Short-Term TSLA Price Movements - 2015

[virtuesoft]

So, in the pre market we've given up all of yesterday's AH gains and are now down another couple of dollars. What a joke. The markets in general are down so perhaps that is playing a part. It will be interesting to see what happens when the market opens.

 

[FANGO]

Elon said that margin would be small while the stationary packs are manufacturing at the Fremont factory, but then grow up to 20% after production of them is scaled up at the GF. On another hand, we know that GF will bring greater than 30% reduction in cost for the packs. So the question is how do we reconcile these three numbers?? The math does not work for me. Could it be that 20% margin number given by Elon is off? Given widely accepted premise that GF will bring pack cost to $150/kWh, the gross margin should be around 40%?

You reconcile it by realizing that the packs will use somewhat more of commodity pricing. Tesla can have higher margins on the cars than on packs, because there's a lot more people capable of making packs than cars.

Part of the 30%+ price reduction from the gigafactory will come from the advancement of technology. This is why Tesla can be so sure of it. Because they said they'd get a 30% reduction over the course of 3 years, and battery prices drop (for everyone) by 7-10% per year, so....

- - - Updated - - -

So, in the pre market we've given up all of yesterday's AH gains and are now down another couple of dollars. What a joke. The markets in general are down so perhaps that is playing a part. It will be interesting to see what happens when the market opens.

Yeah, given the only points anyone can come up with is "cash burn," which is really not very clever given that there's a factory being built, I don't quite get it.

That said, "cash burn" has managed to keep plenty of people skeptical of AMZN, and that's been happening for 15 years or something, so I guess I underestimate people's inability to understand how to grow a business.

 

[WarpedOne]

This "un-enthusiasm" makes me happy ... it widens time window to grab some more shares.

 

[FluxCap]

Global equities markets are tanking as German bund implodes. Unsure if outright market panic will ensue but so far this morning looks like the market selloff continues.

 

[vgrinshpun]

Global equities markets are tanking as German bund implodes. Unsure if outright market panic will ensue but so far this morning looks like the market selloff continues.

Thanks, Flux. It is good to have somebody to provide outside world feed to the Tesla gearheads here...

- - - Updated - - -

You reconcile it by realizing that the packs will use somewhat more of commodity pricing. Tesla can have higher margins on the cars than on packs, because there's a lot more people capable of making packs than cars.

Part of the 30%+ price reduction from the gigafactory will come from the advancement of technology. This is why Tesla can be so sure of it. Because they said they'd get a 30% reduction over the course of 3 years, and battery prices drop (for everyone) by 7-10% per year, so....

I think at least one of us is missing each other point. :smile:

I am not questioning rationale behind the possible decision to keep the margin low, just pointing out that math does not work.

Consider current pricing for the powerpack at $250/kWh. Elon said that there will be small margin while packs are manufactured at the Fremont factory. Let's say, for talking purposes, that Tesla's cost is $240/kWh. Now consider that large scale production at the GF will reduce cost by 30%, as guided by the company. So Tesla's cost to produce the powerpacks will be 0.7 x 240 = $168/kWh. So the gross margin at the GF would be 1-168/250 = 32.8%.

As you can see the math does not work - the three data points - small margin at Fremont at $250/kWh, 30% reduction due to manuf./scale efficiencies at the GF and 20% gross margin at the GF - contradict.

 

[Gerasimental]

As you can see the math does not work - the three data points - small margin at Fremont at $250/kWh, 30% reduction due to manuf./scale efficiencies at the GF and 20% gross margin at the GF - contradict.

Is the 30% cell level or pack level? Also remember that there are other costs (like power electronics, packaging, BMS) in making Powerwall/Powerpack (I can't remember, was the discussion of margins about both or only one of them?) that don't fall with transition to GF. If assembly is at Fremont, some additional costs are added too. So 30% cell level reduction in cost might only mean 15% overall reduction in cost.

 

[FANGO]

How are we down 10 points right now? Other stocks don't seem to be getting hit this badly. This makes little sense to me. It can't be due to the earnings, there was nothing bad in there.

 

[Jonathan Hewitt]

How are we down 10 points right now? Other stocks don't seem to be getting hit this badly. This makes little sense to me.

Only ~75K volume so far? No big buyers premarket just sellers I guess.

 

[FANGO]

Only ~75K volume so far? No big buyers premarket just sellers I guess.

Still, 75k is not 300 or some small order. It has been multiple orders not just one weird one. If there's any sense in the world I'm sure we will recover through the day but I'm really not understanding this at the moment.

 

[mibaro2]

I wouldn't be surprised if we are not in the green tomorrow, even though this was an incredible ER. I honestly think the point hasn't sunk in for most external observers. Hope I'm wrong, but in the long term it doesn't matter regardless.

You called it correctly..down 2% ($5.00) pre-market. I just don't get Mr. Market. The only good thing with this dip is to buy more shares before they take off in a few days.
All other indexes are down this morning also, so might be overall down day for the market.

----
spoke too soon, down 12 points.

 

[FANGO]

You called it correctly..down 2% ($5.00) pre-market. I just don't get Mr. Market. The only good thing with this dip is to buy more shares before they take off in a few days.
All other indexes are down this morning also, so might be overall down day for the market.

Down 13 now...

 

[SuryaDham]

How are we down 10 points right now? Other stocks don't seem to be getting hit this badly. This makes little sense to me.

with 80.000 shares traded preparket only...to me this looks like an engineered drop from someone who wants to accumulate TSLA. Will be interesting to see how the market opens.

 

[spacekadet]

How are we down 10 points right now? Other stocks don't seem to be getting hit this badly. This makes little sense to me. It can't be due to the earnings, there was nothing bad in there.

The overall market sentiment isn't good. Usually the speculative stocks (AMZN, NFLX, TSLA) are affected more during these times. AAPL had a blowout earning recently and the stock has been going down hill ever since. It's really hard to predict the short term. It looks like the move is on a small volume (<100k) and we still have 2hrs until the market opens. We'll definitely see a lot of volatility today; I just hope it's to the upside.

 

[FANGO]

The overall market sentiment isn't good. Usually the speculative stocks (AMZN, NFLX, TSLA) are affected more during these times. AAPL had a blowout earning recently and the stock has been going down hill ever since. It's really hard to predict the short term. It looks like the move is on a small volume (<100k) and we still have 2hrs until the market opens. We'll definitely see a lot of volatility today; I just hope it's to the upside.

Amzn is up Pre market.

 

[spacekadet]

Amzn is up Pre market.

on less than 6000 volume

 

[vgrinshpun]

Is the 30% cell level or pack level? Also remember that there are other costs (like power electronics, packaging, BMS) in making Powerwall/Powerpack (I can't remember, was the discussion of margins about both or only one of them?) that don't fall with transition to GF. If assembly is at Fremont, some additional costs are added too. So 30% cell level reduction in cost might only mean 15% overall reduction in cost.

The whole discussion was upon the request from an analyst to help with the modeling of the stationary storage business. All numbers were clearly on the final product level, not components. The three data point I've mentioned are in contradiction with each other.

 

[FANGO]

There is still no reason in tesla being down 5 pct. I'm half considering staying up til open and buying weeklies if it stays this low counting on recovery through the day as people realize whatever is going on right now is bs

 

[xhawk101]

Pre market buy order entered!

 

[ibcs]

I expected to wake up to 238 this morning and I'm seeing 220. I guess my short term holdings may have just gone long. No way am I selling this at a loss with upcoming events and from the earnings call last night. Amazing.

 

[Gerasimental]

The whole discussion was upon the request from an analyst to help with the modeling of the stationary storage business. All numbers were clearly on the final product level, not components. The three data point I've mentioned are in contradiction with each other.

In that case I agree, although I must admit I'm surprised. 30% has always been quoted as the baseline improvement figure in cell cost from GF no? To now suddenly say 30% cost reduction of overall product is a pretty big change. Maybe just a matter of semantics? After all the Tesla folks often go off on a tangent and don't answer the exact specific question they've been asked but use it as a cue to discuss the overall topic on their terms.