Short-Term TSLA Price Movements - 2016

[neroden]

In neither case is there any reason to believe AutoPilot didn't act as designed. Also, there is no reason to believe both accidents would not have happened if AutoPilot was not active.

It seems like the biggest problem with AutoPilot is "the nut behind the wheel". There's a certain class of highly irresponsible people who use Autopilot as an excuse to ignore the road entirely. I'm not sure how to deal with this problem. It's a well-documented problem in other fields; someone else described how this happened in airplanes, and another person described how it happened in ships, and so on. Give people a little automation, and some people go "Oh, I can slack off completely, leave my worksite, go to a bar, leave the machines totally unmonitored".

I'm not sure how to mitigate this problem, but I am sure that it's a problem in psychology, so I'd advise Tesla to start hunting around for psychologists who have studied this kind of behavior.

 

[bonaire]

I wonder if those were the guys who bought the secondary offering - that could be where their shares came from.
Mike

I wouldn't be surprised if Trowe bought a bunch of the offering. They don't want to be "left behind" the big boys in today's "hot stocks". They were one of the early supports back in 2013 and may still have millions of shares on hand, bought under $90.

 

[bonaire]

Wow! Apparently in Q2 Fidelity upped their stake in TSLA not by 9% as was reported in an article (do not recall which one), but by a whopping 26.7% or 4.37M shares. This makes it crystal clear (if there was any doubt) where they stand on the Solar City acquisition. I am wondering if this is the reason we are seeing the uptick.

Well, if they feel that the SCTY inclusion into TSLA financials is a big negative, having a lot of TSLA stock would mean they might choose to vote no on the merger. It all depends on how convincing Musk was when he talked to them about the merger. Now, the flip side is the revenue stream of SCTY ongoing is somewhat substantial and can feed cash quarterly to TSLA. The solar installation entity can focus on higher margin deals and less on homes and scattered small installations. Which makes sense because the more economical solar installation projects are large ones - one 1MW array is the same energy yield as 100 10KW arrays on random homes, if not more. I've seen some Solar City home installations where there was visible shading issues from trees, chimneys and other factors. Doing a large municipal array with ground-mount racking and no shading can provide higher yields.

 

[MitchJi]

So, what do we see at the Model 3 secondary reveal? I'm guessing we see heads-up display for speed and perhaps for some autopilot functions too. These will, of course, appear on S and X as options well before Model 3 is released. We'll see the final Model 3 interior with refinements that will also be offered as options right away on Model S and Model X. We'll likely get a demonstration of the tremendous progress with autopilot, too.

Thus, I rather believe we'll see AP 2.0 hardware come out before the whole AP 2.0 system is functional, the hardware by itself will serve as a potent demand lever, and we'll see the fully functioning AP 2.0 demonstrated at the late October, early November Model 3 event.

Why would they demonstrate the new AP on the M3? If it's a potent demand lever it makes much more sense to demonstrate it on the MS-MX.

 

[FredTMC]

It seems like the biggest problem with AutoPilot is "the nut behind the wheel". There's a certain class of highly irresponsible people who use Autopilot as an excuse to ignore the road entirely. I'm not sure how to deal with this problem. It's a well-documented problem in other fields; someone else described how this happened in airplanes, and another person described how it happened in ships, and so on. Give people a little automation, and some people go "Oh, I can slack off completely, leave my worksite, go to a bar, leave the machines totally unmonitored".

I'm not sure how to mitigate this problem, but I am sure that it's a problem in psychology, so I'd advise Tesla to start hunting around for psychologists who have studied this kind of behavior.

Yup

I'm getting very irritated with Drivers who have accidents with AP "on" and then immediately blame Tesla and make stupid statements to the media. Every time this happens tesla responds with the facts and is vindicated

So, let's be clear on this...

If you have accident on AP, shut the F up.
Do NOT make statements to the press (if you are a tesla fan)

Feel free to talk to your legal rep and to tesla

 

[vgrinshpun]

Well, if they feel that the SCTY inclusion into TSLA financials is a big negative, having a lot of TSLA stock would mean they might choose to vote no on the merger.

This does not make much sense to me, as a "no" vote will most likely make TSLA nose dive. Not a very smart idea to buy stock into such event.

 

[AlMc]

No. A number of people have proven that's a bad idea. It would just start the antics all over again like; 'I bought a 100k car and I was promised such and such when I bought it, and I've been waiting over 6 months now, I want what I paid for, etc., etc., etc.... No.

We are certainly not in agreement on this. We are approaching, IMO, a time when production *might* exceed demand, especially for highest margin vehicles.
TM indicates that the harnesses are place and/or the hardware is in place and it will be 2017 before the software is released and that sets the expectation

 

[vgrinshpun]

I wonder if those were the guys who bought the secondary offering - that could be where their shares came from.

Mike

The secondary, incidentally, without over subscription, which probably was picked up by the underwriters, was 6.8M shares...

 

[Vad42]

After all, AP 1.0 hardware preceded autopilot lane-keeping functionality by many months and yet the hardware still managed to be a tremendous demand lever.

Out of curiosity, how long after AP 1.0 hardware was in the cars did people find out? And how much detail on future capability of it was actually known before software upgrade? Was it officially announced way before the actual software was released which I believe I was almost a year later?

I haven't been around Tesla circuits at the time so missed out on all the fun Getting my first S delivered next week!

 

[MitchJi]

It seems like the biggest problem with AutoPilot is "the nut behind the wheel". There's a certain class of highly irresponsible people who use Autopilot as an excuse to ignore the road entirely. I'm not sure how to deal with this problem. It's a well-documented problem in other fields; someone else described how this happened in airplanes, and another person described how it happened in ships, and so on. Give people a little automation, and some people go "Oh, I can slack off completely, leave my worksite, go to a bar, leave the machines totally unmonitored".

Tesla is already working on the best solution to that problem. Making AP safer than a human driver.

 

[bh1783]

We are certainly not in agreement on this. We are approaching, IMO, a time when production *might* exceed demand, especially for highest margin vehicles.
TM indicates that the harnesses are place and/or the hardware is in place and it will be 2017 before the software is released and that sets the expectation

Tesla is not reaching a point where production exceeds demand. They are opening up stores in 3 huge markets: Mexico, Taiwan, and South Korea.
Mercedes sells over 1300 S-Classes(starting price is $130k) per MONTH in South Korea(and that's with $8/gallon gas).

 

[neroden]

Tesla is already working on the best solution to that problem. Making AP safer than a human driver.

That great and all, but that's not actually a solution to that problem. At least one of the crashes involved someone speeding, which definitely involved overriding some of the Autopilot defaults... and they all involved using Autopilot on roads it was specifically called out in the manual as not ready for. Get it working on those roads, and someone will try to use it on a dirt road on a mountain, and drive off a cliff. There's always someone trying to push the software beyond its limits.

Remember all the idiots in the early days of GPS who followed their GPS computers and drove into rivers, off cliffs, etc?

The solution is a "human factors" thing, or a communication thing. Something to give the human in the car *the right impression*. In road design, it's now considered important to make roads *look* narrow and twisty (even when they're not really) so that drivers won't be lulled into a false sense of security and start speeding. There has got to be some sort of similar psychological trick which can be used to keep drivers in a mindset where they won't abuse the equipment...

 

[AlMc]

Tesla is not reaching a point where production exceeds demand. They are opening up stores in 3 huge markets: Mexico, Taiwan, and South Korea.
Mercedes sells over 1300 S-Classes(starting price is $130k) per MONTH in South Korea(and that's with $8/gallon gas).

Key words in my post *might* and *especially in high end (highest margin) vehicles.
IF you were considering buying a P90D X or S would you buy it *now*?

 

[CatB]

Yup

I'm getting very irritated with Drivers who have accidents with AP "on" and then immediately blame Tesla and make stupid statements to the media. Every time this happens tesla responds with the facts and is vindicated

So, let's be clear on this...

If you have accident on AP, shut the F up.
Do NOT make statements to the press (if you are a tesla fan)

Feel free to talk to your legal rep and to tesla

I remember some 2013 debates about people hitting the accelerator instead of the brake and blaming the car. If you *think* you've had an accident on AP, humbly admit you're human, call Tesla to figure out what happened, re-RTFM (actually, pls do this BEFORE you drive), then *IF* AP was really on (and you didn't for a split-second turn it off when you tried to take control then remembered AP should save you) report it to NHTSA and Tesla. My "I love all things Tesla" half would hate to report it to NHTSA (because that's all FOIA-available), but I was convinced by all the pilots in 2013 that it is really best to put safety first. Full stop. And I think Tesla would agree.

 

[bonaire]

Tesla is not reaching a point where production exceeds demand. They are opening up stores in 3 huge markets: Mexico, Taiwan, and South Korea.
Mercedes sells over 1300 S-Classes(starting price is $130k) per MONTH in South Korea(and that's with $8/gallon gas).

What is the price of electricity per-kWh there? That is a factor in Europe, where in Germany - residents are charged appx. .30/kWh USD due to the prevalence of Renewables. Fuel prices are a factor but only if the electricity is actually cheaper per-mile.

 

[bonaire]

This does not make much sense to me, as a "no" vote will most likely make TSLA nose dive. Not a very smart idea to buy stock into such event.

Why? SCTY can be tossed and TSLA have less risk due to a non-merger. Don't be surprised if they vote no. The reason they would vote yes is to help Tesla garner the cash flow from the solar leases. There seems to be interest in this idea of a no-vote due to the price of the LEAP options on SCTY. Still pricey even down in the teens for puts. If you are "for sure" that the merger goes through @ $26/pps, then you can sell puts on SCTY OTM and presumably make good cash on that. Bunch of 2018 puts for teens and below are still trading daily.

 

[neroden]

What is the price of electricity per-kWh there? That is a factor in Europe, where in Germany - residents are charged appx. .30/kWh USD due to the prevalence of Renewables. Fuel prices are a factor but only if the electricity is actually cheaper per-mile.

Gotta correct you on this, the German electricity prices are almost entirely due to deliberate subsidies from residential users to industrial users. Wholesale prices are low, but the government has decided to give the benefit of this *only* to industry.

 

[neroden]

The moment the merger is finalized Tesla will be a huge move. Too many people have bought into the BS story that SolarCity is being bailed out, and fail to recognize the value SolarCity will add to Tesla when they merge.

See, the thing is, both can be true. SolarCity had a bunch of problems as an independent company -- including very high cost of sales. The merger actually could eliminate a bunch of the problems with SolarCity, most obviously the sales costs. Merger synergies are real!

Just because your boat needs to be bailed out doesn't mean it isn't a valuable boat. It just has a hole which needs to be repaired.

 

[neroden]

Why? SCTY can be tossed and TSLA have less risk due to a non-merger. Don't be surprised if they vote no.

I would be extremely surprised if Fidelity OTC Fund voted no. I did go through the news and look for statements from the individual fund managers, and he was gung-ho in favor of the merger.

 

[bonaire]

Gotta correct you on this, the German electricity prices are almost entirely due to deliberate subsidies from residential users to industrial users. Wholesale prices are low, but the government has decided to give the benefit of this *only* to industry.

This is not a huge problem. It incentivises the country to keep jobs in-country and not ship to Asia. Plus if there are jobs, people can work and pay for the higher electric bills at home, install LEDs and other things maybe some solar panels to offset. America could offer similar savings to businesses and put the burden on the homeowner who uses a "lot" of power, as they do in the tiered-rate plans of California. Would it go over well in the rust belt? Not really. But in the wealthy zones, those using 3000 kWh a month may as well pay more for the amounts over normal homes. The USA does have cheap power in Texas and some industries have moved there. Not very expensive elsewhere either - such as PA where business and industry is under $.10-.11/kWh in some areas. Ohio similar.