Short-Term TSLA Price Movements - 2016

[racer26]

About 20 years ago Kodak started selling digital cameras, printers and film paper to print pictures st home. They were sued by shareholders. Instead of selling digital frames and online storage they were fighting rearguard ankle biters. Sounds about where ford and GM are now.

I imagine if any of the legacy automakers make that decision to abandon ICEVs and go whole hog on BEVs, their investors will do exactly the same thing that happened to Kodak 20 years ago (and is ultimately why Kodak is no longer a big player). I would expect nothing less - its a MASSIVE shift in business model. Way more than meets the eye, and certainly a big change to what the shareholders bought into.

They have huge investments in ICEV technology - indeed, its pretty much the only IP they still have in house, after 30+ years of the outsource everything model. For them to build compelling EVs, they'll necessarily cannibalize the ICEV sales of comparable models for all but a select few applications (much like film cameras are relegated to a tiny niche today). Their shareholders will cry foul if they try to do that.

Personally, I think GM, Porsche, Nissan and BMW are the best poised to become the Nikon in this equation - they're the ones with the strongest offerings today. (Bolt/Volt, 918, LEAF, i3/i8) (Porsche arguably doesn't belong on that list, but their high-margin, high-performance and motorsport enthusiast clientele will probably float them long enough to build a compelling EV). I think the others (in particular Honda, Toyota, FCA) will ultimately die (though it'll take a number of years to get there) or be relegated to being minor players, like Kodak

 

[neroden]

Not sure why 2020 matters so much given how slow other manufacturers are ramping production, but it seems like that Tesla can get to 3 to 4 million by then. I don't think Elon is joking when he talks about the Alien Dreadnought 3.0 - now try to imagine 2 of them

I've rubbished some of Elon's more... out there... ideas, but I'm pretty sure he can fully automate a car production line. They're working on the hardest bit (the wiring). Sewing the fabric can't be fully automated yet (if Elon knew how, he'd have replaced the entire sweatshop textile industry) but it can be done "out of line" (all the seats are presewn and treated as inventory parts, so they don't slow down the production line; the seat manufacturer can parallelize and hire lots of workers). Wiring has to be done during the final assembly which makes it critical to automate it in order to automate the full production line. I can't think of anything else in the final production which is even difficult to automate; it's all easy.

 

[SebastianR]

Unless TSLA can push out over 10M cars annually in 2020 he is kind of right. He and others old timers are betting the same strategy will be fine. Per global sales figure he can claim victory.

Looking at all other ICE manufacturers the production projections #are tiny which collectively will be less than TSLA.

I think we need to be very careful about what market we assume: The Model S is starting to hurt the luxury market already. If the Model 3 is killing the E-Klass/C-Klass // 5 Series 3 Series markets to an extent where ICE cars can only be sold at a loss / very little margin BMW is toast: there are not enough 1/2 Series cars around to make up for that. The question is then what happens to X3, X4, X5, X6 & Co. from the others.

Frankly, I don't believe that there is enough market for S-Class, 7-Series, A8 to be profitable in another two years or so (assuming Tesla keeps the speed of innovating and AP2 shapes up nicely). We already saw that VW killed the Phaeton...

 

[MitchJi]

Not sure why 2020 matters so much given how slow other manufacturers are ramping production, but it seems like that Tesla can get to 3 to 4 million by then. I don't think Elon is joking when he talks about the Alien Dreadnought 3.0 - now try to imagine 2 of them

I'm pretty tired, so I could have messed this up, but alien dreadnaught 3 is supposed to be 10-20x a car every 27 seconds. So 10 times one car every 30 seconds (a car every three seconds) for 12 hours a day, seven days per week is roughly 7.5 million per year for one factory!

 

[MitchJi]

Solar ETFs - Guggenheim Solar ETF TAN and VanEck Vectors Solar Energy ETF KWT went out of investors’ favor and dropped 9.2% and 7.6%, respectively compared with 3.3% gain registered by SPDR S&P 500 ETF SPY in the last 30 days (as of December 1, 2016).

Donald Trump’s victory in the U.S. has clouded the future of these ETFs. This is because the President-elect plans to bring back the traditional energy businesses of coal, oil, and gas and has expressed skepticism about global climate change in his campaign. Although this spells good news for VanEck Vectors Coal ETF KOL that tracks the global coal industry, it has dimmed the future of solar ETFs (read: ETFs & Stocks That Topped or Flopped After Trump Won).

Trump has promised to cancel the landmark Paris deal and stimulate coal production once he takes office in January. Not only has Trump called climate change a hoax created by China, he has pledged to remove Obama’s Clean Power Plan.
.
Silver Lining However, all is not lost for solar ETFs. Oil price is also likely to be a major influence. High price of oil could give a boost to the solar energy sector. With the OPEC deal finally deciding on output cut and oil hitting the $50 per barrel mark, this could bode well for the solar energy sector (read: OPEC Finally Cuts Output: Energy Stocks & ETFs Up 10% or More)

Meanwhile, in the long run, it is believed that Trump will have limited influence on the U.S. utility industry’s push toward renewable energy. Several companies including NextEra Energy Inc. and Duke Energy Corp. have invested billions in order to generate electricity with cleaner and more economic alternatives.P

Can't hurt Tesla in the long run other than making the planet unlivable for our kids.

 

[3Victoria]

This article on TCC generally naysays young Markie Speigel's thesis at recent gathering: Betting Against Tesla (TSLA) Might Take Spiegel Down to "Zero"
Predicting that his 'fund' is more likely to go to zero than other entities.

 

[Gerardf]

On Friday 9th we will get the next report on short interest. This report will be for November 30 settlement date.
My shares were converted on November 22. Does anybody know if conversion of SCTY shares shorted were also converted to TSLA that week ? .. or anyway before Nov. 30 ? I would expect so. It would make the upcoming report even more interesting than usual.

ValueEV, username, Perfectlogic, Logical Thought, Bonaire, Montana Skeptic .. or other shorts reading here, can you enlighten us when your SCTY short position was converted to TSLA ?

 

[vgrinshpun]

At the same time they are starting to waive the delivery fees for inventories again. See car part of this forum.

There is no link, but I do expect them to do so on a case-by-case basis especially as the quarter draws to an end (as long as a car can be delivered by the end of Q).

They were doing it last quarter as well, when the transport fee was $1,500.

Not sure if you are trying to suggest that this is not an indication that demand is not a problem, but if you are, my point still stands.

Unless 40% of all cars from "inventory" sold with a waver, Tesla overall essentially charges premium for expedited delivery of a car that presumably does not always exactly matches what a buyer wants. This can't be read any other way than an indication of demand not being the problem.

They also increased the transport fee, not decreased or eliminated it. Again, this is not done if demand is a problem

 

[schonelucht]

There is no link, but I do expect them to do so on a case-by-case basis especially as the quarter draws to an end (as long as a car can be delivered by the end of Q).

See Ordering inventory car vs custom order

Not sure if you are trying to suggest that this is not an indication that demand is not a problem, but if you are, my point still stands.

My suggestion really is that we are quick to see every single price raise used to strengthen the argument that demand must not be a problem. while there could just as well be a different reason for the price raise.

Note, I am not suggesting that demand therefore necessarily is slacking. Just saying that we are very quick to see every little price change, every change in the line up, change in availability, wait times etc... explained as a sign that demand is strong. While there is nearly never an honest effort to see if there is not something else that could explain the facts (not even from the bears who tend to not really reason based on facts)

Sometimes this reasoning works out correctly (see last quarter) sometimes we miss severely (see production hell from early this year when we were both arguing blindly, you that wait times suggested increased demand, me that production had caught up with demand while we both missed that production was actually not were it should have been)

 

[myusername]

I'm pretty tired, so I could have messed this up, but alien dreadnaught 3 is supposed to be 10-20x a car every 27 seconds. So 10 times one car every 30 seconds (a car every three seconds) for 12 hours a day, seven days per week is roughly 7.5 million per year for one factory!

you realize you are using the term "alien dreadnaught" without any sort of sarcastic tone... right?...

gigafactory
autopilot
ludicrous mode
falcon wing
S3XY
alien dreadnaught

and Tesla complains about car dealers trying to manipulate customers.

factory
adaptive *
selectable drive mode
door
really?
unbelievable.

 

[Hogfighter]

The BMW CEO is correct. There is little demand for a BMW EV that costs more than a comparable ICE BMW.

Even if there was a similarly priced EV made by BMW, there would be little demand in the U.S. since the dealers would send them on a boat back to Germany.

 

[MartinAustin]

Want to Bring Back Jobs, Mr. President-Elect? Call Elon Musk

http://www.nytimes.com/2016/12/05/b...-dealbook-elon-musk-06db-sorkinhtml.html?_r=0

 

[myusername]

Want to Bring Back Jobs, Mr. President-Elect? Call Elon Musk

http://www.nytimes.com/2016/12/05/b...-dealbook-elon-musk-06db-sorkinhtml.html?_r=0

interesting timing considering the "alien dreadnaught" conversation above... so which is it?... will Elon automate the manufacturer employee to the point of non-existence?... or will he "make america great again"?

Musk: Tesla's factory will become an 'alien dreadnought'

""By version 3, it won’t look like anything else," he said. "You can’t have people in the production line itself, otherwise you drop to people speed. So there will be no people in production process itself. People will maintain the machines, upgrade them, and deal with anomalies.""

"This idea has been talked about in the auto industry and the wider world of manufacturing for some time. But Musk seems to be aiming for full automation of the Model 3 build process."

 

[vgrinshpun]

See Ordering inventory car vs custom order



My suggestion really is that we are quick to see every single price raise used to strengthen the argument that demand must not be a problem. while there could just as well be a different reason for the price raise.

Note, I am not suggesting that demand therefore necessarily is slacking. Just saying that we are very quick to see every little price change, every change in the line up, change in availability, wait times etc... explained as a sign that demand is strong. While there is nearly never an honest effort to see if there is not something else that could explain the facts (not even from the bears who tend to not really reason based on facts)

Sometimes this reasoning works out correctly (see last quarter) sometimes we miss severely (see production hell from early this year when we were both arguing blindly, you that wait times suggested increased demand, me that production had caught up with demand while we both missed that production was actually not were it should have been)

I do not want to engage in lengthy discussion here, except to note that history has shown repeatedly that all signs showing (and Tesla repeatedly saying) that demand is not a problem were borne out. This is the point I was making.

Ironically your example about Q2 underscores my point, as the problem with deliveries was the production, not demand.

I am all for examining something which on a first glance could be missed. But it is very different from saying "something could be amiss" without really elaborating what this something is, while being dismissive of anything on the grounds that we might be missing this nebulous something.

Your posts did not suggest any reasonable alternative reason for increase in price other than it is consistent with demand is not being the problem.

As a side note, hope you are not taking this personally. I always welcome your comments, even if we ultimately disagree.

 

[schonelucht]

Ironically your example about Q2 underscores my point, as the problem with deliveries was the production, not demand.

It's not ironic. It's exactly what I wanted to point out. By focusing every shred of information towards answering the question where is demand, we missed a big clue which totally invalidated any answer we potentially came up with for the demand question (regardless of it was borne out or not)

I am all for examining something which on a first glance could be missed. But it is very different from saying "something could be amiss" without really elaborating what this something is, while being dismissive of anything on the grounds that we might be missing this nebulous something.

Well, I specifically refrained from doing so, exactly because I sometimes have the feeling that I am the only one who is trying to examine stuff from both the positive and the negative angle. I am actually hoping to pull others out of the woods to give an alternative view since it is so simple to make for this particular price delta.

 

[vgrinshpun]

It's not ironic. It's exactly what I wanted to point out. By focusing every shred of information towards answering the question where is demand, we missed a big clue which totally invalidated any answer we potentially came up with for the demand question (regardless of it was borne out or not)



Well, I specifically refrained from doing so, exactly because I sometimes have the feeling that I am the only one who is trying to examine stuff from both the positive and the negative angle. I am actually hoping to pull others out of the woods to give an alternative view since it is so simple to make for this particular price delta.

I am waiting to hear these arguments out, but you should know who most likely to respond, and the quality of the argument they will offer.

 

[Green Pete]

you realize you are using the term "alien dreadnaught" without any sort of sarcastic tone... right?...

gigafactory
autopilot
ludicrous mode
falcon wing
S3XY
alien dreadnaught

and Tesla complains about car dealers trying to manipulate customers.

factory
adaptive *
selectable drive mode
door
really?
unbelievable.

Falcon
Merlin
Raptor
Grasshopper

Are you suggesting that terms like these appeal to NASAs baser instincts and that's why they are getting contracts or do you think Elon might just have a more fun sense of humor than you?

Also:
Mustang
Jaguar
(Not going to bother continuing you get the point)

Or the logos for brands like Ferrari and Lamborghini?

 

[AlMc]

It's not ironic. It's exactly what I wanted to point out. By focusing every shred of information towards answering the question where is demand, we missed a big clue which totally invalidated any answer we potentially came up with for the demand question (regardless of it was borne out or not)



Well, I specifically refrained from doing so, exactly because I sometimes have the feeling that I am the only one who is trying to examine stuff from both the positive and the negative angle. I am actually hoping to pull others out of the woods to give an alternative view since it is so simple to make for this particular price delta.

I am waiting to hear these arguments out, but you should know who most likely to respond, and the quality of the argument they will offer.

Other reason for price increases:
COGS increased
Attempt to increase margins to hit targets for exec compensation
Increase margins to allow for paying for model 3 organically versus through cash raise

Not that I believe any of those reasons but those are my quick ones before my morning coffee

 

[Gerardf]

To whom it may concern .. :

Please resist to respond to nonsense posts that are clearly just posted to (again) derail this thread by certain "named users".
We can not expect the moderator to be here 24/7.

 

[Jonathan Hewitt]

It's not ironic. It's exactly what I wanted to point out. By focusing every shred of information towards answering the question where is demand, we missed a big clue which totally invalidated any answer we potentially came up with for the demand question (regardless of it was borne out or not)



Well, I specifically refrained from doing so, exactly because I sometimes have the feeling that I am the only one who is trying to examine stuff from both the positive and the negative angle. I am actually hoping to pull others out of the woods to give an alternative view since it is so simple to make for this particular price delta.

I thank you for it. Like most people on here, I am here to make money in a stock that I enjoy following, with an emphasis on the making money part. My wife's future Model X isn't going to pay for itself (oh wait, maybe it could). Your posts are very helpful. Quality posts that call on us to consider actual possible negatives are rare. Most posts bringing up possible negatives on TMC belong on Seeking Atrocity.