Short-Term TSLA Price Movements - 2016

[hobbes]

I'm not sure where you're seeing the MS demand growth. MS production has been almost flat for the last 7 quarters:
11627 4Q13
11160
12807
13091
13530
12851
12145 2Q16
And based on the current VIN assignment rate, Q3 will fall within this same population. That's why I think that sales growth will have to come from MX.

You got something wrong with your numbers. Only 5 quarters between Q4 2013 and Q2 2016? Here is a plot of total (S+X) deliveries from our wiki (link in my signature):

Wouldn´t call that flat!

 

[schonelucht]

If only 22,000 cars in Q3, how does Tesla get to their lower guidance of 80,000 cars for 2016, which they confirmed as late as last week.
I am not discounting the VIN assessment, but something is screwy here.

I could see Elon go on a conference call and declare they'll make 28k in the last quarter. I even see a lot of investors who would back such assertion. So it may work.

Anyway, something is screwy. We have the following possibilities (in my personal order of preference)

1) There is huge order growth in the next two three months, for example because Elon presents the all new 100kWh AP2.0 capable car in September.
2) X VIN assignments gives us a mega surprise somewhere in Q2/Q3 because of a contingent of orders we just haven't seen that suddenly materialize (big Chinese drop for example) maybe from a backlog
3) Tesla misses guidance and delivers somewhere 70-75k of cars only this year

In order of likelihood, 2) has the best chance. They delivered some 7000 Model X cars so far yet are assigning VINs in the 16xxx range. Clearly that's a huge difference that could work out to many additional deliveries. If they all would come through in Q3 then 24-25k becomes a possibility again. Again, the Model X is a wildcard that could pull the numbers significantly either way.

 

[bonaire]

I'll keep conservative until August number out. My theory is July (5K) + August (5K) + Sept. (8-9K). If August turns out to have much improved EU/NA number, then I'll change my mind. Just keep in mind, Q1/Q2 delivery is way below anybody's guestimate.

Simply put, you are looking to see if "5150 cars in transit" is some sort of truth or simply lots of inventory cars mixed in with a regular run rate of named customer cars. Europe showed almost no "benefit" to 5150 cars in transit in July. By Sept 5th or so, it will be showing color.

 

[schonelucht]

You got something wrong with your numbers. Only 5 quarters between Q4 2013 and Q2 2016? Here is a plot of total (S+X) deliveries from our wiki (link in my signature):

Wouldn´t call that flat!

The topic specifically was Model S deliveries. They are not entirely flat y-o-y but compared to historical growth rates it's a reasonable term to use.

 

[Matias]

The reason I didn't jump on the number 2017 for answering you was that 2017 is "far off in the future". This is a company that is watched daily, weekly and definitely quarterly. 2017 is a really hazy picture in terms of what will/can be done. We know they have talked about setting up and getting Model 3 assembly lines ready - and then starting to mass produce it by July 2017. If that doesn't happen, how many S and X buyers will come in to save the day by buying units to make up for any delays in Model 3. Perfection is assumed, but reality has many tentacles. Never assume perfection will occur. And so, now we see talk of new "solar roofs" as the next big thing. What I am waiting to see is will they put up a web page to "pre-order" a solar roof so they can announce some kind of order-interest like they did with powerwall.

We won't see any mass production in July 2017. We rather see a rerun of Model X "launch". Few cars delivered some time in the fall and then several months very slow ramp with two steps forward and one step back as they iron out problems. Normal car factories take like 3 years from pencils down to start mass manufacturing. Tesla starts manufacturing before cars is ready (as has been seen with Roadster, Model S and Model X) and uses customers as beta testers.

This has worked before, because customers have been believers and bleeding edge early adopters. I'm not sure if it works with Model 3.

 

[SunCatcher]

Say what you will about it, and I'm glad we are almost done with ICE engines, but damn, that's an impressive machine.

I'll suggest an even more impressive machine: The one our children's children will see in 100 years, when this new paradigm technology has had an equal amount of time to develop. Can you imagine?

The sooner infernal combustion engines are burning in hell, the better, IMHO.

 

[neroden]

Incidentally, the form 13F data for Q2 are trickling in, and these largest holders were increasing their positions, including Fidelity (they mentioned by 9%), Baillie Gifford (by 9.54%, or 1.14M shares), Vanguard (by 13.4%, or 0.58M shares), Bank of Montreal (by 6.8%, or 0.31M shares).

Actually, this is super useful. Baillie Gifford was initially skeptical of the merger. If they're loading up on additional shares, they're probably voting for the merger. We already expected Fidelity funds (*five* of which have more than 1% of TSLA stock) to vote for the merger.

(Mutual fund holders: TSLA Major Holders | Insider Transactions | Tesla Motors, Inc. Stock - Yahoo Finance )

T Rowe Price selling shares is more worrisome. (Edit: that's out of date, they sold in Q1, so I'm going to ignore it.)

There is some pretty serious churn in the institutional holders. I figure we're watching managers who don't like the merger getting out, and managers who do like the merger getting in.

 

[dmckinstry]

This has worked before, because customers have been believers and bleeding edge early adopters. I'm not sure if it works with Model 3.

This time the beta testers are employees.

 

[anticitizen13.7]

Nice try, Drivin. Every one of your examples is a company that had a serious problem, either in demand for the product or in ability to profitably execute. In terms of dollar value, the Tesla Model 3 introduction was the largest immediate backorder in history in terms of dollar value for the ordered products. So, demand isn't the problem. How about ability to execute profitably? Despite the tired "Tesla loses money on every car it sells" mantra of the shorts, Tesla is actually delivery its current products with a 20% to 30% GM and Model 3 should have a 25% GM. Battery costs are likely below $190 kwh now and heading for the game-changing $100/kwh a few short years from now. Your attempt to portray Tesla as a flash in the pan comes up amazingly short, and "short" is an amazingly appropriate word here.

Edit: Your willingness to include a known Ponzi schemer like Madorf in your comparisons with Tesla speaks volumes regarding the value of your comments.

The point is that at the time people weren't aware or ignored the depth of the issues...because this was going to be different this time! It is a game changer!
You don't understand tech or the Internet or the change in society!

Why is my post quoted in Drivin's post at Short-Term TSLA Price Movements - 2016, but the Bulletin Board code altered to attribute the quote to Zhelko Dimic?

 

[Out4aDuck]

@hobbes,
There's nothing wrong with the MS production numbers that I posted. They come directly from Tesla.
Delivery numbers will ebb and flow depending on net finished goods inventory.
Also, your graph includes MX deliveries. How does MS demand look to you?
Again, sales growth will have to come from MX.

 

[SBenson]

Appreciate all the VIN counting discussion. I do agree that it gives a good picture of the current situation (except when there are anomalies, duh!) but I would warn people against using it to predict future.

AP 2.0 will be a fundamental breakthrough. You cannot possibly assess demand for it. Musk thinks that "that will be the only car anybody will want to buy". While skeptics here seem to totally write it off.

I think truth is probably somewhere in between. It will be a phenomenal demand booster (not necessarily the only car anyone will want to buy). If AP 2.0 gets out by end of year, I see no problem with 100K sales next year on S and X. It might even go well over 150K.

 

[tinm]

Tiny data point:

My brokerage firm has emailed me four separate emails in the past four days inviting me (begging me?) to participate in their securities lending program. I decided to give 'em a call. Conversation went something lke this:

Broker: Good morning sir how can I help you?
Me: I'm calling about all the emails you guys have been sending--four so far this week--trying to get me to join the securities lending program.
Broker: Yes, sir!
Me: Let's cut to the chase. You want me to make my stock available for others to short, right?
Broker: Yes sir, that's right!
Me: This is about Tesla, isn't it.
Broker: (chuckling) Yes, absolutely, sir!
Me: Well, let me make this clear. I don't want to give any aid or comfort to anyone shorting Tesla stock. I want them to suffer and hurt as much as possible. I want to watch them squirm when the mother of all short squeezes hits them by surprise. So, you will not be profiting by making any of *my* Tesla shares available for shorting, that's for sure. Are we clear?
Broker: (laughing) Yes sir! Got it! We'll take your name off the list.
Me: Very good. Thanks, bye.
Broker: Bye

 

[FredTMC]

I'll keep conservative until August number out. My theory is July (5K) + August (5K) + Sept. (8-9K). If August turns out to have much improved EU/NA number, then I'll change my mind. Just keep in mind, Q1/Q2 delivery is way below anybody's guestimate.

What August number? Tesla doesn't release deliveries until 3 days after end of quarter.

I've never seen any guesstimates that have any accuracy for US deliveries month by month.

 

[schonelucht]

I've never seen any guesstimates that have any accuracy for US deliveries month by month.

InsideEV is pretty good.

 

[CorneliusXX]

Tiny data point:

My brokerage firm has emailed me four separate emails in the past four days inviting me (begging me?) to participate in their securities lending program. I decided to give 'em a call. Conversation went something lke this:

Broker: Good morning sir how can I help you?
Me: I'm calling about all the emails you guys have been sending--four so far this week--trying to get me to join the securities lending program.
Broker: Yes, sir!
Me: Let's cut to the chase. You want me to make my stock available for others to short, right?
Broker: Yes sir, that's right!
Me: This is about Tesla, isn't it.
Broker: (chuckling) Yes, absolutely, sir!
Me: Well, let me make this clear. I don't want to give any aid or comfort to anyone shorting Tesla stock. I want them to suffer and hurt as much as possible. I want to watch them squirm when the mother of all short squeezes hits them by surprise. So, you will not be profiting by making any of *my* Tesla shares available for shorting, that's for sure. Are we clear?
Broker: (laughing) Yes sir! Got it! We'll take your name off the list.
Me: Very good. Thanks, bye.
Broker: Bye

Don't you want to get even more shorts sucked in so that the squeeze gets even worse when the economic python moves in for the kill?

 

[FredTMC]

InsideEV is pretty good.

Thanks

For United States? Really? Maybe they have a decent guess one quarter or so, but consistently accurate?!

If anyone has any data on their accuracy for U.S. , please share

 

[Fallenone]

Thanks

For United States? Really? Maybe they have a decent guess one quarter or so, but consistently accurate?!

If anyone has any data on their accuracy for U.S. , please share

I agree inside EV is very good on the monthly US deliveries estimates. Have been pretty consistent for many months so far.

 

[geneclean55]

I can't speak to other quarters, but last quarter Inside EV did a pretty good job. Much better than the consensus here.

 

[FredTMC]

I can't speak to other quarters, but last quarter Inside EV did a pretty good job. Much better than the consensus here.

Yep. Was just my recollection that they've been inconsistent in the past

Was hoping someone complied numbers by quarter (their est vs Actual)

 

[vgrinshpun]

The reason I didn't jump on the number 2017 for answering you was that 2017 is "far off in the future". This is a company that is watched daily, weekly and definitely quarterly. 2017 is a really hazy picture in terms of what will/can be done. We know they have talked about setting up and getting Model 3 assembly lines ready - and then starting to mass produce it by July 2017. If that doesn't happen, how many S and X buyers will come in to save the day by buying units to make up for any delays in Model 3. Perfection is assumed, but reality has many tentacles. Never assume perfection will occur. And so, now we see talk of new "solar roofs" as the next big thing. What I am waiting to see is will they put up a web page to "pre-order" a solar roof so they can announce some kind of order-interest like they did with powerwall.

The reason I insisted on 2017 is that you were seemingly making wide ranging conclusions about demand not there to support 20K cars per quarter, which I found unbelievable. Now you seem to qualify that by saying that demand for 20K is not there NOW, but if Tesla continues their focus pocus manipulating of collective conscience of the buying public, it is possible that it will be there going forward after all.

I'll be frank. The line of thought you seem to present sounds down right absurd to me. I guess Tesla came up with the treacherous trick of Model S only to distract our attention from the fact that they can't sell more than 1000 Roadsters per year.

So once again, I am not going to waste time over the hypotheticals of demand not being able to support production if not for Tesla coming up with XYZ update to their line up any more than jump with involuntary joy because they can sell 2 times more Model S only if they are able to drop price by 10K across the board. Neither is going to happen. There WILL BE constant stream of upgrades and modifications to the MS/MX line-up and discussing demand on assumption that these modifications are NOT going to happen is just useless.

As far as the essence of data you and others were presenting on rate of incoming Model S orders in Q2 being just under 1000 cars per week (I am assuming production week since the comparison was done with production rate), although I am generally skeptical about VIN tracking, my review of the Model S Delivery and Ordering Spreadsheet shows that the lowest VIN assigned in Q2 was 1362XX (user Anthony), and the highest - 1501XX (user jac). This yields the difference of 13,900 or incoming rate of orders equal to 1,158 Model S cars per production week (12 per quarter).

So based on the above meeting yearly delivery guidance is mainly an issue of the production and delivery, NOT demand.