Short-Term TSLA Price Movements - 2016

[Zhelko Dimic]

Obviously not.

I guess you don't understand.

I think if you read the transcripts it'll be clear to you.

I understand Elon, but not your confidence in conclusion you made.

You've taken 27s and 10x that, split the diff into 6 steps (same size - linear steps) to get to 23.5s; then you rounded this to 25s.

But starting point is 100s, and not 27s.
And most any model of improvement (hockey stick, S curve, percentage increase) has characteristics that they start rather slow, and bigger numerical gains are down the line.

I am not saying that you're wrong, but that you're trying to calculate something that we don't even have a semblance of enough information.

I don't have a whole lot of interest in this type of prediction, but now that I engaged, here is my thought process, and my guess.
One year from the moment first Model 3 rolls down the line, Tesla will be making 4-10K Model 3 per week (200-500K a year). This is not based on any math, but psychology, persistence of human spirit and Elon's determination. I don't know how they're going to get there, but I believe they'll get there. There are lots of people in Tesla determined to see this happen, and be part of this historic journey.
And they'll just dismantle any obstacle they encounter along the way.
10 years from now, there will be books about this...

 

[Papafox]

Off topic...but in the States it is a holiday weekend: Anyone seen Johan recently??

I sent Johan a PM and received a return about a week and a half ago. He is fine, has been busy with other stuff, but will likely check in again before too much time passes.

 

[trentxintong]

Does cash flow positive and profitable mean including M3 capex ? I would assume so as he did not say otherwise

 

[vgrinshpun]

Does cash flow positive and profitable mean including M3 capex ? I would assume so as he did not say otherwise

I think that a lot of projections made on this Forum were based on even split of the CapEx and OpEx between Q3 and Q4. I think that it is obvious from Elon's email that this assumption did not pan out. Both are likely heavily backloaded, because the M3 related expenses probably do not need to be made until later in H2.

The major drivers for profitability are revenues, GM and OpEx. The cash flow additionally is affected by CapEx.

 

[stealthology]

Aloha,

I posted earlier about a Tesla store opening soon at the Ala Moana shopping center in Honolulu, and I was surprised to see today that Honolulu has another store soon to open (see pic) in the brand new International Marketplace Mall. It has a pretty cool tree next to it, which has been there for ages. There also appears to be access to the store from the outside of the mall along the main road along Waikiki Beach.

Two things come to mind: Q4 openings and solar panels.

 

[Papafox]

View attachment 193167 View attachment 193168 View attachment 193169 Aloha,

I posted earlier about a Tesla store opening soon at the Ala Moana shopping center in Honolulu, and I was surprised to see today that Honolulu has another store soon to open (see pic) in the brand new International Marketplace Mall. It has a pretty cool tree next to it, which has been there for ages. There also appears to be access to the store from the outside of the mall along the main road along Waikiki Beach.

Two things come to mind: Q4 openings and solar panels.

I attended the opening of the Ala Moana store. It replaces a much smaller temporary store in Ala Moana, the largest shopping center in the state. The beauty of Ala Moana is that it gets lots of traffic from locals as well as tourists (since it is close to Waikiki). Ala Moana store has 5 Tesla destination chargers behind it because they plan to stay plenty busy with test drives.

As for the International Market Place store, it is going to have two stories, from what I am told and is right in front, in a particularly prominent position. Lots of mainland and Asian tourists come to Waikiki and the International Market Place (just blocks away from many of the Waikiki hotels) draws them in.

A service center right in Honolulu should open within a year and offer triple the size of the somewhat remote Waipahu location. SC waits for service have been reasonable here in Hawaii so far, and there's rumblings about Maui being the next island to get a service center.

I believe that Hawaii already has the highest per-capita ownership of Teslas of any state, and it has done so with little marketing. Now marketing is about to bust loose and I suspect the results will be stunning, both in Hawaii and with visitors.

As for solar, SolarCity had been selling as a rapid pace until a year or two ago when the local utility for Oahu dropped payments for purchased solar electricity by half. Fortunately, existing customers including SolarCity installations were grandfathered in under the old rates where electricity is bought at the same rate it is sold. Solar City has stopped new installations on Honolulu's island because of this change, but the combination of inexpensive batteries and solar panels could get Solar City back into business in a big way at some point. There's a growing number of residents who are disenchanted with the utility and its expensive rates, and if Tesla absorbs SCTY I am sure that the combined company could get plenty of business in Hawaii. Solar panels are a no-brainer under the old rules and perhaps again if Tesla offers something compelling. Payback of my older, more-expensive panels was only 4 years. Electricity on Oahu is generated by burning oil, before I went solar I was paying up to 33 cents/kwh, and Hawaii is in the tropics and gets immense quantities of sunlight year-round. Bottom line: Tesla has the opportunity to disrupt the local utilities monopoly in a big way with TE, should the SCTY deal go through. One-stop automobile, solar, and batteries can be batched together here quite effectively.

 

[ev-enthusiast]

Did Robert W. Baird reaffirm their outperform rating?
Any other upgrades or downgrades from other companies ahead of potential good Q3 numbers?

 

[schonelucht]

I am kind of surprised that nobody seemingly picked up on this pretty precise definition. The implications are:

Or, Elon is just giving a pep talk speech to rally the troops and exaggerates how close they are to these goals and none of the implications are actually implied. Who knows?

 

[Gerardf]

IMHO it will be very important for Tesla to show it can have positive cashflow (or even be profitable) also while everybody realizes that it will only be for a single quarter.

Very many seem absolutely convinced that Tesla can not build cars at a profit, not now and not in the future.
A good example of how strong this sentiment (and even the whining about it) :


Porsche, however, will need years before it can mass produce and sell its electric sports car at a decent profit. Meanwhile, Tesla will continue to deliver tens of thousands of its vaunted sedans and SUVs every year to wealthy progressives around the world, most likely at a loss.

"I wish we had put that car on the road and not Tesla," confided a senior engineer at Porsche, not a brand typically prone to technological envy. "We have to earn money at the end of the day though."

Speak to other developers in Germany and the same healthy respect mixed with a dose of jealousy can be heard. Whether it is the Wall Street-funded business model, outlandish marketing claims or its brash determination to ignore conventions such as independent retailers, Tesla refuses to play by the same rules as everyone else. And, so far, the company gets away with it.

How do Europe's premium carmakers, and particularly the German luxury brands, compete against a rival like that? The truth is they can't -- at least not as long as Tesla remains a money-losing boutique manufacturer of luxury sports cars propped up by investors.

Source: http://www.autonews.com/article/20160905/OEM05/309059949/tesla-envy-grips-germanys-giants


Yes, envy and even whining over how unfair it is that Tesla is 'allowed' to spoil everything for the others like Porsche because of these mean long-term investors !

A single quarter of profit will proof for once and for all that Tesla can choose to make a profit, but prefers to heavily invest in the Model-3 and GigaFactory.

Edit: Reading Rob's remark, I should have also added : Denial.
Tesla having FCF+ for one quarter might wake them up.

 

[RobStark]

Source: http://www.autonews.com/article/20160905/OEM05/309059949/tesla-envy-grips-germanys-giants

The author of this article also claims autopilot can cause a Tesla "to swerve off the road for no apparent reason" :LOL: and that legacy automakers would never be allowed to get away with this. That once Model 3 is shipping Tesla will be forced to play by the same conservative rules as the legacy automakers. Like unending test of autonomous driving features to be released sometime in the mid 2020's.

 

[RobStark]

Weekend OT

 

[Fallenone]

Or, Elon is just giving a pep talk speech to rally the troops and exaggerates how close they are to these goals and none of the implications are actually implied. Who knows?

Agree. And this isn't the first pep talk, just the first leaked IMO

 

[anon]

Agree. And this isn't the first pep talk, just the first leaked IMO

While I would agree that there have probably been pep talks before, I would imagine that they would mostly have been to specific groups, as a leak from a company-wide e-mail (like this one) seems almost inevitable because of the large number of employees, so I think this is different to usual.

 

[MartinAustin]

TSLA is up 1.5% in the German market.

Autopilot blog isn't out yet. Could be a good Tuesday

 

[MitchJi]

profit will proof for once and for all that Tesla can choose to make a profit, but prefers to heavily invest in the Model-3 and GigaFactory.

I don't believe that any one event will stop the FUD.

Agree. And this isn't the first pep talk, just the first leaked IMO

But the email is clearly important. Vgrinisphun pretty much nailed it.

 

[neroden]

New York State is paying 100% of the original quote for the plant and factory equipment.

Solar City is responsible for any cost overruns. Building is almost complete and equipment has been ordered. Have not heard of any overruns yet.

I remember( but not 100% sure) New York State budgeted $750M for the project and Solar City $150M for cost overruns.

Solar City will lease for $1 per year for next 20 years. Once it hits its revenue and hiring minimums it has the option of expanding the plant with equipment to 5X the original size at New York taxpayer expense.

Thanks for the details, which I only knew some of. This is an *incredibly* good deal. You can see why Elon would want to keep his hands on it regardless of the rest of SolarCity

 

[TrendTrader007]

Welcome to the Forum. Totally agree with your thinking. As a word of caution, though, as much as there is a lot of clarity on Company's fundamentals, there is precious little on the short term SP movements because there are so many forces in play, with a lot of them not organically tied to the fundamental value of the company. Please tread carefully and exercise prudence.

Thanks! I agree that short term price movements are difficult to predict. However, in my experience trading stocks since 1998 the single best way to create wealth is to hold a rapidly growing company through thick and thin until the full growth potential is realized which usually takes several years. If Tesla returns an annualized 34% return in the stock market over the next 10 years then it will be worth $548 billion market cap (not counting dilution) or a stock price of $3681 approximately. Of course this is wildly hypothetical but the point I'm trying to make here is that true wealth is created by allowing a growth company to grow into its full potential just like teenagers need time to grow
And Tesla is a teenager, figuratively speaking with tremendous potential ahead
There are only two possibilities here: either it will crash and burn over the next year or two in the extremely unlikely event of inability to raise capital or slack demand for M3 ( which we know is not true since I have overheard conversations in coffee shops of how mainstream people want M3 and 375 k plus deposits) or it will be wildly successful as an investment
My money is bet on latter

 

[neroden]

Personally I still believe the biggest risk to the company is that Tesla will fail to expand service centers as necessary, and demand will crash because "I can't get my car repaired". I don't see any other serious risks in the 5-year timeframe, though I could be missing some.

 

[McMuggets]

Personally I still believe the biggest risk to the company is that Tesla will fail to expand service centers as necessary, and demand will crash because "I can't get my car repaired". I don't see any other serious risks in the 5-year timeframe, though I could be missing some.

The beauty of owning a Tesla is that I only had to see "service" once in the past year, and they actually came to my garage instead. Service included mostly checking things and refilling my wiper fluid. There was nothing else to do because an electric car has far less to service. The words "gasket" and "oil change" will be obsolete. Brakes? Lol, the Technician told me that I hardly used them and they looked pretty new... and I said it was because regenerative braking meant that all I did was use the brakes once the car was almost stopped at the intersection or during parking procedures.

What I am trying to say is that far less service centres will be needed to "service" cars with 20 moving parts vs. 2000+ moving parts per ICE car. In fact, Tesla themselves state that you do not have to get your annual service in order to keep your warranty valid. I would be planning an exit strategy if I owned one of those "30 minute oil change" stations.

 

[FredTMC]

The beauty of owning a Tesla is that I only had to see "service" once in the past year, and they actually came to my garage instead. Service included mostly checking things and refilling my wiper fluid. There was nothing else to do because an electric car has far less to service. The words "gasket" and "oil change" will be obsolete. Brakes? Lol, the Technician told me that I hardly used them and they looked pretty new... and I said it was because regenerative braking meant that all I did was use the brakes once the car was almost stopped at the intersection or during parking procedures.

What I am trying to say is that far less service centres will be needed to "service" cars with 20 moving parts vs. 2000+ moving parts per ICE car. In fact, Tesla themselves state that you do not have to get your annual service in order to keep your warranty valid. I would be planning an exit strategy if I owned one of those "30 minute oil change" stations.

Yes, my view is that once initial production issues are resolved for a new tesla model, the cars rarely needs service.

My car has 72k and hasn't been in for service in a long time.

Long term EVs should be ultra reliable.

I'm sure Tesla has a target number of Cars in fleet per service bay.