Short-Term TSLA Price Movements - 2016

[MitchJi]

Expenses are probably a little bit higher than Q1, but the margin on all cars should be higher. Not only the additional cars delivered in Q2 over Q1. Tesla Energy might also add some profit.

TE will add some profit. In Q1 TE showed a small profit. It's going to be ramping "faster than cars". When the GF starts producing cells (hopefully by the GF Party at the end of July) it will be off to the races, for profitably. The new format cells plus the changes to the cell chemistry will increase the energy of the packs by at least 10% and costs will go down.

 

[Gerardf]

Asia was up, Europe up more than 3.5%. We might break some DMA's today (IIC the 200 and 50 are at 220 and 228)

European Stock Markets - CNNMoney

 

[DrJohnM]

The pound has rallied strongly against the dollar and the FTSE 100 has soared in the wake of polls and betting markets suggesting Remain ahead in the run-up to the EU referendum

 

[JRP3]

Tesla starting preliminary moves in S. Korea Tesla prepares for South Korea debut in challenge to Hyundai

 

[Johan]

The pound has rallied strongly against the dollar and the FTSE 100 has soared in the wake of polls and betting markets suggesting Remain ahead in the run-up to the EU referendum

Nice. A market rally sparked by a Brittish "Keep Calm and Carry On" as if nothing happened. The market will often look for excuses to either tank or rally. The mass psychology and all the complex intractions going back and forth makes it impossible to interpret how the market will move short term.

 

[MitchJi]

Telsa's Rising Popularity Will Hit Gasoline Demand, Report Says

The rise in the popularity of electric cars from Tesla Motors (TSLA), Nissan Motor (NSANY) and Honda Motor (HMC) is putting the pressure on gasoline demand, according to a report Monday by an energy consulting firm cited by the Wall Street Journal.

Wood Mackenzie said that in the extreme case, U.S. gasoline demand could fall by 2 million barrels a day by 2035 if electric cars account for more than 35% of the market. Currently, the U.S. uses more than 9 million barrels a day. But demand is likely to only fall 5% by 2035 if electric cars account for just more than 10% of all U.S. automobiles.

 

[techmaven]

@erha the finished goods inventory is best examined as a function of production weeks. In other words, as the production increases, it is natural to have an increase in finished goods inventory. Given that Tesla is using more rail for transport and some markets take as much as 8-12 weeks between finished production and customer delivery, the finished goods inventory is expected to increase. If they are at 1,600 vehicles a week at the end of Q1, then the number of production weeks of finished goods inventory using your 6,404 number is 4 weeks, which is actually pretty good for them once they were delivering to China and UK. Last I checked, they had at some point been running closer to 6-7 weeks during 2015 (off the top of my head, I'd have to check my spreadsheets again)

@MitchJi I would not expect much profit from TE this year... it is a nice bonus if it comes, but if they are sourcing cells on the open market given the Samsung cell shipments, then costs aren't likely to be particularly low. Still, it is very hard to pin down the COGS at that point, so it's really a black box when it comes to TE margins this year, hence profit might be elusive. Of course, things probably change a lot if they use Panasonic's output, or when they use the Gigafactory's output. If they aren't using Panasonic's output for this, to me, that means they are committing all that output to vehicles which is a good thing for production expectations.

 

[DrJohnM]

German prosecutors have launched an investigation into Martin Winterkorn, the former Volkswagen chief executive, on suspicion of possible market manipulation related to the VW diesel emissions scandal.

The prosecutor’s office in Braunschweig said there were “sufficient factual indications” that VW should have disclosed the possible financial damage arising from the software manipulations at an earlier date

https://next.ft.com/content/8662c6ac-482f-30ae-97f9-7a20b0a3e68a

 

[hockeythug]

Should be a good week for the market as it makes back the Brexit losses from the last couple weeks.

 

[Drax7]

tesla stock price moving up, i will not get in its way

 

[MitchJi]

@MitchJi I would not expect much profit from TE this year... it is a nice bonus if it comes, but if they are sourcing cells on the open market given the Samsung cell shipments, then costs aren't likely to be particularly low. Still, it is very hard to pin down the COGS at that point, so it's really a black box when it comes to TE margins this year, hence profit might be elusive. Of course, things probably change a lot if they use Panasonic's output, or when they use the Gigafactory's output. If they aren't using Panasonic's output for this, to me, that means they are committing all that output to vehicles which is a good thing for production expectations.

I think that the Samsung shipments were a one time thing to meet demand. If they can even break with the Samsung cells that's a great sign.

I believe that by the end of the year that their TE profits will be substantial, and be growing quickly. The impact on the SP should also grow quickly when the market sees the rapid growth of profits. Right how TE is having zero impact on the SP, with a small contribution from TE, largely because the market doesn't realize it's happening. I believe by the end of either Q3 or or Q4 the profits will be too large to ignore and the following quarter when they show rapidly growth...
Energy Sales: A Catalyst for Tesla Motors, Inc. in 2016? -- The Motley Fool

Energy Sales: A Catalyst for Tesla Motors, Inc. in 2016?
Here's how Tesla's energy storage business has grown from zero to meaningful in just over a year.

<Snip>
But the transition to the Gigafactory didn't take long. The company began relocating production to the battery factory during the fourth quarter -- a move positioning Tesla Energy "for strong growth in 2016," management said in its 2015 third-quarter shareholder letter. The decision for a "pull-ahead" in Tesla Energy's transition to the Gigfafactory was spurred by "very strong demand for Tesla Energy products globally," management explained.
<Snip>
In conjunction with an earlier-than-expected move to the Gigafactory, the company also "accelerated plans to begin cell production for Tesla Energy products at the Gigafactory by the end of 2016" -- a move management said in its third-quarter shareholder letter was several quarters ahead of schedule.
<Snip>
Finally, by the time Tesla released its first-quarter shareholder letter, the business was beginning to ramp up meaningfully.

"Tesla Energy also expanded production and deliveries, with momentum continuing to build, and Gigafactory construction remains ahead of our original plan," management said.

During the first quarter, the company delivered over 2,500 Powerwalls and nearly 100 Powerpacks, or over 25 megawatt-hours of energy. Deliveries spanned across North America, Asia, Europe, and Africa, management said.

As Tesla Energy sales continue to grow, Tesla has begun to see the impact on its financial statements. Revenue from Tesla's "services and other" segment, which includes Tesla's powertrain, service, Tesla Energy, and pre-owned vehicles revenue, was up 131% in Q1 compared to the year-ago quarter. Further, the segment increased from representing 4.9% of sales to 10.5% of sales.

While not all of this segment's increase in revenue can be attributed to growing Tesla Energy sales, the company does at least cite it as a key contributor to the revenue segment's growth; the year-over-year growth was driven primarily by "increases in pre-owned vehicle sales, Tesla Energy sales, and maintenance service revenue," Tesla said in its first-quarter 10-Q filing. Assuming a third of the incremental revenue in the segment came from Tesla Energy, the new segment could already represent about 2.2% of the company's total sales -- enough to become a meaningful driver of the company's overall business if rapid growth continues. And given Tesla CEO Elon Musk's recent remarks that Tesla Energy sales could eventually approach Tesla vehicle sales, the company's optimism suggests growth isn't slowing.

Going forward, high demand, rapidly expanding production, and management's aggressive expansion of the business segment mean Tesla Energy could become a meaningful catalyst for the company by the end of this year.

 

[MitchJi]

Tesla is Confident It Can Build More Cars. Should You Be?

Spak and team visited the Tesla Motors (TSLA) factory in Fremont, Calif., and came away feeling more comfortable with the upstart automaker’s ability to increase production. They explain:

Joe White/Reuters
Tesla seems to have made progress toward 2,000/week production run-rate. Model X production run-rate improved but still appears to have some challenges requiring a lot of man hours at final assembly. However, we believe Model S supply has improved (now has capacity of 1,500/week) which explains timing of 60kWh introduction. Tesla indicated plant was running close to 50/50 split of S/X, but by our count on the final assembly line (an admittedly limited sample size) we would put mix at closer to 60-65% Model S…

Tesla is confident they can ramp Model 3 quickly – a) technology will be relatively standard, b) paint capacity is already at 250k, and can go to 500k with limited capex, c) stamping needs modest investment. Incremental capex really going to Model 3 robotic line and final assembly line which needs to be built…

To that end, Tesla is essentially learning how to become a manufacturing company on the fly. While we don’t have meaningful reason to doubt Tesla can eventually get to their targets, doing so in a timely matter without some growing pains could prove challenging. Failure to hit near-term objectives may not impact the long-term view, but could hold back the stock or provide a more favorable risk/reward entry point

This morning I checked the price of J18 $400 strike,price LEAPS, about $6. I'm wondering when the odds start to be reasonable enough to buy a few as lottery tickets. At some point they should make as much or more sense than weeklies?

Maybe when J19's are released in November?

Please don't spend a substantial amount of money based on my idle speculation!

 

[kenliles]

This morning I checked the price of J18 $400 strike,price LEAPS, about $6. I'm wondering when the odds start to be reasonable enough to buy a few as lottery tickets. At some point they should make as much or more sense than weeklies?

I'm currently a holder of these (25% of my LEAPS w/ 75% in J18 $300); They have 3x return if TSLA moves to $300+ in the next 6 months and 2x if in 9 months. I use these as a risk-reward play regardless of whether they are eventually in the money- It's just another portfolio position- i.e. I don't always treat them as a hold thru expiration. And if TSLA SP does in fact ramp faster, you can capture that reward in full measure. thoughts for consideration-
(keep in mind these are on top of strong stock core position, they are part of trade layer)

 

[MitchJi]

I'm currently a holder of these (25% of my LEAPS w/ 75% in J18 $300); They have 3x return if TSLA moves to $300+ in the next 6 months and 2x if in 9 months. I use these as a risk-reward play regardless of whether they are eventually in the money- It's just another portfolio position- i.e. I don't always treat them as a hold thru expiration. And if TSLA SP does in fact ramp faster, you can capture that reward in full measure. thoughts for consideration-
(keep in mind these are on top of strong stock core position, they are part of trade layer)

I was thinking that fairly soon (within 1-2 years) the odds will probably shift IMO to where the likelihood of a faster ramp is more likely than not. If I'm correct and well ahead of the market that will be a nice opportunity. OTOH it's not dumb to have a few lottery tickets in my portfolio.

Roughly what percent of your portfolio is in LEAPS?

If Tesla even comes close to meeting their production goals you will have a big EV grin.

Thanks!

 

[kenliles]

Roughly what percent of your portfolio is in LEAPS?

about 20% (by dollars);

If Tesla even comes close to meeting their production goals you will have a big EV grin.

Grin and Bear-it

 

[SBenson]

I'm expecting a modest beat on deliveries. If S deliveries were solid it can turn out to be a good beat too, but I don't have enough clarity on S deliveries given the face-lift in between.

Having said that, I see a lot of posts hoping for +EPS or +FCF. I think that hope is misplaced. Based on what I see consensus analyst estimates are

Q2:
Non-GAAP Revenue: $1.824B
Non-GAAP EPS: -0.327

Q3:
Non-GAAP Revenue: $2.402B
Non-GAAP EPS: 0.488

Very linearly looking at this, and assuming negligible TE contribution in Q2, the break even appears to be about 20K deliveries. I don't think any of us are expecting that high of deliveries.

FCF is way too wild of a card to make any sort of predictions on. It very largely depends on what sorts of CapEx management decides to make. Given the context of ramped model-3 plans, we might as well forget about that metric. I don't think Wall St will care about that metric either. Everybody knows Tesla wants to accelerate spending to accelerate model-3 ramp.

 

[30seconds]

Panasonic to jump-start US battery cell output for Tesla- Nikkei Asian Review


Tesla's Model 3 sedan.

OSAKA -- Panasonic will begin mass-producing components for electric-car batteries ahead of schedule at an American factory it is building with Tesla Motors, responding to brisk demand for a forthcoming sedan from the U.S. automaker.

The duo had initially said the lithium-ion-battery plant in the state of Nevada would be up and running sometime in fiscal 2016 -- a time frame taken to mean early 2017. The plant is now set to open this July, with power cell production to begin in November. Tesla is thought to have called on Panasonic to compress its timeline after receiving a large number of preorders for the Model 3 sedan, due out next year.

Investments to expand output will also be sped up. Panasonic was initially to pour up to $1.6 billion into the plant in eight installments. But this could change, as the company "would like to avoid delays in [Tesla's] auto production caused by an insufficient battery supply," an executive at the Japanese electronics maker said.

Panasonic is also growing electric-car operations in China, the world's largest market, by partnering with Beijing Automotive Group (BAIC) to make electric compressors for air conditioners. The automaker sold around 2.5 million new vehicles there in 2015, putting it at fifth place in the country's auto industry. BAIC's roots are in parts production, though it has made automobiles since 1958. The company now builds such vehicles as luxury cars in partnership with Germany's Daimler and South Korea's Hyundai Motor and is stepping up involvement in electric cars and other environmentally friendly autos.

Panasonic is leaning on its ties to BAIC in an effort to grow Chinese operations related to electric vehicles. Cooperation on other products is to be discussed going forward.

Sales from Panasonic's automotive operations came to around 1.3 trillion yen ($12.4 billion) in the year ended March 31. The plan is to lift the figure to 2 billion in fiscal 2018, transforming electric vehicles into a key driver of earnings.

 

[Jayjs20]

I'm just wondering. With everyone and their mothers predicting that TSLA will beat guidance for Q2, is there a possibility that even if they announce that they beat Q2 guidance, the SP won't move much because they're already expected to beat it?

 

[30seconds]

Seriously doubt it. TSLA hasn't beat guidance for awhile, I think expectation is that they barely make it or just miss it

 

[geneclean55]

I'm just wondering. With everyone and their mothers predicting that TSLA will beat guidance for Q2, is there a possibility that even if they announce that they beat Q2 guidance, the SP won't move much because they're already expected to beat it?

Seriously doubt it. TSLA hasn't beat guidance for awhile, I think expectation is that they barely make it or just miss it

This. A lot of people are predicting a beat here on TMC. However if you went to seeking alpha, you would get a different view point.