Krugerrand
Meow
Now that would be funny. I can see the cries of outrage now that people are speculating a bigger battery (
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Making the product so compelling it creates 5-6 years of queue's would mean that it is priced way too low. That said, it could be a wise move I guess for the primary mission of Tesla.
We have seen already with the X that people hold back until they can drive and test the vehicle. This would be the same with Model 3 for many people, both for reservation and for actual confirmation of orders.
Many people that wants a Tesla to such degree that they are willing to wait 2-3 years after a reservation would instead get a Model S or a used Model S. There is also no precedence of anything close to this type or mass reservation for a future product.
I think personally there will be a big second wave after the first Model 3 have been produced, just as there will be a big second wave of Model X orders coming soon.
Anyway, we will know more in a week.
We have seen already with the X that people hold back until they can drive and test the vehicle. This would be the same with Model 3 for many people, both for reservation and for actual confirmation of orders.
Many people that wants a Tesla to such degree that they are willing to wait 2-3 years after a reservation would instead get a Model S or a used Model S. There is also no precedence of anything close to this type or mass reservation for a future product.
I think personally there will be a big second wave after the first Model 3 have been produced, just as there will be a big second wave of Model X orders coming soon.
Anyway, we will know more in a week
.
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Now that would be funny. I can see the cries of outrage now that people are speculating a bigger battery (
Solar City isn't going anywhere. It might get privatized but it is in the best position to take advantage of an ongoing trend of Solar and Storage getting cheaper than oil and gas of any company on the planet. What most people seem not to get is that it will probably get even cheaper than Fusion before capturing Fusion is invented. Solar City is really, really safe - not necessarily a source of dividends ever though as a result of endless expansion but that is another story altogether - hence the confusion. Oh and it employs too much casual labor to be a candidate for Model 3 line jumping and it is not directly a Musk-controlled business.
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on topic: reveal, short term SP action
MitchJi, thank you for your comment. I was hoping I could learn more of how you think.
For my part I will just summarise here:
Fantasy, so far yes.
Grandiose thinking. Yes, and sorry if it offends. But Musk, I suggest is orders of magnitude more grandiose than I.
I am invested in Musk, not so much TM.
There isn't a pure play stock called MUSK, so I invest in both TM and SolarCity.
To protect (and enjoy my investment more) I try to understand Musk's secret master plan.
Understanding what is below the water line might be key to share price action around the reveal.
The reveal is in less than 1 week.
This is the Short Term Thread, so very relevant I would suggest.
I hope you won't put me on ignore because I invite comments always, to help me understand other views.
If I turn out to be totally wrong (a wrongbat?)...well all the more strength to your bow. Well done!
MitchJi, thank you for your comment. I was hoping I could learn more of how you think.
For my part I will just summarise here:
Fantasy, so far yes.
Grandiose thinking. Yes, and sorry if it offends. But Musk, I suggest is orders of magnitude more grandiose than I.
I am invested in Musk, not so much TM.
There isn't a pure play stock called MUSK, so I invest in both TM and SolarCity.
To protect (and enjoy my investment more) I try to understand Musk's secret master plan.
Understanding what is below the water line might be key to share price action around the reveal.
The reveal is in less than 1 week.
This is the Short Term Thread, so very relevant I would suggest.
I hope you won't put me on ignore because I invite comments always, to help me understand other views.
If I turn out to be totally wrong (a wrongbat?
)...well all the more strength to your bow. Well done!on topic: reveal, incentives to reserve
Thanks for biting, JRP3
BTW, I have found many of your posts very informative going back a long time (in my 'lurker' phase). Thanks!
As to incentives:
I invite you, and possibly many in the US, to zoom out for a moment.
There are many car buyers on this planet.
There is only one GF, nowhere near completed.
Potential non-US reservers see no hope of getting the product for a ridiculously long time to come.
Now zoom in again by putting your mind in the Muskscape:
Musk will soon have information in his hand which is at one and the same time:
A big negative to anybody dithering about reserving
But a big positive for investors in TSLA
What would you do?
I suggest, showman and lover of superlatives that he is, Musk will go for the superlatives
Announce the astronomical reservations as they grow!
But, oh *sugar* that discourages further reservations
I know, we will throw in something as an incentive so M3 looks like the bargain of a lifetime.
....and reservations explode the world over
....gee, another superlative! and the cash deposits to play with!
Thanks for biting, JRP3
BTW, I have found many of your posts very informative going back a long time (in my 'lurker' phase). Thanks!
As to incentives:
I invite you, and possibly many in the US, to zoom out for a moment.
There are many car buyers on this planet.
There is only one GF, nowhere near completed.
Potential non-US reservers see no hope of getting the product for a ridiculously long time to come.
Now zoom in again by putting your mind in the Muskscape:
Musk will soon have information in his hand which is at one and the same time:
A big negative to anybody dithering about reserving
But a big positive for investors in TSLA
What would you do?
I suggest, showman and lover of superlatives that he is, Musk will go for the superlatives
Announce the astronomical reservations as they grow!
But, oh *sugar* that discourages further reservations
I know, we will throw in something as an incentive so M3 looks like the bargain of a lifetime.
....and reservations explode the world over
....gee, another superlative! and the cash deposits to play with!
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JRP3
Hyperactive Member
I see and understand your reasoning, I just don't think it's necessary, nor would it be that effective. Most people aren't long term thinkers when it comes to purchases and a 4-6 year wait time means many people will simply need to purchase another vehicle in the meantime, and will be less willing to have their money tied up when they will need it elsewhere. For a large portion of the Model 3 target market I'm betting they have never previously considered putting down $1K on a vehicle years in advance. I don't think there are any reasonably likely incentives beyond the car itself to get significantly larger numbers to reserve.
I agree and there is also Model S and used Model S to be had directly instead of waiting all those years for your Model 3. Tesla will also push that transaction if they can, they obviously much rather sell a Model S than "sell" another deposit for a multi year queue.
Come to think of it... the Model 3 reveal and reservation process has the potential to become a BIG boost for Model S and maybe even X sales. I think once again the market and most investors are focusing too much of Model 3 and GF and underestimate the growth story and margin expansion story (this is a very potent combination for a stock) of S and X.
on topic: reveal, incentives to reserve
Thanks for the comment.
Equally, I understand your reasoning well, because I would have said the same 3 days ago.
That's when we diverged.
Thanks for the comment.
Equally, I understand your reasoning well, because I would have said the same 3 days ago.
That's when we diverged.
on topic: reveal, reservations
I agree to the extent that what you have written describes the scenario without a compelling incentive.
But are you conflating reserving with ordering?
To your second paragraph...people hold back ordering.
Reservation is reversible. (Ordering comes much much later, nearer the delivery time)
As long as a reservation isn't cancelled it is a vote:
Musk for POPE=President Of Planet Earth (credit to Julian!)
And an interest free loan to TM!
Making the product so compelling it creates 5-6 years of queue's would mean that it is priced way too low. That said, it could be a wise move I guess for the primary mission of Tesla.
We have seen already with the X that people hold back until they can drive and test the vehicle. This would be the same with Model 3 for many people, both for reservation and for actual confirmation of orders.
Many people that wants a Tesla to such degree that they are willing to wait 2-3 years after a reservation would instead get a Model S or a used Model S. There is also no precedence of anything close to this type or mass reservation for a future product.
I think personally there will be a big second wave after the first Model 3 have been produced, just as there will be a big second wave of Model X orders coming soon.
Anyway, we will know more in a week
I agree to the extent that what you have written describes the scenario without a compelling incentive.
But are you conflating reserving with ordering?
To your second paragraph...people hold back ordering.
Reservation is reversible. (Ordering comes much much later, nearer the delivery time)
As long as a reservation isn't cancelled it is a vote:
Musk for POPE=President Of Planet Earth (credit to Julian!)
And an interest free loan to TM!
Thanks!
Haha...no...bats are blind I think (nws their sonar capabilities)
We wombats can see, but we don't always understand what we are looking at!
Edit] I'm invested in a visionary thinker: Musk
So I'm really only trying to keep up.
It is difficult because the wombat brain is seriously challenged for speed,
but interestingly, when facts are completely out of sight, thoughts run a whole lot faster!
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It does not make sense for Tesla to push for a multi year queue. Just as it does not make sense for them to want even more X orders (which is why the normal order process has not started yet). What does make sense though is to tap into the Model 3 interest and willingness to reserve to try to sell more Model S and X.
Not sure what you mean or refer to with incentive. The incentive for Tesla is to sell cars, not reservation deposits.
@Ukland Wombat
IMO this is getting irritating not just because it's off topic but because you have something profoundly backwards.
Musk isn't taking great risky swings at the world. That is
An impression he leaves on fanboys and one of the effects of his actions. I don't think you are particularly close to channeling his mindset at all. What he is actually doing is continually de-risking Tesla's pole position in a race that was already won by Tesla nearly a decade ago and that race is not Musk vs the world, it is an inevitable technology trend that Tesla is of course accelerating but mostly one that it is simply riding.
IMO this is getting irritating not just because it's off topic but because you have something profoundly backwards.
Musk isn't taking great risky swings at the world. That is
An impression he leaves on fanboys and one of the effects of his actions. I don't think you are particularly close to channeling his mindset at all. What he is actually doing is continually de-risking Tesla's pole position in a race that was already won by Tesla nearly a decade ago and that race is not Musk vs the world, it is an inevitable technology trend that Tesla is of course accelerating but mostly one that it is simply riding.
Tesla has kept the reservation numbers for S and X a secret. Occasionally they provide vague guidance about the S and X reservation numbers. Perhaps the time has come for Tesla to provide a continuously updated count of Model 3 reservations. The counter could be part of the Tesla Motors Forum. Many advantages could be realized. Even shorts might benefit as the count would indicate to them that Tesla Motors is on a strong growth path and they should close their positions. The rest of us could weigh the meaning of the count for investment in Tesla and Panasonic. The count might help Tesla Motors raise capital to expand Model 3 production. We could all cheer a large and rapidly growing reservation count for the Model 3.
Imagine if the count got to a million by next year. That would imply potential revenues of $40 billion ($40K/car). The power of a publicly shared reservation count would impact the share price, cost of raising capital by Tesla Motors, and give those in line a more realistic estimate of when they might receive their Model 3s.
Not sure there is any downside to posting the Model 3 reservation count, especially after the count exceeds 100,000, which I expect will occur quite soon.
Imagine if the count got to a million by next year. That would imply potential revenues of $40 billion ($40K/car). The power of a publicly shared reservation count would impact the share price, cost of raising capital by Tesla Motors, and give those in line a more realistic estimate of when they might receive their Model 3s.
Not sure there is any downside to posting the Model 3 reservation count, especially after the count exceeds 100,000, which I expect will occur quite soon.
on topic reveal, reservation deposits
And how will they ever make anything but a very small number of cars and and a very small number of storage products in the face of a world absolutely screaming for more?
Grow organically, the textbook business school way or grow like a rocket off the launch pad?
I put it to you that if Musk had a chance to grow rocket-style, he would take it.
Musk is all about accelerating the advent of sustainable transport. I think we should take him at his word.
I have come to the view (3 days ago) that Musk actually has that chance in his hands right now with the M3.
Obviously my view is a minority view among active posters, at the moment.
That's alright, it's only a short term thing to think about, and hey...this is the short term thread...
so, short term, it will all blow over, one way or another.
And how will they ever make anything but a very small number of cars and and a very small number of storage products in the face of a world absolutely screaming for more?
Grow organically, the textbook business school way or grow like a rocket off the launch pad?
I put it to you that if Musk had a chance to grow rocket-style, he would take it.
Musk is all about accelerating the advent of sustainable transport. I think we should take him at his word.
(Unfortunately it will take boat loads of cash to build GFs first. One way is to get a large number of reservation deposits. Unfortunately a reservation is a 'thing' that Osborns itself. A Self-Osborning reservation tally kind of defeats the purpose. It can be avoided by throwing in a very compelling freebie as an incentive to reserve. Suddenly the thought of reserving 4 or 5 or even 6 years ahead of the expected delivery date might not look so silly. If it isn't silly, then we can expect truly astronomical numbers and $billions of money to flow to TM (to build GFs.)
I have come to the view (3 days ago) that Musk actually has that chance in his hands right now with the M3.
Obviously my view is a minority view among active posters, at the moment
.That's alright, it's only a short term thing to think about, and hey...this is the short term thread...
so, short term, it will all blow over, one way or another.
Agree--
Solar/Storage price headed to near zero in that time period, and since Solar IS 'capturing Fusion', but without having to build/support the reactor, and without having to distribute the output, fusion just not going to get there...
off topic perhaps
Thanks for your weigh in on "irritating". On that, I think you speak for most active posters. No argument there!
Whether "on topic" or "off topic", the verdict is not yet in. If I'm wrong with the idea I have floated, and it really is a guess, then of course you are right...it will be relegated to off-topic and be totally forgotten within 2 weeks, I reckon.
As long as the verdict is not yet in, and there are posters, who want to comment, I would politely suggest that it may be "on topic" to some, as it could have a bearing on short term price action, which this thread is supposed to be about.
But I am sensitive to the majority view, and so I am trying to consistently label my posts so readers can quickly see my subtopic displayed in the top line and quickly move on if they don't want to be more irritated.
To your comment on 'swings at the world' and 'de-risking', I can only say that this swing at the world does de-risk. Heaps.
'Accelerating' versus simply 'riding'. I have no idea which is the more correct way to think. But I have no problem with you being totally correct in everything you have said in your post! Discussion/argument is really just sport to me.
And no claims of channeling or clairvoyance. I am overwhelmed and outnumbered by those with technical and financial expertise posting in this thread. Both depend on a quantitative approach and usually back their reasoning with evidence, that is valuable to all, thank you.
I can only think qualitatively not quantitatively. I use the wombat persona so readers won't take me too seriously.
Thanks for your weigh in on "irritating". On that, I think you speak for most active posters. No argument there!
Whether "on topic" or "off topic", the verdict is not yet in. If I'm wrong with the idea I have floated, and it really is a guess, then of course you are right...it will be relegated to off-topic and be totally forgotten within 2 weeks, I reckon.
As long as the verdict is not yet in, and there are posters, who want to comment, I would politely suggest that it may be "on topic" to some, as it could have a bearing on short term price action, which this thread is supposed to be about.
But I am sensitive to the majority view, and so I am trying to consistently label my posts so readers can quickly see my subtopic displayed in the top line and quickly move on if they don't want to be more irritated.
To your comment on 'swings at the world' and 'de-risking', I can only say that this swing at the world does de-risk. Heaps.
'Accelerating' versus simply 'riding'. I have no idea which is the more correct way to think. But I have no problem with you being totally correct in everything you have said in your post! Discussion/argument is really just sport to me.
And no claims of channeling or clairvoyance. I am overwhelmed and outnumbered by those with technical and financial expertise posting in this thread. Both depend on a quantitative approach and usually back their reasoning with evidence, that is valuable to all, thank you.
I can only think qualitatively not quantitatively. I use the wombat persona so readers won't take me too seriously
.on topic reveal, reservation deposits
And how will they ever make anything but a very small number of cars and and a very small number of storage products in the face of a world absolutely screaming for more?
Grow organically, the textbook business school way or grow like a rocket off the launch pad?
I put it to you that if Musk had a chance to grow rocket-style, he would take it.
Musk is all about accelerating the advent of sustainable transport. I think we should take him at his word.
(Unfortunately it will take boat loads of cash to build GFs first. One way is to get a large number of reservation deposits. Unfortunately a reservation is a 'thing' that Osborns itself. A Self-Osborning reservation tally kind of defeats the purpose. It can be avoided by throwing in a very compelling freebie as an incentive to reserve. Suddenly the thought of reserving 4 or 5 or even 6 years ahead of the expected delivery date might not look so silly. If it isn't silly, then we can expect truly astronomical numbers and $billions of money to flow to TM (to build GFs.)
I have come to the view (3 days ago) that Musk actually has that chance in his hands right now with the M3.
Obviously my view is a minority view among active posters, at the moment
That's alright, it's only a short term thing to think about, and hey...this is the short term thread...
so, short term, it will all blow over, one way or another.
They grow organically the same way from M3 deposits, S, X and stationary storage sales. Non-organic growth usually means M&A.
1 million Model 3 reservations is $1B. One more GF and one more car factory is probably in the order of $8-$10B in total, cheaper if they build one in China and expand GF1. Either way the deposits do not cover all that much. And it is still a liability and such a huge number is something they have to be prepared for withdrawals, so they don't necessarily have access to all of it for expansion. The net effect of that number of reservations is that it would be easier to raise equity but only if the share price goes up. So the primary target is to raise the share price and I think that is accomplished in a better way by growing revenue from the products. It is of course possible the share price will multiply if the reservations are of the hook, but in order to raise 2x with the same dilution the share price has to double.
I think what they plan for is to do a modest raise and do several before 2020. This is also the implicit guidance.
Just to be clear, they would not say no to such a large number of reservations, but if it happens the best action would be to convert it to real product sales for the current line.
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off topic perhaps
Thanks for your weigh in on "irritating". On that, I think you speak for most active posters. No argument there!
Whether "on topic" or "off topic", the verdict is not yet in. If I'm wrong with the idea I have floated, and it really is a guess, then of course you are right...it will be relegated to off-topic and be totally forgotten within 2 weeks, I reckon.
As long as the verdict is not yet in, and there are posters, who want to comment, I would politely suggest that it may be "on topic" to some, as it could have a bearing on short term price action, which this thread is supposed to be about.
But I am sensitive to the majority view, and so I am trying to consistently label my posts so readers can quickly see my subtopic displayed in the top line and quickly move on if they don't want to be more irritated.
To your comment on 'swings at the world' and 'de-risking', I can only say that this swing at the world does de-risk. Heaps.
'Accelerating' versus simply 'riding'. I have no idea which is the more correct way to think. But I have no problem with you being totally correct in everything you have said in your post! Discussion/argument is really just sport to me.
And no claims of channeling or clairvoyance. I am overwhelmed and outnumbered by those with technical and financial expertise posting in this thread. Both depend on a quantitative approach and usually back their reasoning with evidence, that is valuable to all, thank you.
I can only think qualitatively not quantitatively. I use the wombat persona so readers won't take me too seriously
I can do qualitative just fine. Expanding the scope of the Gigafactory prototype phase at Tesla's risk and on Tesla's dime would be an unmitigated disaster and gain very little in terms of speed of rollout even in the unlikely event that risk paid off (and was worth permanently impairing Tesla's capital structure for). Musk is a genius, what you are proposing is the opposite. Any other MBA school graduate would have sent Tesla bust already by over-extending by speculating on future demand while departing the critical path just like that. Musk's de-risking the critical path is extraordinary. What you cannot seem to see is that he hits the key risks of the business at the smallest scale possible. Just take SpaceX resusability - how much do you think it costs Musk to crash test a fist stage landing in a core that is fully paid for?
Kindly just accept that when he's proved GF Module one, the money will throw itself at him without Tesla taking on any risks it does not suit him. That is why he is who is is and has got where he's got.
on topic reservationers and capital
Thanks, lango, thanks for correcting and dissecting...appreciate it.
you are absolutely correct, of course, growing by deploying deposit moneys to capex is still organic growth. I was careless in word choice there.
And deposits certainly are a liability...yikes what if there was a mass cancellation of reservations. It would be like a run on a bank!
On the plus side, 'to make the bank look solid', we expect good revenue streams. S and X and energy.
Yes, I take your point that revenue from selling product plus the obvious message that the product will sell for the foreseeable future, are positives to the share price, and thereby raising capital...the most de-risked way of taking the company forward as Julian also pointed out to me moments ago, and as most posters have been discussing for a long time.
Please understand that I am not heavily invested in being right. I don't take offence at being wrong.
I have only floated a 'flash-in-the-pan' idea, for the consideration of investors around the reveal time. And of course it excites me as readers can tell.
The wishful thinking, the idealist in me, would like to see Musk have a freer hand in carrying out his secret master plan, that's all.
To me, that means anything which reduces dependence on Banks and the macro-future of markets is good.
Thanks, lango, thanks for correcting and dissecting...appreciate it.
you are absolutely correct, of course, growing by deploying deposit moneys to capex is still organic growth. I was careless in word choice there.
And deposits certainly are a liability...yikes what if there was a mass cancellation of reservations. It would be like a run on a bank!
On the plus side, 'to make the bank look solid', we expect good revenue streams. S and X and energy.
Yes, I take your point that revenue from selling product plus the obvious message that the product will sell for the foreseeable future, are positives to the share price, and thereby raising capital...the most de-risked way of taking the company forward as Julian also pointed out to me moments ago, and as most posters have been discussing for a long time.
Please understand that I am not heavily invested in being right. I don't take offence at being wrong.
I have only floated a 'flash-in-the-pan' idea, for the consideration of investors around the reveal time. And of course it excites me as readers can tell.
The wishful thinking, the idealist in me, would like to see Musk have a freer hand in carrying out his secret master plan, that's all.
To me, that means anything which reduces dependence on Banks and the macro-future of markets is good.
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