Short-Term TSLA Price Movements - 2015

[Curt Renz]

This appeared in my TD Ameritrade account this morning:

Credit Suisse's Galves on Tesla's Referral Experiment: Warns Some Will See Sign of Weak Demand for Model S, But Says 'We Don't'

9:31 am ET July 30, 2015(Benzinga)

The analyst sees "evidence that points to strong Model S demand."

1. "Based on the Tesla website, Q3 appears nearly sold out
2. Demand has accelerated in Europe
3. A full quarter of availability of the lower-end S70D version should drive incremental global demand in Q3
4. This is all supported by CEO Musk's comments during a recent Reporters round-table that during Q2: Model S orders in NA / Europe grew 30% / 60% YOY and in Asia doubled vs 1Q15. This increased order flow in Q2 should benefit deliveries in Q3.

[SUB]
EDIT: Here's a link to the now more complete article at Benzinga: Why Tesla Referrals Aren't A Bad Thing For The Stock[/SUB]

 

[doggusfluffy]

Suncore to import Tesla

“There is not much that I can say about the deal at the moment, but I am pretty sure that we will be able to secure about 500 units of the Tesla X and the Tesla S,” said Choi Kyu-sun, chairman and CEO of Suncore, in an interview with The Korea Herald.

Because Tesla has a strict policy of direct operation, Suncore’s role will be limited to a sales representative ― commonly referred to as a dealer here.

 

[RubberToe]

The first Supercharger permit in Poland is now on the supercharge.info map. Maybe expansion to Poland is next up? I know Mexico was earlier stated as later this year...

 

[jhm]

My view is that Tesla is signaling a fourth quarter push in Model S to make room for Model X. The point is not so much to increase demand for the Model S as it is simply to get potential buyers to not delay placing their order. I see production in first half of 2016 going exclusively to filling the Model X backlog. After all these customers have been waiting for years for their Model X, so it seems inconsiderate to place a recent order for a Model S ahead of any Model X order. Thus, anyone who is thinking about buying a Model S had better place their order now. If you wait until November, you should not expect to see you your Model S until the Model X backlog is resolved, summer 2016 at the earliest.

If my speculation is near correct, then it is a very friendly thing to urge our family and friends to quit putting off that Model S order.

One more speculation, the Gigafactory party in April 2016 will include the unveiling of the Model 3 for which the Gigafactory was built.

 

[ev-enthusiast]

One more speculation, the Gigafactory party in April 2016 will include the unveiling of the Model 3 for which the Gigafactory was built.

That would make sense as volume production of cells in the GigaFactory enables mass production of Model 3.
In my opinion this would be a great way to honor the efforts of the state of Nevada to make the GigaFactory happen.

 

[dmckinstry]

Nope. As pointed out by AEDennis in another thread, Tesla had a program years ago where they gave Roadster owners a free HPC when they referred a new owner. (And most of those free HPCs ended up being donated by owners to build out the much-used Tesla Highway.)

I'll defer to your history Bonnie.

- - - Updated - - -

My view is that Tesla is signaling a fourth quarter push in Model S to make room for Model X. The point is not so much to increase demand for the Model S as it is simply to get potential buyers to not delay placing their order. I see production in first half of 2016 going exclusively to filling the Model X backlog. After all these customers have been waiting for years for their Model X, so it seems inconsiderate to place a recent order for a Model S ahead of any Model X order. Thus, anyone who is thinking about buying a Model S had better place their order now. If you wait until November, you should not expect to see you your Model S until the Model X backlog is resolved, summer 2016 at the earliest.

If my speculation is near correct, then it is a very friendly thing to urge our family and friends to quit putting off that Model S order.

One more speculation, the Gigafactory party in April 2016 will include the unveiling of the Model 3 for which the Gigafactory was built.

With that assumption they are doing the right thing. Model X registrants have waited long enough. Model S purchasers have already had plenty of time, but the incentive program just might get them off the fence to clear the way for increased production on the Model X. Of course, when the backlog on the Model X has cleared, production of X vs S would proceed on a first come first served basis.

 

[Soflason]

One particular line in that Referral Program email last night jumped out at me, Musk stated that "... this is similar to the customer growth program that I worked on at PayPal/X.com back in ’99." So, after some digging to figure out what he was referring to, according to Peter Thiel, Elon's partner at Paypal at the time, "New customers got $10 for signing up, and existing ones got $10 for referrals. Growth went exponential, and PayPal wound up paying $20 for each new customer... [this resulted in] 7 to 10% daily growth and 100 million users." Also, check out this 2003 video with Elon Musk elaborating on Paypal's referral-based viral nature and why it was so successful...

And, it turns out that Tesla has used a referral program before during the early stages of the company with the Tesla Roadster. In addition, as Chairman of SolarCity Elon Musk has been running a successful "SolarCity Ambassador" referral program as well.

 

[Ugliest1]

What will actually, really happen when the Model X is revealed is anybody's guess. We all have our various opinions of course.

You can design and engineer and test a complicated system like a Model S, or X, or Falcon 9, but you can't fully predict a complex system, like human behaviour (i.e., car buying decisions). The only way to test what happens in a complex system is to run experiments in it and measure what happens.

I think this is a brilliant, relatively inexpensive experiment to gain insight into a complex system. (See Cynefin - Wikipedia, the free encyclopedia for more on "complicated vs complex" systems thinking). The whole point is to *find out what will happen*, and not spend/risk a whole lot doing it, and make sure you learn from what happens *even if it "fails"*. That way, the experiment is just a cost of doing business, and it's not a big enough hit to cause a problem, and the company still gets plenty of value out of it.

 

[austinEV]

My view is that Tesla is signaling a fourth quarter push in Model S to make room for Model X. The point is not so much to increase demand for the Model S as it is simply to get potential buyers to not delay placing their order. I see production in first half of 2016 going exclusively to filling the Model X backlog. After all these customers have been waiting for years for their Model X, so it seems inconsiderate to place a recent order for a Model S ahead of any Model X order. Thus, anyone who is thinking about buying a Model S had better place their order now. If you wait until November, you should not expect to see you your Model S until the Model X backlog is resolved, summer 2016 at the earliest.

If my speculation is near correct, then it is a very friendly thing to urge our family and friends to quit putting off that Model S order.

One more speculation, the Gigafactory party in April 2016 will include the unveiling of the Model 3 for which the Gigafactory was built.

I am a believer, good theories. I hadn't thought about the GF, model 3 confluence but that makes so much sense I think it has to be the default theory now.

 

[surfside]

@jhm, while what you suggest (halting model s production until model x backlog is cleared) may seem like the nice thing to do for longtime model x reservation holders, i think the likelihood of tesla doing this is extremely low and a bad idea (i'll explain). after building worldwide demand for the model s over 3+ years, suddenly having a 6+ month backlog for the car would be extremly off-putting for potential new model s buyers and send a really poor message about tesla's ability to manufacture and sell multiple cars at once. can you imagine all of the negative articles about this? folks who placed model x orders knew there would be a long wait; why punish someone who would like to buy a model s for the fact that someone wanted tesla's SUV a couple years ago? just doesn't make sense (to me at least).

surfside

 

[30seconds]

One particular line in that Referral Program email last night jumped out at me, Musk stated that "... this is similar to the customer growth program that I worked on at PayPal/X.com back in ’99." So, after some digging to figure out what he was referring to, according to Peter Thiel, Elon's partner at Paypal at the time, "New customers got $10 for signing up, and existing ones got $10 for referrals. Growth went exponential, and PayPal wound up paying $20 for each new customer... [this resulted in] 7 to 10% daily growth and 100 million users." Also, check out this 2003 video with Elon Musk elaborating on Paypal's referral-based viral nature and why it was so successful...

And, it turns out that Tesla has used a referral program before during the early stages of the company with the Tesla Roadster. In addition, as Chairman of SolarCity Elon Musk has been running a successful "SolarCity Ambassador" referral program as well.

I remember that. I made about $100 from it. A friend was working there back then & let me know.

 

[dalalsid]

I made several thousand from the Amazon affiliate program over a few years a while back. If you think of Tesla as on online retailer then almost every online retailer has an affiliate program.

 

[jhm]

@jhm, while what you suggest (halting model s production until model x backlog is cleared) may seem like the nice thing to do for longtime model x reservation holders, i think the likelihood of tesla doing this is extremely low and a bad idea (i'll explain). after building worldwide demand for the model s over 3+ years, suddenly having a 6+ month backlog for the car would be extremly off-putting for potential new model s buyers and send a really poor message about tesla's ability to manufacture and sell multiple cars at once. can you imagine all of the negative articles about this? folks who placed model x orders knew there would be a long wait; why punish someone who would like to buy a model s for the fact that someone wanted tesla's SUV a couple years ago? just doesn't make sense (to me at least).

surfside

No one need be punished. It is just a consequence of first come, first served. If they, let X reservationists place their orders in a short time frame, then the order queue will be flooded with X orders.

The obvious implication of the referral program is that S orders will naturally fall off in November. And I conjecture that the point of the program is to pull forward these post-October order. In November, there will be a clearing for converting the bulk of X reservations into orders. So the point is to minimize frustration to Model S buyers by incenting them to pull ahead.

Additionally, there should be plenty of Model S CPO vehicles for buyers who did not jump on the referral program. As Model X are delivered, there may in fact be small flood of Model S traded in. So Tesla also needs to manage demand for this CPO surge. If wait times on new Model S lunge ahead to summer of 2016, then CPO sales of Model S should be brisk.

Now a complicating issue with all this is how to deal with balancing the needs of international markets. Each national market has some mix of demand for X vs. S. Suppose there is a country where there is zero demand for Model X--not sure where that would be, but let's assume such a place exists. If there are very few Model S build in first half of 2016, this S only market could get frustrated. I'm sure that management has a grip on such issues. They rotate their production from one region to another in BAU to balance things out. If they stick with that practice and fill orders on a first come first served basis within each market. Thus, Model S orders get done in S only and S dominant markets. So I am confident that management can work through all these details, but I think the main thrust of the referral program is to clear the order book for Model X and to do so in a way that minimizes frustration for all buyers through this transition.

 

[Papafox]

Both JHM and Bonnie have a good point that this referral program is all about insuring adequate demand for Model S during the 4th quarter while Model X production is spinning up and Model X is capturing most of the press coverage.

Regarding waiting times for various vehicle types, however, production line 1 is going to be a dedicated Model S line until it is shut down for conversion to Model 3 production, and I think first half of 2016 would be a little early for that shutdown.

 

[FluxCap]

NASDAQ has been vertical since about 11am EST, and we have not followed it up. Going to be interesting to see movement into the close.

 

[replicant]

I hope Tesla will ask for the referrer's name before validating the purchase, otherwise it's very easy to exploit this program: run an ad on Google with your referral URL as the destination URL, and target queries like "model s reservation". For a few dollars, you can get hundreds of clicks and a few conversions, without generating any additional sales / word-of-mouth for Tesla. I've managed to get 16 GB of bonus space on Dropbox for a few cents with this trick.

Here's the second page of Google search results for [model s reservation]:

See the ad placement at the top? Its destination URL is http://my.teslamotors.com/models/design/referral/<referral_id>

This is the kind of hijacking I talked about earlier: 2000$ of lost sale and zero word-of-mouth whatsoever.

 

[Citizen-T]

Here's the second page of Google search results for [model s reservation]:

View attachment 88995

See the ad placement at the top? Its destination URL is http://my.teslamotors.com/models/design/referral/<referral_id>

View attachment 88994

This is the kind of hijacking I talked about earlier: 2000$ of lost sale and zero word-of-mouth whatsoever.

Report it to Tesla. Certainly not being done in "good faith".

 

[GregRF]

My view is that Tesla is signaling a fourth quarter push in Model S to make room for Model X. The point is not so much to increase demand for the Model S as it is simply to get potential buyers to not delay placing their order. I see production in first half of 2016 going exclusively to filling the Model X backlog. After all these customers have been waiting for years for their Model X, so it seems inconsiderate to place a recent order for a Model S ahead of any Model X order. Thus, anyone who is thinking about buying a Model S had better place their order now. If you wait until November, you should not expect to see you your Model S until the Model X backlog is resolved, summer 2016 at the earliest.

Why would they do this? They will have two lines running, one only building Model S. I expect that to continue through the backlog of X's. They won't need to decommission line 1 until they need to prep for Model 3 line which I would expect to be at the end of '16 at the earliest.

 

[dalalsid]

Here's the second page of Google search results for [model s reservation]:

View attachment 88995

See the ad placement at the top? Its destination URL is http://my.teslamotors.com/models/design/referral/<referral_id>

View attachment 88994

This is the kind of hijacking I talked about earlier: 2000$ of lost sale and zero word-of-mouth whatsoever.

Wow that was fast work !

 

[pGo]

Wow that was fast work !

Username: jeffrey2844