Short-Term TSLA Price Movements - 2016

[AlMc]

Look at it this way:

In the past few months, Tesla has been under a torrent of relentless bad press:

• Q2 delivery miss
• Autopilot related fatality, accidents, and related controversies
• Opposition and/or ridicule concerning SolarCity acquisition
• Negative reception of SMP2

And despite all of this, TSLA still sits at $230/share.

So much FUD has already been thrown at TSLA that I think FUD fatigue has set in. Having a smaller additional secondary offering is fairly minor in comparison with the insanity of the past couple weeks.

Still..........................Was there a reason he had to put 'capital raise' in ANY discussion with the press at this time?

Yes, we know that expansion will cost money......

 

[MitchJi]

I wonder if this maybe relevant for Tesla, given their separation from Mobileye.

Panasonic shifts from home electronics to cars

Panasonic making batteries, and possible partner for ADAS technology? In house at the GigaFactory?

Obviously I have no insight into the quality of Panasonic ADAS products.

Panasonic aims to design safety and autonomous driving technologies on top of its existing range of sensors. It sees potential in everything from adaptive headlights that follow the driver's eye movements to auto-parking systems.

"In order to do that, camera sensing, sonar, laser radar is necessary," Shibata said. "We have those devices."

Focusing on cameras

Among the image technologies Panasonic is developing is a camera sensing system that provides clearer visibility in snowy, rainy or foggy weather. The camera captures the view of the road at 60 frames per second and, through advanced image processing, strips out the snow, rain and fog for a clearer picture. Panasonic reassigned hundreds of workers to auto imaging from its declining audio-visual business, Shibata said.

Good find!

Panasonic used to make excellent video cameras, probably still does. It might take them longer to get their products ready than Tesla is willing to wait, but otoh what they are working on sounds like it exactly matches what Elon's been saying about not needing lidar.

 

[TMSE]

Still..........................Was there a reason he had to put 'capital raise' in ANY discussion with the press at this time?

Yes, we know that expansion will cost money......

I really didn't like he mentioned about cap raise. It just made my stomach churn.

Do you think there will be a capital raise, equity or debt, soon? Like within the next month or two?

 

[AlMc]

I really didn't like he mentioned about cap raise. It just made my stomach churn.

Do you think there will be a capital raise, equity or debt, soon? Like within the next month or two?

My opinion ( heck, I don't know but I will take a WAG ), is that any cap raise at this point needs to come after they hit at least one guided target....just one....Am I asking for toooooooo much?

 

[TMSE]

My opinion ( heck, I don't know but I will take a WAG ), is that any cap raise at this point needs to come after they hit at least one guided target....just one....Am I asking for toooooooo much?

I think Q3 will be a hit. I hope to bail out of my Jan'17 options right after the earnings call early Nov. I hope no more cap raise talk untill then.

Or, is Elon thinking that this week's GF reveal is a hit? Then we are screwed!

 

[MitchJi]

Tesla slams the accelerator on Gigafactory

Musk hopes to replicate the factory in Europe, China, perhaps India and elsewhere, as demand for Tesla’s products increases and the need for a streamlined battery production process grows. A sign by the lobby’s front door pointedly calls the facility “Gigafactory 1.”

“It’s like materials (go) in one side, from the mine, and out comes a car,” he said.

Tesla — which has had trouble speeding up deliveries of its latest car, the Model X SUV — needs the Gigafactory to hit its battery production and cost-reduction goals. That’s particularly true now that Musk has released a long-term plan for Tesla that calls for creating buses, freight trucks and a fleet of autonomous cars that can be hailed as taxis, in a challenge to Uber.

“He’s essentially thinking about powering every movable object on the road with electricity,” said Jessica Caldwell, senior analyst with the Edmunds.com auto information web site. “Without low-cost, efficient batteries, none of this can work.”

This gigantic Gigafactory idea I thought was crazy,” said Yoshi Yamada, senior advisor to Panasonic, speaking Tuesday at the plant. “I was wrong.”

The surge of orders worldwide for the Model 3, a car that won’t be available for more than a year, convinced him that the plant was needed. “There is strong demand for this battery,” Yamada said.

Tesla Motors opens Gigafactory to expand battery production

Outside, nearly 1,000 workers are laying the groundwork for the factory’s expansion, digging trenches and erecting steel supports in the hot, dusty valley. By the second quarter of 2017, 31 percent of the factory will be completed.

The factory’s name stems from "giga," a unit of measurement that represents billions. One gigawatt hour is the equivalent of generating one billion watts for one hour — one million times that of one kilowatt hour.

Tesla says the factory will be producing 35 gigawatt hours of batteries by 2018. That’s the equivalent to the entire world’s production in 2014. Tesla CEO Elon Musk has said the factory has the capacity to produce 150 gigawatt hours if it needs to. To put that in context, New York City uses around 52 gigawatt hours of energy per year.

 

[srini]

Look at it this way:

In the past few months, Tesla has been under a torrent of relentless bad press:

• Q2 delivery miss
• Autopilot related fatality, accidents, and related controversies
• Opposition and/or ridicule concerning SolarCity acquisition
• Negative reception of SMP2

And despite all of this, TSLA still sits at $230/share.

So much FUD has already been thrown at TSLA that I think FUD fatigue has set in. Having a smaller additional secondary offering is fairly minor in comparison with the insanity of the past couple weeks.

Dude, that's bad news, not bad press!!

 

[MTL_HABS1909]

I wonder if this maybe relevant for Tesla, given their separation from Mobileye.

Panasonic shifts from home electronics to cars

Panasonic making batteries, and possible partner for ADAS technology? In house at the GigaFactory?

Obviously I have no insight into the quality of Panasonic ADAS products.

Given how most of us expect Model 3 to be a huge success and Panasonic will be playing a huge role in the Gigafactory and battery production, has anyone here invested/considered investing in Panasonic?

 

[vgrinshpun]

According to the StreetInsider (paywall) digest of the Deutsche Bank note on MBLY, the reference to the recent fatal accident appears to be an excuse for Mobileye to end business relationship that did not raise to their expectations to be a partner in system design, rather than just an OEM supplier...

As a side, based on the mention of $22M sales to Tesla (ostensibly projected for 2016), my napkin math shows that the total price paid to Mobileye per car is $22M / 80K = $275.

Deutsche Bank reiterated a Buy rating on Mobileye N.V (NYSE:MBLY) with a price target of $72. Analyst Rod Lache commented on news Mobileye will not work with Tesla (Nasdaq: TSLA) beyond the current (IQ3) generation of the technology. Despite the bearish development, the analyst remains positive on the stock, and he said he would take advantage of weakness in MBLY.

"We have suspected for some time that the relationship between Mobileye and Tesla was stressed. Tesla has been pushing the envelope of applications using Mobileye’s vision technology—likely far beyond Mobileye’s comfort level, and clearly far beyond what Mobileye’s current generation system was designed to do. And unlike the relationship with other major Automakers, it is clear that the advanced development work at Tesla has been largely independent of any external party (including Mobileye). Mobileye has been treated as a generic component supplier, which is unusual for advanced technology of this type" said Lache.

The analyst continued, "Mobileye did not provide much detail on the details behind this development. But we suspect that Mobileye’s concerns about lack of co-development activity came to a head post the recent Tesla crash. Mobileye believes that they need to play an intimate role given the safety critical role of this technology."

Lache added, "Based on our discussions with Industry participants, our expectation has been that Tesla would likely fall off Mobileye’s customer list at some point. We’ve noted this whenever we’ve been asked about potential negative catalysts. We’d point out that Mobileye accounted for $22 MM out of MBLY’s $1.1 bn revenue forecast, so this is not financially material. Clearly, the big concern is that this is a sign that OEMs could eventually replace MBLY (i.e. if TSLA can do it, this can be done). We’d note that MBLY has not been replaced here. Tesla will continue to buy MBLY’s IQ3 system, and they appear to need it as a critical piece of the Tesla Autopilot system. This is nonetheless a logical concern, and it underpins our view that MBLY is unlikely to achieve 100% market share. However, it is our view that the momentum continues to be in Mobileye's direction. The overwhelming majority of Auto OEMs appear to be joining MBLY, and we continue to see strong evidence of this momentum in contract awards (Volvo, FiatChrysler, Honda during 1H16). We also see evidence of this through developments at competitors (Mobis appears to be giving up on aspirations to compete with MBLY). We would take advantage of weakness on MBLY."

 

[Mike Smith]

This Reuters article clarifies that the possible 'modest capital raise' would be for the entire range of products in the master plan, not the model 3. The majority of the costs will be covered by operating profits. This should be very well received by investors, who were probably anticipating the need for substantial capital raises.

Tesla's Musk sees 'modest' capital raise for next strategic turn

 

[tander]

"Model 3 500,000 in 2018"

Reuters Business on Twitter
I thought it was supposed to be 500k s x and 3?

 

[MartinAustin]

Given how most of us expect Model 3 to be a huge success and Panasonic will be playing a huge role in the Gigafactory and battery production, has anyone here invested/considered investing in Panasonic?

Of course! it's PCRFY. I considered investing in them when I knew they were un-mothballing 18650 factories to produce more for Tesla... this was right around the time they were ceasing production of their industry-leading plasma TVs (despite having the best picture you could buy, having finally eclipsed the Pioneer Kuro, they were still ceasing production due to the assault from lower-priced LCD TVs). Obviously the company and stock was in trouble, but I didn't buy any. I don't think PCRFY has climbed significantly since those days, so perhaps there is a chance for growth.

 

[MartinAustin]

"Model 3 500,000 in 2018"

Reuters Business on Twitter
I thought it was supposed to be 500k s x and 3?

Yes. S + X + 3 = 500,000, that's the capacity of the factory. (or "Factory #1" as we should probably start calling it)

Unfortunately there are so many numbers and details to remember about Tesla, some members of the press are getting things mixed up... a corollary of not paying enough attention and not checking your facts, which is happening all over the journalistic world these days

 

[TMSE]

Yes. S + X + 3 = 500,000, that's the capacity of the factory. (or "Factory #1" as we should probably start calling it)

Unfortunately there are so many numbers and details to remember about Tesla, some members of the press are getting things mixed up... a corollary of not paying enough attention and not checking your facts, which is happening all over the journalistic world these days

500K capacity limit is valid if there were no volumetric improvements, that Elon so fondly talks about. If Tesla achieves even a modest 30% improvement in capacity by 2018, that would 650K in capacity (500K 3 + 150K SX).

 

[MartinAustin]

500K capacity limit is valid if there were no volumetric improvements, that Elon so fondly talks about. If Tesla achieves even a modest 30% improvement in capacity by 2018, that would 650K in capacity (500K 3 + 150K SX).

Yes. However I can't help but opine that Tesla should build Factory #2 by that time, so that the proverbial TSLA eggs aren't all in one basket - a basket that is right next to a massive geological fault that is due for a large earthquake.

 

[EinSV]

Ok, just catching up but here are the key points I've seen so far:

1. Pencils down on Model 3 two weeks ago; Model 3 on schedule
2. Still on target for 500,000 vehicles in 2018, two years ahead of original schedule of 500,000 vehicles by 2020
3. On target for GF to produce 35GW cells and 50GW packs in 2018, also two years ahead of schedule
4. Pack costs expected to be under $100/kWh by 2020
5. Model 3 expected to generate 25% gross margins (!) and $20B in revenue/year at full production
6. TE initially 1/3 of production growing to 1/2 long-term (as big as car business)
7. Modest cap raise expected to be needed for SMP2, i.e., integrated Tesla solar roof/battery product, Tesla Semi, Tesla Mini-Bus and Tesla Pickup.

Love it!!

The press will of course spin it however they decide to spin it. Nice summary from Electrek on Model 3: Tesla Model 3: Elon Musk sees the vehicle generating ~$20 billion in revenue with 25% gross margin (TSLA)

 

[30seconds]

Ok, just catching up but here are what seem to be the key points:

1. Pencils down on Model 3 two weeks ago; Model 3 on schedule
2. Still on target for 500,000 vehicles in 2018, two years ahead of original schedule of 500,000 vehicles in 2020
3. On target for GF to produce 35GW cells and 50GW packs in 2018, also two years ahead of schedule
4. Pack costs expected to be under $100/kWh by 2020
5. Model 3 expected to generate 25% gross margins (!) and $20B in revenue/year at full production
6. TE initially 1/3 of production growing to 1/2
7. Modest cap raise expected to be needed for SMP2, i.e., integrated Tesla solar roof/battery product, Tesla Semi, Tesla Mini-Bus and Tesla Pick

Love it!!

The press will of course spin it however they decide to spin it. Nice summary from Electrek on Model 3: Tesla Model 3: Elon Musk sees the vehicle generating ~$20 billion in revenue with 25% gross margin (TSLA)

GF capacity up to 150GWh

 

[Cobbler]

I'm wondering when one of the bigger car manufacturers will announce a partnership to use the GF-cells in their cars, like in the past with Toyota/Daimler

 

[Fallenone]

As a side, based on the mention of $22M sales to Tesla (ostensibly projected for 2016), my napkin math shows that the total price paid to Mobileye per car is $22M / 80K = $275.

If this is true, then what MBLY supplies to TSLA would be quite different from their average product. I did some research on MBLY last year and the ASP of their product is below $100 (I think I found this number in their ER letters).

 

[EinSV]

500K capacity limit is valid if there were no volumetric improvements, that Elon so fondly talks about. If Tesla achieves even a modest 30% improvement in capacity by 2018, that would 650K in capacity (500K 3 + 150K SX).

Elon mentioned at the SH meeting in May that it was feasible for Fremont to build up to 1M vehicles per year but whether that was advisable was a separate question: Tesla’s Fremont factory could manufacture up to 1 million vehicles per year, says Musk