Why do you think growth will go from 30%-50% to negative? That would be surprising. They are not in every market and they have quite a few levers they can pull when it comes to marketing.
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Why do you think growth will go from 30%-50% to negative? That would be surprising. They are not in every market and they have quite a few levers they can pull when it comes to marketing.
I think that there is a possibility that some of their largest markets (California) are getting saturated with the S, some key markets (Norway) have change policy, significant China growth still a challenge, from the standpoint of the S and once the X is in showrooms most of the orders will go that way (above capability to build in 2016). On the other hand I think autopilot and D has kept the interest in new orders very strong.
Plus its a 50% ramp on production.
I didn't say that they won't achieve it, I just don't think it will be easy.
Plus its a 50% ramp on production.
I didn't say that they won't achieve it, I just don't think it will be easy.
Why do you believe this is the first year that the Model S will not receive any sort of improvement?
Musk reiterated pretty recently that they're not doing model year cars like other automakers--their models are all going to be extremely long-lived, but with constant iteration and improvement. By the end of the year they could have a P95DL with more advanced autonomous hardware installed, along with a 75D--making for a much more compelling upgrade for early Model S owners (+15 kwh battery, on top of improvements so far such as autopilot).
Three year leases are also going to be coming off at increasingly high numbers, which is a good sign when mixed with high consumer reports loyalty and "would buy again" rates.
Not to mention (pure speculation, of course) that a Model S refresh is likely to come sometime this year now that the bulk of MX development is out of the way, and Model 3 will soon become the company's biggest focus. I'd be very surprised if the Model S doesn't get the Model X's nosecone and improved interior quality by the end of this year. Other factors like having very few mature markets (US, Norway), increased supercharger and service center rollout, and China are all great indications that the Model S story is far from over.
This ain't your traditional automaker
Tesla still has plenty of levers to pull, so as long as the Model X execution rebounds strongly in the short-term I have little worries about the rest of this year.
Adding some specifics to this train of thought...
* South Korea would likely be a good market for Models S and X. It's a demand lever awaiting execution.
* Now that the supercharger network is becoming dense in the United States, many markets in the midwest are suitable locations for a Tesla store now
* We're approaching 4 years from when many early Model S cars were delivered. Both in terms of lease agreements and in terms of consumer behavior, many car owners choose to upgrade to a newer model after 4 years. I own both a 2013 and a 2015 Model S, and I can tell you that the upgrade is compelling with autopilot, auto-dimming headlights, and next-gen seats, among other improvements. Long-distance driving is a real joy in an autopilot-equipped Tesla with Traffic Aware Cruise Control and lane-keeping features. Even if you prefer to keep the car in its own lane by hand steering, the TACC is a huge benefit. It detects speed changes in the car ahead of you faster than you can with your eyes, and it therefore adds considerable safety to the equation.
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This article
Capital Market Laboratories — The Secret’s Coming: Tesla Will Stun the Market
lays out the bull thesis plainly and ties in the importance of the March 31 Model 3 launch. When Tesla delivers on the promise of insane levels of Model 3 reservations, other journalists will join the ranks of those who believe TSLA will soon take off.
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Zhelko Dimic
Careful bull
From reddit, you will be able to reserve Model 3 as soon as stores are open on March 31st. I was saying this same thing, and making point that reservations sight unseen are even more powerful. But really, it's about practicality. By the time reveal happen in PT, most of the rest the world that can buy Tesla cars will sleep - certainly Europe, East Cost and good chunk of Canada, and it will be very late on the West Coast
Don't bring cash to reserve Model 3 in stores 3/31 : teslamotors
"Hey all I check this subreddit like 20+ times a day and haven't seen this info posted. So i called up my nearest store and asked what the details were. No cash, bring debit or credit and reservations will happen right when doors open. We don't have to wait for the reveal. Good luck all!"
Don't bring cash to reserve Model 3 in stores 3/31 : teslamotors
"Hey all I check this subreddit like 20+ times a day and haven't seen this info posted. So i called up my nearest store and asked what the details were. No cash, bring debit or credit and reservations will happen right when doors open. We don't have to wait for the reveal. Good luck all!"
jhm
Well-Known Member
Early adopter types may be inclined to prefer a first production year Model X to a fourth production year Model S, all else being equal. But most consumers are not early adopters. Many consumers value that a model has a multi-year track record and solid used car prices to back up resale value expectations. We also learned from the CC that 2015 MS had half the first year warranty claims as the 2014 cohort, an one quarter the first year claims as the 2013 cohort. So Tesla is building these cars better every year. This is a benefit to both Tesla and customers. So the Model S is a much more estabilished value than the Mosel X. This matters to alot of value oriented consumers. So the Model S is still proving itself to a lot of cautious consumers. Thus, demand will continue to grow.
Personally, my wife and I are contemplating buying our second Model S. We're curious about the Model X, but skeptical about whether it is the best fit for us and worth the inevitable first year quirks. We also consider waiting for the Model 3 but that is a long wait. And again we're skeptical about first year issues. So we have great confidence in the Model S. We know that we'll get a great car while waiting for other products to come to market and prove themselves. So in 4 or 5 years we may trade in our fist Model S for another Tesla, but until then we can be quite happy with a Model S 70D as second car. So you see, our family's demand for the Model S has actually gone up in the last year. It's getting quite close to doubling. If Tesla were to announce a battery upgrade or something, that would probably put us over the top, and we'll place that order.
Yes, and there are many that want a Tesla but don't have a (large) family.
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There is always a possibility. But going from 30%-50% growth to negative is very rare and it almost always happens if there is another product or service replacing it or if there is some other sudden drop in demand, for example legislation or safety concerns.
Basically, to claim they will go negative you have to present some compelling arguments, without those continued growth is the right assumption.
Buddyroe
Active Member
I'm not sure how many of you are on the east coast, but there is still a HUGE untapped market out here.
Tesla needs to start a program on the east coast (all the way down to Florida I mean) where they lease a car to individuals that have (or get) a dealers license in their home state. Then Tesla pays them a fee to make the car available for test drives (and a lesson on the car/Tesla/EVs) for people who contact Tesla about the car, and a commission for cars sold as a result of these test drives. I know I live in Savannah, GA. I would GLADLY do test drives on the weekend for people at the Landings, Hilton Head Island, St Simons Island, Jekyll Island, etc.
There's a LOT of money in those places - and NO Teslas to be found. I know that I actively HUNT people to tell about Tesla. I would LOVE to be the person out giving test drives and demoing (is that a word? ) the car. Though I'm not a salesman, I am quite passionate about Tesla. I think I can sale some cars!
Hell, just sell me a car cheap enough and I will do the freaking test drives and demos for free!!
Tesla needs to start a program on the east coast (all the way down to Florida I mean) where they lease a car to individuals that have (or get) a dealers license in their home state. Then Tesla pays them a fee to make the car available for test drives (and a lesson on the car/Tesla/EVs) for people who contact Tesla about the car, and a commission for cars sold as a result of these test drives. I know I live in Savannah, GA. I would GLADLY do test drives on the weekend for people at the Landings, Hilton Head Island, St Simons Island, Jekyll Island, etc.
There's a LOT of money in those places - and NO Teslas to be found. I know that I actively HUNT people to tell about Tesla. I would LOVE to be the person out giving test drives and demoing (is that a word?
) the car. Though I'm not a salesman, I am quite passionate about Tesla. I think I can sale some cars!Hell, just sell me a car cheap enough and I will do the freaking test drives and demos for free!!
RobStark
Well-Known Member
I don't see demand in California abating any time soon. It might actually increase.
The issue in Norway is not policy changes this year but the Macro economic conditions. Namely the fall in the price of oil and the value of the Norwegian Krone. Wealthier Norwegians can still very much afford a Model S and X but will they spend the money with increased economic pessimism? I think the rest of Europe, name Switzerland UK and the rest of Northern Europe may compensate.
The issue in Norway is not policy changes this year but the Macro economic conditions. Namely the fall in the price of oil and the value of the Norwegian Krone. Wealthier Norwegians can still very much afford a Model S and X but will they spend the money with increased economic pessimism? I think the rest of Europe, name Switzerland UK and the rest of Northern Europe may compensate.
jhm
Well-Known Member
I'm not sure how many of you are on the east coast, but there is still a HUGE untapped market out here.
Tesla needs to start a program on the east coast (all the way down to Florida I mean) where they lease a car to individuals that have (or get) a dealers license in their home state. Then Tesla pays them a fee to make the car available for test drives (and a lesson on the car/Tesla/EVs) for people who contact Tesla about the car, and a commission for cars sold as a result of these test drives. I know I live in Savannah, GA. I would GLADLY do test drives on the weekend for people at the Landings, Hilton Head Island, St Simons Island, Jekyll Island, etc.
There's a LOT of money in those places - and NO Teslas to be found. I know that I actively HUNT people to tell about Tesla. I would LOVE to be the person out giving test drives and demoing (is that a word?
Hell, just sell me a car cheap enough and I will do the freaking test drives and demos for free!!
It seems Tesla could use a store between Savannah and Charleston. Jacksonville, Atlanta-Decatur and Charlotte just seem too remote to serve this upscale coastal area. Heaven forbid you need some service. We're still waiting on an Augusta Supercharger.
I think many readers here have a hard time understanding the geographical challenges that potential Tesla customers in your area face. With the exception of Florida, there is a lot of in filling Tesla needs to do to reach markets in the South. Arkansas is a Tesla dead zone with no Supercharger access. It's hard not to feel that there are cultural biases at work that lead Tesla to underserve the South.
The good news is that Tesla has untapped demand all over North America. Simple geographical consideration shows that Tesla has not maxed out demand even for the Model S in North America.
We know, a Tesla is better then every other car out there, but there is a huge mass of dis informed people - especially in Europe. So when the minds are tuned, the gates will open for a flood. The only question is "When will it happen?"
But no matter what we wish for S/X, the real deal will be M3 and 3/31. Can't wait to see pictures of people waiting in line to get a reservation for a car! If somewhere people wait in line, even the hardest unbeliever who looks at them, feels that he might miss a good opportunity and goes deeper.
So T-46days
colettimj
Member
Elon did say during the earnings call that the Northeast US was underserved. Check Telsa's website and you'll see they have no showrooms in Maine, New Hampshire, Rhode Island, and Vermont. They have a total of 19 showrooms in the remaining states to serve 55.9 million people. I have no idea how much it would cost to open a showroom, but I think it's fair to say they have room to expand.
ev-enthusiast
Active Member
TSLA sitting below the 61.8 Fibonacci retracement I do see next support at about $112.
I could imagine that lots of traders see the same support on the daily chart.
Ahead of Gen 3 reveal and positive official news about Model X deliveries ramping, there is enough opportunities for SP to go there.
Gen 3 talk and X sales will propel SP up again.
Personally I like that management adepted to the changed macro conditions and is a bit more careful about spending now.
BTW already mid of Q1 and no official word out from Tesla about Model X production ramping significantly.
I could imagine that lots of traders see the same support on the daily chart.
Ahead of Gen 3 reveal and positive official news about Model X deliveries ramping, there is enough opportunities for SP to go there.
Gen 3 talk and X sales will propel SP up again.
Personally I like that management adepted to the changed macro conditions and is a bit more careful about spending now.
BTW already mid of Q1 and no official word out from Tesla about Model X production ramping significantly.
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ev-enthusiast
Active Member
May I ask you where you have that number from?
Personally I would think about weekly production rate doubling from end of last December run rate in the time of a month as significant.
I would love to hear an official number from Tesla blog/IR/twitter.
BTW what is a significant ramp for you, given end of year 2015 weekly production rate?
JRP3
Hyperactive Member
Not until there is at least a hint of demand falling below production rate, which is obviously not the case.
Impressions from 4Q ER and CC
Jason Wheeler's moving away from term "Free Cash Flow" and moving towards "Cash Flow from Core Operations" and "Net Cash Flow".
Translation: Wheeler doesn't like using "Free Cash Flow" as a measure of success because it constrains CapEx. By using Net Cash Flow, and predicting it will be positive, Tesla execs wish to confirm that the bank account will be growing, but they don't want to rule out an equity raise if additional facilities are needed to meet incredible Model 3 demand. Net Cash Flow Positive will yield more money in the bank, which should calm investors. Why should a decision to grow through an equity raise at some point for expansion of manufacturing capabilities be considered detrimental, as long as the money in the bank keeps growing?
As for the term "Cash Flow from Core Operations", this is an important indicator of success for Tesla that has been overlooked previously. The main advantage of introducing it for 4th quarter is that by this metric, Tesla has turned an important corner (see chart)
The previous Free Cash Flow chart showed Tesla falling deeper and deeper into the red with each passing quarter, largely because of increased CapEx. The Cash Flow from Operations shows Tesla improving quarter-over-quarter and going positive in 4th quarter, which is just the kind of graph you wish to show investors in 4th quarter.
Non-GAAP profitability in 2016 and GAP profitability in Q4 of 2016 are predicted.
Model X issues preventing further ramp-up, address by Elon Musk: "Yeah, we really don't see any fundamental issues."
Translation: We really don't see any fundamental issues.
Elon and JB spoke of the windshield sourcing, the door and door seal issues, and we learned about the now corrected supply issue with the chrome finish around the front windshield's brightwork. Elon indicated no show stoppers at this point. We learned of a production pause in January for quality reasons, and Elon indicated the ability for peak production of 1,000 Model X vehicles/week by mid to late 2nd quarter but with an average production of more like 700 to 800 Model Xs.
Re: Andrea James question about timetables for migrating Model S to Body in White Line 2 and Elon's decision to not provide details
Translation: The original plan was to sometime in 2016 move Model S to share body in white line 2 with Model X and thereby free up space for the future Model 3 production line. I suspect Elon doesn't want to abandon using BIW Line 1 for Model S production until BIW Line 2 demonstrates that it can produce a high enough mixed batching of Models S and X to satisfy the 80,000-90,000 vehicle delivery goal of 2016. If the abandonment of BIW Line 1 happens later in the year than forecasted, then analysts become concerned about how this delay will affect Model 3 production preparations. Tesla has nothing to gain by making a prediction here and then not meeting it. Best to avoid speculation.
Overall impressions: If Tesla can live up to delivery guidance and make a non-GAAP profit in 2016, plus prove to be Net Cash Flow Positive in 2016, then investors will be reassured and we will see TSLA appreciate substantially. The real question is how quickly Model X can be ramped up. The trajectory of TSLA stock in 2016 depends upon a successful Model X ramp. The demand for Model X in 2016 is already there and for Model S should be there, so, once again, production, not demand, is key to the year's results.
The one exception regarding demand is Model 3. Since there will be no 2016 production of Model 3, that car is all about demand. If deposits can grow to over 100,000 in a short time (and this should be quite possible given the order backlog for Model X at a substantially higher price point, then Tesla might be inclined to do an equity raise later in the year for the purpose of building a Chinese or European factory. For this reason, it is important to move away from the Free Cash Flow metric of performance of move toward Net Cash Flow and Cash Flow from Operations to judge cash performance by. Tesla's setting the deposit amount at $1,000 is clearly an effort to maximize the number of deposits and show the world the level of demand for Model 3. As long as Model 3 is reasonably attractive to look at, I think they'll exceed this number. High deposit numbers for Model 3 will boost TSLA price and simultaneously give TSLA reason to look at an equity raise, even though it says that this is not needed (and it isn't needed, but it could be a good thing if Model 3 is being reserved in amazing numbers).
Jason Wheeler's moving away from term "Free Cash Flow" and moving towards "Cash Flow from Core Operations" and "Net Cash Flow".
Translation: Wheeler doesn't like using "Free Cash Flow" as a measure of success because it constrains CapEx. By using Net Cash Flow, and predicting it will be positive, Tesla execs wish to confirm that the bank account will be growing, but they don't want to rule out an equity raise if additional facilities are needed to meet incredible Model 3 demand. Net Cash Flow Positive will yield more money in the bank, which should calm investors. Why should a decision to grow through an equity raise at some point for expansion of manufacturing capabilities be considered detrimental, as long as the money in the bank keeps growing?
As for the term "Cash Flow from Core Operations", this is an important indicator of success for Tesla that has been overlooked previously. The main advantage of introducing it for 4th quarter is that by this metric, Tesla has turned an important corner (see chart)
The previous Free Cash Flow chart showed Tesla falling deeper and deeper into the red with each passing quarter, largely because of increased CapEx. The Cash Flow from Operations shows Tesla improving quarter-over-quarter and going positive in 4th quarter, which is just the kind of graph you wish to show investors in 4th quarter.
Non-GAAP profitability in 2016 and GAP profitability in Q4 of 2016 are predicted.
Model X issues preventing further ramp-up, address by Elon Musk: "Yeah, we really don't see any fundamental issues."
Translation: We really don't see any fundamental issues.
Elon and JB spoke of the windshield sourcing, the door and door seal issues, and we learned about the now corrected supply issue with the chrome finish around the front windshield's brightwork. Elon indicated no show stoppers at this point. We learned of a production pause in January for quality reasons, and Elon indicated the ability for peak production of 1,000 Model X vehicles/week by mid to late 2nd quarter but with an average production of more like 700 to 800 Model Xs.
Re: Andrea James question about timetables for migrating Model S to Body in White Line 2 and Elon's decision to not provide details
Translation: The original plan was to sometime in 2016 move Model S to share body in white line 2 with Model X and thereby free up space for the future Model 3 production line. I suspect Elon doesn't want to abandon using BIW Line 1 for Model S production until BIW Line 2 demonstrates that it can produce a high enough mixed batching of Models S and X to satisfy the 80,000-90,000 vehicle delivery goal of 2016. If the abandonment of BIW Line 1 happens later in the year than forecasted, then analysts become concerned about how this delay will affect Model 3 production preparations. Tesla has nothing to gain by making a prediction here and then not meeting it. Best to avoid speculation.
Overall impressions: If Tesla can live up to delivery guidance and make a non-GAAP profit in 2016, plus prove to be Net Cash Flow Positive in 2016, then investors will be reassured and we will see TSLA appreciate substantially. The real question is how quickly Model X can be ramped up. The trajectory of TSLA stock in 2016 depends upon a successful Model X ramp. The demand for Model X in 2016 is already there and for Model S should be there, so, once again, production, not demand, is key to the year's results.
The one exception regarding demand is Model 3. Since there will be no 2016 production of Model 3, that car is all about demand. If deposits can grow to over 100,000 in a short time (and this should be quite possible given the order backlog for Model X at a substantially higher price point, then Tesla might be inclined to do an equity raise later in the year for the purpose of building a Chinese or European factory. For this reason, it is important to move away from the Free Cash Flow metric of performance of move toward Net Cash Flow and Cash Flow from Operations to judge cash performance by. Tesla's setting the deposit amount at $1,000 is clearly an effort to maximize the number of deposits and show the world the level of demand for Model 3. As long as Model 3 is reasonably attractive to look at, I think they'll exceed this number. High deposit numbers for Model 3 will boost TSLA price and simultaneously give TSLA reason to look at an equity raise, even though it says that this is not needed (and it isn't needed, but it could be a good thing if Model 3 is being reserved in amazing numbers).
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Zhelko Dimic
Careful bull
I've come to conclusion that we, here, are leading indicator of TSLA SP.
We were freaking out and fretting over X deliveries before market REALLY freaked out on TSLA.
Since CC, most of us are lot more comfortable as we understand that things are under control, and we just need to wait for market to catch up with us.
I really hope I'm right
We were freaking out and fretting over X deliveries before market REALLY freaked out on TSLA.
Since CC, most of us are lot more comfortable as we understand that things are under control, and we just need to wait for market to catch up with us.
I really hope I'm right
everman
Member
I've come to conclusion that we, here, are leading indicator of TSLA SP.
We were freaking out and fretting over X deliveries before market REALLY freaked out on TSLA.
Since CC, most of us are lot more comfortable as we understand that things are under control, and we just need to wait for market to catch up with us.
I really hope I'm right
You are! You are indeed!
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