Short-Term TSLA Price Movements - 2016

[Value Ev]

Yes. Remind me. How many EV Superchargers has Ford installed to date? How much experience does Ford have managing and maintaining Superchargers?

You act as if managing and maintaining Superchargers is rocket science.
It isn't.

Let's take a look at just one program that Ford has done.
In 2010 they launched a Go Green initiative for efficiency and cost improvements at their dealerships.
By 2014, half the dealerships have cut their energy consumption by 27%
18% of their energy usage comes from renewables.

So, yes, I believe that Ford can figure out how to build and a manage a charger that an electric car can plug into.

 

[vgrinshpun]

@vgrinshpun ?? you seem to be in agreement.

... with @techmaven

 

[SteveG3]

According to the EU all charging stations must be "non-discriminatory" by Jan 1 2019. Or was it 2018? I forget but the result is the same. Available to all at the same price.

Very helpful post Rob. If you have any links on this, please post.

 

[techmaven]

You act as if managing and maintaining Superchargers is rocket science.
It isn't.

The installation and maintenance of a DC fast charging network, as well as the technology in the EVSE's themselves isn't technically difficult. However, outside of Tesla, no one else has managed to sort it out correctly. They have all fallen short on the actual technical specifications, the number of plugs per site, the locations, and the maintenance. Given the 100% failure rate thus far, you are saying that they will finally see the light and sort it out? Great! More plugs that Tesla owners can use in the future without capex spend for Tesla which also, btw, validates Tesla's commitment to a BEV future.

The 2nd part is the financial underpinnings of a DC fast charging network. There is zero profit in it. There is likely zero profit in it for the foreseeable future. It's a money pit. Tesla gets around this by building those costs into the cost of the car and assumes there is zero profit in it. That way, when some of the DC fast charge networks inevitably die or fall into disrepair due to financial difficulties, Tesla owners get to continue to use the Tesla Supercharger network. It's about making owners comfortable with the adoption of this new technology, and the other automakers have not yet demonstrated the competence or force of will necessary to carry through with this transition. Press releases are cheap, we'll see on the follow through. And customers easily see the difference in Tesla's long term commitment to this transition versus everyone else's. That carries into the brand awareness and therefore the brand value and comes up when it becomes time for many people to buy BEVs in the coming years.

 

[MartinAustin]

Today's slide seems to be because of Mark B. Spiegel's very strong bashing

Hilarious! That that plonker could be an influencer of a stock's price. No-one that owns TSLA, or is thinking of buying it, takes him seriously.

And anyway, CNBC thinks differently. Here is a direct on-screen quote from Tyler Mathisen -
"Tesla under fire... reports that the SEC is criticizing the electric car maker for using prohibited accounting metrics and that is sending shares lower right now."

Such departure from the truth! Conveniently ignoring that this was resolved according to the SEC October 12th. He was probably reading copy created by their Tesla-loving staffer Robert Ferris.

 

[techmaven]

Actually, I think oil is the big influencer today, including the possibility of a failed OPEC meeting and a plunge into the $30's for oil. Right now, the indexes are carrying on like nothing is wrong. And possibly this time the market will decide that hey, cheaper oil is a good thing. Last time, it decided it wasn't though.

An interesting dynamic for lower gas prices. It doesn't really change the market dynamics for Tesla buyers... it is a factor, but not a strong one for many buyers. However, it could be very bad for cheap BEVs that do not carry their own value propositions... ie. the equivalent gas model is 50% cheaper. Those BEVs would suffer greatly in a cheaper gas environment.

 

[SteveG3]

Charging stations is the most easily surmountable of Tesla's advantages. Much more difficult are autonomy, battery technology and scale, and dreadnaughts.

for years now my Tesla thesis has been primarily based on one moat I hardly ever hear discussed (likely in no small part because the shorts try to divert the discussion to nonsense),

If long range EVs are going to be clearly more attractive to the bulk of consumers than gasoline cars in the near future, we are at the start of a process of "creative destruction." For all the incumbent automakers, participation in the destructive part of this process (the fall of the ICE market) is baked in, participation in the creative part (the rise of the long range EV market) is an open competition with uncertain survival of each of them. Tesla is untouched by the destruction, while the creation is its mission.

The amount of infrastructure required for this process, i.e., the massive amount and cost of new battery plants to replace ICE production with long range EVs, means this process will still be going on beyond 2030. A collective incentive among the incumbents to stall this process that puts each of their survival at risk has further slowed the process (though we've seen some signs this year that they are lightening up on the stall approach).

As long as we are in this process that I'm very confident will take over 15 years, Tesla needs to make vehicles better than ICE to grow, not be the best in every respect (let alone only) maker of long range EVs.

 

[GoTslaGo]

Hilarious! That that plonker could be an influencer of a stock's price. No-one that owns TSLA, or is thinking of buying it, takes him seriously.

And anyway, CNBC thinks differently. Here is a direct on-screen quote from Tyler Mathisen -
"Tesla under fire... reports that the SEC is criticizing the electric car maker for using prohibited accounting metrics and that is sending shares lower right now."

Such departure from the truth! Conveniently ignoring that this was resolved according to the SEC October 12th. He was probably reading copy created by their Tesla-loving staffer Robert Ferris.

I think this is a nice classic Short attack. We saw a nice load up on short shares last week when prices ran up. Then we see this release of the "bad news" (always best with some government regulatory agency) and spin it so that it scares the casual buyer from the stock. Profit!

I'm sure we'll see more. All I can say is keep dry powder handy. There will be more action like this in the future.

I wonder if Hedge funds have to pay an extra 2.8% taxes this year on their profits, or are the rules different because they're Hedge funds...

 

[Ulmo]

The saddest part here is we need a person of the caliber of Ron Baron to refute Mark Spiegel.

Quick witted observation from any corner can affect others' observations. Key is to have the others' observations also see the whole picture and its respective parts better. It might only need to be someone slightly more competent than M. Spiegel, but that R. Baron is "good enough" by way more than necessary.

 

[MitchJi]

Charging stations is the most easily surmountable of Tesla's advantages. Much more difficult are autonomy, battery technology and scale, and dreadnaughts.

Scale for batteries requires demand, which in turn requires compelling EV's, which apparently is too difficult for GM to figure out. They appear to believe that if they produce an EV that has a greater than 200 mile range, with a chevy badge that it's compelling. That will probably be enough when they get the price down to the same level as their ICE's, but that is going to take them a while.

 

[hacer]

TIL that GAAP is prejudiced against innovation and growth.

Here are some innovative and growth companies that report using GAAP
Google
Facebook
Amazon
Grubhub
Arista Networks
Veeva Systems
Skyworks Solutions
Lam Research
Fortinet
Wageworks

There are companies that may have used "creative accounting" to describe their business as being healthier than it really was, but those companies probably aren't around anymore - for good reason.

Actually all publically traded companies are required to report GAAP accounting, and they do including Tesla. It's just that many (growth and non-growth) companies frequently also report "pro forma earnings" where they use non-GAAP accounting. Take for example Facebook: Blowing the Froth Off Tech Earnings, one of your supposed counter-examples.

 

[Value Ev]

The installation and maintenance of a DC fast charging network, as well as the technology in the EVSE's themselves isn't technically difficult. However, outside of Tesla, no one else has managed to sort it out correctly.

I get that some no name, no experience organizations may have, but, of the companies mentioned in the press release, Ford and others, which ones have tired and failed?

The 2nd part is the financial underpinnings of a DC fast charging network. There is zero profit in it. There is likely zero profit in it for the foreseeable future. It's a money pit. Tesla gets around this by building those costs into the cost of the car and assumes there is zero profit in it.

I expect that Ford and others have more money than Tesla has to throw into the pit. IIRC, the model moving forward for Tesla is that they will be charging for some of the use of the network, so even they are partially monetizing it. There is no reason to believe that Ford and others wouldn't do the same to defray the costs.

 

[Value Ev]

Actually all publically traded companies are required to report GAAP accounting, and they do including Tesla. It's just that many (growth and non-growth) companies frequently also report "pro forma earnings" where they use non-GAAP accounting. Take for example Facebook: Blowing the Froth Off Tech Earnings, one of your supposed counter-examples.

You said that all public companies report GAAP.
But then you say Facebook is a "supposed counter-example"
But I said FB reports GAAP.
FB is a public company.

I

 

[MitchJi]

Just going through the Kia Soul EV forums on the net that collect this kind of data. NMC is supposed to have a very high cycle life, so I suspect it comes down to the initial nominal rating and the exact mix of NMC and electrolyte used by each vendor. Not all NMC is the same. The SKI NMC cells in the Soul EV had the highest specific energy of any NMC automotive cell until the most recent batch of EVs, so it was the most interesting to observe. It has interesting ramifications for the Chevy Bolt and the PowerWall. The difference with the PowerWall is the much lighter duty cycle in terms of c-rate charging and discharging, but deeper DoD.

I'm sure that Tesla has tweaked their TE chemistries to work well with the usage patterns. JB has said that a major reason he doesn't think using car batteries for storage is because of the degradation.

I think it could be the opposite. If destination chargers could feed the grid the cars would provide a service, which would increase the demand for those chargers. If the car owners were compensated for the battery degradation I'd consider it a positive thing because after four or five years I'd be able to get a bigger and cheaper battery for a big discount (paid for from storage use) or free, plus that would help the environment.

 

[racer26]

With Ron Baron on at 15 minutes to the close, anybody expecting a strong rally into the close?

 

[JRP3]

More plugs that Tesla owners can use in the future without capex spend for Tesla which also, btw, validates Tesla's commitment to a BEV future.

Seriously, why do so many people fail to understand this? Tesla will always have more charging options than any of the competitors because Tesla is the only one with a closed charging network. Unless of course another company decides to pony up and join with Tesla, which also benefits Tesla.

 

[Drax7]

Hilarious! That that plonker could be an influencer of a stock's price. No-one that owns TSLA, or is thinking of buying it, takes him seriously.

And anyway, CNBC thinks differently. Here is a direct on-screen quote from Tyler Mathisen -
"Tesla under fire... reports that the SEC is criticizing the electric car maker for using prohibited accounting metrics and that is sending shares lower right now."

Such departure from the truth! Conveniently ignoring that this was resolved according to the SEC October 12th. He was probably reading copy created by their Tesla-loving staffer Robert Ferris.

After the AP2 video recently released, coupled with the engineer's video presentation concerning the Invidia chip,
tesla stock should Be able to find very strong support. This is a moat they have just expanded considerably.

Todays price action down should be quickly negated.

 

[Gerardf]

Do some of you seriously think that Spiegel is influential on the shareprice ?
Any psych who would even just look at his tweets knows that guy has serious issues that can not be fixed.

I guess maybe the FUD around a SEC investigation did some harm, which the shorts took advantage of the best they could. But that is what it is, FUD spread by stakeholders spreading misinformation and strategic short selling.

I have a hard time to believe Spiegel plays a measurable role.

 

[RobStark]

Very helpful post Rob. If you have any links on this, please post.

Here is a whole discussion/thread starting with bills in the German Bundestag in January 2015.

German bill requires CCS and L2 plugs at every new fast charge point.

 

[luca]

You said that all public companies report GAAP.
But then you say Facebook is a "supposed counter-example"
But I said FB reports GAAP.
FB is a public company.

I

So tesla didn't report GAAP?