Short-Term TSLA Price Movements - 2016

[Runarbt]

About the phase out of the federal incentive.

To me it looks like a pending political disaster. At some point in time you will see "American job's under-cut with the help of American Tax-payer dollars", when imports will still receive full incentive and Tesla/GM not.

It is difficult for me to imagine that this policy will remain unaltered ...

Actually mind blowing! when will it slow down? Next week, month, year? At a million+ reservations?

Tesla may have a billion usd in rent free crowd funding very soon.:-D!?

Banks may fight to be a part of heavy Worldwide expansion with factories for cars and batteries, just to try to keep up with demand. Now we are talking; lower cost through serious volume.. higher margins/low price model y?

World domination, then mars!;-P

 

[ggies07]

Correct me if I'm wrong, as I'm not a M3 reservation holder. But in response for the people saying the wait list is growing so big that people get discouraged and don't want to "wait" for the car. I'm assuming most people would reason like me, in that I don't consider it "waiting" for anything. I just plunck down $1,000 and forget about it. Life goes on, I keep driving whatever I drive or get a car to bridge over the "wait" and when my number gets called I get the M3. There's no actual "waiting" involved, if you have the right mindset. Of course, I can see how some people will be put off by the waitlist, but I think that's a minority, so I expect the M3 queue to keep growing and touching 1 million before the end of this year.

Exactly! The only waiting that occurs is that when they finally start building them and someone finds out about the car and wants one, THEN they'll have to wait.

 

[EinSV]

I pick the fourth option. Elon is making a conservative estimate, because he is angling for a *loan against future revenues* at a good interest rate, so that he can make even more capital expenditures without diluting the stockholders.

That is a definite possibility but here is one more: at $35K (US) the Model 3 is close to the average price of new cars/trucks sold in the US and comparably priced to a loaded Camry.

Elon may be expecting a massive amount of demand from customers who would otherwise buy a Toyota, Honda, Ford, GM etc. in the $20-35K price range, but stretch their budget a bit to buy a Tesla. Those customers could send the number of M3 sales into the millions, but they will likely buy something close to the base model, driving down the ASP. Elon keeps emphasizing how compelling the base model will be, which seems like an appeal to customers who don't want to or can't afford to pay $40K+ for lots of options, but would rather drive a Tesla than a Camry, Accord, etc.

I would be surprised if the PXXD is less than $60K, but would (selfishly) love to be wrong about that.

 

[JRP3]

Correct me if I'm wrong, as I'm not a M3 reservation holder. But in response for the people saying the wait list is growing so big that people get discouraged and don't want to "wait" for the car. I'm assuming most people would reason like me, in that I don't consider it "waiting" for anything. I just plunck down $1,000 and forget about it. Life goes on, I keep driving whatever I drive or get a car to bridge over the "wait" and when my number gets called I get the M3. There's no actual "waiting" involved, if you have the right mindset.

You mean we all won't be sitting at home, reading TMC, for the next few years, until our 3's are delivered?

 

[Drax7]

This reservation thing is clearly disruptive and the unintended consequences
Will manifest themselves in the days ahead.
Julian expressed it repeatedly and he is right on .
We Suffered through the massive correction and now we
Should be vindicated.

I anticipate a massive short covering rally in the days ahead.

 

[Stretch2727]

About the phase out of the federal incentive.

To me it looks like a pending political disaster. At some point in time you will see "American job's under-cut with the help of American Tax-payer dollars", when imports will still receive full incentive and Tesla/GM not.

It is difficult for me to imagine that this policy will remain unaltered ...

This is a really good point. Looks like GM will be hitting the 200K limit about 2018.

110K through end of 2016 (Volt and ELR)
40K -2017 - Volt and Bolt
50K -2018 -Volt and Bolt

I really think they should move to an industry cap. 2M vehicles industry wide leaves plenty of room for both the Bolt and M3.

 

[gene]

My guess, many people who will be obsessed while waiting for their Model 3 will simply say "oh hell, I'll take a base Model S right now!"

Worth a chuckle, my son was in line at the Santa Barbara store. There is a BMW dealer across the narrow street. He said the salesmen were standing there looking at the long line, jaws agape!

 

[Curt Renz]

The media coverage of the M3 lines from major news outlets (the local ones were fine) seemed surprisingly light and tepid to me. This was a groundbreaking event buoyed by massive energy, anticipation and $$$.

The headlines did not reflect that energy for the most part.

Advertising revenues are the lifeblood of the media. Tesla does not advertise. It is a competitor of companies that advertise heavily. Of course Tesla will likely advertise eventually, and media outlets may be wise to start developing favorable relationships with Tesla.

 

[SBenson]

...

Elon and those at Tesla have shown great capacity to be creative problem solvers. I'm sure they'll work it out like they do everything else.

This is one of the things we all need to have a greater appreciation for (even bulls, yes!).

All the talk about Capital Raise as though somehow it is bad/dilutive is not an accurate reflection of the situation. Elon and rest of the management team have been extremely creative with everything. There is a solid chance that they will do something extremely creative to get the funds. Issuing out dumb equity is straightforward and very unimaginative. I expect to see something else...

Maybe some nation states will sponsor entire factories. Remember the panel factory for SolarCity is almost all being paid by NY state, upto $750mln, including manufacturing equipment!! and being leased to SolarCity for $1 for a decade! Not a typo - it is ONE DOLLAR.

Maybe some sovereign wealth funds interested in divesting from fossil fuels will lend money as a loan, the factories being built themselves can be collateral.

Maybe something else...

In any case, please don't bog yourselves down with capital raise concerns. Leave Elon to figure it out. Take it easy.

 

[Julian Cox]

Hi Julian,

They are sort of running scared over at Seeking Alpha! Even "Always Dubious" admitted he put a reservation in for a Model 3. Anton is writing articles trying to explain that GM will use a consortium for SuperChargers, and Cparmerlee is acting oblivious to the entire thing. It's full fledged chaos in the bear camp there!

Anton's Whalman's article is a masterpiece - genuine textbook case of a mind cracking up in late stage denial worthy of reprinting in actual psychology textbooks.

Look at this quote from Anton:

"

• More fundamentally, why would Tesla be able to deliver all of this content at a lower price than equivalent 2017 EVs from other automakers?

"

This is not even English. I had to read it twenty times until it was obvious what was wrong with it.

Here is the fixed version:

• More fundamentally, why would Tesla be able to deliver all of this content at a lower price than 2017 EVs from other automakers?

 

[BobSk]

Then they weren't really all that interested to start. It's just that simple. If someone really wants something, waiting isn't an issue other than there being a 'specific and immediate *need*' to fulfill in the moment. And like I mentioned, there's ways to cover transportation until one's turn comes up for a 3.



Most of those S/X owners never waited several years for a car prior to their Teslas either. So the various reasons that had them patiently (and not so patiently) waiting for their cars will be the same various reasons for the next set of new Tesla owners.



Elon and those at Tesla have shown great capacity to be creative problem solvers. I'm sure they'll work it out like they do everything else.

I agree. The waiting line is not really a waiting line. You reserve your spot and life goes on, there is no downside. I can't understand why some people hesitate to do it, only to watch the line grow everyday. Maybe $1k is a lot of money, in that case I would understand their hesitation. If the part 2 unfold as expected, the true demand for model 3 (the whole platform sedan+SUV) will be more than 10 million a year. I'm not sure Tesla has fully realized this true demand, let alone the people on the street. For those who still can't decide, my suggestion is "Just reserve it, ask questions later."

 

[BobSk]

Bottom line that bears have to offer today in a counter argument: the M3 is bad for Tesla.

This is very much like 2013 again. Many investors who sold Tesla at 150s all the way to 220s will simply be left behind in an event of a beat come Monday. Chasing of the price upward will eventually capitulate short term investors. Like the Coco Cola auntie, they will come to regret this mistake for the rest of their life. Of course, longs could be wrong and we see a miss come Monday, but then that's the perk for being long, we can afford a few misses here and there all the way till 2025.

As long-term investors who keeps adding, low prices and pullbacks are wonderful.

 

[The Blue Owl]

Anton's Whalman's article is a masterpiece - genuine textbook case of a mind cracking up in late stage denial worthy of reprinting in actual psychology textbooks.

This extreme level of cognitive dissonance is matched in the comments to the article. One guy is asking "Better question, why would anybody want a Tesla?" Right, brilliant question. Meanwhile, Tesla just pre-sold 232,000 cars in one day.

 

[MikeC]

I don't remember seeing Andrea James' PT upgrade to $500 posted here yesterday:

www.streetinsider.com/dr/news.php?id=11465741

 

[jhm]

Hope you don't mind, but I'm going to be a contrarian based on an engineer's perspective. To get a $35k model 3 (with high quality), there would have to be a significant amount of automation. Since Tesla has the space, why wouldn't they design and build out the assembly line with 400k model 3's at the get go?

Using the model X as a guide, do burst builds to verify and qc the assembly process, and then let it rip! With a target of 1k / week of model X by the end of Q2, and 2k by the end of the year for both X & S on the same line, Tesla basically went from assembly line completion to full operation in ~1 year.

If they did the model 3 assembly line with the intent of max production within the space available in Fremont, then wouldn't it be more like:
2017 5k (initial deliveries to meet guidance)
2018 100k (qc burst builds, automation fine tuning and verification; full speed by year end)
2019 400k (full speed production)

It just doesn't make sense to build out part of the automated assembly line to a lower speed and then increase it over multiple years. The model S was ramped that way, because there was quite a bit of manual work that got automated over the years. Can't see that process working out too well with the model 3.

Thanks. I was hoping someone would challenge this. I hope you're right. It seems the Tesla will still want to crank up a second factory within that timeframe. Would it follow the same curve only delayed a year or later?

Regardless, it seems that 500k reservations books us through 2019. We're halfway there in reservations. Anyone who want to buy any affordable Tesla this decade needs to post a reservation right now.

 

[RubberToe]

Maybe some sovereign wealth funds interested in divesting from fossil fuels will lend money as a loan...

Calpers, worlds largest public pension fund. Been trying to get them out of the oil business despite billions of losses. But they say they take the "long term view". WTF? Elon is the only one taking the long term view. Maybe some of these bean counters controlling hundreds of billions of dollars looking for some good investments will have seen the lines of people waiting hours for the chance to buy a Tesla. Maybe the light bulb will finally go on in their head. Or maybe they keep buying Exxon stock for the " long term".

Calpers controls $300,000,000,000 in assets.

RT

 

[Julian Cox]

From the WSJ re 2015 US car sales:

"In all, auto makers sold 17.5 million cars and light trucks in the U.S. last year, a 5.7% increase, and on average paid more for each one. Americans overall spent about $570 billion on new rides—fueling an industry revival that is putting more money in the pockets of auto workers, dealers and executives."

Just something to think about. That 5.7% is just 940,643 more cars than the previous year's numbers.

Tesla reservation holders are highly likely NOT to be visiting a car dealership this year starting now.

A 7% drop on US vehicle demand (sales to be precise) between 2007 and 2008 was sufficient to bankrupt Chrysler and GM and put Ford astonishingly in debt to the point of handing over the Ford brand and logo as lending security.

These companies are projecting a sustaining increase in 2016 demand which is the kind of thing that leads to channel stuffing and escalating days of finished goods inventories and stalled cash flows and supplier credit accounts hitting limits - if the customers don't show up as projected.

Tesla will undoubtedly accumulate over a million reservation holders this year possibly over a million in the USA alone who most likely won't be going to a car dealer as well - and reservation holders are not the general public, they are the specific subset of the general public that dealers and ICE OEMs are relying upon most especially to turn up, that is the subset that is in the market for a new car.

 

[Xpert]

I

This reservation thing is clearly disruptive and the unintended consequences
Will manifest themselves in the days ahead.
Julian expressed it repeatedly and he is right on .
We Suffered through the massive correction and now we
Should be vindicated.

I anticipate a massive short covering rally in the days ahead.

I also anticipate this massive short covering, starting with a huge reservation number by monday (possibly 300k - 350k by then. Think about 250k reservation holders bragging about their model 3 reservation to their family/friends over the weekend, I myself got a few into reserving their car by accident), and a likely delivery beat (16,500-17000 cars).

The bears will give in soon enough. Not a matter of If, but When. If not now, perhaps when Elon strikes a deal for the second factory, he is rethinking production plan, with incredible negotiating leverage due to numbers of reservations.

 

[Runarbt]

From the WSJ re 2015 US car sales:

"In all, auto makers sold 17.5 million cars and light trucks in the U.S. last year, a 5.7% increase, and on average paid more for each one. Americans overall spent about $570 billion on new rides—fueling an industry revival that is putting more money in the pockets of auto workers, dealers and executives."

Just something to think about. That 5.7% is just 940,643 more cars than the previous year's numbers.

Tesla reservation holders are highly likely NOT to be visiting a car dealership this year starting now.

A 7% drop on US vehicle demand (sales to be precise) between 2007 and 2008 was sufficient to bankrupt Chrysler and GM and put Ford astonishingly in debt to the point of handing over the Ford brand and logo as lending security.

These companies are projecting a sustaining increase in 2016 demand which is the kind of thing that leads to channel stuffing and escalating days of finished goods inventories and stalled cash flows and supplier credit accounts hitting limits - if the customers don't show up as projected.

Tesla will undoubtedly accumulate over a million reservation holders this year possibly over a million in the USA alone who most likely won't be going to a car dealer as well - and reservation holders are not the general public, they are the specific subset of the general public that dealers and ICE OEMs are relying upon most especially to turn up, that is the subset that is in the market for a new car.

+1000

A fact that not many think about.. a 1million reserve number might spell doom the the other car manufacturers. Especially if they loose potential customers for their more profitable higher end model.

How long until we see the first one "folding", and going into partnership With tesla to start producing a Real EV? Who will it be? Nissan?

 

[dalalsid]

+1000

A fact that not many think about.. a 1million reserve number might spell doom the the other car manufacturers. Especially if they loose potential customers for their more profitable higher end model.

How long until we see the first one "folding", and going into partnership With tesla to start producing a Real EV? Who will it be? Nissan?

If the model Y would have come first IMHO Porsche would have folded (as in shrunk to nothing or bankrupt, not partner with Tesla) before 2020 as the macan would be dead. Now I still see Porsche as the first one down by 2025.