Short-Term TSLA Price Movements - 2015

[aznt1217]

Nicely articulated thoughts. I definitely don't share the same sentiment. I think demand still isn't an issue, but I think Tesla wants to ramp up the demand as production is scaling in a controllable manner for Model S as they continue to slow roll out the X. I believe they were burned in the past in manufacturing and being super conservative for reasons of brand preservation.

Production is only as quick as their slowest supplier unfortunately.

 

[Julian Cox]

I agree with most here that it's going to be a challenge to reach 50k deliveries for the year. However, I think I have a different line of reasoning. I don't think it's production that's the big bottle neck. If Tesla wanted to deliver 16-17k Model S's in Q4, I think they can. I don't there are major production limitations. They can always work on Saturdays (although it'll cost more with overtime) and really push their workers with a super short Thanksgiving break (and not take any other breaks the whole quarter). But the question really is does Tesla WANT to deliver 16-17k Model S's in Q4? And this is where I differ from most people. I think Tesla, for some reason, appears to be hesitant to push production because I think we're hitting the limits of current Model S demand. Do I think Tesla has enough orders to deliver 16-17k Model S's in Q4? Yes, I do. I think there is the demand for that. But the bigger question, that Tesla might be thinking, is is that demand sustainable. 16k cars/quarter is 64k Model Ss annually, and that's probably more than current demand. Thus, Tesla might be thinking it's unwise to push production that high in Q4 just to meet their annual guidance. However, on the other hand they might think it's worth it to push production that high to meet annual guidance since the following quarters they'll have Model X deliveries so they could orchestrate where Q1 2016 doesn't show a drop in total deliveries. I think the biggest clue, however, was the deliveries in Q3. It was lower than I had expected. And I was hoping they would deliver a lot more, ie., 12.5-13k cars, to show they were really serious about meeting year-end guidance. But I think delivering 11,580 vehicles probably signals that they're not fully committed to 50k delivery guidance. But I say "probably" because there's always the possibility that they are. It's possible that they produced a lot more cars than 11,580 last quarter and it's possible that they have enough demand where they feel comfortable to push production/deliveries higher for Q4. Again, I don't see an issue with them be able to produce and deliver the # cars necessary to meet full-year guidance. I just am not convinced that Tesla sees it as a "wise" choice to do so.

Q1 - 10,045 vehicles delivered (11,160 produced)
Q2 - 11,532 vehicles delivered (12,807 produced)
Q3 - 11,580 vehicles delivered (production # unknown, guidance for "just over 12,000 vehicles produced")

Tesla needs to deliver 16,843 cars to meet 50k full year guidance.

Dave, I remember when the Model X was first revealed that this corresponded to a demand spike for Model S. So when recently Musk reported another demand spike for Model S as well as Model X on the back of the Model X launch that I think was to be expected. I also think it stands to reason that holding Model X at $132K with new reservations deliverable after clearing a nine month reservation backlog will naturally redirect new interest in the Tesla brand to reservations of $70K + Model S. None of this features in your synopsis and yet I think it has a large bearing on prognosis and outcomes. I am not buying a slack demand thesis. The only thing that I can think of that would cause them to opt to reward short sellers with a miss on delivery guidance is if massive production resources were required to be distracted with dealing with the Model X ramp - for example half the Model S workforce pulled off the job to mentor Model X workers in training. I think that is what they were doing in Q3 with huge numbers of new production workers and flat delivery output. Unless I have missed something then 50-55K ought to be a cake walk and a well deserved slap to the naysayers.

 

[maoing]

Kudos to DaveT to share your "demand constraint" view in this perma-bull camp. I had similar view since beginning of this year when Q1 guidance was even lower than Q4, and my view was further proved in Q2 and Q3 guidance/delivery number. Investors might get confused that why TM has demand constraints while there is still about 2-3 months backlog? Demand constraints doesn't mean weak demand, it just another words of flat demand growth trajectory. From TM standpoint of view, it would rather get blamed by production ramp up instead of showing the flat demand. TM can opt to deliver 16-17K model S in Q4, but the problem is can they do flat or slight positive QoQ again in Q1 while Model X production ramp up is still uncertain? So I would agree with DaveT that TM might choose deliberately control the model S delivery # quarter by quarter to maintain "slightly" positive QoQ while waiting for Model X production ramp up. Just my 2 cents.

I agree with most here that it's going to be a challenge to reach 50k deliveries for the year. However, I think I have a different line of reasoning. I don't think it's production that's the big bottle neck. If Tesla wanted to deliver 16-17k Model S's in Q4, I think they can. I don't there are major production limitations. They can always work on Saturdays (although it'll cost more with overtime) and really push their workers with a super short Thanksgiving break (and not take any other breaks the whole quarter). But the question really is does Tesla WANT to deliver 16-17k Model S's in Q4? And this is where I differ from most people. I think Tesla, for some reason, appears to be hesitant to push production because I think we're hitting the limits of current Model S demand. Do I think Tesla has enough orders to deliver 16-17k Model S's in Q4? Yes, I do. I think there is the demand for that. But the bigger question, that Tesla might be thinking, is is that demand sustainable. 16k cars/quarter is 64k Model Ss annually, and that's probably more than current demand. Thus, Tesla might be thinking it's unwise to push production that high in Q4 just to meet their annual guidance. However, on the other hand they might think it's worth it to push production that high to meet annual guidance since the following quarters they'll have Model X deliveries so they could orchestrate where Q1 2016 doesn't show a drop in total deliveries. I think the biggest clue, however, was the deliveries in Q3. It was lower than I had expected. And I was hoping they would deliver a lot more, ie., 12.5-13k cars, to show they were really serious about meeting year-end guidance. But I think delivering 11,580 vehicles probably signals that they're not fully committed to 50k delivery guidance. But I say "probably" because there's always the possibility that they are. It's possible that they produced a lot more cars than 11,580 last quarter and it's possible that they have enough demand where they feel comfortable to push production/deliveries higher for Q4. Again, I don't see an issue with them be able to produce and deliver the # cars necessary to meet full-year guidance. I just am not convinced that Tesla sees it as a "wise" choice to do so.

Q1 - 10,045 vehicles delivered (11,160 produced)
Q2 - 11,532 vehicles delivered (12,807 produced)
Q3 - 11,580 vehicles delivered (production # unknown, guidance for "just over 12,000 vehicles produced")

Tesla needs to deliver 16,843 cars to meet 50k full year guidance.

 

[sub]

I agree AI, more DaveT! To add some thoughts on Tesla choosing to meet the guidance with Model S, it really could be a trifecta for TSLA. It would meet yearly guidance, prove increased production capabilities and get them close to if not all the way to cash flow positive for Q4. They could then focus a bit more on Model X in the first half of next year while Model S back log builds back up.

 

[doggusfluffy]

Energy storage tipped to drive revolution in power grids

Australia is the first country to see the launch of the Enphase system, a 1.2-kilowatt-hour "plug-and-play" device designed to allow home owners to optimise control of their energy supply, depending on solar conditions, electricity charges and feed-in tariffs.

The system will be priced to installers at $1150 per kilowatt-hour, though the final costs to households will depend on additional costs charged by distributors and installers.


Comparing the actual costs for energy storage for households is complicated by extra costs involved with some batteries for inverters, control systems or installation, and different capacities. AGL Energy has advised that its integrated solar/battery product, launched in July, is priced from $12,889 for 3-4.5 kilowatts of solar.

 

[Crowded Mind]

V7 software with Autopilot and Autoparking will be released worldwide next week from 10/15 - 10/19.

Probably unlikely to have much impact in the short term price movement, but figured I'd post anyway in case anyone missed it. Info per Elon's twitter. (@elonmusk) | Twitter

It also sounds like the X has the same autopilot hardware as the S, though the response is somewhat unclear.

 

[RobStark]

Just my 2 cents.

So basically your thesis is TM is praying for a demand spike to meet guidance?

 

[maoing]

No. TM doesn't care the guidance met as much as short term investors. TM already raised capital @ 242. If TM can do 16-17K S delivery in Q4 without affecting Q1 YoY (50%) and QoQ (>1%) growth story. Elon Musk will be more than happy to do that to meet low end of revised guidance 50K. Otherwise guidance miss is not new for TM and only short term trading thread like here will feel the pain.

So basically your thesis is TM is praying for a demand spike to meet guidance?

 

[JDamlan]

Barclays downgraded TSLA to a Sell on Friday because the analyst thinks the issues surrounding the Model X rollout are a big enough problem to issue a Sell rating... I wouldn't sell before the Model 3 comes out, but the analyst has been on the sideslines of TSLA for a while now [url]https://www.tipranks.com/analysts/brian-johnson [/URL]

 

[MitchJi]

Yep, can't say.

Can you tell us either the number of MX's that Tesla could produce on the new line (if they had the parts) or at least an approximate number?

 

[RobStark]

No. TM doesn't care the guidance met as much as short term investors. TM already raised capital @ 242. If TM can do 16-17K S delivery in Q4

Q3 was 11,580

16,000-11,580 =4,420

4,420/11,580 = .38

5,420/11,580=.468

A 38% increase in sales in a non production constrained Tesla market is not a demand spike?

How about a 47% increase in sales?


BTW Are you also in the camp that Tesla does not "need" to do another capital raise in the near future?

 

[Scott Ales]

I don't feel an upward trend line can be generated by a series of seemingly positive tweets. At the core, the actual deliveries and subsequent social media presentation of that experience with folks sharing their use of said new features and the MX is what we need short term. It would be wonderful if anyone could create a system of information delivery that wasn't so easily controlled (and manipulated IMHO) by the horde of analysts. Not sure what that would look like or how to create it but there certainly is a need to marginalize them. This would fill the vacuum of Tesla's Non-Marketing concept which I frankly appreciate. Currently we are allowing other dis-interested parties to have a larger voice in this delivery system where Elon's Tweets have less impact each day. It used to be called journalism, but that is a thing of the past. Consequently, were stuck with short term movements being alternatively controlled by the less than scrupulous horde.

Objectivity is all but disappeared in our world. The angles are wide and deep and seem to be growing every day. VW is proof of that. The fact that so many can be detrimentally impacted by their situation and no one goes to jail is alarming. And I do not believe for a second anyone will be punished.

 

[maoing]

Yep, if 16-17K is the case for Q4, then I wouldn't call it demand spike instead of just sales spike, but I doubt it will happen. From the Q4/Q1/Q3/Q3 delivery # in a row, I guess the demand/quater won't exceed 12K. So I guess the stretch goal for Q4 Model S delivery might be 13-14K at the most.

Q3 was 11,580

16,000-11,580 =4,420

4,420/11,580 = .38

5,420/11,580=.468

A 38% increase in sales in a non production constrained Tesla market is not a demand spike?

How about a 47% increase in sales?


BTW Are you also in the camp that Tesla does not "need" to do another capital raise in the near future?

 

[30seconds]

I don't feel an upward trend line can be generated by a series of seemingly positive tweets. At the core, the actual deliveries and subsequent social media presentation of that experience with folks sharing their use of said new features and the MX is what we need short term. It would be wonderful if anyone could create a system of information delivery that wasn't so easily controlled (and manipulated IMHO) by the horde of analysts. Not sure what that would look like or how to create it but there certainly is a need to marginalize them. This would fill the vacuum of Tesla's Non-Marketing concept which I frankly appreciate. Currently we are allowing other dis-interested parties to have a larger voice in this delivery system where Elon's Tweets have less impact each day. It used to be called journalism, but that is a thing of the past. Consequently, were stuck with short term movements being alternatively controlled by the less than scrupulous horde.

Objectivity is all but disappeared in our world. The angles are wide and deep and seem to be growing every day. VW is proof of that. The fact that so many can be detrimentally impacted by their situation and no one goes to jail is alarming. And I do not believe for a second anyone will be punished.

Keep an eye on the Ordering, Production and Delivery thread of the Model X forum. Lots of configurations (>500) but no production or delivery dates yet.

 

[maoing]

AIMc, your message box is full. Please clean up

 

[AlMc]

AIMc, your message box is full. Please clean up

:wink: I assure you it is not because I am popular!

 

[RobStark]

then I wouldn't call it demand spike instead of just sales spike,

 

[AlMc]

Interesting article: you have to get by the headline and read it all. http://finance.yahoo.com/news/why-tesla-always-overpromises-underdelivers-172510307.html

 

[Discoducky]

Interesting article: you have to get by the headline and read it all. http://finance.yahoo.com/news/why-tesla-always-overpromises-underdelivers-172510307.html

Thanks for pointing out this article, good read, but this rings with me:

Tesla is a completely different story. You don't change the world without expressing ambitious stretch goals. Ultimately, you don't have much of a story without ambitious stretch goals. So Musk really has no choice but to overpromise, knowing that underdelivering is probable.

 

[tinm]

Another potentially short-term and long term impact to the stock is the autopilot software. But not a positive impact, rather, a negative one.

I have some worry that some S drivers are going to get into accidents because of the exotic newness of autopilot. I know, you all will think I am crazy. But it seems inevitable: unanticipated edge cases Tesla's software isn't prepared for, plus drivers inexperienced with software taking on more of the driving tasks. A recipe for Murphy's Law.

I just hope it doesn't turn into the f*re scare we had in 2013-1014.