Short-Term TSLA Price Movements - 2016

[schonelucht]

Another critical piece of information to reveal at the ER will be current production rate and incoming orders, as well as production and deliveries guidance for Q3.

I do not believe we have enough information to conclude whether meeting current 80-90K guidance will require pulling additional demand levers or not.

If you follow VIN assignments, it is pretty easy to put a good upper bound on the incoming order rate. I am currently tracking around 7600 assigned VINs over 4 weeks. Some of that is backlog of the X, some of that is inventory builds which is why I feel quite confident that current order rates will put them on a trajectory of just missing 80k even if they pull some additional 2000-3000 cars from the pipeline and already existing inventory.

The problem with information on the incoming order rate given by Tesla is that is nearly never straight up. A classical example was the 45% more incoming orders from 16Q1. The issue there was that 15Q1 was pretty weak due to dual motors/AP announcement at the end of 2014 pulling forward quite a bit of demand. I would love for Tesla to give unambiguous incoming order rate information but I don't think they'll do it. I would even take the same for their backlog, for example if they'd break up their customer deposit numbers by model, but again, I don't think they will.

Wrt to production, I am less and less excited by that number. It was meaningful when order rate was still higher than production capacity but with their recently announced capabilities (>2000) it simply is not the case anymore. Even if they announced production run rates of 2400/week today, it is meaningless if that just means the gap between deliveries and production keeps growing. On the contrary, discounts on fully loaded inventories are approaching 30k. Cash is still king and they don't need that kind of drag on their SG&A. Put differently, that's nearly giving away a car at costs of goods for having driven 2000 miles... Should they pull a good demand lever (Autopilot 2.0 is my best bet right now, which may easily have a potential to up demand to 2500/week), then I will reconsider on the production rate.

 

[RobStark]

On the contrary, discounts on fully loaded inventories are approaching 30k.

These are pre-refresh cars, some even without autopilot.

That happens industry wide when you have an obsolete model.

 

[schonelucht]

These are pre-refresh cars, some even without autopilot.

With the pace of innovation at Tesla this happens all the time though, but I believe the ones I am referring too all have Autopilot 1.0 at least.

 

[mrdoubleb]

That is simply incorrect. An article mention JB straussel slipped on a radio interview that recent model 3 reservation number is closer 315-325k.

Didn't someone point out here at TMC that it turned out that interview was recorded in April?

 

[jhm]

Wow a lot of discussion for a thing that has almost 0 chance of happening. If we assume that Elon is the best person to know solar city and he doesn't want to annoy solar city and tesla investors, and a bunch of smart people have now done a due diligence, and tesla revised down the initial offer knowing both the Rive brothers are going to lose tons of money on scty options, and solar city board is in agreement with the deal, people are still pondering if a higher offer is coming from someone other than Elon?

On the CC yesterday, Musk said that he had recused himself from from the exchange ratio setting process. So 0.11 was news to him as it was to us. Also he has stipulated that if a materially better offer come along and disinterested shareholders vote for it, his shares of SolarCity will be sold along with the new deal. So while Musk owns about 29% of SolarCity, he is generally stepping back to let disinterested boardmembers and shareholders speak.

For my part, I think that even a counter offer with a substantial premium to the Tesla offer would be a bad deal for SolarCity. It would mean that SolarCity loses the leadership of Musk and disconnects with the greater vision of Tesla.

So ultimately SolarCity shareholders must decide if they want to be part of Musk's vision or not. Musk is not forcing this on anyone. But I fear the company would be hollowed out if it chose to go a separate way.

 

[MitchJi]

Interesting information on energy storage (a few excerpts):
Energy Storage Teaches Utilities How To Hurry

Accustomed to conservative planning that can stretch across decades, electric utilities are learning to install energy storage in a matter of months—not just to back up coming renewables, but also leaky gas facilities, shuttered nuclear plants, and because it’s a good idea anyway.

California utilities are leading the way, prompted by progressive government policies and a few emergencies, like the unexpected shut downs of the San Onofre Nuclear Power Plant and the Aliso Canyon natural-gas storage facility.

“It is incredibly unusual that we are trying to bring on assets anywhere near this rapidly,” said Mark Irwin, director of technology development for Southern California Edison, during the opening session of the STUDIO Energy Storage Technical Conference Monday night at San Francisco’s Park Central Hotel.

SCE is accustomed to natural-gas projects that take seven to 10 years for planning and permitting, Irwin said. At the end of May, the company launched a rapid deployment, within 6 months, of energy storage to meet demand that normally would be met by power plants fueled by Aliso Canyon gas.

But the energy-storage rush isn’t confined to California. AES Corp. recently installed 20 MW of storage capacity in Indiana, in a process that took 12 months—still quick by industry standards.

“California really is the first domino in accepting storage as a solution. The problems that it’s solving exist everywhere,” said Praveen Kathpal, AES vice president for energy storage.

“It doesn’t really matter whether we’re talking about three months or 12 months, because it’s extremely fast as far as the utility procurement and planning timelines go. It’s already a paradigm shift, that a lot of the other things we usually do to maintain reliability haven’t or potentially won’t catch up to.”

Nonetheless, six to 12 months can seem like a snail’s pace to those innovators who are pioneering storage, watching its cost curve drop, and seeing its potential to spread across the grid.
<Snip>
“I think everybody in this room can agree that storage presents tremendous benefits,” said Janice Lin, executive director of the California Energy Storage Alliance. “It can be deployed quickly, it’s resilient, it diversifies the mix, it helps size the infrastructure more adequately to demand, it just makes the whole thing more efficient. So we agree that there’s great promise, we know that it works… so how do we make it go faster?”

AES estimates the U.S. will need to add 40 GW of peaker plants in the coming decade—unless it can offset the need by installing storage instead. Peaker plants start up quickly in response to demand, usually run on natural gas, and tend to be costlier and dirtier than conventional plants that operate more routinely.

At the end of each day, Kathpal asks his team, “What did you do today to stop new peaking generation being built?”

Decades of aging infrastructure are waiting for storage to enhance capacity, flexibility and reliability, but in each state utilities and regulators have to determine how to implement it and recover its costs.

“We’re not talking about whether the technology works, because we know that it does,” Kathpal said. “We’re not talking about whether it can be integrated reliably, because we know that it can. And to a large degree we’re not really talking about whether it’s cost effective, because we know that it is. We’re talking about the other things that get it in place.”
<Snip>

I hope we're still on track (probably six to twelve months late):
Elon Musk: Tesla Powerpack Doesn't Need Renewables, Battery Market 'Staggeringly Gigantic'

Musk Predicts Battery Sales Of ‘At Least A Few Billion Dollars’ In 2017

But that doesn’t mean Tesla needs renewables to sell batteries, founder and CEO Elon Musk said Wednesday.

“It seems like people link this too much to renewable energy,” Musk said during Tesla’s Second Quarter earnings call. “Of course we are great believers in renewable energy, but that is not the gating function for stationary storage.”

Ultimately, said Musk, storage allows utilities to turn off power plants or defer new ones.

“You can basically, in principle, shut down half of the world’s power plants if you had stationary storage,” he said.

Utilities currently have to build power plants to meet peak demand, and then some. Batteries allow utilities to store energy when demand is low and use it when demand is high, without turning on more power plants.

“The fundamental economics of cost are always true, meaning there’s always a cost advantage of system-wide implementation of stationary storage because of high peak to trough of electricity usage.”

 

[MitchJi]

Tesla has 373,000 Model 3 reservations as of May 15, after 8k cancellations and 4k duplicates

It is hard to fathom that Tesla has lost a net total of 38k-48k reservations in the last 2.5 months.

It's also hard to fathom that anyone thinks that this matters at all.

 

[dalalsid]

IMHO - panel is the roof might be Tesla's solution rather than solar shingles etc. No need to stay within existing framework of shingles or tiles or whatever. So some kind of interlocking panel + something to make it continuous with some side frame to accommodate sizing would be great with microinverter attached under the panel with easy access from the attic (as opposed to the current need to climb on the roof) would be great.

 

[Matias]

I hope we're still on track (probably six to twelve months late):
Elon Musk: Tesla Powerpack Doesn't Need Renewables, Battery Market 'Staggeringly Gigantic'

That interview was April 2015 and according to that Musk said

"The company plans to ramp up, produce and sell $40-$50 million in batteries in the Fourth Quarter. Next year it will produce ten times that many, Musk said. And in 2017 sales should amount to another five to ten times more"

This once again shows that Musk always gives too optimistic timeline. I don't believe, that we see any meaningfull Model 3 launc 2017. But I think neither believes market, so miss is propably allready baked in.

 

[PtG62901]

IMHO - panel is the roof might be Tesla's solution rather than solar shingles etc. No need to stay within existing framework of shingles or tiles or whatever. So some kind of interlocking panel + something to make it continuous with some side frame to accommodate sizing would be great with microinverter attached under the panel with easy access from the attic (as opposed to the current need to climb on the roof) would be great.

I think the wind would rip off a larger panel. Everyone gets big gusts sooner of later. If the material was very thin, and could be attached to the roof very securely, I would think it would wear out?

 

[dalalsid]

I think the wind would rip off a larger panel. Everyone gets big gusts sooner of later. If the material was very thin, and could be attached to the roof very securely, I would think it would wear out?

Why would wind rip off a larger panel any more than it would rip off a regular roof or at least pieces of it? I've seen lots of large glass roofs. glass roof - Google Search

 

[PtG62901]

Why would wind rip off a larger panel any more than it would rip off a regular roof or at least pieces of it? I've seen lots of large glass roofs. glass roof - Google Search

I guess it depends how you do it. If you have a standard shingle, American roof, it seems expensive to tear that off and replace it with a new roof. My house's roof costs about as much as a solar electric system needed to power the house completely ($24k or so). To me that is a nonstarter for most people. If you are going to put a membrane on the roof, like they do on flat commercial roof, it has to be attached down by glue, and it is very thin. At the moment, solar doesn't work on thin, tough, waterproof membranes. It could be done, but the wind force on flat object increased exponentially as size increases (though, I haven't thought about those formulas for many, many years, so I can't quote them), and you make a sail. The tech seems to be aimed at thin solutions inside of windows right now.

 

[JRP3]

That is simply incorrect. An article mention JB straussel slipped on a radio interview that recent model 3 reservation number is closer 315-325k.

Actually, you, and that article, were simply incorrect. JB didn't "slip", the article unknowingly, or knowingly, referenced an old recording of JB.

 

[NOLA_Mike]

Now that $TSLA and $SCTY are seemingly tied at the hip it looks like we are bracing for two (2) bad earnings reports...

Bumpy road ahead - let's see how the suspension holds up... (Did you get what I did there? )

 

[JRP3]

Some negativity on autopilot: Elon Musk's push for autopilot unnerves some Tesla employees

Those building autopilot were acutely aware that any shortcoming or unforeseen flaw could lead to injury or death -- whether it be blind spots with the car's sensors or drivers misusing the technology.

But Tesla founder and CEO Elon Musk believes that autopilot has the potential to save lives by reducing human error -- and has pushed hard to get the feature to market.

 

[Calvin.K]

The gap between Tesla and SolarCity shares seems to be widening.. Not sure what the reasoning is

 

[Lessmog]

I guess it depends how you do it. If you have a standard shingle, American roof, it seems expensive to tear that off and replace it with a new roof. My house's roof costs about as much as a solar electric system needed to power the house completely ($24k or so). To me that is a nonstarter for most people. If you are going to put a membrane on the roof, like they do on flat commercial roof, it has to be attached down by glue, and it is very thin. At the moment, solar doesn't work on thin, tough, waterproof membranes. It could be done, but the wind force on flat object increased exponentially as size increases (though, I haven't thought about those formulas for many, many years, so I can't quote them), and you make a sail. The tech seems to be aimed at thin solutions inside of windows right now.

Wind is a very powerful force. My neighbor's roof got hit by strong freak upwinds in a storm last year which easily flipped over and moved about 100 of his concrete, 2-wave standard tiles. I just put a bundle of 4 of them on my bathroom scales at 21 kg, so about 12 lb each. Didn't bring a tape measure, but size is approx. 25 by 40 cm at a guess. Not a big sail, and heavy. And the outermost two rows had been screwed down too. Still took off.

Care must be taken to fasten things on roofs.

 

[AlMc]

Battening down the hatches a bit. Sold all call options last week and trading shares today.
Plenty of 'dry powder' now for post ERs (SCTY and TM).
Hope I am wrong on my suspicions of the stock direction.
Good luck to all longs..I still will be better off if I am wrong, short term, than right.

 

[theschnell]

You all will be happy to know that I purchased some way out of the money weekly puts. Because I (almost) never make money on options, you can be assured that I have put a floor in the stock price at least for the rest of the week. It's still lower than you would prefer, but at least its a floor

 

[Krugerrand]

Some negativity on autopilot: Elon Musk's push for autopilot unnerves some Tesla employees

Ever the pragmatist, that Elon Musk.

Just as somebody is going to die on their way to Mars or on Mars. Life is a risk. Advancing technology, doing what's never been done before...all add risk. Mix in human fallibility, stupidity, bad luck etc... and additional risk is added. I grew up riding my bike all over town, often times without my hands on the handlebars, and certainly without a helmet. Every time had a level of risk. I knew it as a child, my parents certainly knew it.

If some people would rather exist in a bubble than live, then they should go do that and leave others to their own devices; destructive or otherwise.