Short-Term TSLA Price Movements - 2016

[kenliles]

Apple estimated: took 103.6% of smart phone market profits despite shipping 12% of the market volume. (Samsung captured .9% and all others lost money)
Apple captures more than 103% of smartphone profits in Q3 despite shrinking shipments

Impossible to know, for sure, but given Tesla's new found profit last quarter, an interesting question to Wall Street analysts;
Does anyone else make GAAP profits on the burgeoning BEV market?
Article with Headline: Tesla takes more than 100% of growing BEV market
might provide an alternative view to the current : just sayin'

 

[vgrinshpun]

So, 56% cost efficiency at the renewal. What is the 6% discount rate?

Agree with rest, except that I think you're not optimistic enough on efficiency improvements of new products (at time of renewal), but even if it is higher like I suspect, they're already closer to that than they used to be a decade ago, by a lot, so I think your point still holds.

Not sure how you arrived at 56%. Solar City assumes renewal cash flow at only 22% of the contracted cash flow: 0.36 / 1.61 = 0.224

Read about NPV and discount rate here.

 

[vgrinshpun]

Apple estimated: took 103.6% of smart phone market profits despite shipping 12% of the market volume. (Samsung captured .9% and all others lost money)
Apple captures more than 103% of smartphone profits in Q3 despite shrinking shipments

Impossible to know, for sure, but given Tesla's new found profit last quarter, an interesting question to Wall Street analysts;
Does anyone else make GAAP profits on the burgeoning BEV market?
Article with Headline: Tesla takes more than 100% of growing BEV market
might provide an alternative view to the current : just sayin'

Obviously not. That's why all the experts are positive that neither does Tesla (nor ever will).
As @Krugerrand noted, use of pie might not be sufficient at this point.

 

[kenliles]

Few points that need to be considered before assuming that NPV for renewals is largely illusory:

• example of efficiency improvement between 4 times to 7 times is not relevant, as at 22.5% efficiency when new current cells are much closer to the theoretical efficiency limit of 33%. Even assuming that the SQ Limit can be surpassed at some point in future, assuming even 2 times improvement might prove to be optimistic
  
  
• urge of rip down 20-year old panels upon expiration of lease to replace them with something less than 2 times more efficient is not any more likely than replacement of the house HVAC system simply because more efficient system is available on the market. Absolute majority of HVAC system get replaced because aging system breaks and no longer operational, not because of presence of more efficient HVAC systems on the market.

The analogy needs adjustment imo. It's not so much the efficient improvement in power generation. It's just.... a better roof.
The HVAC system is a good comparative case. When it wears out, it gets replaced with whatever the latest technology provides.
The (leased) Solar panels are not what is worn out and due for replacing. It's the now leaking 20 year old asphalt roof. The cost of a new Glass-PV roof now (2036) is (ostensibly) cheaper (and likely the standard) than any alternative replacement of shingles PV or otherwise (even without regard to electricity costs imo). The technological obselence will be in the roof, not the Solar PV (although certainly will contribute).
In fact, my guess is that in 20 years, any roof being replaced with other than Glass-PV will require code exception approval. Regardless, renewal on PPAs still surviving (rare as most will already been sold off to investors) will be zero imo. I think the sooner Tesla NPVs these disappearing values, the better.

 

[EinSV]

Apple estimated: took 103.6% of smart phone market profits despite shipping 12% of the market volume. (Samsung captured .9% and all others lost money)
Apple captures more than 103% of smartphone profits in Q3 despite shrinking shipments

Impossible to know, for sure, but given Tesla's new found profit last quarter, an interesting question to Wall Street analysts;
Does anyone else make GAAP profits on the burgeoning BEV market?
Article with Headline: Tesla takes more than 100% of growing BEV market
might provide an alternative view to the current : just sayin'

Great point.

And profits from sales of S and X seem highly likely to rise in Q4. In fact, another 2-4+% gross margin increase for S/X -- from 25% to 27-29+% on a non-GAAP basis -- is in the cards due to a variety of factors including:

• Discontinuing the X60, Tesla's lowest margin vehicle
• P100D sales
• Enhanced Autopilot and Full Self-Driving Capability
• Improved production efficiency of S and X
• Less discounting

With X production now running smoothly S and X should continue to generate positive GAAP and non-GAAP earnings, as well as serious amounts of cash.

 

[kenliles]

Obviously not. That's why all the experts are positive that neither does Tesla (nor ever will).
As @Krugerrand noted, use of pie might not be sufficient at this point.

Good point... not likely to blow through at this point

 

[brian45011]

example of efficiency improvement between 4 times to 7 times is not relevant, as at 22.5% efficiency when new current cells are much closer to the theoretical efficiency limit of 33%. Even assuming that the SQ Limit can be surpassed at some point in future, assuming even 2 times improvement might prove to be optimistic

Except most if not all of those 300,000 leases/PPAs SCTY is projecting will have a high renewal rate for years 21 to 30 have low cost (and quality?) Chinese panels with efficiencies probably in the low teens

urge of rip down 20-year old panels upon expiration of lease to replace them with something less than 2 times more efficient is not any more likely than replacement of the house HVAC system simply because more efficient system is available on the market. Absolute majority of HVAC systems get replaced because aging system breaks and no longer operational, not because of presence of more efficient HVAC systems on the market.

Except HVAC systems are owned, not leased. An owned HVAC system is a sunk cost (and similar to cars) the longer one can avoid replacing the asset the more economical it becomes. A leased solar system at the expiration of the lease is a walk away proposition for the homeowner.

But, "have it your way"

 

[brian45011]

Ugh.

Some terrible assumptions being used both by CR and by some posters here regarding the solar roofs.

It would be far better if Tesla would have been more forthcoming and transparent by providing financial and technical details about its new product; but then, like monthly car deliveries (with what ever clarifying explanations Tesla cares to disclose), those details would probably just be mis-interpreted by the market.

 

[vgrinshpun]

The analogy needs adjustment imo. It's not so much the efficient improvement in power generation. It's just.... a better roof.
The HVAC system is a good comparative case. When it wears out, it gets replaced with whatever the latest technology provides.
The (leased) Solar panels are not what is worn out and due for replacing. It's the now leaking 20 year old asphalt roof. The cost of a new Glass-PV roof now (2036) is (ostensibly) cheaper (and likely the standard) than any alternative replacement of shingles PV or otherwise (even without regard to electricity costs imo). The technological obselence will be in the roof, not the Solar PV (although certainly will contribute).
In fact, my guess is that in 20 years, any roof being replaced with other than Glass-PV will require code exception approval. Regardless, renewal on PPAs still surviving (rare as most will already been sold off to investors) will be zero imo. I think the sooner Tesla NPVs these disappearing values, the better.

I replaced original builder's grade asphalt shingle roofing on my house when it was 27 years old. The roof was not leaking.

Most of the roofing damage due to age happens on south slope because of exposure to heating cycles.
Since PV panels are installed on the south facing slope, the assumption that at 20-years mark roof will be leaking IMO is not realistic, especially because contemporary roofing materials have significant quality improvements. I really do not believe in proposition of replacing functional roof with functional solar panels, when an owner can just renew his sgreement with Tesla/Solar City, and likely on better terms.

 

[TrendTrader007]

Your thoughts on closing below the key $187.87 level?

$187.50 keeps the double bottom thesis still in play because lot of times price may undercut the prior low and form a double bottom.
however, there is nothing magical about it and for all i know TSLA may go all the way and test $181.40 level which was the low all the way back in March 2015. i still think we are closer to a bottom because of several technical reasons, whether the bottom comes tomorrow or next week or after Nov 17th i really dunno but bottomline is that TSLA (and the market) is being stretched in one direction like a rubber band and bears/shorts are pressing as hard as they can to the extent that they are pushing their luck and if by some unforeseen God forsaken miracle HRC gets elected against all odds next Tuesday then a world of hurt could be unleashed on shorts with the mother of all rallies coming their way.
so either i have lost all my marbles and i am staring into the abyss with my TSLA investment or we are probably in for another 3 trading days away from the mother of all rallies, and infact, we may not even have to wait that long and i suspect the rally may start as early as Tuesday if not tomorrow or Monday
exciting times for sure
i love it

 

[Ulmo]

Apple estimated: took 103.6% of smart phone market profits despite shipping 12% of the market volume. (Samsung captured .9% and all others lost money)
Apple captures more than 103% of smartphone profits in Q3 despite shrinking shipments

Is that performance expectation baked into Apple's stock? I'd hate to be the person who has to accomplish more than 100% perfection.

 

[vgrinshpun]

Except most if not all of those 300,000 leases/PPAs SCTY is projecting will have a high renewal rate for years 21 to 30 have low cost (and quality?) Chinese panels with efficiencies probably in the low teens.

Loss in efficiency at 30 years point is only about 14%. At 30 years old panels still preserve 86% of the initial efficiency. The other point is that I do not see why owner would have incentive to rip functioning roof with solar panels at 20 years if he/she is offered to buy power at the same or better rate that can be offered by Tesla on a new solar roof at that point in time.

Except HVAC systems are owned, not leased. An owned HVAC system is a sunk cost (and similar to cars) the longer one can avoid replacing the asset the more economical it becomes. A leased solar system at the expiration of the lease is a walk away proposition for the homeowner.

But if the owner decides to walk away, he/she will have to replace roof and solar panels with the new solar roof. It will cost him/her money to do so, either outright, or he can finance, or have another arrangement when he/she buys electricity at the set rate from the company that replaces the roof. The point @RobStark was making is that if owner is offered a slightly better deal, there will be no incentive to rip the old roof and solar panels out unless the roof is leaking or panels stop functioning.

But, "have it your way"

I think we can have normal measured discussion even while disagreeing. I do not understand this urge to slam a door at the end of each post. I think we can do better than that.

 

[MitchJi]

Brexit court defeat for UK government - BBC News

Brexit court defeat for UK government

Parliament must vote on whether the UK can start the process of leaving the EU, the High Court has ruled.

This means the government cannot trigger Article 50 of the Lisbon Treaty - beginning formal exit negotiations with the EU - on its own.

Theresa May says the referendum - and existing ministerial powers - mean MPs do not need to vote, but campaigners called this unconstitutional.

The government is appealing, with a further hearing expected next month.
<Snip>
Labour leader Jeremy Corbyn urged the government "to bring its negotiating terms to Parliament without delay", adding that "there must be transparency and accountability to Parliament on the terms of Brexit".

But UKIP leader Nigel Farage said he feared a "betrayal" of the 51.9% of voters who backed leaving the EU in June's referendum and voiced concern at the prospect of a "half Brexit".

BBC assistant political editor Norman Smith said the court ruling could mean potentially "months and months" of parliamentary hurdles but said a majority of MPs would be likely to vote for Article 50 - despite having backed the Remain campaign - as Brexit had been supported in the referendum.

Any market impact?

I'm not sure if I'm pleased or not that the U.S. isn't the only mess.

 

[madodel]

It would be far better if Tesla would have been more forthcoming and transparent by providing financial and technical details about its new product; but then, like monthly car deliveries (with what ever clarifying explanations Tesla cares to disclose), those details would probably just be mis-interpreted by the market.

I'm still waiting for Tesla to price the Model X Service plan and ESA. It will come when they have it figured out. If they release prices and then have to raise them the analysts would go nuts. My wife is already sold on this without knowing the price, just on the look and the features announced at the reveal. I expect to pay a premium for the best but Tesla seems to always hit the sweet spot on pricing.

 

[madodel]

Brexit court defeat for UK government - BBC News

Any market impact?

I'm not sure if I'm pleased or not that the U.S. isn't the only mess.

It is a mess. The EU still seems determined to send the Brits packing as a warning to any others who decide to do something this stupid. Probably a brief surge of elation in markets until they realize it doesn't mean a thing if the EU refuses to let them back out and the current PM is determined to follow through no matter what the courts or anyone else says. Maybe the EU Court can save the Brits from doing something they did because they hated the EU Court having any say over them.

 

[anon]

The Brexit news will probably not have much market impact; it does not mean that Brexit won't happen, but that the Prime Minister will have to go a longer route of actually passing a bill through parliament and obtaining approval for her proposed plan and timeline from MPs, rather than simply being able to initiate Brexit entirely on her own terms and at a timing of her choosing. It most likely doesn't change the outcome, as it is very unlikely that parliament will vote against it after the referendum. Note that the referendum was technically only advisory and not immediately written into law until approved by parliament, but the Prime Minister was hoping to bypass that parliamentary approval and proceed entirely on her own terms - this ruling has stopped that.

 

[anon]

On the subject of the roof, it is worth considering the value of a customer to Solar City even in the event of a roof replacement at the end of the contract and non-renewal; even in this case, there is still value to Solar City there - they would likely still do business with the customer by providing the roof, so there is value in terms of customer acquisition, although of course it is very hard to quantify that value many years in advance.

 

[AudubonB]

I replaced original builder's grade asphalt shingle roofing on my house when it was 27 years old. The roof was not leaking.

Most of the roofing damage due to age happens on south slope because of exposure to heating cycles.
Since PV panels are installed on the south facing slope, the assumption that at 20-years mark roof will be leaking IMO is not realistic, especially because contemporary roofing materials have significant quality improvements. I really do not believe in proposition of replacing functional roof with functional solar panels, when an owner can just renew his sgreement with Tesla/Solar City, and likely on better terms.

As someone whose recent (latest quarter-century) fame & fortune depends on buildings - I believe I own fifteen or so structures larger than a shed and up to 5,000 soft or roof surface - I can tell all absolutely unequivocally that the statements and the sentiments behind

The roof was not leaking

and

the assumption that at 20-years mark roof will be leaking IMO is not realistic

are terribly off the mark.

OF COURSE they are not leaking! One always always always must replace a roof before leaks begin, or you are in a world of pain and misery.

A roof with 20-year warranted shingles will, under normal circumstances, likely eke itself out to 30 years. A businessman cannot take that risk. A homeowner who thinks he'll be selling his house by, say, year 25 might not. A legacy owner whose house will stay in family definitely will. But my main point is that the shingles no more dissolve at month 240 than do all of us return to dust upon striking threescore year & ten.

 

[vgrinshpun]

As someone whose recent (latest quarter-century) fame & fortune depends on buildings - I believe I own fifteen or so structures larger than a shed and up to 5,000 soft or roof surface - I can tell all absolutely unequivocally that the statements and the sentiments behind

and


are terribly off the mark.

OF COURSE they are not leaking! One always always always must replace a roof before leaks begin, or you are in a world of pain and misery.

A roof with 20-year warranted shingles will, under normal circumstances, likely eke itself out to 30 years. A businessman cannot take that risk. A homeowner who thinks he'll be selling his house by, say, year 25 might not. A legacy owner whose house will stay in family definitely will. But my main point is that the shingles no more dissolve at month 240 than do all of us return to dust upon striking threescore year & ten.

Do you think that presence of solar panels on the south slope of the roof will have any efect on the process of aging of the roofing material?

 

[AudubonB]

My strong supposition is that the shading effect of the panels from sunlight would be a larger overall positive effect than any negative effect of the panel mounting hardware and associated penetrations. Shading from precipitation is more iffy, as one could posit that rain, ice, chemical fallout etc. would, instead of being evenly distributed across a roof, rather be concentrated at the lower edge of panels and thus potentially more destructive. We're talking minuscule effects being accumulated over very long periods of time, but they could add up.

I worry about wasps making use of the fine protected spaces but so far, haven't been so afflicted. Anyone else?