Short-Term TSLA Price Movements - 2016

[mmd]

Production is slow: "Model X is an unbuildable mistake!"
Production speeds up: "Model X demand is falling significantly; new orders are being produced quickly!"

What people have said here is X is "over engineered" and difficult/expensive to build. Don't recall anyone saying it is unbuildable. They did build one 4 years ago. I've already read many posts in Model X forum regarding door issues. People expect the car doors to work 100% of the time. Even 99% is not good enough.

Since NEW X orders in CA are now produced right away, this means within 3200 total produced MX for US, all 90D and P90D Model X orders from CA are exhausted. I leave it to each to draw their own conclusions.

 

[sundaymorning]

Oil is back to $40, the same level as early December before the drop, Tesla is also back to 230s, the same level before the drop. Let's not forget that in August of 2015, we were trading in the 240s-250s range. Presently there are no economic headwinds in sight, although this could change, I don't anticipate anything significant occurring from here till April, which is why a squeeze may be in the cards. The recent rise reminds me of 2013, when Tesla ramped up model S, now we are seeing model X ramp up along with powerpacks. There is definitely rythm and reason to this rise, whereas the drop in January was FUD.

In 2013, a very large sum of investors on this forum thought it was prudent to sell in the 50s after a 50% rise, thinking they can strategically rebuy at 40s. Little could they anticipate the large percentage of shorters piling in along with new investors/believers kept the stock on a tear. There are many similarities between now and 2013, if you have options, lock up some, if you have shares, hang onto it, this may run away from a lot of people, again...

I'm not worried about M3 reservations, Tesla will likely announce freakishly high demand. If you're comfortable with this stock ripping through 30 million shorts after an April beat, more power to you; having tasted 2013, I'm never going back to trading short term.

 

[Julian Cox]

By all accounts the X ramp seems to finally be significant and TM is doing the usual ( and I support it )...local deliveries are pushed in the last couple weeks of the quarter.my 'gut' tells me they deliver 16k.

Thanks. Sounds fine. All that matters is that they don't have to announce a Q1 deliveries miss.

The way I am thinking about this is that anyone interested in placing a really substantial short will have access to auto industry experts to consult (and to blame if it all goes wrong). On the 31st these shorts will come face to face with what the experts told them was an impossibility for at least a decade.

 

[Julian Cox]

Battery technology should be on par with ICE costs in about 2020

As far as cars go, we are about to meet a car that exceeds this benchmark on March 31st. In other words a car against which an ICE vehicle cannot compete on price without some objective compromise that makes it worth less to the majority of consumers than the price of the EV.

Arguably you can say that this tipping point is only realized when the car goes into production in late 2017 assuming it remains on schedule but even then that is not entirely accurate. Reservations for this vehicle directly impact demand for ICE vehicles by removing customers from the ICE vehicle market - and that too starts on March 31st 2016.

 

[Krugerrand]

I would not trade on the reveal event.

Searching..............looking for that chicken emoticon....

 

[Krugerrand]

Reservations for this vehicle directly impact demand for ICE vehicles by removing customers from the ICE vehicle market - and that too starts on March 31st 2016.

This.

The questions: How many reservations until *they* start to feel the pain? How many reservations until *they* really start to worry/panic? How many reservations until it's too late for *them* to do anything about it?

I don't know the answer, but I think we're about to find out.

 

[AudubonB]

Test post. Nothing to see here.

 

[jhm]

(my bolding)...I don't think it matters to address a wider audience early on. Jhm said upthread that he see more value to Tesla a few years down the road if more conquest sales than loyalty sales are made in the short term. I disagree.

To me, it seems cars distribute themselves very effectively in the whole populated landscape. It does not matter whether a Tesla employee or a newly acquired customer is at the wheel. Cars get around. And they are a fashion item. They get noticed. They sell on their merits. Since FB, I'm told, there are only about 4 degrees of separation between any two people on the planet. How will Teslas not get noticed?

Customers will offer themselves up for "conquest" voluntarily. IMO, there will be no struggle to acquire customers. Quite the opposite, I think, as long as Teslas stay at least as good as other EV 200+ milers.

And in contrast to jhm's point made a day or two ago that after 2020 when other Automakers have many of their own EV 200+ milers in the dealers lot, I can't imagine that the fervour of customers to offer themselves for "acquisition" by Tesla will be diminished.

By 2020, it will be the ICE manufactures who will be struggling, no matter what the price of gasoline, such will be the effect of the superior EV meme diffusing into human consciousnesses everywhere.

By then all EV brands will enjoy being supply-constrained for lack of battery capacity. The winners will be the ones with their captive battery pack supply line.

As a little personal anecdote, I've been reading all things Musk since 2012 and been a TSLA shareholder since 2013, so you would expect me (of all people in my neck of the woods) to notice a Tesla, if one happened to cross my path.

Have I ever seen a Tesla in the flesh?

No! Never!

Ok, I live in the SW corner of England which isn't exactly on the way anywhere. At least my daughter sat in one displayed at an airport somewhere, and my son drove one in Sweden.

But the point of this little personal datapoint is to say that the UK is not Norway or California ...at least not yet.

But it will be because the EV value proposition is so much better in Europe than the US (gasoline here 2 or 3 times what you guys pay)...even more so once autonomous vehicles are permitted on our roads because parking here is such a hassle. Why not just get picked up by a car-bot, instead of trying to find a place to park one of your own anywhere within a 10 minute walk of where you want it to take you?

End of rant...sorry to put it here...it's just that I read this thread most of the time.

This is the "if you build it, they will come" school of thought. Seriously, the product alone is not that great. It needs a sales channel and charging network, and lots of publicity, just for starters.

But most importantly Tesla needs a lot of word of mouth. The customers talking with friends and acquaintances are the real secret sauce that sells a Tesla. In some places like California, word of mouth spreads like wildfire. In other places like Germany, it's a slow process. Globally, word of mouth takes time to build. A great product helps. It provides alot of positive content for conversation. But a great product is just a start. A great customer is the absolutely indespensible peice. It's not enough just to sell cars, you want to place each one with a customer who will love that car and share it with friends. What is truly great about Tesla is how they put the customer first. Selling product is simply something that happens along the way.

 

[EinSV]

As far as cars go, we are about to meet a car that exceeds this benchmark on March 31st. In other words a car against which an ICE vehicle cannot compete on price without some objective compromise that makes it worth less to the majority of consumers than the price of the EV.

Exactly right. March 31st 2016 will officially mark the end of the ICE age.

 

[Ukland Wombat]

This is the "if you build it, they will come" school of thought. Seriously, the product alone is not that great. It needs a sales channel and charging network, and lots of publicity, just for starters.

But most importantly Tesla needs a lot of word of mouth. The customers talking with friends and acquaintances are the real secret sauce that sells a Tesla. In some places like California, word of mouth spreads like wildfire. In other places like Germany, it's a slow process. Globally, word of mouth takes time to build. A great product helps. It provides alot of positive content for conversation. But a great product is just a start. A great customer is the absolutely indespensible peice. It's not enough just to sell cars, you want to place each one with a customer who will love that car and share it with friends. What is truly great about Tesla is how they put the customer first. Selling product is simply something that happens along the way.

Thanks jhm for picking up on this again. If word of mouth is on the critical pathway to Tesla sales, then I contend that word of mouth will generate demand for the product much sooner than Tesla can hope to supply that demand even if all ramping goes perfectly.

Also, I seem to remember Musk being questioned on the demand issue (in a CC a couple of years back, I think) where he used the metaphor "the fish are jumping into the boat".

Some may argue that is no longer the case because we have the referrals program. But I think that was more of a strategic move to prevent a bit of Osborning of S while waiting for X, and to take some pressure off Tesla sales teams, and to reward early adopters for evangelising the product, all simultaneously.

I think the fish are still jumping into the boat and will continue to jump into the boat beyond 2020, so long as Tesla doesn't drop the ball.

You say the product is not that great, to sell itself, I guess you mean. Well, I was almost going to put down $1,000 April 01 for a Model 3. (Decided not to reserve because of the ridiculously long wait). Yet I have never even seen an S or X and never had any one I know tell me how wonderful Tesla is. Tripped over the Musk story reading about Space in 2011/2012. That led me to read about Tesla. Even the local guy who owns the garage that serviced my car wasn't sure what Tesla was as recently as 18 months ago and he is a big follower of motorsport here in the UK...i.e. a car guy thru and thru.

Jhm, I think you underestimate how knowledge of Tesla spreads. Face to face contact isn't necessary. I think it will diffuse through the population like a pandemic. I don't think it will be a hard sell. A few years from now ICE will be the hard sell, especially in Europe. Knowledge of Tesla has barely scratched the surface of human consciousness, even in parts of the US I've learned. Well where I live that knowledge is almost totally non-existent and yet the value proposition here is much greater than the US. I think there is a Tesla-awareness explosion about to happen. No further action required. But ok, it would help if Musk keeps using twitter.

 

[Fallenone]

Also, I seem to remember Musk being questioned on the demand issue (in a CC a couple of years back, I think) where he used the metaphor "the fish are jumping into the boat".

“fish jumping into the boat" was referring his perceived demand of S in China in H1 2014. Well, didn't turn out the way he thought it was...

 

[roblab]

What people have said here is X is "over engineered" and difficult/expensive to build. Don't recall anyone saying it is unbuildable. They did build one 4 years ago. I've already read many posts in Model X forum regarding door issues. People expect the car doors to work 100% of the time. Even 99% is not good enough.

Since NEW X orders in CA are now produced right away, this means within 3200 total produced MX for US, all 90D and P90D Model X orders from CA are exhausted. I leave it to each to draw their own conclusions.

Californians want Range, not Performance? Californians still love the S more than the X? I don't understand what you are trying to say. You think there are no orders? I read of people who ordered months ago who aren't getting their cars yet. Luckily, I got mine last September.

My friend here in town with a Perf Mod X has doors that work. I think a lot of this door issue is from a very few people, and they are fixed, like all Tesla car issues. When I ordered my Signature, it was door handles. Now its FWDs, maybe. I suspect you could say that a lot of cars are over engineered. No proof, as far as I can see, compared to other Premium Luxury SUVs. Sounds like FUD.

 

[uselesslogin]

“fish jumping into the boat" was referring his perceived demand of S in China in H1 2014. Well, didn't turn out the way he thought it was...

He was referring to Model X actually:
ELON MUSK: Tesla's SUV Will Be More Popular Than The Model S Sedan

 

[Ukland Wombat]

“fish jumping into the boat" was referring his perceived demand of S in China in H1 2014. Well, didn't turn out the way he thought it was...

Thanks for pointing that out. You may be correct. I didn't bother to search for the context. Even in China though, the fish were jumping in the boat ...just the wrong fish...scalper-fish. However, scalpers were indicative of demand exceeding supply, in a situation where Tesla naively screwed up too badly to get any benefit.

Other times in CCs over the years Musk has said demand is not a problem. I tend to believe him.

 

[snellenr]

“fish jumping into the boat" was referring his perceived demand of S in China in H1 2014. Well, didn't turn out the way he thought it was...

No, it was in the Q42013 Earnings Conference call and was in reference to Model X demand, not China. As reported in Bloomberg Business Insider (February 20. 2014):

Tesla Motors announced Q4 earnings yesterday, announcing it expects to 55% vehicle delivery growth in 2014.

It expects to raise weekly production rates of the its Model S sedan from 600 to 1,000, news that sent the stock soaring.

On a conference call following the announcement, CEO Elon Musk was asked how demand looks for Tesla's Model X, the all-electric crossover that will go into production later this year.

As usual, Musk was quite confident. Despite making no marketing push to promote the car, he said, Tesla has seen huge customer interest. Comparing it to a fishing trip, he said, "It's like the fish are jumping into the boat."

 

[Fallenone]

He was referring to Model X actually:
ELON MUSK: Tesla's SUV Will Be More Popular Than The Model S Sedan

Sorry, my bad

 

[Fallenone]

Thanks for pointing that out. You may be correct. I didn't bother to search for the context. Even in China though, the fish were jumping in the boat ...just the wrong fish...scalper-fish. However, scalpers were indicative of demand exceeding supply, in a situation where Tesla naively screwed up too badly to get any benefit.

Other times in CCs over the years Musk has said demand is not a problem. I tend to believe him.

Turned out it was me remembering wrong.

 

[Julian Cox]

Seriously, the product alone is not that great.

Let me stop you there.

This is the product the entire world has been screaming out loud for since Woodstock 1969. Consumers have so had enough of hopless enslavement to environmental pollution, OPEC, Car Dealers Gas Pumps and Oil Changes to suggest otherwise is just completely and utterly nuts.

 

[Ukland Wombat]

Let me stop you there.

This is the product the entire world has been screaming out loud for since Woodstock 1969. Consumers have so had enough of hopless enslavement to environmental pollution, OPEC, Car Dealers Gas Pumps and Oil Changes to suggest otherwise is just completely and utterly nuts.

+1000

I'm of the woodstock generation...and look if I were a few orders of magnitude smarter than I am, I would have done back then exactly as Musk is doing now.

 

[Intl Professor]

Let me stop you there.

This is the product the entire world has been screaming out loud for since Woodstock 1969. Consumers have so had enough of hopless enslavement to environmental pollution, OPEC, Car Dealers Gas Pumps and Oil Changes to suggest otherwise is just completely and utterly nuts.

Tesla is well-branded. Only one in my neighborhood that I know of. Often, unlike any of our neighbors, he leaves it parked outside for all to see. I could care less about the looks of the car but it really looks like its moving from the side! I looked into getting insurance for a loan before buying. (I'm near 80 with a fairly young wife.) My brother said I'm too old to take on something like that and besides, "you're not a millionaire!" Since an X would be more than one year's income I had to agree.

I told the young insurance saleswoman I'd probably get a Model 3 but not the X. She then talked about seeing many MS in her neighborhood (there are better in Sacramento) and we chatted on AAA's dime for almost an hour. I think I'll see her at the Rocklin store come 3/31.

Remember, and repeat after me, again and again.... "It's not a car, it's a Tesla."