Short-Term TSLA Price Movements - 2016

[DaveT]

I predict it will take at least $5k discounts for GM to sell 30k Bolts in 2017.

2017 Volts already have a $5k dealer discount here in Los Angeles. Dealer discount, Factory cash back or equivalent subsidized lease.

On a separate point.

Bolt is in a different class than Model 3.

About three classes downmarket but at the same price or at a $2500 premium.

Actual transaction prices will have to go way down to actually move the metal.

I think most people here are underestimating the California market.

In California, the carpool sticker is a really, really big deal. And California isn't giving it anymore to plug-in hybrids. So no carpool stickers for Prius plug-in or Chevy Volt.
No More California Carpool-Lane Stickers For Plug-In Hybrids

And most recently, the legislature failed to extend the cap for stickers for plug-in hybrids,
California fails to extend green sticker program for plug-in hybrids – East Bay Times

So, if you want a carpool sticker (which for some dramatically reduces their commute time) you'll need to go all electric, basically. The Leaf doesn't give you much mileage. And the Model S is too pricey for most.

So, enter the Bolt.

Bolt gives you 238 miles per charge. And after federal ($7.5k) and state ($2.5k in california, income-dependent), that gives $10k off the price. So, if they sell it for $37.5k, then it'll cost $27.5k. This is affordable to a lot of people. AND they get the carpool sticker.

Prediction: lots of people in California will get the Bolt since it'll get them a carpool sticker. And California is a very big market.

GM won't have any problem moving 30k Bolts next year. This is completely different than the Volt or Leaf.

 

[dakh]

I'd be willing to bet that a TM3 Pxx(x?)D will outperform a BMW M3 on every metric.

Don't get too excited. It might be a while before electric car can outrun a fast ICE one on anything much longer than a quarter mile run. There's a reason Tesla isn't claiming any Ring lap records or even close to that. Not that it matters for most buyers.

 

[neroden]

Let's see if there's life left in the recall tomorrow. Obviously, this is not looking like a big deal so far.

I strongly suspect that there was actually a slow recall over the course of August, which kept the price up against relentless bad news and short-selling pressure. In other words: most of the recall has already happened.

 

[neroden]

I think the bigger issue for the Bolt is this: if GM is actually losing money on the car on a gross-margins basis ($5000/car according to our inside leak, or $7500/car if the price is reduced to $35K), then they will make serious efforts to *not* sell the car, or at least not for the MSRP. Self-sabotage.

 

[DaveT]

I think the bigger issue for the Bolt is this: if GM is actually losing money on the car on a gross-margins basis ($5000/car according to our inside leak, or $7500/car if the price is reduced to $35K), then they will make serious efforts to *not* sell the car, or at least not for the MSRP. Self-sabotage.

I doubt the specifics of the inside leak. Sure, GM might lose $5k car on low volumes (ie., 10-20k cars/year). But once the Bolt reaches 50k cars a year, I'm fairly confident they'll be at least marginally profitable.

 

[esk8mw]

I strongly suspect that there was actually a slow recall over the course of August, which kept the price up against relentless bad news and short-selling pressure. In other words: most of the recall has already happened.

Evidence does point that way, but every time I think about that I remind myself that institutions are making massive risk-free profit on lending out shares. If I were them I'd hold out until the last nanosecond to recall the shares. Recalling in August leaves a month+ of free money on the table.

 

[DaveT]

Largely irrelevant, since the pack cost is about ($245/kWh x 60kWh) $14,700.

@MitchJi Where are you getting Bolt's pack cost to be $245/kWh?

 

[RobStark]

GM won't have any problem moving 30k Bolts next year. This is completely different than the Volt or Leaf.

1) LEAF 2.0 should be out early next year. Given than Nissan already sells 60k gimped LEAFs per year I have no doubt they plan global economies of scale of least 100k for next year. Giving them an advantage over GM in cost per unit.

2) Model 3 should be out late next year already taking much of the California market for long range EVs in this price class in the form of reservations.

3) I think people grossly exaggerate the value of having a white sticker a few months early.


BTW Moving slow for GM is very very stupid. It is a sure fire way to bankruptcy by 2030. It is a great idea for Mary Barra as she will rack up tens of millions of dollars in bonuses/salary for extracting the last value of GM's ICE infrastructure and be long retired by 2030.

 

[vgrinshpun]

 

[neroden]

Evidence does point that way, but every time I think about that I remind myself that institutions are making massive risk-free profit on lending out shares. If I were them I'd hold out until the last nanosecond to recall the shares. Recalling in August leaves a month+ of free money on the table.

It's kind of brutal on the markets to recall them all at once, for the kind of gargantuan quantities which Fidelity holds. (5.6 million in Fidelity Contrafund, 3.1 million in Fidelity OTC, 1.8 million in Fidelity Blue Chip Growth, 1.8 million in Fidelity Growth Company, 1.1 million in Fidelity Advisor New Insights A, 600K in Fidelity Series Blue Chip Growth... 20.3 million total). With 148 million shares outstanding, that's 13% of the stock. The SEC frowns on big (>5%) holders doing sudden huge moves and would investigate it as "market manipulation".

Even if Fidelity *asked* to recall them all at once, I read an article *by a fund manager who had done a recall* which said that the brokerages would drag their feet on it. Fidelity probably started recalling at the beginning of August and did so continuously in smaller doses (recall 1/45 of their shares each day, something like that) to make sure that they could actually get them all recalled. It's what I'd have done. They don't really lose a full month of money because they're only recalling a bit at a time; maybe half a month. And for these huge holders, the voting rights are very important.

Really big holders of stock, who hold a significant percentage of a company, have learned that you can't dump a huge order on the market in one lump, and I would guess they would apply the same rule to recalls.

The late recall, right now, would be from all the smaller holders who can't make an impact on the market *by themselves* (and so aren't worried about the SEC investigating them). And in this context "smaller" could mean a million shares each.

 

[SunCatcher]

Their wheels are in motion, albeit far behind Tesla.

BMW and Volkswagen Take on Tesla Motors With a New U.S. Fast-Charging Network -- The Motley Fool

"In a joint statement on Tuesday, the three companies announced that they have installed a total of 95 new DC Fast charging stations that will support electric-vehicle travel between Portland, Oregon, and San Diego on the West Coast, and from Boston to Washington, D.C., on the East Coast."

"Now, companies like BMW and VW and GM, and just about all of the other big automakers considering a push into electric cars, are a couple of big steps closer to being able to make the same argument. And this is just the beginning: Expect a lot more of these DC Fast charging stations to get built in the U.S. very soon."

 

[dakh]

We are among the first 15,000 plus reservations for two M3's, one of which we could buy now without saddling my 40 year younger wife with much debt. I would really like an MX and we may buy one if TSLA goes up substantially within a year or so. Social security says I have 8.7 years *statistically* to live which I don't expect and certainly don't count on. In the worst outcome my wife should keep at least one of the M3s forever as a collector's car; she'll be rich. Imagine the Pebble Beach concours d'excellence of 2050, "a pristine 2017 Tesla M3 75D scarlet red, with air suspension, autopilot, and a hand soldered signature by Elon Musk in an inaccessible part of the chassis!" (They will learn to advertise eventually.)

Don't underestimate the invigorating effect a much younger wife has! I guess that means no X for you huh?

 

[davecolene0606]

Range while driving at speeds between 40 and 60 mph is not real.

It appears that the Bolt battery is larger than 60 kWh, it apparently has 60 kWh usable capacity, which means that after assuming 5% anti-bricking reserve its nominal capacity is actually 63kWh. The article has a picture of the dash display showing 58.7 kWh used over the drive of 240.2 miles

HEY! Maybe GM can give one o' these babies to BRODER!! He get the range down for sure!

 

[dakh]

Wait, so that means once the record date passes we'll see 140 again?

 

[davecolene0606]

I think the main issue is that anyone can build a GF, but who can produce packs at one using current cell technology for under $133 (extremely conservative estimate) per kWh pack cost ($190 - 30% for GF reduction).

Right to the point... I concur.

 

[Jayjs20]

Wait, so that means once the record date passes we'll see 140 again?

If Q3 is something disastrous like 20k, then we probably will. If it's under 21k, I'm bailing.

 

[nienco2]

Let's see if there's life left in the recall tomorrow. Obviously, this is not looking like a big deal so far. My guess is that some brokerages with 0 shares available to short (like Fidelity) are doing some recalls and other brokerages such as IB are not. This offers died-in-the-wool shorts an option of changing brokerages in order to maintain a short position, but many will not do so.

Hmm, wool shorts... that strikes me as an uncomfortable situation to be in.

Really? you guys with the "squeeze" focus of investing.

"Well there you have your squeeze. Almost a two dollar increase in the last 45 minutes."

Since end of July shares held short is basically unchanged through 8/31,(most current data) shares are hard to borrow and yet the SP is down 16%. So who has been doing all the selling?

 

[ggies07]

nm

 

[Jayjs20]

Really? you guys with the "squeeze" focus of investing.

"Well there you have your squeeze. Almost a two dollar increase in the last 45 minutes."

Since end of July shares held short is basically unchanged through 8/31,(most current data) shares are hard to borrow and yet the SP is down 16%. So who has been doing all the selling?

It was a joke.

 

[DaveT]

1) LEAF 2.0 should be out early next year. Given than Nissan already sells 60k gimped LEAFs per year I have no doubt they plan global economies of scale of least 100k for next year. Giving them an advantage over GM in cost per unit.

2) Model 3 should be out late next year already taking much of the California market for long range EVs in this price class in the form of reservations.

3) I think people grossly exaggerate the value of having a white sticker a few months early.


BTW Moving slow for GM is very very stupid. It is a sure fire way to bankruptcy by 2030. It is a great idea for Mary Barra as she will rack up tens of millions of dollars in bonuses/salary for extracting the last value of GM's ICE infrastructure and be long retired by 2030.

The Leaf 2.0 might not be coming for a while (2017 Nissan Leaf Could Get 140-Mile Range - HybridCars.com). The Model 3 might be delayed a bit. And it will be difficult for new reservation holders to get a car quickly. So, there will be leftover demand. Further, GM can attract commuters with some nice 2 year lease deals.

I'm not saying that the Bolt will outsell the Model 3 or even come close. I'm just saying moving 30k Bolts next year shouldn't be a problem, and is a good start for them.

On another point, I'm holding off criticism of the Bolt until I can test drive the car. What GM/LG has done to create a 238 mile EV for $37k is quite an accomplishment. Whether it drives well or not, is another story, and I'm anxious to find out myself.