Short-Term TSLA Price Movements - 2015

[Julian Cox]

Urban EV owning is not so bad.

There are two things at play here.

First the evolutionary approach - condo dwellers get charging in their basement parking spot. No problem or argument with that. If you want to hail a Uber you can do that too and pay on average maybe $2.25 per mile.

Then the revolutionary approach - Hail an AI Tesla EV in 5-10 years time and it just appears, properly charged wherever you are and costs you a flat fee of $0.12 cents per mile. (At that rate, twelve cents per mile, Tesla would earn a 100% gross margin for operating the service and the apartment/condo dweller would have no cost of car ownership and no need to pay for a parking spot let alone a personal charging bay).

The latter solution will function perfectly and affordably for any and every city dweller anywhere in the world including for millions of people in developing nations that aspire to own a car but cannot afford one. Naturally there will still be a market for individual car ownership and for luxury high performance vehicles but the 'have to buy a car to get from a to b' needs of millions upon millions of people will I think be met like this and not by ICE vehicle ownership - and for the most part not by personal vehicle ownership at all.

 

[Yuri_G]

Part of me wants there to be a huge delivery event...the part that wants our Sig X to arrive magically out of the blue. However, not giving owners a head's up that their car is ready, but they have to wait until 12/21 is silly. Just check out the facebook post from the the lady who's red Sig X (VIN 664) was spotted in Syosset, NY before she had heard a thing from her DS.

What business reason is there for waiting and surprising unsuspecting owners with their $133,200 vehicles? If Tesla gave any information out it would be a different story, but they've been tight lipped. I would argue that it will have the opposite effect of delaying deliveries since most people have to move some things around financially before writing a check for $93,200+tax/tag/title.

There's a chance the person that spotted the VIN is mistaken, given that no Sig VINs have been seen, let alone delivered. It's most likely another Founders X.

 

[jhm]

A problem with humans is that good sense rarely trumps the desire to cling to power or to entitlement to a source of privileged income. Power is never given, always taken. The only way oil and ICE is going to be put out of business is by putting them out of business. What large corporations fail to appreciate is that there is a higher power and that is the collective will of consumers. There are all sorts of tricks with marketing and politics to throw obstacles in the way of consumer choice and to hamper new choices coming to market but bottom line a cheaper and more desirable product will unseat oil and ICE and it will happen destructively like the breaking of a dam rather than like a gentlemanly transition.

Someone earlier brought up Tony Seba. He has a presentation on technology disruption that shows a near total transition from horse and carriage to ICE in photographs of a New York Easter parade ten or maybe thirteen years apart. Technology disruptions are dramatic. They seem like they will take an unbelievably long time in prospect and when they happen they happen in cascade fashion unbelievably quickly. Especially from the perspective of the disrupted.

In fact protectionism only assists in the matter. SpaceX vs ULA provides a perfect case study. ULA blocked and blocked and blocked to maintain its monopoly on military satellite launches and when the customer finally said wait a minute we do want access to choice, the effect on ULA was catastrophic. CEO and 30% of the executive out, next contract up for grabs they could not even bid for it and until 2019 or 2020 at the earliest if they last that long they have nothing that can compete and without a direct $1 billion per year government subsidy to stay in business they would be long gone already - and this is before SpaceX commences reusable flights which will undercut ULA by at least 10:1 on price which it is bound to do before 2020.

Tesla is not shooting for destruction and layoffs in large auto. It has done everything it can to encourage and assist large auto in a rational transition but this is not up to Tesla. Technology disruption is a dynamic between the technology and the consumer. Tesla will be lifted by that tide and big auto demolished by it and there is nothing that either can do about it. A profoundly excellent EV at a competitive price if were offered by Ford for example would hasten the implosion of Ford's ICE business and hence the Ford Motor Company faster than anything Tesla does ever could. Musk probably knew that when open sourcing patents but it does not matter if he was just trying to help out of the goodness of his heart. What open sourcing the patents and publicly encouraging big auto to compete does for Tesla, is to hold Tesla blameless for the inevitable destruction of big auto, nothing more.

Sometimes you've got to beat those donkeys over the head with a 2x4 to get them to move...not that I advocate violence to animals, speaking metaphically only.

 

[austinEV]

There are two things at play here.

First the evolutionary approach - condo dwellers get charging in their basement parking spot. No problem or argument with that. If you want to hail a Uber you can do that too and pay on average maybe $2.25 per mile.

Then the revolutionary approach - Hail an AI Tesla EV in 5-10 years time and it just appears, properly charged wherever you are and costs you a flat fee of $0.12 cents per mile. (At that rate, twelve cents per mile, Tesla would earn a 100% gross margin for operating the service and the apartment/condo dweller would have no cost of car ownership and no need to pay for a parking spot let alone a personal charging bay).

The latter solution will function perfectly and affordably for any and every city dweller anywhere in the world including for millions of people in developing nations that aspire to own a car but cannot afford one. Naturally there will still be a market for individual car ownership and for luxury high performance vehicles but the 'have to buy a car to get from a to b' needs of millions upon millions of people will I think be met like this and not by ICE vehicle ownership - and for the most part not by personal vehicle ownership at all.

No argument. I just wanted to provide a datapoint on the general assumption that EV (owning) is troubled in urban markets. I see it taken on faith, even by me in the past, that Urban living is at odds with having a pure EV since we don't have a private garage. Then the conversation turns to how TM will have to install superchargers and urbanites will use them all the time. The fact is that isn't that bad and a LOT of urbanites have Teslas. This shouldn't be a surprise given that my new neighborhood is more progressive and high end. The real estate market is accommodating this trend without a fight.

None of this impacts the future potential transition to transport as a service.

 

[Julian Cox]

None of this impacts the future potential transition to transport as a service.

True. Definitely not a rate limiting step. Tesla's near term market comprises the intersection of people in the US, Asia, Australia and Europe (with Russia, Middle East and Africa to follow) that can afford $35K for a car with extremely low running costs and can find somewhere to charge it. So perhaps the limit in the next few years until cars can go off and charge themselves is only 20 to 25 million car buyers per year out of a 100 million new car buyers annually.

That leaves a lot of people to comment that an EV is neither affordable nor practical until it becomes affordable and practical for them too. Sometimes a criticism is a criticism, sometimes it is a request.

 

[Scott Ales]

There is also another logical reason they are holding several hundred MXs till the last week of the year. They might all be 2016 VIN numbers. It's one thing to deliver 2016s way early in 2015. But there is no real harm in delivering a 2016 the last 1-2 weeks of 2015. And this provides a more balanced delivery flow for general production and of course normalized guidance.

 

[Bobbyducati]

Scott motivated me (along with other factors of course) to pick up some calls. I hope your idea works, for you and me both. onward and upward, tlsa.

 

[Scott Ales]

Scott motivated me (along with other factors of course) to pick up some calls. I hope your idea works, for you and me both. onward and upward, tlsa.

Oh boy!

Now it's on me!

 

[FluxCap]

China Drops Consumer Fuel Discount To Fight Pollution | OilPrice.com



4000 deaths per day! This is absolutely inhumane.

It really is. China has an opportunity to lead the way to save the planet's climate, even beating the US, but they have to rise to the challenge which is not a simple thing. Having lived there years ago, environmental safety and population health were about the last priorities of its government. But I actually think it is more likely that a policy directive would work there rather than here in our dysfunctional lawmaking branch. That's why for the USA, I'm betting on Elon.

 

[Bobbyducati]

Oh boy!

Now it's on me!

lol dont worry, i do a good enough job losing my money on my own. this cant be any less successful than some of my recent sales.

 

[jhm]

There are two things at play here.

First the evolutionary approach - condo dwellers get charging in their basement parking spot. No problem or argument with that. If you want to hail a Uber you can do that too and pay on average maybe $2.25 per mile.

Then the revolutionary approach - Hail an AI Tesla EV in 5-10 years time and it just appears, properly charged wherever you are and costs you a flat fee of $0.12 cents per mile. (At that rate, twelve cents per mile, Tesla would earn a 100% gross margin for operating the service and the apartment/condo dweller would have no cost of car ownership and no need to pay for a parking spot let alone a personal charging bay).

The latter solution will function perfectly and affordably for any and every city dweller anywhere in the world including for millions of people in developing nations that aspire to own a car but cannot afford one. Naturally there will still be a market for individual car ownership and for luxury high performance vehicles but the 'have to buy a car to get from a to b' needs of millions upon millions of people will I think be met like this and not by ICE vehicle ownership - and for the most part not by personal vehicle ownership at all.

Another dimension to consider here in transitioning off of oil is how to deal with an abundance of used gas vehicles. Globally cars stay on the road 20 years or more. So even after EVs come to dominate the new car market there is still a two decade overhang of used cars.

I think AI EV fleets are the answer here. Consider a used car owner who drives 10k miles per year at 15 mpg with gas at $1.50/gal. So for fuel they pay 10c/mile. But maintenance is another $1000 per 10k miles. Insurance, registration and parking add say another $1000 per year. So even if this car were a free hand me down from parents, the driver has a marginal cost of 20c/mile for fuel and maintenence and a total cost of 30c/mile.

So if an AI EV fleet can offer rates below 30c/mile, this used vehicle has negative value. That is, one would not accept ownership even if the car was free. Thus, such a car goes straight into recycling and is taken off the road, even though it may be good for another 50k miles of use.

This is exactly what must happen. So AI EV fleets directly compete with used vehicles. This causes conventional vehicles to depreciate much faster than would otherwise be the case. Once new car buyers recognize that resale values for ICE cars are plummeting, then demand for new ICE plummets as well. Only a well built EV will be worth buying as a private vehicle because they will retain value longer relative to using a fleet car. Specifically, the fuel and maintenance costs will be comparable to fleet cars, so the reaming issue is whether the level of use covers the cost of insuring, registering and parking, which of course is highly variable to the owners situation. In urban area, the cost of parking and insurance may still be prohibitive. In any case, the demand for a well built used EV will be higher than demand for a used conventional car. Longer run, as the fleet of used convention vehicles shrinks, the cost of insurance and parking decline. That is, the accident rates decline with more self-driving vehicles on the road, shrinking insurance premiums, and fleet vehicles need fewer parking spaces reducing demand for parking parking lots.

Another point is that the oldest cars on the road produce most of the emissions. So the sooner AI EV fleets can take clunkers off the road, the better it will be for our health and the environment.

 

[Scott Ales]

Another dimension to consider here in transitioning off of oil is how to deal with an abundance of used gas vehicles. Globally cars stay on the road 20 years or more. So even after EVs come to dominate the new car market there is still a two decade overhang of used cars.

I think AI EV fleets are the answer here. Consider a used car owner who drives 10k miles per year at 15 mpg with gas at $1.50/gal. So for fuel they pay 10c/mile. But maintenance is another $1000 per 10k miles. Insurance, registration and parking add say another $1000 per year. So even if this car were a free hand me down from parents, the driver has a marginal cost of 20c/mile for fuel and maintenence and a total cost of 30c/mile.

So if an AI EV fleet can offer rates below 30c/mile, this used vehicle has negative value. That is, one would not accept ownership even if the car was free. Thus, such a car goes straight into recycling and is taken off the road, even though it may be good for another 50k miles of use.

This is exactly what must happen. So AI EV fleets directly compete with used vehicles. This causes conventional vehicles to depreciate much faster than would otherwise be the case. Once new car buyers recognize that resale values for ICE cars are plummeting, then demand for new ICE plummets as well. Only a well built EV will be worth buying as a private vehicle because they will retain value longer relative to using a fleet car. Specifically, the fuel and maintenance costs will be comparable to fleet cars, so the reaming issue is whether the level of use covers the cost of insuring, registering and parking, which of course is highly variable to the owners situation. In urban area, the cost of parking and insurance may still be prohibitive. In any case, the demand for a well built used EV will be higher than demand for a used conventional car. Longer run, as the fleet of used convention vehicles shrinks, the cost of insurance and parking decline. That is, the accident rates decline with more self-driving vehicles on the road, shrinking insurance premiums, and fleet vehicles need fewer parking spaces reducing demand for parking parking lots.

Another point is that the oldest cars on the road produce most of the emissions. So the sooner AI EV fleets can take clunkers off the road, the better it will be for our health and the environment.

These points along with a myriad of additional aspects we haven't even considered will move this landscape much faster than even we anticipate. I have stated to many friends that people eventually won't take an ICE vehicle for free at some point. It will be surprising how quickly this will happen. Once people connect the dots they don't just sit back a wait years to save money or time. Who do you know that still uses a flip phone?

 

[austinEV]

It really is. China has an opportunity to lead the way to save the planet's climate, even beating the US, but they have to rise to the challenge which is not a simple thing. Having lived there years ago, environmental safety and population health were about the last priorities of its government. But I actually think it is more likely that a policy directive would work there rather than here in our dysfunctional lawmaking branch. That's why for the USA, I'm betting on Elon.

Let's give China credit where credit is due. They may have terrible air and burn a lot of dirty coal, but they did finance the massive solar panel glut that is pushing down panel prices, enabling all this. That solar capacity should be more impactful in the future than the coal they are burning now, and its the thing that will hopefully let us turn the corner on CO2 emissions.

 

[MitchJi]

Of course, once the cost of an EV is less that the cost of an ICEV, regardless of operation cost, then this capital efficiency issue won't matter. But so long as you are trying to offset high capex with lower opex, it will matter. Any any case, I think this is a second order effect. The key issues are the cost of powering the vehicle, servicing and maintenance costs, and longevity. The cost of the battery will simply keep falling until it hits whatever critical threshold is needed.

Tesla will probably hit that in 2017-2018, definitely by 2020.

I agree with Bonnie about not publishing a "soft" date, but I can say that I've received the same soft date as her (they plan on delivering Sig 1 and 2 together). It appears that many cars are being pre-positioned at other delivery points, but their delivery dates are expected to start after ours.

If that happens End-Dec...End-Jan how do we think the SP will react? Sell the news or sustained bump? How big a bump?

 

[Bobbyducati]

cmon... lets break thru 236...

 

[Scott Ales]

lol dont worry, i do a good enough job losing my money on my own. this cant be any less successful than some of my recent sales.

Okay, so you can officially take a profit right now! I'm off the hook.

 

[sub]

Another dimension to consider here in transitioning off of oil is how to deal with an abundance of used gas vehicles. Globally cars stay on the road 20 years or more. So even after EVs come to dominate the new car market there is still a two decade overhang of used cars.

I think AI EV fleets are the answer here. Consider a used car owner who drives 10k miles per year at 15 mpg with gas at $1.50/gal. So for fuel they pay 10c/mile. But maintenance is another $1000 per 10k miles. Insurance, registration and parking add say another $1000 per year. So even if this car were a free hand me down from parents, the driver has a marginal cost of 20c/mile for fuel and maintenence and a total cost of 30c/mile.

So if an AI EV fleet can offer rates below 30c/mile, this used vehicle has negative value. That is, one would not accept ownership even if the car was free. Thus, such a car goes straight into recycling and is taken off the road, even though it may be good for another 50k miles of use.

This is exactly what must happen. So AI EV fleets directly compete with used vehicles. This causes conventional vehicles to depreciate much faster than would otherwise be the case. Once new car buyers recognize that resale values for ICE cars are plummeting, then demand for new ICE plummets as well. Only a well built EV will be worth buying as a private vehicle because they will retain value longer relative to using a fleet car. Specifically, the fuel and maintenance costs will be comparable to fleet cars, so the reaming issue is whether the level of use covers the cost of insuring, registering and parking, which of course is highly variable to the owners situation. In urban area, the cost of parking and insurance may still be prohibitive. In any case, the demand for a well built used EV will be higher than demand for a used conventional car. Longer run, as the fleet of used convention vehicles shrinks, the cost of insurance and parking decline. That is, the accident rates decline with more self-driving vehicles on the road, shrinking insurance premiums, and fleet vehicles need fewer parking spaces reducing demand for parking parking lots.

Another point is that the oldest cars on the road produce most of the emissions. So the sooner AI EV fleets can take clunkers off the road, the better it will be for our health and the environment.

I think one issue with this idea is the 50% of the population that will deny global warming until their last breath. Once they are "recycled" things will move much more quickly. Until then they will stash gasoline in their Doomsday bunkers next to their MRE's.

 

[Scott Ales]

I think one issue with this idea is the 50% of the population that will deny global warming until their last breath. Once they are "recycled" things will move much more quickly. Until then they will stash gasoline in their Doomsday bunkers next to their MRE's.

Even for those folks, breaking 1,000 all time high temperature records in December a few days ago in the US might help them along.

 

[sub]

Even for those folks, breaking 1,000 all time high temperature records in December a few days ago in the US might help them along.

Unfortunately these people dont don't tend to let facts get in the way of their opinion.

 

[Drax7]

I think one issue with this idea is the 50% of the population that will deny global warming until their last breath. Once they are "recycled" things will move much more quickly. Until then they will stash gasoline in their Doomsday bunkers next to their MRE's.

Most all understand pollution.
In the context of pollution, moving away from
hydrocarbons is an easy sell .
All understand costs, low cost reigns.