Short-Term TSLA Price Movements - 2016

[SBenson]

Shanghai Said to Be Front-Runner for Tesla China Production Site -- By Bloomberg today

Shanghai has emerged as the front-runner to become the production base for Tesla Motors Inc. in China in an investment that may be valued at about $9 billion, according to a person with knowledge of the matter.

 

[Bgarret]

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

2035??? That's funny, Bloomberg New Energy finance has electric cars displacing 2million barrels a day in 2023....and that was Before Tesla moved up it's schedule for the Model III release, after which BNEF author said he would have to adjust his timeline accordingly. 2021 anyone??

 

[esk8mw]

Minutes ago from IB:

June 20 (Reuters) -
* Jinqiao Group has signed a non-binding memorandum of
understanding with Tesla on building its production facilities
in China- Bloomberg,citing sources
* Jinqiao Group has signed a non-binding memorandum of
understanding with Tesla on building its production facilities
in China- Bloomberg,citing sources

 

[JRP3]

Any legal minds have thoughts on this? Law Firm, Hagens Berman, Warns Tesla Owners: Don’t Sign Goodwill Agreements, Forfeit Your Rights

Law Firm, Hagens Berman, Warns Tesla Owners: Don’t Sign Goodwill Agreements, Forfeit Your Rights Consumer-rights law firm investigating agreement language on behalf of Tesla Model S owners

 

[tinm]

Any legal minds have thoughts on this? Law Firm, Hagens Berman, Warns Tesla Owners: Don’t Sign Goodwill Agreements, Forfeit Your Rights

Note that that is not a news article. It's a press release, literally, put out by BusinessWire, the press-release publishing company.

Note the headline: designed to promote the law firm itself. Any normal news article would never include some obscure law firm's name in the headline. No editor would allow that. What this law firm is trying to do is promote itself. They're trying to drum up business, not inform the public. This is marketing.

 

[Lessmog]

Any legal minds have thoughts on this? Law Firm, Hagens Berman, Warns Tesla Owners: Don’t Sign Goodwill Agreements, Forfeit Your Rights

Agree with the previous commenter, this is pure ambulance-chasing.
/ illegal mind

 

[hockeythug]

Minutes ago from IB:

June 20 (Reuters) -
* Jinqiao Group has signed a non-binding memorandum of
understanding with Tesla on building its production facilities
in China- Bloomberg,citing sources
* Jinqiao Group has signed a non-binding memorandum of
understanding with Tesla on building its production facilities
in China- Bloomberg,citing sources

Saw a brief headline from Reuters claiming it could be a $4.5B partnership.

Edit: I guess it's $30B in yuan. $30B dollars would be a little much. Haha.

 

[Gerardf]

Well, It IS the headline.. In $

Actionable Trading Ideas, Real Time News, Financial Insight | Benzinga

But it sounds.. A lot... But your guess Of 30B yuan to 4,5B US$ makes sense.
More will get out soon.

It is not in the note on Reuters..
BRIEF-Jinqiao Group signs non-binding MOU with Tesla - Bloomberg, citing sources

 

[hockeythug]

I just read the Bloomberg article posted earlier. It clears up the confusion. Up to $4.5B USD investment for each side. So up to $9B total.

 

[MitchJi]

I'm expecting a modest beat on deliveries.
Having said that, I see a lot of posts hoping for +EPS or +FCF. I think that hope is misplaced.

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.

I don't disagree with your first points.

But IMO a large part of the current softness in the SP is due to concerns about Tesla accelerating their spending to accommodate building more cars faster, which nobody believes they can do. If they can come close enough to convince the market that they can get there without more cap raises (which Ron Baron thinks they can do) I think it will be huge.

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.

Eight installments implies 1/8 of 50 GWh per installment for at least 6 GWh. But that's probably low given the 2-3x productivity increase. So 12 GWh of cell capacity in late 2016 seems reasonable. And once they nail phase one it will be easier, cheaper, and faster to build phases 2-8.

Shanghai Said to Be Front-Runner for Tesla China Production Site -- By Bloomberg today

Shanghai has emerged as the front-runner to become the production base for Tesla Motors Inc. in China in an investment that may be valued at about $9 billion, according to a person with knowledge of the matter.

Jinqiao Group, a Shanghai government-owned company, has signed a non-binding memorandum of understanding with Tesla on building its production facilities in the municipality, said the person, who asked not to be identified because the negotiations are private. Each party may invest about 30 billion yuan ($4.5 billion) in the partnership, with Jinqiao putting up land for most of its share, the person said.

Khobi Brooklyn, a Tesla spokeswoman, said the company wouldn’t comment on “rumor and speculation.”

If it's true I'm relieved (whew!) that they are not spending money on this, hopefully not until the M3 production line is proven. I think the best strategy for my LEAPS (not necessarily for Tesla) would be to jump on this as soon as they know the demand is there, and as early in the M3 ramp as possible. Once they nail production line 1[PL1], it will be easier, cheaper, and faster to build PL2 in China and PL3 (Europe?). Probably simultaneously?

 

[vgrinshpun]

Any legal minds have thoughts on this? Law Firm, Hagens Berman, Warns Tesla Owners: Don’t Sign Goodwill Agreements, Forfeit Your Rights

Not a legal mind here, but looks like a pretty dumb FUD. without any legs...

 

[SteveG3]

I think we now have the pieces to put together a very clear and simple rationale for the new "60" with the locked 75 kWh battery.

from RBC (via Barron's)

"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 It Can Build More Cars. Should You Be?

so, as I understand it,

Tesla made a very sound move to defer the goal of a roughly 50/50 S and X split. rather than push the Model X to ~1K per week by mid-year, they can slow that ramp by moving S demand well over ~1K per week with the 60.

think about what this accomplishes,

- a more rational, long-term oriented approach to improving X production, than "we need to be at ~1K/week last month!"
- a more manageable X production rate means reducing the number of new X owners who receive cars with quality issues. this helps future X demand by turning the tide on the unfavorable word of mouth on X quality.
- slowing down the rate Tesla runs through the backlog of X demand (see above, hopefully clear improvement in quality will help X demand get towards Model S levels Elon had expected)
- likely as good or better financials... yes, the S60s are lower margin than an S75, but, an S60 that "replaces" an X in the 2K production per week goal is very likely as or more profitable than that X. beyond the fact that we know X is just months into volume production, the RBC note specifically said these X are "requiring a lot of man hours at final assembly."

I realize some S60s are replacing S75s... it's not perfect, but I think the basic point, and what is likely mainly happening is the new S60s picking up the slack to allow more realistic (and less margin draining) X production levels. of course, as has been discussed here plenty, to the extent S75 sales go to S60s, some of that lost potential profit will be recovered by some owners deciding to unlock the full capacity of the battery, and Tesla doing the same for 60s that come into the CPO program.

 

[MitchJi]

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…"

IF they are making 1500 MS per week it's huge.

It is not a big leap to think they will be able to get to 1500 per week for both S and X in the near future (end of Q3?).

If the 1500 MS per week is correct and the 60-65% are both correct it means that the total production is between about 2,500 and 2,700.

 

[SteveG3]

IF they are making 1500 MS per week it's huge.

It is not a big leap to think they will be able to get to 1500 per week for both S and X in the near future (end of Q3?).

If the 1500 MS per week is correct and the 60-65% are both correct it means that the total production is between about 2,500 and 2,700.

I think they are at about 2,000 per week. yes, maybe a bit more, but I don't think 2,500 to 2,700 is at all likely at this point.

fwiw, my guess based on the RBC report is that Tesla is at or is moving to ~1300 S/week, 700-800 X/week. Tesla may be moving from a close to 1K even split as the S60 orders have started coming in, doing so to get relief from the strain of hitting that 1K run rate on the X at this point in time.

 

[vgrinshpun]

IF they are making 1500 MS per week it's huge.

It is not a big leap to think they will be able to get to 1500 per week for both S and X in the near future (end of Q3?).

If the 1500 MS per week is correct and the 60-65% are both correct it means that the total production is between about 2,500 and 2,700.

Let's not get ahead of ourselves. Supply improved to 1500 MS/week is not the same as they are making 1500 MS/week. It will take some time to ramp up the MS production.

The interesting question is whether this increase from 1200 (nominal) MS/week to 1500MS/week is achieved using the old BIW line, or they are starting to blend MS production on the new, "MX" BIW line.

 

[MitchJi]

Trip Chowdhry Talks About Tesla Motors Inc (TSLA) Battery Technology and its Role
Chip is definitely correct on this:

The research firm has also given a hefty valuation of $50 billion to the gigantic lithium-ion plant, which represents over 150% of the existing valuation of the entire company
<Snip>

The analyst highlighted that competitors and investors of the company are only taking into account its battery-powered electric vehicles, the autonomous driving system called the Autopilot, fast charging technology via the Supercharger network, and/or clean technology. However, he believes they are missing the big picture, which includes company’s battery technology and the Gigafactory.

 

[dc_h]

Not a legal mind here, but looks like a pretty dumb FUD. without any legs...

Probably some lawyer reads WSJ and "realizes" that 37 people named Keef Wivaneff keep getting hosed with defective cars. Elon obviously has some issue with the name Keef and is determined to eliminate them all by delivering rusty ball joints that will fail when they are mushroom hunting on dirt roads on step inclines while traversing large rocks, requiring highest clearance.

 

[MitchJi]

Let's not get ahead of ourselves. Supply improved to 1500 MS/week is not the same as they are making 1500 MS/week. It will take some time to ramp up the MS production

Let's not be foolish either.

How can the supply possibly increase without a corresponding increase in production?

And I qualified my post more than once with if it's correct information in bold!

 

[vgrinshpun]

Let's not be foolish either.

How can the supply possibly increase without a corresponding increase in production?

And I qualified my post more than once with if it's correct information in bold!

Phrase "However, we believe Model S supply has improved (now has capacity of 1,500/week) which explains timing of 60kWh introduction" means that 60kWh was introduced because company is capable to increase production of MS from nominal 1200 to 1500 car/week. The ramp up is not instantaneous, especially if they start to blend MS body production into the new BIW line. Capacity is there, but ramp of the production will take time.

 

[dc_h]

Phrase "However, we believe Model S supply has improved (now has capacity of 1,500/week) which explains timing of 60kWh introduction" means that 60kWh was introduced because company is capable to increase production of MS from nominal 1200 to 1500 car/week. The ramp up is not instantaneous, especially if they start to blend MS body production into the new BIW line. Capacity is there, but ramp of the production will take time.

What I think is becoming apparent is that Model S capacity is over 1000 per week. I base that on the delivery thread and the Model S order and delivery site. It does seem that deliveries are happening much faster since about May 20th. Also apparent is that Model X deliveries picked up after Elon stopped sleeping on the floor (May 1st?) and continues and deliveries appear to be over 500 per week, since mid to late May. It is also being reported that total deliveries are at or above 2000 since mid-May. We don't know that 2000 rate has been maintained every week, or if it has been exceeded at any point. Based on deliveries, 2000 production rate seems like it would be required to maintain delivery pace. With Model X fixes left over from Q1, it also seems that they should have at least 1000 post production deliveries held over from Q1.
A conservative production estimate would be an average of 1200 Model S and 500 X per week. Adding 3000 cars to the channel, per Tesla's signal, would seem to imply a pretty good beat (22,000 - 3000), where Tesla signaled 3000 produced over deliveries, I do not think they planned on having so much X stock at the plant and at service centers, so there could also be a delivery bump, as Q1 cars are delivered.
Assuming a 13 week production quarter. 1200 would allow for a slow down during transition to the S refresh model.

Model S 1200*13=15,600
Model X 500*13 = 6500
Model X Q1 hangover deliveries = 1000
21,500 produced - 3000 + 1000