars per week is a sustainable demand rate in 2016? I certainly do, especially with continued refinements to the cars such as autopilot.
Do you believe that 1,000 Model X vehicles per week is a sustainable demand rate through 2016? That would be about 50,000 Model X vehicles that would need to be produced during the year and backorders for the Model X already amount to more than half that amount.
Add 1,000 Model S/week to 1,000 Model X per week and you can see sustained demand of 2,000 Teslas/week throughout 2016.

Why, then, did Tesla guide for 1600 - 1800 vehicles/week, then? Crowded Mind put forward a reasonable explanation that the 2,000 vehicles/week number is a best case for a good week production rate and with holidays, scheduled downtime, etc., 1600-1800 vehicles/week is a more reasonable number to expect. I suggest that in 2014 Tesla hadn't formulated a plan to shift production of both S and X to a single vehicle in white line during 2016 to free up the other line for Model 3 production preparations. In other words, I am suggesting that Tesla will be production constrained below 2000 vehicles/week, due not only to this shift of production lines but also because we will not see a production rate of 1,000 Model X vehicles/week as we enter 2016. With these realities on the production side, it would likely be inaccurate to expect an average production capability of 2,000 vehicles/week. For this reason, you cannot reliably say that Tesla's 1600-1800 number is the result of decreased demand expectations. In fact, if you look at Model S current production rate and Model X backlog of orders, you will see that Tesla could indeed sell at least 2,000 Teslas a week in 2016 if production allowed.

I am willing to open my mind and consider that during parts of 2015 Tesla could have produced more Model S cars if demand had been stronger. I hope you too will have an open mind and will consider that Tesla's deliveries in 2016 will be constrained by production capability and not by demand.

 

[maoing]

Papafox, I think your points are well reasoned and I appreciate. Model X definitely can help mitigate 2016 demand concern, but not in Q4. In other words, if model S demand is strong enough, it should mitigate any model X shortfall and give strong positive boost on stock price. But it's NOT, so that's the demand issue playing negative impact on SP. Going into 2016, when model X in full production, we won't see demand issue for 2-3 quarters. So that's the reason I'll turn to bullish in anticipating model X momentum kicking in and model 3 release. But before model X production ramp up got serious confirmation, I'll put aside majority of my cash in sideline to watch the drama rolling out.

 

[pGo]

pGo, you're talking practicalities, and I'm talking logic, two different things. On the logic side, if Tesla said they're highly confident they could produce and deliver 1600 to 1800 cars per week and actual demand was for 2000 vehicles per week, does that extra demand conflict with their confidence of being able to produce and deliver within that range? Of course not. Conversely, if demand was only 1400 vehicles per week, the confidence would have been unwarranted.

It comes down to "winning should feel like winning". If Tesla walks the walk, I would be inclined to believe 1800/week. Otherwise, even if the demand is 2500/week, but they couldn't ramp up production, market will look at incapability of production raise in timely manner. Actually, that is one of the reasons Tesla is where it is now.

In investing, I don't want to depend on rough numbers. Or at least, Tesla will have to earn back that respect as market at this moment is not taking their week old projection seriously. Some folks here took it for granted that early this year Tesla was going at 1100-1200/week, only to bring back. I hope 2000 does not become norm in people's head before it could become a reality.

 

[Scott Ales]

There is a fundamental difference between demand being defined with current design and features vs known opportunities to actually reinvigorate demand at will.

You can Google - Elon Musk demand not problem -

This is the consistent comment from EM over the last few years and still today. There is a very significant and fundamental difference between Tesla and all other auto manufacturers. They are not constrained by the model year / annual roll-out process. When they are prepared to drive sales they introduce a new feature or set of features. I must believe (I have no proof but it is logical they track page views as related to actual orders on the configuration tool) they track the various visits to the website to determine how to present the options and packages to drive sales. I mean really, if they have the technology to map billions of road miles they certainly wouldn't ignore all the juicy data from their website traffic. So they can always make adjustments to the car and how it is presented without any specific press release or statements. Add to that the various new features along the way that are sitting on the shelf ready to throttle up demand when production time is available and I see a bunch of really smart people in control. This has never been done in the business, ever. No other manufacturer has the direct and data rich environment to drive demand because they have dealers on the ground who do NOT track this information either at all or in a very limited and inconsistent manner. And they rarely share it with the manufacturer in a way that would be meaningful to make production / design / package changes.

So when EM says "Demand is not a problem" I see it as a statement that over 7 years they have refined the process of collecting data to carefully match demand with production. When I ordered my 2013 Model S in July of that year, I received the car the second week of August. When I ordered my latest Model S last month they estimated a Dec. 15th delivery. That's 2 years later with no significant style or body changes. But an enormous amount of features and improvements added since then. This is where Tesla REALLY has an edge. It's interesting and helpful now with the MS and MX. But this ability and the systems that will be in place for the M3 is a substantial disruption. Other manufacturers are paralyzed with their 100 year old process and their sales / delivery model of dealerships aren't exactly early adopters!

I don't need to back up all the moments Tesla has executed this, everyone who has followed the company even remotely knows it has happened close to if not more than 100 times with just the MS over the last 3 years. But in case of skeptics, here are a few majors. And don't forget about the iPhone no one was asking for in the early 2000s. 5 years from now you can consider who was asking for self driving electric cars! Virtually no one!

* Autopilot
* Dual Drive
* Insane
* Ludicrous
* Heated rear seats and Steering Wheel
* Park sensors (and everyone thought they were for parking!)
* Next Gen seats
* Drop the 40KW
* Drop the 60KW
* Add the 70KW
* Range option
* And who could forget one of the most famous early downloads? Memory Seats!

Ask any car dealer if their models receive new features in the middle of the year. Rarely, current manufacturers are disconnected from all the data. They call in a few hundred or thousand people and sit back to see if the focus groups liked their decisions. Then they go to the auto show. After launch, they sit back with their fingers crossed again to see who is disappointed with how the actual production car looks as compared to the "Concept Car". They dump everything they have to date along with style changes and make previous buyers look like they are driving an old car. Think about it, are we in a market that likes to be seen in last year's stuff? Think iPhone for a moment. Yet Tesla makes it cool to have a 2012 sitting next to a 2016 MS and no one is the wiser. Why? If you're going to build a car that will go for one million miles over 10 years, the style needs to stay relevant for more than 2-4 years. Folks, we will NOT be building 17 million new cars every year in the next decade. Those days are all but over. And all the infrastructure to do that will decrease massively each year going forward. So if you want to understand why the current system is bucking the EV consider that!

So my summation is this. If there were no new features coming for the next 3-5 years and the MS as we know it today would remain unchanged, I believe Tesla would absolutely have a demand problem very soon! Since that is not their history I am very confident they have complete control of the throttle. Did you participate in Elon's recent request for improvements? That was a quite method of stocking the "Demand" self for later when needed. When was the last time you had a chance to suggest a new feature to the CEO of Ford, Toyota, or GM?

Demand is NOT a problem.

 

[electracity]

My Tesla investment thesis is that the uniqueness of Tesla is already in the price, but not growing. The premium is not growing as more investors catch on to reality of Tesla growing production to have significant market share.

In a sense, Tesla success is educating investors about the capital requirements of manufacturing. It ain't Instagram.

Even Tesla head of global communication says "our goal is not to build mass market cars". I have to assume he is on message.

 

[anticitizen13.7]

There is no supply issue either for model S production. Demand constraint is the hardest question Elon want to face also many TSLA bulls unfortunately. But market is smart enough to sense this already.

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"In addition, we are adding new production capacity at our Fremont factory that will allow us to meet the growing
worldwide demand for our vehicles. The speed at which we are executing this capacity upgrade will allow us to exceed
35,000 Model S deliveries this year. Provided that we execute well and there are no serious macroeconomic shocks,
Tesla’s annualized delivery rate should exceed 100,000 units by the end of next year."

What is your evidence that there is no supply issue for Model S production? How do you know that the production line was not constrained by battery cell or other component deliveries?

"annualized delivery rate" of 100,000 units/year is about 2000 units/week, assuming 50 weeks production in a 52 week year. I'm not entirely clear if you are saying that Tesla claimed they would produce 100,000 units in 2015, which they very clearly did not say. There was mass confusion here and in the media about this.

 

[anticitizen13.7]

Papafox, I think some following posts already pointed out my answer and I also did explain that in my original post. Sorry I didn't respond to you directly. Let me rephrase it here:
1) Missing 2000/week delivery goal is not the only reason I made my suspect. Q4Q1Q2Q3 production rate stay flat or slight increase directly against TM's 11/17/2014 blog that "The line is now running at about 1,000 cars a week with the potential for significantly more with minor adjustments."

The problem with citing the Tesla blog post is that the language is imprecise.

What exactly is "significantly more"? Are we talking 10%? 25%? 50%? And what is "minor adjustments"? What is the level of difficulty involved in a small change? When would these adjustments be made? As far as I can tell there are no answers to any of these questions, and I don't think it is a simple matter to just ramp up production at will, because the entire supply chain needs to ramp up along with the factory.

From the shareholder letters at ir.teslamotors.com:

Q3 2015: 13,091 vehicles produced (with 1 week shutdown noted in shareholder letter)
Q2 2015: 12,807 vehicles produced
Q1 2015: 11,160 vehicles produced (with shorter quarter and 1 week shutdown noted in shareholder letter)
Q4 2014: 11,627 vehicles produced

First, you cannot logically conclude that demand is the reason that Tesla has not ramped up Model S production as quickly as you expected, because there are any number of other possible reasons for the pace of the ramp. Second, a ramp is happening. The Q3 2015 weekly production rate is noticeably higher than in previous quarters. If demand was a problem, the number of cars produced would be static or falling.

 

[Krugerrand]

Even Tesla head of global communication says "our goal is not to build mass market cars". I have to assume he is on message.

And like you, most will misunderstand that statement. It doesn't mean what you think it means and therefore the chances of you getting run over by the train are enormous.