Short-Term TSLA Price Movements - 2016

[chickensevil]

Exactly, the poll was just an excuse to say it without referencing material insider information.

Wouldn't be the first time they used someone else's data to prove a point. The Q4 letter had the NA break out by the various companies.

This just upped my confidence that when they have a material amount of deposits they will come forward with the data!

 

[Fallenone]

Wouldn't be the first time they used someone else's data to prove a point. The Q4 letter had the NA break out by the various companies.

This just upped my confidence that when they have a material amount of deposits they will come forward with the data!

The breakout in Q4 letter was accurate. This poll is far from that level of accuracy. But I think EM's tweet is more of a tease than seriously saying "OMG look at this poll, we gotta do something"

 

[chickensevil]

The breakout in Q4 letter was accurate. This poll is far from that level of accuracy. But I think EM's tweet is more of a tease than seriously saying "OMG look at this poll, we gotta do something"

Actually it wasn't. That breakout was using estimates for NA deliveries and was published BEFORE the Q4 ER. The numbers were no more accurate than insideEVs or any other source that has been guessing at the number. It must have been a close enough of a guess for Tesla to not feel the need to fix the data... Which makes me wonder if the poll is just as flawed, but still good enough that there is no need to correct.

We will know one way or another come Thursday... But based on all the other bits of data we have on this, it seems reasonable that 300-350k Model 3 wasnt going to be enough production. Most had been saying that for a very long time. This is just another two bits of data... The poll and Elon's willingness to hint that an expansion is likely necessary to meet demand.

 

[RobStark]

Why will anyone continue to buy old ICE's when the costs are so much higher (and add to that list: performance is worse, and space is less)? How can the current auto makers survive if all of a sudden, buyers change their minds overnight as to what makes a vehicle purchase compelling?

Remember that a seven percent drop in demand during the Great Recession caused two bankruptcies. Why, then, would you think that the ICE manufacturers will be able to survive a complete retooling for an overnight change in expectations regarding what a vehicle should have?

People don't change their minds overnight with ~35k purchases. There is an inherent risk averse conservatism in the vast majority of the car buying population. Japan made superior ICEv for 20 years before the market has mass defections away from Detroit. It takes roughly two decades for perception to catch up to reality. The objectively best product does not always get 100% market share.

As an example I have my sister. She is quite knowledgeable about Tesla because I can keep my mouth shut about Tesla 95% of the time but not 100% of the time. Not only did she not want a Tesla she bought a 2016 Toyota Highlander. I told her the the 2017 Highlander would have a new direct injected engine with a new 8 speed transmission giving you higher performance and better fuel efficiency. She wanted the old multi-port fuel injected engine and 6 speed transmission because they have 10 plus years proven reliability. Consumer Reports just said Tesla has below average reliability. Zero chance she waits to buy an all new Tesla design.

GM and Ford balance sheets are much much stronger than before 2008. GM wiped away lots of debt and both the Big 2 shut down unneeded excess capacity. Both have a ~$25B Rainy Day fund. FCA has net debt at the peak of the business cycle. They may be screwed for a variety of reasons.

 

[chickensevil]

People don't change their minds overnight with ~35k purchases. There is an inherent risk averse conservatism in the vast majority of the car buying population. Japan made superior ICEv for 20 years before the market has mass defections away from Detroit. It takes roughly two decades for perception to catch up to reality. The objectively best product does not always get 100% market share.

As an example I have my sister. She is quite knowledgeable about Tesla because I can keep my mouth shut about Tesla 95% of the time but not 100% of the time. Not only did she not want a Tesla she bought a 2016 Toyota Highlander. I told her the the 2017 Highlander would have a new direct injected engine with a new 8 speed transmission giving you higher performance and better fuel efficiency. She wanted the old multi-port fuel injected engine and 6 speed transmission because they have 10 plus years proven reliability. Consumer Reports just said Tesla has below average reliability. Zero chance she waits to buy an all new Tesla design.

GM and Ford balance sheets are much much stronger than before 2008. GM wiped away lots of debt and both the Big 2 shut down unneeded excess capacity. Both have a ~$25B Rainy Day fund. FCA has net debt at the peak of the business cycle. They may be screwed for a variety of reasons.

And let's not forget brand loyalty. Toyota and Honda both have some serious brand loyalty. If not for Tesla, I would still be driving Hondas.

 

[EinSV]

The breakout in Q4 letter was accurate. This poll is far from that level of accuracy. But I think EM's tweet is more of a tease than seriously saying "OMG look at this poll, we gotta do something"

Actually, I think exactly what he is saying is "OMG ... we gotta do something."

 

[vgrinshpun]

I think that with Elon's tweet and positive macro following Yellen remarks, as well as positive oil in Asian trading we will test $240 tomorrow.

 

[Fallenone]

Actually it wasn't. That breakout was using estimates for NA deliveries and was published BEFORE the Q4 ER. The numbers were no more accurate than insideEVs or any other source that has been guessing at the number. It must have been a close enough of a guess for Tesla to not feel the need to fix the data... Which makes me wonder if the poll is just as flawed, but still good enough that there is no need to correct.

We will know one way or another come Thursday... But based on all the other bits of data we have on this, it seems reasonable that 300-350k Model 3 wasnt going to be enough production. Most had been saying that for a very long time. This is just another two bits of data... The poll and Elon's willingness to hint that an expansion is likely necessary to meet demand.

That breakout in Q4 letter was citing "company reports". Aren't those reports official figures from other auto companies? By the time they prepared that breakout figure, all other companies have finished their monthly sales report up to Jan 2016 so the data is clearly out there isn't it? Unless the other companies didn't disclose the composition of their sales.

 

[BornToFly]

Agreed, but when there is sufficient demand for the Bolt (when their battery pack costs go down by about 50%), they could quickly-easily ramp production to over 500k per year.

Two big problems here. Their battery costs aren't going down 50% when they have to buy them from someone else (LG). There will never be Model 3 demand for the Bolt because the Bolt is an ugly, $17,000 car with a $40,000 price tag, with no supercharging network, and a GM label on the front. If they ever sell more than 30,000 a year, it will be a miracle.

 

[Ulmo]

Additional details on the subject are here.

This is a long term thing, but I will be watching it constantly with short term interest:

My play on MBLY-TSLA (Mobile Eye & Tesla) is that I believe the same thing that George Hotz said about MBLY's ability to do its job for TSLA.

We Are Coming for You, Tesla, And You, Too, Google, Says Hacker Hotz

What this means to me is that the MobileEye-Tesla partnership will continue to thrive in business, installations, manufacturing, sales, and stocks, until the day that it doesn't, when they realize, oh, damn, that twerp dude was right, and then it will go puff. So I'll just put stock in that partnership in a VERY tepid way (because that's the current "business dealings" the stock will track) and be ready to pull out at a dust mite's notice anything related to that partnership.

The good news is that even if I'm right (that Hotz is right), the fix is easy: hire Hotz and put his work to work. Hotz already found out Musk is a PITA to do business dealings with. As others have said, this is just a negotiating strategy: Musk practically tried to steal Hotz' value from him. Instead, he'll have to pay top dollar. But if it demonstrates properly, it will be worth it. I'd hate to be the fly on the wall of those conversations, but eventually something will work. Best case scenereo (wrt $TSLA stock price): I'm completely wrong.

 

[BobSk]

This is a long term thing, but I will be watching it constantly with short term interest:

My play on MBLY-TSLA (Mobile Eye & Tesla) is that I believe the same thing that George Hotz said about MBLY's ability to do its job for TSLA.

We Are Coming for You, Tesla, And You, Too, Google, Says Hacker Hotz

What this means to me is that the MobileEye-Tesla partnership will continue to thrive in business, installations, manufacturing, sales, and stocks, until the day that it doesn't, when they realize, oh, damn, that twerp dude was right, and then it will go puff. So I'll just put stock in that partnership in a VERY tepid way (because that's the current "business dealings" the stock will track) and be ready to pull out at a dust mite's notice anything related to that partnership.

The good news is that even if I'm right (that Hotz is right), the fix is easy: hire Hotz and put his work to work. Hotz already found out Musk is a PITA to do business dealings with. As others have said, this is just a negotiating strategy: Musk practically tried to steal Hotz' value from him. Instead, he'll have to pay top dollar. But if it demonstrates properly, it will be worth it. I'd hate to be the fly on the wall of those conversations, but eventually something will work. Best case scenereo (wrt $TSLA stock price): I'm completely wrong.

After reading all the stories surrounding this, my view is different. Elon is the real deal. Hotz is not. MBLY is great, Tesla will continue to work with MBLY as long as Elon feels he can trust MBLY to be not too greedy. Elon can develop his own chips if he wants to. So in the end, Tesla is the only sure thing, or close to be sure thing as nothing is 100% sure.

 

[BobSk]

In the early days, Elon mentioned that model S sales are clustered: one sale leads to more sales in the same area. Once the Model 3 starts (reservation and production), I think we will see the same effect in a larger scale. Some people would never consider a Tesla, now seeing his friend reserved/bought one, he is more likely to reserve/buy one too. It's a snow ball effect that will be hard for ICE industry to stop.

 

[sundaymorning]

In the early days, Elon mentioned that model S sales are clustered: one sale leads to more sales in the same area. Once the Model 3 starts (reservation and production), I think we will see the same effect in a larger scale. Some people would never consider a Tesla, now seeing his friend reserved/bought one, he is more likely to reserve/buy one too. It's a snow ball effect that will be hard for ICE industry to stop.

Not only will people see others buying one, but also will likely hear their friends chatter about it non stop like we do here. The curve from S to model3 adoption will look like a hockey stick.

 

[Cobos]

In the early days, Elon mentioned that model S sales are clustered: one sale leads to more sales in the same area. Once the Model 3 starts (reservation and production), I think we will see the same effect in a larger scale. Some people would never consider a Tesla, now seeing his friend reserved/bought one, he is more likely to reserve/buy one too. It's a snow ball effect that will be hard for ICE industry to stop.

I agree and you can really see this for EVs in Norway. One Leaf leads to more Leafs and Golf EVs, Teslas etc.
BUT this requires a car to be effective, not just an order. To convine slightly sceptic neighboors you need to show them the car, and that propably wont be before early 2018 we really start to see the effect of this. So yes it will happen but not yet.

Cobos

 

[Papafox]

In the early days, Elon mentioned that model S sales are clustered: one sale leads to more sales in the same area. Once the Model 3 starts (reservation and production), I think we will see the same effect in a larger scale. Some people would never consider a Tesla, now seeing his friend reserved/bought one, he is more likely to reserve/buy one too. It's a snow ball effect that will be hard for ICE industry to stop.

Good point. While there are lots of areas in the Midwestern U.S. where Model S and Model X are few and far between, I suspect Model 3 will pollinate most every region of the country. Further, many Europeans prefer smaller cars due to narrow streets in the old towns, and as excited as many of us are about Model 3 and North America, Europe could be an even more powerful success story, when compared with S and X sales.

 

[Ulmo]

In the early days, Elon mentioned that model S sales are clustered: one sale leads to more sales in the same area. Once the Model 3 starts (reservation and production), I think we will see the same effect in a larger scale. Some people would never consider a Tesla, now seeing his friend reserved/bought one, he is more likely to reserve/buy one too. It's a snow ball effect that will be hard for ICE industry to stop.

Agreed, but the cluster effect may be nearly erased by slow turnaround times (long wait queues for manufacturing). If the ramp up can be quicker than that, or some clustering sales-delivery function (don't deliver to one new area until 10 factory slots are reserved for rapid capacity delivery to new members of that cluster (hopefully they can do this if needed)), then of course what you said can happen. I wonder if that's some of the urgency of EM's tweet.

 

[schonelucht]

There is no need for Tesla to communicate model 3 delivery numbers. The stock is holding up great without it and anyways, Elon has repeatedly told us he is not primarily interesting in supporting the stock price. When they diverged from that policy it was because a capital raise was coming and they wanted/needed to do it on favorable terms.

If they reveal the model 3 reservation number it's going to happen in the Q1 shareholder letter to offset potential negative talk about the sharp dive model S numbers are taking this quarter.

 

[Xpert]

Love it when Elon tweets. He has 3.6 million followers, tons of free advertisement just from his last model 3 tweet alone + 2K retweets, means millions would be aware of model 3. I think Tsla is going to gap up tomorrow due to this tweet and the poll results getting out.

 

[CyberDutchie]

Picked up my X today at the Fremont factory and it is flawless! On the factory tour, high production rate of X was evident. Very smooth process, from registering for the factory tour to driving away with your new car. I counted at least 8 simultanious X deliveries in the tent, plus several S as well, during the time I was there. Very impressed with Tesla Motors and how they are able to scale production and delivery so efficiently.

I had brought a colleague from work and he could not believe this whole process--trade-in, factory tour, financing and ownership documents signed, X walk-through--was done in about one hour. At any ordenary dealership, this could easily take half a day.

 

[Gerardf]

After that guy in Australia, more lines are starting to happen.

Imgur: The most awesome images on the Internet

And several news sources are starting to notice it.

Combined with green markets today in Europe (now + 1,5%) and even oil a bit up, we might see some more green for TSLA today.