Short-Term TSLA Price Movements - 2016

[SBenson]

I'm surprised nobody is talking about Elon saying in the conference call that he expects no humans to be on the production lines by 2018. That seems like a major advance in production speed and accuracy.

He didn't say that. He said by version 3 it would be no humans on the line.

2016 - version 0.5
2017 - version 1
2019 - version 2
2021 - version 3

This being Musk timeline, I would double all legs and call it an aggressive timeline.

So I say 2026 is the best case scenario.

 

[Yggdrasill]

I have to admit, it's been a long time since last time I was this bullish. Probably sometime in 2015.

My outlook:

- Shorts pretty much out of ammo.
- Problematic Model X ramp out of the way. 100k+ annual production from here on out.
- New features will be announced in ~Q4, probably 100 kWh pack, autopilot 2.0 and Model 3 reveal part 2 (probably centered around HUD).
- Gigafactory cell mass production startup in Q4.
- 21-70 cell production allows Tesla Energy to kick it into high gear, probably with improvements to the specs and pricing. Full effects should be seen in Q1 2017.
- 21-70 cell production also allows Tesla to start production of Model 3 betas. The first ones should start being observed in late Q1/ early Q2 2017.

 

[roblab]

Service centers are recurring revenue/profit centers in the long run. A model S/X owner spends about $50/60 per month on maintenance costs, with annual plan or a la acarte. This is recurring revenue stream for the life of the car with hefty profit margin for Tesla. Imagine 2M model3's on the road one day in future spending about $25/30 per month on maintenance. That revenue could be very significant.

Maybe in some other universe. Agreed that the average high end owner never does any work on his car, takes it to the dealer for anything, and does that routinely because he/she has no idea what the car needs. I really doubt that will be your average Model ≡ owner, who is more likely used to doing his own brakes, wipers, oil changes, filters, hoses (on ICEs) and knows what it is when the car goes squeak or groan. These Tesla service centers won't see that guy. They don't see me. I don't spend that kind of money on maintenance UNLESS you are talking about tires, and I do not go to Tesla for tires. I know how to replace the battery in my fob.

I find it interesting that all these non owners who think they will need all this service when they get their new Tesla are clamoring for more service centers. Folks, service is overdone. Sure, Tesla will happily take your money, but I find that service is not required. Maintenance can be done by anyone. And there is precious little maintenance to do.

You ever notice there is no access to the motor, battery, gears, etc., like you get on an ICE car? You can't look under the hood to check the oil, or check your valves, or put on new points and plugs.

 

[CALGARYARSENAL]

NASDAQ | SEC Filing

Tesla sec filing today's

"Given the size and complexity of this undertaking, the cost of building and operating the Gigafactory could exceed our current expectations and the Gigafactory may take longer to bring online than we anticipate."

Oh boy.

All companies are required to put possibilities such as this in their filings. This is poor bear material if I ever seen it!

 

[Yggdrasill]

He didn't say that. He said by version 3 it would be no humans on the line.

2016 - version 0.5
2017 - version 1
2019 - version 2
2021 - version 3

This being Musk timeline, I would double all legs and call it an aggressive timeline.

So I say 2026 is the best case scenario.

He said that by version 1 it should have no people on the line. (Just went back and checked the transcript.) That will be 2018, not 2017.

 

[TMSE]

Maybe in some other universe. Agreed that the average high end owner never does any work on his car, takes it to the dealer for anything, and does that routinely because he/she has no idea what the car needs. I really doubt that will be your average Model ≡ owner, who is more likely used to doing his own brakes, wipers, oil changes, filters, hoses (on ICEs) and knows what it is when the car goes squeak or groan. These Tesla service centers won't see that guy. They don't see me. I don't spend that kind of money on maintenance UNLESS you are talking about tires, and I do not go to Tesla for tires. I know how to replace the battery in my fob.

I find it interesting that all these non owners who think they will need all this service when they get their new Tesla are clamoring for more service centers. Folks, service is overdone. Sure, Tesla will happily take your money, but I find that service is not required. Maintenance can be done by anyone. And there is precious little maintenance to do.

You ever notice there is no access to the motor, battery, gears, etc., like you get on an ICE car? You can't look under the hood to check the oil, or check your valves, or put on new points and plugs.

I have to say this..You come off as condescending and arrogant, but I am sure you didn't mean it. Why do you think I am a non owner? Even if I am non owner, am I any less qualified to comment here? It is the apparent attitude such as yours that makes a bear case against TSLA stronger.

You know nothing about me. Watch your tone please.

 

[Sparky]

...
More factory observations:

o it is a giant busy stuffed place. It is a real deal factory. Grubbier and busier than I expected. None of this gleaming white and red perfection I was expecting. Still pretty as factories go but a seriously massive operation
...

If you get a chance, visit the SpaceX factory in Hawthorne. It's a PKD-inspired beehive. I was there a year ago and it seemed quite "volumetrically efficient". I haven't run the numbers but when they are cranking Falcon-H's and 9's at full clip I won't be surprised if they lead U.S. manufacturers in $ /sq-ft.

 

[Turing]

All companies are required to put possibilities such as this in their filings. This is poor bear material if I ever seen it!

"hey guys, we've building the biggest manufacturing facility in the world of any kind, there could bumps along the way fyi."

 

[Papafox]

NASDAQ | SEC Filing

Tesla sec filing today's

"Given the size and complexity of this undertaking, the cost of building and operating the Gigafactory could exceed our current expectations and the Gigafactory may take longer to bring online than we anticipate."

Oh boy.

Official documents such as this often list the risks involved in the venture. Cost and timetable extensions are obvious risks. They may not come true, but they need to be listed, regardless. I see nothing good or bad about this statement, only a CYA comment that needs to be in the docs.

Oops, Calgaryarsenal beat me to it.

 

[roblab]

I have to say this..You come off as condescending and arrogant, I am sure you didn't mean it. Why do you think I am a non owner? Even if I am non owner am i any less qualified to comment here?

You know nothing about me. Watch your tone please.

Maybe I just have done a lot of maintenance and service. Is that condescending? I did not think you are a non owner, but many not-yet owners worry on these forums that we won't have enough service centers. I am saying, we won't need them. Is that arrogant? Having driven EVs for the last dozen years, I know there is hardly any maintenance or service required, and I know that many many drivers don't know how their cars work. I am really trying to put a reality check in here. It's experience, 60 years of it. That's not being arrogant. It's trying to get people to stop spending their money where they don't need to. It's trying to get people to learn about their cars instead of letting the folks at the shop "fix" their car and they not knowing what it is that got fixed.

True, I know nothing about you, other than you are telling me that Tesla will make a ton of money off of people in their service centers, and all I said was, not me, and not a lot of other people, either.

 

[Jayjs20]

Smells like a quick dip Monday morning

 

[SBenson]

He said that by version 1 it should have no people on the line. (Just went back and checked the transcript.) That will be 2018, not 2017.

I had to go back and re-read the transcript. yes, you are right, version 1 no people on the line. He seems to have implied 2017 (1 year after version 0.5). I will double it and take it as 2018.

Here is the relevant snippet if anyone else is interested:

Elon Reeve Musk - Chairman, Product Architect and CEO

The Model 3 – the internal name for designing the machine makes the machine is the – we call it the alien dreadnought. At the point at which the factory looks like an alien dreadnought, then you know you've won. It's like, what the hell is that? So we've got alien dreadnought version 0.5 will be Model 3. It will take us another year get to version 1 and probably a major version every two years thereafter. By version 3, it won't look like anything else. It might look like a giant chip pick-and-place machine or a super high-speed bottling or canning plant, and you really can't have people in the production line itself. Otherwise you'll automatically drop to people speed. There's still a lot of people at the factory, but what they're doing is maintaining the machines, upgrading them, dealing with anomalies. But in the production process itself there essentially would be no people.

Rod Lache - Deutsche Bank Securities, Inc.

Yes.

Elon Reeve Musk - Chairman, Product Architect and CEO

With version 1, not version 0.5. But I don't want people to think, oh, Tesla's going to have a factory without people. It's going be a huge number of people, but they will be maintaining machines and upgrading the machines and dealing with anomalies. And the output per person will be extraordinarily high.

 

[winfield100]

If you get a chance, visit the SpaceX factory in Hawthorne. It's a PKD-inspired beehive. I was there a year ago and it seemed quite "volumetrically efficient". I haven't run the numbers but when they are cranking Falcon-H's and 9's at full clip I won't be surprised if they lead U.S. manufacturers in $ /sq-ft.

note: OT. there was a mention of "Falcon Heavy" in book "Exo" by Stephen Gould

 

[Yggdrasill]

I had to go back and re-read the transcript. yes, you are right, version 1 no people on the line. He seems to have implied 2017 (1 year after version 0.5). I will double it and take it as 2018.

0.5 will be Model 3, and Model 3 will be first produced in 2017. So version 1 should be in 2018.

 

[SBenson]

I'm surprised nobody is talking about Elon saying in the conference call that he expects no humans to be on the production lines by 2018. That seems like a major advance in production speed and accuracy.

Now that I correctly understand Musk timeline. Yes, it is shocking no body is even talking about it.

This is really, really, REALLY BIG F'ING DEAL!!!!

Do a google search on "iPhone assembly process" and watch the latest videos. It's pathetic. The most glamorous electronic device this day, a tiny device (relative to a car) has so much manual intervention that it is really shocking.

Musk is saying that an entire car will be built by machines with no human touching it (only touching the machine that makes the car). This is light years ahead.

 

[TMSE]

Official documents such as this often list the risks involved in the venture. Cost and timetable extensions are obvious risks. They may not come true, but they need to be listed, regardless. I see nothing good or bad about this statement, only a CYA comment that needs to be in the docs.

Oops, Calgaryarsenal beat me to it.

Nevertheless, it is a talking point for the bobble-heads on CNBC. Melissa Lee of Fast Money-CNBC was ranting about it. They had a breaking news about it in the middle of the show.

 

[Sparky]

"Why would longs blink"?

That is a good and reasonable question. Here are two possible answers:

1. Redemptions & portfolio re-balancing. If a Fidelity, etc., needs to cover for redemptions, it must sell something. Sometimes, their portfolio managers will shake out dogs to cover; sometimes big profitmakers. Also, portfolio mandates oft-times necessitate getting rid of at least some of a core holding: this fund can hold only X% in technology, Y% in automotive, Z% in US stocks, and so on.

2. As attractive as any particular name, let's call it "Tesla Motors" is, for a short-, medium-, or long-term perspective, there can come a time when something else seems to be particularly appealing. For example, exactly two years ago (1 August), for me Nvidia at $17.81 appeared to be fantastic. So I bought a bunch of it. IN RETROSPECT, I would have done far better - from the 5 August 2016 vantage point, mind you - had I then sold TSLA and bought 5Xabunch of it. So who knows what might pop up on the radar...or lidar...screen tomorrow that suggests it could share some TSLA shares from a hard-core long-term holder?

Anyway, there are two quasi-possible answers to your question.

I'm feeling some of this. I have a short-term pot of TSLA that's done well this year after buying late ($200) on the Feb rebound and selling at $254 when I jumped on the DTU-train. Then I jumped back in big around $208 when "Down" happened right on schedule. Since then I've been flailing a little with stop-losses, unforced errors and missed buying opportunities but I'm still up a solid 50% on the year with my short-term TSLA.
Now, I'm wondering if long-longs are baked into the current SP and short-term longs are beginning to trickle out to go find other shiny objects for a few months. The broader market is kicking a$$. TSLA seems to have found a comfy parking spot.
My interpretation of the DTU thesis was we'd be seeing ATH again in September timeframe.
Does anyone see signs of that in the latest SP movement? I'm kinda put off by the low volume but I'm staying for now since I keep thinking there will be some juicy announcements in the early Fall and with Q3.
Willing to be dissuaded.

 

[SBenson]

0.5 will be Model 3, and Model 3 will be first produced in 2017. So version 1 should be in 2018.

500K Model 3's in 2017. But the idea is that the production starts in second half of 2016 with 200K to 300K deliveries in 2016, per Musk.

Again for the sake of reality if you are doubling Musk timeline that is fine. I'm doing the same. But we can't both double and say, no humans in 2020!

2018 is good with me.

 

[Yggdrasill]

500K Model 3's in 2017. But the idea is that the production starts in second half of 2016 with 200K to 300K deliveries in 2016, per Musk.

What year is it right now?

 

[SBenson]

What year is it right now?

Oh crap, you got me