Short-Term TSLA Price Movements - 2016

[vgrinshpun]

2 questions:

1. Are we sure that 16Q2 was a 0 for ZEV? I didn't see a number in the letter and I know he complained about credits being worthless, but that doesn't necessarily prove the number was 0. Either way, probably a small number so maybe doesn't matter.

2. Even if a ZEV is worth $4k, isn't it possible they sold for far less, given Elon's "pennies on the dollar" statement, or am I missing something?

I suspect that Tesla unloaded these credits at a healthy discount. After this sale they had only 3,530 credits left. Looking at the bloated balance of credits for the companies to which they sold - Fiat, Ford and Honda, which are 68,308.2; 62,566.16 and 32,294.07 respectively, I think it is fair to assume that the reason these companies bought so many was not because they needed them right away, but because they were offered at a discount.

However, even if we assume that the credits were sold at half price, which is $3,000 - $4,000, say (very conservatively) $1,500 for each, we are still talking about addition to bottom line of more than $50MM.

 

[esk8mw]

Definitely was not zero, but Tesla didn't break it out. How much revenue must it have been in order for them to break it out?



It is definitely categorized as cash flow from operating activities, but likely lost in the accounts receivable?

I don't think there's a hard and fast rule to separately itemize the revenue (experts, correct me if I'm wrong). However, they have always done so in the past, so the implication is that past amounts were considered material and the Q2 amount was considered not material - unless they are moving away from providing the number at all going forward.

 

[esk8mw]

I suspect that Tesla unloaded these credits at a healthy discount. After this sale they had only 3,530 credits left. Looking at the bloated balance of credits for the companies to which they sold the credits - Fiat, Ford and Honda, which are 68,308.2; 62,566.16 and 32,294.07 respectively, I think it is fair to assume that the reason they bought so many is not that they need them right away, but because they were offered at discount.

However, even if we assume that they the credits were sold at half price, which is $3,000 - $4,000, say (very conservatively) $1,500 for each, we are still talking about addition to bottom line of more than $50MM.

Agreed. Time to update my spreadsheets.

EDIT: I think this is also further proof that Elon is trying to engineer a complete blowout in Q3. I'll be investing accordingly.

 

[MitchJi]

Buy Solarcity, shut it down, give away to panasonic whats left.
Introduce a roof/solar panels sold at
tesla stores and let cross selling do its magic.
The no brainer part sort of eludes me.

You obviously don't have all of the relevant facts.

It eludes you that it's a no brainer, to assume that you can reach a correct conclusion without all of the relevant facts?

 

[MitchJi]

Agreed. Time to update my spreadsheets.

EDIT: I think this is also further proof that Elon is trying to engineer a complete blowout in Q3. I'll be investing accordingly.

I didn't think we needed further proof!

My only question is how many bullets he has. He must think he has enough or he wouldn't be trying to do it.

Maybe they show up on the balance sheet if they want the information to be known, or not. If Zev credits are a big part of the reasons for profitability they might not want to draw attention to that fact?

 

[austinEV]

No, actually I've worked for companies of all types, fast moving tech (bigger and smaller than SCTY/TSLA) included. IR is taken seriously across the board and that goes double for a company whose every move is in the news. Giving it another read, this is a statement to a reporter. So, consider that the PR department has also vetted the statement.

Look, you are taking words directly from the company (which were vetted by someone important) and either saying they are outright lying/clueless or otherwise twisting them beyond all recognition. The statement is quite clear and the onus is on you to bring evidence to the contrary. Your evidence was that the IR department is deceptive or stupid - great critical thinking!

It's pretty hilarious that you'd prefer to exile me - who actually works with companies in these exact capacities every day and shares information about the process on a regular basis - to a separate "I'm crazy about Tesla" thread so you can engage in this super serious "critical thinking from actual investors."

You are a superstar. You are very appreciated here!

 

[vgrinshpun]

Agreed. Time to update my spreadsheets.

EDIT: I think this is also further proof that Elon is trying to engineer a complete blowout in Q3. I'll be investing accordingly.

Allow me to offer the following EDIT to your EDIT: I think this is also further proof that Elon engineered a complete blowout in Q3. I'll be investing accordingly.

 

[racer26]

Well. I just reconfigured my holdings to try and capitalize better on the coming tsunami of hurt. Sold my Jan2018 100 Call, rolled it up into a 130 Call for the same expiry to free up some cash, and then bought 3 220 Jan2017 calls with the difference.

 

[pGo]

So what if AP 2.0 announcement is a product available for other manufacturers too? Since we can say it will be ahead of Mobileeye solutions, does that equate to a 5+B market?

 

[Drax7]

You obviously don't have all of the relevant facts.

It eludes you that it's a no brainer, to assume that you can reach a correct conclusion without all of the relevant facts?

and you know the facts, ok show me

 

[Matias]

Elon said he did exactly what I described. You can either believe in the regulations on the books or in standard industry practices. You could also choose to believe in the tooth fairy if you want to.

I don't believe that Elon wants to violate SEC regulations.

 

[austinEV]

So what if AP 2.0 announcement is a product available for other manufacturers too? Since we can say it will be ahead of Mobileeye solutions, does that equate to a 5+B market?

The market would value it at 0. Just saying. Honestly, unless TM is ready to sell the thing next week I wish they would keep their amazing developments quiet until they were ready.

It will probably be the technology about "glass": the heads up display, which will be coming into the S/X. They have to announce it before they deliver it.

 

[MitchJi]

and you know the facts, ok show me

I don't know all of the relevant facts. Which puts me way ahead of someone who thinks he knows what he doesn't know.

 

[MitchJi]

Elon said he did exactly what I described. You can either believe in the regulations on the books or in standard industry practices. You could also choose to believe in the tooth fairy if you want to.

I don't believe that Elon wants to violate SEC regulations.

If you listen to the second SCTY call you will hear Elon say exactly what I described. Plus the private call backs, and private tours which are publicly known.

You are choosing to ignore well known facts, which is not a wise investment strategy!

 

[Alketi]

So what if AP 2.0 announcement is a product available for other manufacturers too? Since we can say it will be ahead of Mobileeye solutions, does that equate to a 5+B market?

Extremely unlikely IMO. That would be like GM buying Autopilot technology from Ford. Also, Google already shopped their (essentially) L4 autopilot package to everyone, and only Chrysler consented to trying it in one minivan line.

 

[Matias]

You obviously don't have all of the relevant facts.

It eludes you that it's a no brainer, to assume that you can reach a correct conclusion without all of the relevant facts?

Are these facts secret? You surely know, that it would violate SEC rules to hide relevant information from shareholders..

 

[Navin]

Thanks for the z-credit info. Makes coming to this board worth it despite the nonsense and noise.

 

[Matias]

You are choosing to ignore well known facts. Which is not a wise investment strategy!

I believe, that you don't understand, that violating SEC rules is a crime.

 

[esk8mw]

OK, apologies for all these ZEV posts, I know I'm bordering on spam here. Just trying to reconcile the numbers.

So, 2015 shows that Tesla transferred 1504 credits from 14Q2 through 15Q3. If we multiply by $4,000 per credit, that's just $6 million. However, TSLA shows regulatory credit revenue of $170 million during this timeframe (66 million 14Q4, 51 million 15Q1, 14 million 15Q2 and 39 million 15Q3). I know there are other credits than ZEV at play, but what specifically accounts for the $164 million extra? Are these extra credits still around and are they measurable like the ZEV? If so, I bet they were sold off in 16Q3 too.

This question is relevant to the 80,227 number for 2016. How much ZEV accounts for the reported $65 million already sold in 15Q4, 16Q1 and 16Q2? Did other credits carry the day in these quarters or did discounted ZEV credits make up the numbers (and are thus largely spoken for already?).

 

[madodel]

I've just voted online our shares in Solar City after e-mail notice from Schwab. This time I noticed two votes through proxyvote as we have two accounts with shares of SCTY. That prompted looking at an earlier notice re the TSLA shares and learned there were actually two notices, not just the one I voted, for the TSLA vote, but for our other account (we have two with TSLA as well). Of course they are now voted.

Someone earlier asked about multiple accounts. I damn near missed voting some shares because I didn't notice the first time Schwab issued the call for proxies in two accounts but delivered as one with two parts. Pfew, or whatever. That's probably the industry standard because I asked for e-mail confirmation they are recorded and will doubtless get other confirmations now.

Thanks for the heads up. Just voted my SCTY as well.