Short-Term TSLA Price Movements - 2016

[bonaire]

Could you explain from where you are getting this? Q1 letter doesn't say that M3 deposits were part of customer deposit figure. It only says, it was included in receivables.

I think, the problem is your assumption that 150k M3 deposits are counted in Q1. Q1 letter says "almost all model 3 deposits on the last day of Q1 are in accounts receivables", so it is likely that only the $115M is what's counted as M3 deposits for Q1 (end of day PST instead of midnight?). Here, I'm assuming your quote of "36% of $318M" from sec filing is correct, which I believe it is.

So, if we drop the less certain 150k M3 reservations counted for Q1, then the numbers can start making sense. If we also assume that M3 deposits weren't part of Q1 customer deposits, then the deposit numbers start meaning something.
Q1 customer deposits = $391.3M
Q2 customer deposits = $679.8M ( if $373M increase is due to M3, then the MS+MX deposits dropped by $85M)

During Q1 ER Q&A call, it was said by Jason W. that because 3/31 reservations were done by credit card, they were not transferred funds until the next day (4/1) so couldn't be counted as a true deposit. mmd's info here is about right. Now, since Customer Deposits include paid for cars as well as the cash deposit ($110K versus $5K) the more cars in transit, the higher Customer Deposits can appear. If there were 1000 Model X Sigs in transit at end of Q1, many or most paid for by eager customers - that is $130M alone. 2000 MS ASP $90K would be $180M. Add in 2150 others not yet paid for.

In order to keep Customer Deposits showing up as large numbers, you want as many as possible of paid-for cars in-transit at the end of a quarter. Read TMC posts about guys getting asked to pay for cars before they show up at sales and service centers. Realistically, they should be paid for on the day of delivery but many are presented with payment requests much sooner. And don't forget Texas buyers (and other states) are required to pay in full before shipping from the factory. I recently bought a car elsewhere from a dealership and paid for it 3 days after delivery. Took it home with no money down, wrote a check and had them deposit it 3 days later. Very disruptive.

 

[bonaire]

Does anyone know the # of Model S and Model X produced (of each) during Q2? They gave a total, 18345 but didn't break it down.

 

[Mario Kadastik]

Does anyone know the # of Model S and Model X produced (of each) during Q2? They gave a total, 18345 but didn't break it down.

No, the only one who knows is Tesla

 

[NOLA_Mike]

The negative articles over at Shorting Alpha (SA) are perculating nicely.

Some samples (from different articles no less) for your morning coffee:

"Tesla no longer guides for the next 3 months - only 6 months. You all know what this means: The next 3 months will be catastrophic."

"The CapEx miss is truly outrageous. Tesla is deferring the badly needed CapEx to keep powder dry for a SolarCity bridge loan."

ad nauseum...

 

[ev-enthusiast]

Some very interesting SP moves during trading session in Europe.

 

[pGo]

Elons comment about 30%GM for MS and 25% for MX possible exiting the year (not entire quarter) leads me to speculate that he's expecting the cost of packs to decline suddenly (about 3% GM combined) in last few weeks of the year. Tesla removed the language though from the letter states they are not sure when will this happen if this were to be true. Goes well with the stationary storage production end of the year.

 

[W84M3]

If TSLA goes green today, some short sellers will completely lose it.

Spiegel is already on the verge of a mental breakdown.

 

[electracity]

"The CapEx miss is truly outrageous. Tesla is deferring the badly needed CapEx to keep powder dry for a SolarCity bridge loan."

Is Tesla hoarding capex for potential solarcity problems not a valid concern? Capex is so much below guidance that it should cause concern.

 

[aznt1217]

If TSLA goes green today, some short sellers will completely lose it.

Spiegel is already on the verge of a mental breakdown.

I only go to his feed for comedy. His entire Twitter is basically just hating on TSLA from his run out of his apartment "hedge fund."

It blows my mind how people don't understand how it takes investments to make something. That and on a more neutral tone, if he was trading to make money, he should know better than to trade based on emotions.

 

[electracity]

Elons comment about 30%GM for MS and 25% for MX possible exiting the year (not entire quarter) leads me to speculate that he's expecting the cost of packs to decline suddenly (about 3% GM combined) in last few weeks of the year.

He said gigafactory batteries in S/X in 6-9 months, IIRC.

 

[NOLA_Mike]

Is Tesla hoarding capex for potential solarcity problems not a valid concern? Capex is so much below guidance that it should cause concern.

Not for me. Who is it that knows when Tesla needs to spend CapEx $ to achieve Model 3 launch? Complain when they spend too much money, complain when they don't spend enough quick enough. Give me a break.

 

[vgrinshpun]

Scratch that last question, it's the ZEV credits.

For me the gross margin is the positive story in the financials for this quarter. I stated my concern on them before release here but it seems the company is in a good position to counter the negative effects of the discounted 75kWh (aka 60 model). Not only did they guide it up, they already showed a marked improvement for this quarter as well.

It is. Essentially they confirmed that they will be tracking toward 25% for MX and 30% for MS, albeit on the delayed from the prior guidance schedule. I think it is obvious now that MS 60 and MX 60D were included in their GM projection. I never doubted this as introducing 60 required engineering development (it is not simply a matter of installing a software switch), which was in the making some time before the Q1 ER when they provided the original GM guidance.

There is an important implication from this. The first is that introduction of 60 was not an emergency maneuver to counter falling demand, but rather planned expansion of the product lower into the market, one of the proverbial levers Elon mentioned a while ago. The second is that company's projection of the demand is based on the internally known pipeline of the products which are not visible to us until they are introduced. That is why the skepticism for company's guidance on demand is really based on the present snap shot, and is not really accurate for the company that continually introduces new variants of the product. That is why I am cautiously optimistic about their projection of achieving 2200 units per week by the end of Q3 and 2400/week at the end of Q4. They have additional tailwind as far as demand is concerned because of the general seasonality of car sales: they are historically higher in Fall and December than other periods of the year.

 

[Tslynk67]

The negative articles over at Shorting Alpha (SA) are perculating nicely.

Some samples (from different articles no less) for your morning coffee:

"Tesla no longer guides for the next 3 months - only 6 months. You all know what this means: The next 3 months will be catastrophic."

"The CapEx miss is truly outrageous. Tesla is deferring the badly needed CapEx to keep powder dry for a SolarCity bridge loan."

ad nauseum...

BBC spinning it negatively too: Tesla reports deepening losses - BBC News

 

[winfield100]

Author claims shares will not be recalled for the merger:
http://seekingalpha.com/article/3995066-tesla-shares-recalled-shareholder-vote-myths

I checked with Schwab. while they did not confirm or deny above since i didnt ask that question they did say
"We do confirm that none of your shares have been shorted or available. The only reason that this would happen is if you have a margin debit on the account. If you have a margin debit on the account, we can borrow up to 140% of the margin debit and market value...... The only option to not have the shares available to short will be to not incur a margin debit."

I am trying to find out (apologies if everyone already knows this) if I GTC sell order all my shares at a much higher price (5x-10x) if that affects borrowing my shares to short by others

 

[vgrinshpun]

Unbelievable, I found the Mark Spiegel interview in the big German newspaper 'Süddeutsche Zeitung'.
Elektromobilität – Dieser Mann prophezeit Teslas Untergang
New Yorker Hedgefonds-Manager – "Tesla ist ein schreckliches Unternehmen"

So much misinformation, so much hate, why the hell?!

Because he is going to loose his Castle, deep down knows it, but can't bring himself to acknowledge that he is wrong. Pretty sad story, awkwardly painful to observe, actually.

 

[electracity]

Who is it that knows when Tesla needs to spend CapEx $ to achieve Model 3 launch?

Tesla knows, which is why they gave Capex guidance. How does that suddenly change by hundreds of millions per quarter? Spending hundreds of millions doesn't just happen. It originates in long term planning. They are aggressively deferring capex leading up to the M3 launch. A normal investment inquiry would be "why" and "how".

 

[NOLA_Mike]

Tesla knows, which is why they gave Capex guidance. How does that suddenly change by hundreds of millions per quarter? Spending hundreds of millions doesn't just happen. It originates in long term planning. They are aggressively deferring capex leading up to the M3 launch. A normal investment inquiry would be "why" and "how".

Correct. And instead, ones that don't know have said it's because they are saving it for a SCTY bridge loan.

 

[Irishjugg]

Tesla knows, which is why they gave Capex guidance. How does that suddenly change by hundreds of millions per quarter? Spending hundreds of millions doesn't just happen. It originates in long term planning. They are aggressively deferring capex leading up to the M3 launch. A normal investment inquiry would be "why" and "how".

It's not very difficult to spend hundreds of millions of dollars very quickly when you are buying robots and manufacturing equipment for a 500k vehicle production line.

I don't forsee any issue with them getting to 2 billion capex by years end.

 

[W84M3]

Tesla knows, which is why they gave Capex guidance. How does that suddenly change by hundreds of millions per quarter? Spending hundreds of millions doesn't just happen. It originates in long term planning. They are aggressively deferring capex leading up to the M3 launch. A normal investment inquiry would be "why" and "how".

Well, only recently they upped Gigafactory efficiency by a factor 3. If the 28% completed can produce 35 GW for Model 3, it makes a big difference.


Unless Gigafactory has nothing to do with it and I'm guessing wrong

 

[Yggdrasill]

Delay in capex spend increases risk of Model 3 delays, but it has nothing to do with SCTY.

It is still possible that Tesla manages to spend 2+ billion. They could have large incoming deliveries from KUKA or Fanuc, which could be several hundred million with the stroke of a pen. We will just have to wait and see.