Short-Term TSLA Price Movements - 2015

[drinkerofkoolaid]

Very surprised no-one is taking about this. Consumer Reports Ranking and confirmation of a second Gigafactory are very good signs for Tesla. Also, this further significantly increases the probability that once the supply chain for batteries is in place and ready to ramp up, battery costs will fall significantly.

On top of this, The Model 3 will likely qualify for subsidies in China, based on common sense, and statements out of China. More than likely, the Model S and Model X didn't make the list due to the Chinese government somewhat forcing government officials to cut back on expensive vehicles, and the fact that those who are buying the first few years production of the Model S and Model X are don't need or want their vehicle to be heavily subsidizeed. The Chinese government even said Tesla was directly involved in the new charging standard. I'm also fairly sure Tesla has been working directly with the Chinese utilities, and potentially a number of Chinese billionaires to deploy the Supercharger network and possibly even built a few Gigafactories?

What ever happened to the Chinese billionaire who said he would personally pay for a few hundred Superchergers?

Chinese investment: Panasonic to build green-car battery plant in China- Nikkei Asian Review

 

[Causalien]

Panasonic is going to have their technology stolen in 3 years. Which means that their R&D is dead sure that a new innovative battery will be out in 3 years.

 

[Bobbyducati]

bleh close. bring on tomorrow.

 

[Lessmog]

bleh close. bring on tomorrow.

And a new year next week. :biggrin: With fresh delivery figures. Yum.

 

[uselesslogin]

bleh close. bring on tomorrow.

Well I am happy with 2 closes above the 200-day SMA which hasn't happened since we fell below the line in October.

 

[techmaven]

Very surprised no-one is taking about this. Consumer Reports Ranking and confirmation of a second Gigafactory are very good signs for Tesla. Also, this further significantly increases the probability that once the supply chain for batteries is in place and ready to ramp up, battery costs will fall significantly.

Chinese investment: Panasonic to build green-car battery plant in China- Nikkei Asian Review

Panasonic already has plants in China. Matter of fact, I was originally quite surprised that Tesla sourced batteries from Panasonic's plants in Osaka since I expected that their existing China plant would be the cheapest. But then, Panasonic already took big write-downs for the Osaka plants in 2011 or so.

Usually when an article refers to capacity as number of electric vehicles, this means they are usually small hybrid battery packs. The 200,000 number seems far more impressive then. Give a 1.5 kWh hybrid pack x 200,000 we get 300,000 kWh annual production. If we choose 5 kWh average, we're talking 1 GWh. That's about right for $412 million invested, of which Panasonic is probably contributing a bit under 50%. This plant was already telegraphed in Panasonic's investor reports earlier. All of this production would be consumed by the Chinese market... I would be surprised if any significant amount of the produced product left China.

I'm not sure where you are getting Gigafactory #2 out of this, as these are prismatic or pouch cells for cheap Chinese EVs. But technically, Panasonic's Osaka plants are Gigafactory #0, so Tesla already will have two Gigafactories when the one in Sparks, NV comes online.

 

[mmd]

But technically, Panasonic's Osaka plants are Gigafactory #0, so Tesla already will have two Gigafactories when the one in Sparks, NV comes online.

Good comment, except Tesla owns 0% of Gigafactory #0. It's fully owned by Panasonic. Tesla has a contract to buy 2 billion cells from Panasonic, of which it used ~350 mil this year (roughly 7000 per car). 1.65B cells yet to be purchased from Panasonic's Gigafactory #0. Does anyone know if Tesla has to buy all those cells?
Tesla signs deal for 2 BILLION battery cells from Panasonic, enough to quintuple EV production : TreeHugger

I actually see this Chinese Panasonic GF as a negative for Tesla. Instead of investing more money in the $5B Nevada GF, Panasonic is investing elsewhere. But, to each his own.

 

[Bobbyducati]

Well I am happy with 2 closes above the 200-day SMA which hasn't happened since we fell below the line in October.

very true, i just have my short term blinders on pretty heavy right now.

 

[techmaven]

Good comment, except Tesla owns 0% of Gigafactory #0. It's fully owned by Panasonic. Tesla has a contract to buy 2 billion cells from Panasonic, of which it used ~350 mil this year (roughly 7000 per car). 1.65B cells yet to be purchased from Panasonic's Gigafactory #0. Does anyone know if Tesla has to buy all those cells?
Tesla signs deal for 2 BILLION battery cells from Panasonic, enough to quintuple EV production : TreeHugger

I actually see this Chinese Panasonic GF as a negative for Tesla. Instead of investing more money in the $5B Nevada GF, Panasonic is investing elsewhere. But, to each his own.

Well, Gigafactory cluster #0 (since it's really more than one physical factory) is fully owned by Panasonic, but it's geared to making cylindrical cells. There's really only one place to sell that many GWh of NCA cylindrical cells, Audi R8 e-tron not withstanding. The bigger problem isn't that Panasonic won't sell to Tesla, it's that Tesla won't buy from Panasonic's Gigafactory cluster #0. Further, the relationship is no different than GM with LG or VAG with LG... the lock up with long term supplier contracts at this size is not easy to shift around and there has been only one reliable consumer of many gigawatt-hours of automotive cells thus far. It's also capex that Tesla doesn't need to spend.

Now, for Gigafactory 1, at the tune of $5 billion, well, Panasonic doesn't want to come with the scratch for that alone. Neither does LG or Samsung SDI. They need automobile manufacturers to do JV's to make that happen or, at the very least, very substantial pre-purchase agreements with up front capital. A bunch of these battery cell companies already died or came close to dying the first time around when the automakers didn't come through with orders.

As for the new China factory, the amount of money that Panasonic set aside for capex expansion this year is something like $800 million dollars if I recall correctly. They already said that the money to be spent on this China factory and the Tesla Gigafactory, so at roughly 50% of $412 million for the China plant, that leaves about $590 million for the Gigafactory. The actual financials seem to always be quite murky with Asian companies, at least the South Korean and Japanese companies that I follow. In other words, there's plenty of capex money coming from Panasonic for the Gigafactory.

 

[BornToFly]

I wonder if the sell off at the end today was because of "end of the year profit taking" by day traders, some institutions, and weak longs?

 

[drinkerofkoolaid]

Panasonic is going to have their technology stolen in 3 years. Which means that their R&D is dead sure that a new innovative battery will be out in 3 years.

Look at how the battery industry works today. 1-2 companies produce the majority of the worlds lithium ion batteries. If a Chinese company steals Panasonic's technology, the only place they might be able to sell the knock offs in large quantity is in China, India, and a handful of other countries. A significant increase in the battery production supply chain will be a huge benefit to Panasonic, Tesla, and any company that stands to make a fortune from the cost of producing batteries falling to $100kwh or lower.

There are many reasons Tesla open sourced its patents. I seriously doubt Panasonic, Tesla, or any legitimate battery manufacturer, is concerned about China mass producing knock offs of any new technology that gets released in the next 1-2 years. If China wants to significantly reduce the cost and availability to obtain the raw materials that go into manufacturing batteries, everyone wins.

The move today is a huge Bull Flag.

 

[Joel]

"Tesla vs. everyone else"

Autodata believes Tesla sold 20,350 of its electric luxury wonder-cars through the first 11 months, up 18.7%. It blew past the less capable plug-ins costing half as much. Those included Nissan Leaf at 15.922, down 41.2%, and Chevrolet Volt at 13,279, down 23.3%."

These are domestic projections:
How the top car, SUV sales rivalries stacked up in 2015

 

[doctoxics]

Panasonic already has plants in China. Matter of fact, I was originally quite surprised that Tesla sourced batteries from Panasonic's plants in Osaka since I expected that their existing China plant would be the cheapest. But then, Panasonic already took big write-downs for the Osaka plants in 2011 or so.

Panasonic recently closed a battery factory in China that made batteries for consumer electronics. Are there other Panasonic battery factories in China that make car batteries? I thought all of the Panasonic car batteries were made in Japan.

 

[drinkerofkoolaid]

The outcome for oil is binary. Either we stop using oil by the end of the century or we don't. If we don't very bad things will happen to the planet. If we do, very good things will happen. However, for OPEC, if the world stops using oil, OPEC's main product, oil, will become worthless. If oil was priced to reflect a scenario where the world stops using oil by 2100, it would be worth close to $0. However, other costs, along with present demand for oil will prevent that from happening. However, if investors and speculators stop betting on oil being worth something in 2100, the price will stay very low, and possibly head lower as demand continues to decline. Perhaps this will end with 1 or 2 companies being the only suppliers of oil until the world stops needing it ceases to make financial or moral sense for those companies to continue to operate. (i.e the coal industry).

 

[FluxCap]

The outcome for oil is binary. Either we stop using oil by the end of the century or we don't. If we don't very bad things will happen to the planet. If we do, very good things will happen. However, for OPEC, if the world stops using oil, OPEC's main product, oil, will become worthless. If oil was priced to reflect a scenario where the world stops using oil by 2100, it would be worth close to $0. However, other costs, along with present demand for oil will prevent that from happening. However, if investors and speculators stop betting on oil being worth something in 2100, the price will stay very low, and possibly head lower as demand continues to decline. Perhaps this will end with 1 or 2 companies being the only suppliers of oil until the world stops needing it ceases to make financial or moral sense for those companies to continue to operate. (i.e the coal industry).

I got shot down for saying this recently but if I was an oil investor aware that the Gigafactory is coming online and the Model 3 alpha will be shown in a few months, I might be starting to price in a massive, permanent, global decline in demand for oil starting now and ending within 3 decades or so in a near complete abandonment of fossil fuels for new automobile production. Why? Because solar/electric/battery solutions aren't just better for the environment, they are actually just *better* overall. Faster, more efficient, less unpleasant looking and smelling, more reliable, and able to be networked, automated and digitally managed with powerful software. This keeps being reinforced by owners, and reinforced by independent reviews like yesterday's Consumer Reports #1 and #2 best car in the world spots going to a Tesla product.

Who wins in a scenario of permanent decline of oil demand? I can think of at least one company.

 

[Electrifying]

Who wins in a scenario of permanent decline of oil demand? I can think of at least one company.

Or how about shorting XOM and CVX and alike? They are juicy shorts. XOM market cap $325B. I can become a billionaire if I capture 0.03% of its total market cap loss to bankruptcy.

 

[dha]

Or how about shorting XOM and CVX and alike? They are juicy shorts. XOM market cap $325B. I can become a billionaire if I capture 0.03% of its total market cap loss to bankruptcy.

Oil will continue to be valuable for decades and shareholders of these companies will be entitled to hundreds of billions in cash flow by the time they go belly-up. It does not logically follow that it is wise to short oil based on the premise that oil will eventually be worthless. Which relates to this point:

If oil was priced to reflect a scenario where the world stops using oil by 2100, it would be worth close to $0

That's not true at all. My Honda Civic will certainly be worthless by 2100. That doesn't mean it is worth $0 today. It has real economic value at the present moment. The price of oil is in no way based on investors and speculators "betting on oil being worth something in 2100." It is based on supply / demand at the present moment, which is based on the utility it currently provides.

 

[Electrifying]

Oil will continue to be valuable for decades and shareholders of these companies will be entitled to hundreds of billions in cash flow by the time they go belly-up. It does not logically follow that it is wise to short oil based on the premise that oil will eventually be worthless. Which relates to this point:

True. But the oil's decline will establish a ceiling to oil companies' stocks. Option traders can simply hold bearish spreads (or sell naked calls) on them ad infinitum to profit.

 

[dha]

True. But the oil's decline will establish a ceiling to oil companies' stocks. Option traders can simply hold bearish spreads (or sell naked calls) on them ad infinitum to profit.

That would only be true if the market value of these companies was significantly higher than the net present value of all their future cash flows. Do you believe that to be the case? Oil companies trade at relatively low multiples.

 

[AudubonB]

It's extremely important to remember that someone who has shorted a dividend-paying stock owes that dividend. XOM and CVX currently yield 3.7% and 4.7%. That can hurt!